XM Radio 2009 Annual Report Download - page 50

Effective Time
If our board of directors approves the reverse stock split, the split would become effective as of
11:59 p.m., Eastern Time, (the “Effective Time”) on the date of filing the Reverse Stock Split Amendment
with the office of the Secretary of State of the State of Delaware. Except as explained below with respect to
fractional shares, at the Effective Time, shares of our common stock issued and outstanding immediately prior
thereto will be combined, automatically and without any action on the part of the stockholders, into one share
of our common stock in accordance with the reverse stock split ratio determined by our board of directors.
After the Effective Time, we will continue to be subject to periodic reporting and other requirements of
the Exchange Act. Our common stock will continue to be listed on The NASDAQ Global Select Market under
the symbol “SIRI”, although NASDAQ will add the letter “D” to the end of the trading symbol for a period of
20 trading days after the Effective Date to indicate that the reverse stock split has occurred.
Board Discretion to Implement the Reverse Stock Split Amendment
If the reverse stock split is approved by our stockholders, it will be effected, if at all, only upon a
determination by our board of directors that a reverse stock split (at a ratio determined by the board of
directors as described above) is in the best interests of the company and the stockholders. The board of
directors’ determination as to whether the reverse stock split will be effected and, if so, at what ratio, will be
based upon certain factors, including existing and expected marketability and liquidity of our common stock,
prevailing market conditions and the likely effect on the market price of our common stock. If our board of
directors determines to effect the reverse stock split, the board of directors will consider various factors in
selecting the ratio including the overall market conditions at the time and the recent trading history of the
common stock.
Fractional Shares
Stockholders will not receive fractional post-reverse stock split shares in connection with the reverse
stock split. Instead, our transfer agent for the registered stockholders will aggregate all fractional shares and
arrange for them to be sold as soon as practicable after the Effective Time at the then prevailing prices on the
open market on behalf of those stockholders who would otherwise be entitled to receive a fractional share. We
expect that the transfer agent will cause the sale to be conducted in an orderly fashion at a reasonable pace
and that it may take several days to sell all of the aggregated fractional shares of common stock. After
completing the sale, stockholders will receive a cash payment from the transfer agent in an amount equal to
the stockholder’s pro rata share of the total net proceeds of these sales. No transaction costs will be assessed
on the sale. However, the proceeds will be subject to certain taxes as discussed below. In addition, stockholders
will not be entitled to receive interest for the period of time between the Effective Time and the date a
stockholder receives payment for the cashed-out shares. The payment amount will be paid to the stockholder
in the form of a check in accordance with the procedures outlined below.
After the reverse stock split, a stockholder will have no further interest in the company with respect to
their cashed-out fractional shares. A person otherwise entitled to a fractional interest will not have any voting,
dividend or other rights except to receive payment as described above.
Effect on Beneficial Holders of Common Stock (i.e., stockholders who hold in “street name”)
Upon the reverse stock split, we intend to treat shares held by stockholders in “street name,” through a
bank, broker or other nominee, in the same manner as registered stockholders whose shares are registered in
their names. Banks, brokers or other nominees will be instructed to effect the reverse stock split for their
beneficial holders holding our common stock in “street name”. However, these banks, brokers or other
nominees may have different procedures than registered stockholders for processing the reverse stock split and
making payment for fractional shares. If a stockholder holds shares of our common stock with a bank, broker
or other nominee and has any questions in this regard, stockholders are encouraged to contact their bank,
broker or other nominee.
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