XM Radio 2009 Annual Report Download - page 185

At December 31, 2009, we were in compliance with all financial covenants.
(12) Stockholders’ Equity
Common Stock, par value $0.001 per share
We were authorized to issue up to 9,000,000,000 and 8,000,000,000 shares of common stock as of
December 31, 2009 and 2008, respectively. There were 3,882,659,087 and 3,651,765,837 shares of common
stock issued and outstanding as of December 31, 2009 and 2008, respectively.
As of December 31, 2009, approximately 3,659,320,000 shares of common stock were reserved for issuance in
connection with outstanding convertible debt, preferred stock, warrants, incentive stock plans and common stock to
be granted to third parties upon satisfaction of performance targets. During the year ended December 31, 2009,
employees did not exercise any stock options.
To facilitate the offering of the Exchangeable Notes, we entered into share lending agreements with Morgan
Stanley Capital Services Inc. (“MS”) and UBS AG London Branch (“UBS”) under which we loaned MS and UBS
an aggregate of approximately 263,000,000 shares of our common stock in exchange for a fee of $.001 per share.
The obligations of MS to us under its share lending agreement are guaranteed by its parent company, Morgan
Stanley.
During the third quarter of 2009, Morgan Stanley Capital Services Inc. returned to us 60,000,000 shares of our
common stock borrowed in July 2008 to facilitate the offering of the Exchangeable Notes. The returned shares were
retired upon receipt.
The shares we loaned to the share borrowers are issued and outstanding for corporate law purposes, and holders
of borrowed shares (other than the share borrowers) have the same rights under those shares as holders of any of our
other outstanding common shares. Under GAAP as currently in effect, however, the borrowed shares are not
considered outstanding for the purpose of computing and reporting our net loss per common share. The accounting
method may change if, due to a default by either UBS or MS (or Morgan Stanley, as guarantor), the borrowed shares,
or the equivalent value of those shares, will not be returned to us as required under the share lending agreements.
In January 2004, SIRIUS signed a seven-year agreement with a sports programming provider. Upon execution
of this agreement, SIRIUS delivered 15,173,070 shares of common stock valued at $40,967 to that programming
provider. These shares of common stock are subject to transfer restrictions which lapse over time. We recognized
expense associated with these shares of $5,852 in each of the years ended December 31, 2009, 2008 and 2007,
respectively. As of December 31, 2009, there was a $7,420 remaining balance of common stock value included in
Other current assets and Other long-term assets in the amount of $5,852 and $1,568, respectively. As of
December 31, 2008, there was a $13,272 remaining balance of common stock value included in Other current
assets and Other long-term assets in the amount of $5,852 and $7,420, respectively.
Preferred Stock, par value $0.001 per share
We were authorized to issue up to 50,000,000 shares of undesignated preferred stock as of December 31, 2009.
There were 24,808,959 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) issued and
outstanding as of December 31, 2009 and 2008. There were 12,500,000 shares of Convertible Perpetual Preferred
Stock, Series B (the “Series B Preferred Stock”), issued and outstanding as of December 31, 2009. There were no
shares of Preferred Stock, Series C Junior (the “Series C Junior Preferred Stock”), issued and outstanding at
December 31, 2009.
The Series A Preferred Stock is redeemable at the option of the holder at any time for an equal number of
shares of our common stock.
F-31
SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)