XM Radio 2009 Annual Report Download - page 102

Exercisability. The rights will not be exercisable until the close of business on the tenth business day
after a public announcement by us that a person or group has become an Acquiring Person.
We refer to the date that the rights become exercisable as the “Distribution Date.” Until the Distribution
Date, our common stock certificates will evidence the rights and will contain a notation to that effect. Any
transfer of shares of common stock prior to the Distribution Date will constitute a transfer of the associated
rights. After the Distribution Date, the rights may be transferred on the books and records of the Rights Agent
as provided in the Rights Plan.
After the Distribution Date, each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become null and void), will thereafter have the right to receive upon exercise of
a Right and payment of the Purchase Price, that number of shares of common stock having a market value of
two times the Purchase Price.
Exchange. On or after the Distribution Date, the Company, (i) will, if on such date the voting rights set
forth in Section 12 of the Certificate of Designations for our Convertible Perpetual Preferred Stock, Series B-1,
are still in effect, and (ii) at any time thereafter, may, at the option of the Board, exchange the Rights (other
than Rights owned by such person or group which will have become void), in whole or in part, at an exchange
ratio of one share of our common stock per right (subject to adjustment).
Expiration. The rights and the Rights Plan will expire on the earliest of (i) August 1, 2011, (ii) the time
at which the Rights are redeemed pursuant to the Rights Plan, (iii) the time at which the Rights are exchanged
pursuant to the Rights Plan, (iv) the repeal of Section 382 of the Code or any successor statute if the Board
determines that the Rights Plan is no longer necessary for the preservation of Tax Benefits, (v) the beginning
of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward
and (vi) June 30, 2010 if Stockholder Approval has not been obtained.
Redemption. At any time prior to the Distribution Date, the Board may redeem the Rights in whole, but
not in part, at a price of $0.00001 per Right, subject to adjustment to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (the “Redemption Price”). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption Price.
Anti-Dilution Provisions. Our Board may make certain adjustments to prevent dilution that may occur
as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the
preferred shares or our common stock. Such adjustments may include adjustments to the purchase price of the
preferred shares under the Rights, the number of preferred shares issuable pursuant to each Right and the
number of outstanding Rights, in each case as provided in the Rights Plan. Generally, no adjustments to the
purchase price of less than 1% will be made.
Amendments. Before the Distribution Date, our Board may amend or supplement the Rights Plan
without the consent of the holders of the Rights. After the Distribution Date, our Board may amend or
supplement the Rights Plan only to cure an ambiguity, to alter time period provisions, to correct inconsistent
provisions, or to make any additional changes to the Rights Plan, but only to the extent that those changes do
not impair or adversely affect any rights holder and do not result in the rights again becoming redeemable,
and no such amendment may cause the Rights again to become redeemable or cause this Rights Plan again to
become amendable other than in accordance with this sentence.
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