XM Radio 2008 Annual Report Download - page 180

terms and conditions of any such Other Stock-Based Award, including the price, if any, at which securities
may be purchased pursuant to any Other Stock-Based Award granted under this Plan.
(b) Dividend Equivalents. In the sole discretion of the Committee, an Award (other than Options or
Stock Appreciation Rights), whether made as an Other Stock-Based Award under this Section 10 or as an
Award granted pursuant to Sections 6 through 9 hereof, may provide the Participant with dividends or dividend
equivalents, payable in cash, Shares, other securities or other property on a current or deferred basis; provided,
that in the case of Awards with respect to which any applicable Performance Criteria have not been achieved,
dividend equivalents may be paid only on a deferred basis, to the extent the underlying Award vests.
SECTION 11. Performance Compensation Awards.
(a) General. The Committee shall have the authority, at the time of grant of any Award described in
Sections 6 through 10 (other than Options and Stock Appreciation Rights), to designate such Award as a
Performance Compensation Award in order to qualify such Award as “performance-based compensation” under
Section 162(m) of the Code.
(b) Eligibility. The Committee will, in its sole discretion, designate within the first 90 days of a
Performance Period (or, if longer, within the maximum period allowed under Section 162(m) of the Code)
which Participants will be eligible to receive Performance Compensation Awards in respect of such
Performance Period. Designation of a Participant eligible to receive an Award hereunder for a Performance
Period shall not in any manner entitle the Participant to receive payment in respect of any Performance
Compensation Award for such Performance Period. The determination as to whether or not such Participant
becomes entitled to payment in respect of any Performance Compensation Award shall be decided solely in
accordance with the provisions of this Section 11. Moreover, designation of a Participant eligible to receive an
Award hereunder for a particular Performance Period shall not require designation of such Participant eligible
to receive an Award hereunder in any subsequent Performance Period and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation of any other person as a
Participant eligible to receive an Award hereunder in such period or in any other period.
(c) Discretion of Committee with Respect to Performance Compensation Awards. With regard to a
particular Performance Period, the Committee shall have full discretion to select the length of such
Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria
that will be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance Goals(s)
is/are to apply to the Company and the Performance Formula. Within the first 90 days of a Performance
Period (or, if longer, within the maximum period allowed under Section 162(m) of the Code), the Committee
shall, with regard to the Performance Compensation Awards to be issued for such Performance Period,
exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence of
this Section 11(c) and record the same in writing.
(d) Payment of Performance Compensation Awards. (i) Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company on the last day of a Performance Period
to be eligible for payment in respect of a Performance Compensation Award for such Performance Period.
(ii) Limitation. A Participant shall be eligible to receive payment in respect of a Performance Compen-
sation Award only to the extent that: (1) the Performance Goals for such period are achieved; and (2) the
Performance Formula as applied against such Performance Goals determines that all or some portion of such
Participant’s Performance Award has been earned for the Performance Period.
(iii) Certification. Following the completion of a Performance Period, the Committee shall meet to
review and certify in writing whether, and to what extent, the Performance Goals for the Performance Period
have been achieved and, if so, to calculate and certify in writing that amount of the Performance Compensa-
tion Awards earned for the period based upon the Performance Formula. The Committee shall then determine
the actual size of each Participant’s Performance Compensation Award for the Performance Period and, in so
doing, may apply Negative Discretion, if and when it deems appropriate.
C-8