XM Radio 2009 Annual Report Download - page 187

Rights Plan
In April 2009, our board of directors adopted a rights plan. The terms of the rights and the rights plan are set
forth in a Rights Agreement dated as of April 29, 2009 (the “Rights Plan”). The Rights Plan is intended to act as a
deterrent to any person or group acquiring 4.9% or more of our outstanding common stock (assuming for purposes
of this calculation that all of our outstanding convertible preferred stock is converted into common stock) without
the approval of our board of directors.
The Rights Plan will continue in effect until August 1, 2011, unless it is terminated or redeemed earlier by our
board of directors. We plan to submit the Rights Plan to a stockholder vote prior to June 30, 2010, and the failure to
obtain this approval will result in a termination of the Rights Plan.
(13) Benefits Plans
We maintain four share-based benefits plans. We satisfy awards and options granted under these plans through
the issuance of new shares. We recognized share-based payment expense of $73,981, $87,405 and $78,900 for the
years ended December 31, 2009, 2008 and 2007, respectively. For a summarized schedule of share-based payment
expense, see the appended footnote to our consolidated statements of operations. We did not realize any income tax
benefits from share-based benefits plans during the years ended December 31, 2009, 2008 and 2007, as a result of a
full valuation allowance that is maintained for substantially all net deferred tax assets.
2009 Long-Term Stock Incentive Plan
In May 2009, our stockholders approved the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (the
“2009 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under
the 2009 Plan. The 2009 Plan provides for the grant of stock options, restricted stock, restricted stock units and other
stock-based awards that the compensation committee of our board of directors may deem appropriate. Vesting and
other terms of stock-based awards are set forth in the agreements with the individuals receiving the awards. Stock-
based awards granted under the 2009 Plan are generally subject to a vesting requirement. Stock-based awards
generally expire ten years from the date of grant. Each restricted stock unit entitles the holder to receive one share of
common stock upon vesting. As of December 31, 2009, approximately 274,425,000 shares of common stock were
available for future grant under the 2009 Plan.
Other Plans
SIRIUS and XM Holdings maintain four other share-based benefit plans — the XM Holdings 2007 Stock
Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM
Holdings 1998 Shares Award Plan and the XM Holdings Talent Option Plan. These plans generally provide for the
grant of stock options, restricted stock, restricted stock units and other stock based awards. No further awards may
be made under these plans. Outstanding awards under these plans will be continued.
The following table summarizes the weighted-average assumptions used to compute reported share-based
payment expense to employees and members of our board of directors for the years ended December 31, 2009, 2008
and 2007:
2009 2008 2007
For the Years Ended
December 31,
Risk-free interest rate . . . ..................................... 2.5% 2.3% 4.8%
Expected life of options — years ................................ 4.68 4.89 4.45
Expected stock price volatility ................................. 88% 80% 60%
Expected dividend yield . ..................................... $ — $ — $ —
F-33
SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)