XM Radio 2009 Annual Report Download - page 51

Effect on Registered “Book-Entry” Holders of Common Stock (i.e. stockholders that are registered on
the transfer agent’s books and records but do not hold stock certificates)
Certain of our registered holders of common stock may hold some or all of their shares electronically in
book-entry form with the transfer agent. These stockholders do not have stock certificates evidencing their
ownership of the common stock. They are, however, provided with a statement reflecting the number of shares
registered in their accounts.
If a stockholder holds registered shares in book-entry form with the transfer agent, no action needs to be
taken to receive post-reverse stock split shares or cash payment in lieu of any fractional share interest, if
applicable. If a stockholder is entitled to post-reverse stock split shares, a transaction statement will
automatically be sent to the stockholder’s address of record indicating the number of shares of common stock
held following the reverse stock split.
If a stockholder is entitled to a payment in lieu of any fractional share interest, a check will be mailed to
the stockholder’s registered address as soon as practicable after the Effective Time. By signing and cashing the
check, stockholders will warrant that they owned the shares of common stock for which they received a cash
payment. The cash payment is subject to applicable federal and state income tax and state abandoned property
laws. In addition, stockholders will not be entitled to receive interest for the period of time between the
Effective Time of the reverse stock split and the date payment is received.
Effect on Certificated Shares
Stockholders holding shares of our common stock in certificate form will be sent a transmittal letter by
the transfer agent after the Effective Time. The letter of transmittal will contain instructions on how a
stockholder should surrender his or her certificate(s) representing shares of our common stock (“Old
Certificates”) to the transfer agent in exchange for certificates representing the appropriate number of whole
shares of post-reverse stock split common stock (“New Certificates”). No New Certificates will be issued to a
stockholder until such stockholder has surrendered all Old Certificates, together with a properly completed and
executed letter of transmittal, to the transfer agent. No stockholder will be required to pay a transfer or other
fee to exchange his, her or its Old Certificates.
Stockholders will then receive a New Certificate(s) representing the number of whole shares of common
stock to which they are entitled as a result of the reverse stock split. Until surrendered, we will deem
outstanding Old Certificates held by stockholders to be cancelled and only to represent the number of whole
shares of post-reverse stock split common stock to which these stockholders are entitled.
Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of
stock, will automatically be exchanged for New Certificates. If an Old Certificate has a restrictive legend on
the back of the Old Certificate(s), the New Certificate will be issued with the same restrictive legends that are
on the back of the Old Certificate(s).
If a stockholder is entitled to a payment in lieu of any fractional share interest, such payment will be
made as described above under “Fractional Shares”.
Stockholders should not destroy any stock certificate(s) and should not submit any stock certificate(s)
until requested to do so.
Accounting Matters
The reverse stock split will not affect the par value of a share of our common stock. As a result, as of the
Effective Time of the reverse stock split, the stated capital attributable to common stock on our balance sheet
will be reduced proportionately based on the reverse stock split ratio (including a retroactive adjustment of
prior periods), and the additional paid-in capital account will be credited with the amount by which the stated
capital is reduced. Reported per share net income or loss will be higher because there will be fewer shares of
common stock outstanding.
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