XM Radio 2008 Annual Report Download - page 152

Fractional Shares
Stockholders will not receive fractional post-reverse stock split shares in connection with the reverse
stock split. Instead, our transfer agent for the registered stockholders will aggregate all fractional shares and
arrange for them to be sold as soon as practicable after the Effective Time at the then prevailing prices on the
open market on behalf of those stockholders who would otherwise be entitled to receive a fractional share. We
expect that the transfer agent will cause the sale to be conducted in an orderly fashion at a reasonable pace
and that it may take several days to sell all of the aggregated fractional shares of common stock. After
completing the sale, stockholders will receive a cash payment from the transfer agent in an amount equal to
the stockholder’s pro rata share of the total net proceeds of these sales. No transaction costs will be assessed
on the sale. However, the proceeds will be subject to certain taxes as discussed below. In addition, stockholders
will not be entitled to receive interest for the period of time between the Effective Time and the date a
stockholder receives payment for the cashed-out shares. The payment amount will be paid to the stockholder
in the form of a check in accordance with the procedures outlined below.
After the reverse stock split, a stockholder will have no further interest in the company with respect to
their cashed-out fractional shares. A person otherwise entitled to a fractional interest will not have any voting,
dividend or other rights except to receive payment as described above.
Effect on Beneficial Holders of Common Stock (i.e., stockholders who hold in “street name”)
Upon the reverse stock split, we intend to treat shares held by stockholders in “street name,” through a
bank, broker or other nominee, in the same manner as registered stockholders whose shares are registered in
their names. Banks, brokers or other nominees will be instructed to effect the reverse stock split for their
beneficial holders holding our common stock in “street name”. However, these banks, brokers or other
nominees may have different procedures than registered stockholders for processing the reverse stock split and
making payment for fractional shares. If a stockholder holds shares of our common stock with a bank, broker
or other nominee and has any questions in this regard, stockholders are encouraged to contact their bank,
broker or other nominee.
Effect on Registered “Book-Entry” Holders of Common Stock (i.e. stockholders that are registered on
the transfer agent’s books and records but do not hold stock certificates)
Certain of our registered holders of common stock may hold some or all of their shares electronically in
book-entry form with the transfer agent. These stockholders do not have stock certificates evidencing their
ownership of the common stock. They are, however, provided with a statement reflecting the number of shares
registered in their accounts.
If a stockholder holds registered shares in book-entry form with the transfer agent, no action needs to be
taken to receive post-reverse stock split shares or cash payment in lieu of any fractional share interest, if
applicable. If a stockholder is entitled to post-reverse stock split shares, a transaction statement will
automatically be sent to the stockholder’s address of record indicating the number of shares of common stock
held following the reverse stock split.
If a stockholder is entitled to a payment in lieu of any fractional share interest, a check will be mailed to
the stockholder’s registered address as soon as practicable after the Effective Time. By signing and cashing the
check, stockholders will warrant that they owned the shares of common stock for which they received a cash
payment. The cash payment is subject to applicable federal and state income tax and state abandoned property
laws. In addition, stockholders will not be entitled to receive interest for the period of time between the
Effective Time of the reverse stock split and the date payment is received.
Effect on Certificated Shares
Stockholders holding shares of our common stock in certificate form will be sent a transmittal letter by
the transfer agent after the Effective Time. The letter of transmittal will contain instructions on how a
stockholder should surrender his or her certificate(s) representing shares of our common stock (“Old
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