XM Radio 1999 Annual Report Download - page 44

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42 XM RADiO
information relating to the Plan for the year ended December 31, 1998 and 1999 are summarized below:
Outstanding Options
Weighted-
Average
Number of Exercise
Shares Price
Balance, January 1, 1998 ............................................. — —
Options granted.................................................... 787,297 $ 16.35
Options canceled or expired.................................. — —
Options exercised................................................. — —
Balance, December 31, 1998 ........................................ 787,297 $ 16.35
Options granted.................................................... 2,188,988 10.50
Option repricing.................................................... 818,339 16.35
Options canceled or expired.................................. 57,786 13.91
Options exercised................................................. 1,071 9.52
Balance, December 31, 1999 ........................................ 2,099,089 $ 10.32
The following table summarizes information about stock options outstanding at December 31, 1998 and 1999:
Options Outstanding Options Exercisable
Weighted
Average Weighted- Weighted-
Remaining Average Average
Number Contractual Exercise Number Exercise
Exercise Price Outstanding Life Price Exercisable Price
1998 ......... $16.35 787,297 9.5 years $ 16.35 — $ 16.35
1999 ......... $9.52-$12.00 2,099,089 9.24 years $ 10.32 416,294 $ 9.52
There were no and 416,294 stock options exercisable at December 31, 1998 and 1999, respectively. There
were 575,540 shares available under the plan for future grants at December 31, 1999. At December 31, 1999,
all options have been issued to employees, officers and directors.
The per share weighted-average fair value of employee options granted during the year ended December 31,
1998 and 1999 was $10.54 and $6.21, respectively, on the date of grant using the Black-Scholes Option
Pricing Model with the following weighted-average assumptions:
December 31,
1998 1999
Expected dividend yield ........................................ 0% 0%
Volatility ............................................................... 56.23% 63.92%
Risk-free interest rate range .................................. 4.53% to 5.57% 5.47% to 5.97%
Expected life........................................................ 7.5 years 5 years
Employee Stock Purchase Plan
In 1999, the Company established an employee stock purchase plan that provides for the issuance of 300,000
shares of Class A common stock. All employees whose customary employment is more than 20 hours per week
and for more than five months in any calendar year are eligible to participate in the stock purchase plan,
provided that any employee who would own five percent or more of the Company’s total combined voting power
immediately after an offering date under the plan is not eligible to participate. Eligible employees must authorize
the Company to deduct an amount from their pay during offering periods established by the compensation
committee. The purchase price for shares under the plan will be determined by the compensation committee but
may not be less than 85 percent of the lesser of the market price of the common stock on the first or last
business day of each offering period. As of December 31, 1999, 28,791 shares had been issued by the
Company under this plan.