XM Radio 2014 Annual Report Download - page 70

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(ii) In the event that an entity acquired by the Company or any subsidiary or with which the
Company or any subsidiary merges has shares available under a pre-existing plan previously
approved by stockholders and not adopted in contemplation of such acquisition or merger, the
shares available for grant pursuant to the terms of such plan (as adjusted, to the extent
appropriate, to reflect such acquisition or merger) may be used for Awards made after such
acquisition or merger under this Plan; provided,however, that Awards using such available shares
may not be made after the date awards or grants could not have been made under the terms of
the pre-existing plan absent the acquisition or merger, and may only be made to individuals who
were not employees or directors of the Company or any subsidiary prior to such acquisition or
merger. The Awards so granted may reflect the original terms of the awards being assumed or
substituted or converted for and need not comply with other specific terms of this Plan, and may
account for Shares substituted for the securities covered by the original awards and the number of
shares subject to the original awards, as well as any exercise or purchase prices applicable to the
original awards, adjusted to account for differences in stock prices in connection with the
transaction.
(iii) Any Shares that are issued or transferred by, or that are subject to any Awards that are
granted by, or become obligations of, the Company under Sections 4(c)(i) or 4(c)(ii) above will not
reduce the Shares available for issuance or transfer under the Plan or otherwise count against the
limits described in Section 4(a)(i) of the Plan. In addition, no Shares that are issued or transferred
by, or that are subject to any Awards that are granted by, or become obligations of, the Company
under Sections 4(c)(i) or 4(c)(ii) above will be added to the aggregate limit described in Section
4(a)(i) of the Plan.
(d) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award
may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.
SECTION 5. Eligibility. Any employee of, or consultant to, the Company or any of its Affiliates
(including any prospective employee), or non-employee director who is a member of the Board or
the board of directors of an Affiliate, shall be eligible to be selected as a Participant.
SECTION 6. Stock Options.
(a) Grant. Subject to the terms of the Plan, the Committee shall have sole authority to
determine the Participants to whom Options shall be granted, the number of Shares to be covered
by each Option, the exercise price thereof and the conditions and limitations applicable to the
exercise of the Option. The Committee shall have the authority to grant Incentive Stock Options, or
to grant Non-Qualified Stock Options, or to grant both types of Options. In the case of Incentive
Stock Options, the terms and conditions of such grants shall be subject to and comply with such
rules as may be prescribed by Section 422 of the Code, as from time to time amended, and any
regulations implementing such statute. All Options when granted under the Plan are intended to be
Non-Qualified Stock Options, unless the applicable Award Agreement expressly states that the
Option is intended to be an Incentive Stock Option. If an Option is intended to be an Incentive
Stock Option, and if for any reason such Option (or any portion thereof) shall not qualify as an
Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof)
shall be regarded as a Non-Qualified Stock Option appropriately granted under the Plan; provided
that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to
Non-Qualified Stock Options. No Option shall be exercisable more than ten years from the date of
grant.
(b) Exercise Price. The Committee shall establish the exercise price at the time each Option is
granted, which exercise price shall be set forth in the applicable Award Agreement and which
exercise price (except with respect to Substitute Awards) shall not be less than the Fair Market
Value per Share on the date of grant.
(c) Exercise. Each Option shall be exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement.
The Committee may impose such conditions with respect to the exercise of Options, including,
without limitation, any relating to the application of federal or state securities laws, as it may deem
necessary or advisable.
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