XM Radio 2008 Annual Report Download - page 151

• Because the number of issued and outstanding shares of common stock would decrease as result of the
reverse stock split, the number of authorized but unissued shares of common stock would increase on a
relative basis. If we issue additional shares of common stock, the ownership interest of our current
stockholders would be diluted, possibly substantially.
• The proportion of unissued authorized shares to issued shares could, under certain circumstances, have
an anti-takeover effect. For example, the issuance of a large block of common stock could dilute the
stock ownership of a person seeking to effect a change in the composition of the board of directors or
contemplating a tender offer or other transaction for the combination of the company with another
company.
• The reverse stock split may result in some stockholders owning “odd lots” of less than 100 shares of
common stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other
costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round
lots” of even multiples of 100 shares.
Our board of directors intends to effect the reverse stock split only if it believes that a decrease in the
number of shares is likely to improve the trading price of our common stock and if the implementation of the
reverse stock split is determined by the board of directors to be in the best interests of the company and its
stockholders.
Effective Time
The proposed reverse stock 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, on 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. We expect to file the Share Increase
Amendment authorized by Item 2 with the Secretary of State of the State of Delaware promptly upon approval
by our stockholders and in any event prior to effecting any stock split and share decrease authorized by this
Item 3. Approval by stockholders of this Item 3 is not conditioned upon approval of Item 2; conversely,
approval by stockholders of Item 2 is not conditioned upon approval of this Item 3.
After the Effective Time, our common stock will each have new committee on uniform securities
identification procedures (“CUSIP”) numbers, which is a number used to identify our equity securities, and
stock certificates with the older CUSIP numbers will need to be exchanged for stock certificates with the new
CUSIP numbers by following the procedures described below.
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
director’s 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.
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