XM Radio 2008 Annual Report Download - page 155

Required Vote and Recommendation
The affirmative vote of the holders of a majority of the voting power of our common stock, our Series A
Convertible Preferred Stock and our Series B-1 Preferred Stock, voting together as a single class, and of
holders of a majority of the voting power of our common stock, voting as a separate class, will be required to
approve the Reverse Stock Split Amendment. Approval by stockholders of this Item 3 is not conditioned upon
approval of Item 2; conversely, approval by stockholders of Item 2 is not conditioned upon approval of this
Item 3.
The board of directors unanimously recommends a vote “FOR” the proposal to amend our
certificate of incorporation to effect a reverse stock split at a ratio of not less than one-for-ten and not
more than one-for-fifty any time prior to June 30, 2010, with the exact ratio to be determined by our
board of directors and to reduce the number of authorized shares as set forth in Item 3 above.
Item 4 — Approval of the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan
Our board of directors has adopted the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan
(referred to herein as the “Plan”), subject to the approval of our stockholders. If the Plan is approved by our
stockholders, no future equity awards will be made pursuant to the Amended and Restated Sirius Satellite
Radio 2003 Long-Term Incentive Plan, the XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan and
the XM Satellite Radio Holdings Inc. Talent Option Plan (collectively, the “Predecessor Plans”). The Plan, if
approved, will expire in 2019.
Summary of the Plan
Set forth below is a summary of the principal features of the Plan. This summary is qualified in its
entirety by reference to the terms of the Plan, a copy of which is included in this proxy statement as
Appendix C.
Purpose
The Plan authorizes our board of directors, or a committee designated by our board of directors and made
up of two or more non-employee directors, to provide equity-based compensation for the purpose of attracting
and retaining directors, employees and consultants and providing our directors, employees and consultants
incentives and rewards for superior performance.
The Plan is designed to comply with the requirements of applicable federal and state securities laws, and
the Internal Revenue Code of 1986, as amended (the “Code”), including the performance-based exclusion from
the deduction limitations under Section 162(m) of the Code.
The Plan permits the granting of (i) stock options, including incentive stock options (“ISOs”) entitling the
optionee to favorable tax treatment under Section 422 of the Code, (ii) stock appreciation rights (“SARs”),
(iii) restricted stock, (iv) restricted stock units (“RSUs”), (iv) performance awards, and (v) other awards valued
in whole or in part by reference to or otherwise based on our common stock (“Other Stock-Based Awards”).
Each type of award is described below under “Types of Awards Under the Plan.” Each of the awards will be
evidenced by an award document setting forth the terms and conditions.
Shares Subject to the Plan
Our board of directors has authorized the issuance of 600 million shares of our common stock (less than
10% of the total shares of our common stock outstanding, calculated on a fully-diluted basis) in connection
with awards pursuant to the Plan. No more than 120 million of those shares are available for the exercise of
ISOs. The number of shares with respect to options and SARs that may be granted under the Plan to any
individual participant in any single fiscal year during the term of the Plan may not exceed 120 million shares,
and the maximum number of shares that may be paid to any individual participant in connection with awards
intended to qualify as “performance-based compensation” under Section 162(m) of the Code in respect of a
single performance period may not exceed 120 million.
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