XM Radio 2012 Annual Report Download - page 115

SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
consolidated operating cash flow after the incurrence of the indebtedness, (ii) incur liens, (iii) pay dividends or
make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with
affiliates, (v) merge or consolidate with another person, (vi) sell, assign, lease or otherwise dispose of all or
substantially all of our assets, and (vii) make voluntary prepayments of certain debt, in each case subject to
exceptions. We also must comply with a maintenance covenant that we not exceed a total leverage ratio,
calculated as total consolidated debt to consolidated operating cash flow, of 5.0 to 1.0.
Under our debt agreements, the following generally constitute an event of default: (i) a default in the
payment of interest; (ii) a default in the payment of principal; (iii) failure to comply with covenants; (iv) failure
to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount;
(v) certain events of bankruptcy; (vi) a judgment for payment of money exceeding a specified aggregate amount;
and (vii) voidance of subsidiary guarantees, subject to grace periods where applicable. If an event of default
occurs and is continuing, our debt could become immediately due and payable.
At December 31, 2012 and 2011, we were in compliance with our debt covenants.
(13) Stockholders’ Equity
Common Stock, par value $0.001 per share
We were authorized to issue up to 9,000,000,000 shares of common stock as of December 31, 2012 and
2011. There were 5,262,440,085 and 3,753,201,929 shares of common stock issued and outstanding as of
December 31, 2012 and 2011, respectively.
As of December 31, 2012, approximately 1,885,629,000 shares of common stock were reserved for issuance
in connection with outstanding convertible debt, preferred stock, warrants, incentive stock awards and common
stock to be granted to third parties upon satisfaction of performance targets.
Special Dividend Declared, $0.05 per share
On December 5, 2012, we declared a special cash dividend of $0.05 per share on our outstanding common
stock and preferred stock, on an as-converted basis, to stockholders of record as of the close of business on
December 18, 2012. The dividend was paid in cash on December 28, 2012 in the amount of $327,062.
Stock Repurchase Program
In December 2012, we announced that our board of directors approved a $2,000,000 common stock
repurchase program. Shares of common stock may be purchased from time to time on the open market or in
privately negotiated transactions. As of December 31, 2012, we have not repurchased any shares.
Share Lending Arrangements
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”) in July 2008, under which we
loaned MS and UBS an aggregate of 262,400,000 shares of our common stock in exchange for a fee of $0.001
per share. During the third quarter of 2009, MS returned to us 60,000,000 shares of our common stock borrowed.
In October 2011, MS and UBS returned the remaining 202,400,000 shares loaned. The returned shares were
retired upon receipt and removed from outstanding common stock. The share lending agreements have been
terminated. Under GAAP, the borrowed shares were not considered outstanding for the purpose of computing
and reporting our net income per common share.
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