XM Radio 2009 Annual Report Download - page 48

The principal effects of the Reverse Stock Split Amendment will be that:
• depending on the ratio for the reverse stock split selected by our board of directors, each two or
twenty-five shares of common stock owned by a stockholder, or any whole number of shares of
common stock between two and twenty-five as determined by the board of directors, will be combined
into one new share of common stock;
• the number of shares of common stock issued and outstanding (including the shares issuable upon
conversion of our preferred stock) will be reduced from approximately 6.5 billion shares to a range of
approximately 3.25 billion shares to 260 million shares, depending upon the reverse stock split ratio
selected by the board of directors;
• the number of authorized shares of common stock will be reduced from 9 billion to a range of
approximately 4.5 billion to 700 million dependent on the reverse stock split ratio chosen by the board
of directors. The table below illustrates the number of authorized shares of common stock that will
correspond to each range of reverse stock split ratios:
Range of Reverse Stock Split Ratios
Total Authorized Shares of Common Stock
after Reverse Stock Split
One-for-two to one-for-nine .......................... 4,500,000,000
One-for-ten to one-for-nineteen ....................... 1,300,000,000
One-for-twenty to one-for-twenty-five................... 700,000,000
• because the number of issued and outstanding shares of common stock will decrease as result of the
reverse stock split, the number of authorized but unissued shares of common stock may increase on a
relative basis. These additional shares of authorized common stock would be available for issuance at
the discretion of our board of directors from time to time for corporate purposes such as raising
additional capital and settling outstanding obligations, acquisitions of companies or assets and sales of
stock or securities convertible into or exercisable for common stock. We believe that the availability of
the additional shares would provide us with additional flexibility to meet business and financing needs
as they arise;
• based upon the reverse stock split ratio selected by our board of directors, proportionate adjustments
will be made to the per share exercise price and/or the number of shares issuable upon the exercise or
conversion of all outstanding options, restricted stock awards, restricted stock units, warrants, convert-
ible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of
common stock, which will result in approximately the same aggregate price being required to be paid
for such options and restricted stock awards and units upon exercise immediately preceding the reverse
stock split; and
• the number of shares reserved for issuance or pursuant to the securities or plans described in the
immediately preceding bullet will be reduced proportionately based upon the reverse stock split ratio
selected by our board of directors.
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