XM Radio 2011 Annual Report Download - page 117

SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In January 2004, Sirius signed a seven-year agreement with a sports programming provider which expired in
February 2011. Upon execution of this agreement, Sirius delivered 15,173,070 shares of common stock valued at
$40,967 to that programming provider. These shares of common stock were subject to transfer restrictions which
lapsed over time. We recognized share-based payment expense associated with these shares of $1,568, $5,852,
and $5,852 in the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011 and
December 31, 2010, there was $0 and $1,568 remaining balance of common stock value included in other current
assets, respectively.
Preferred Stock, par value $0.001 per share
We were authorized to issue up to 50,000,000 shares of undesignated preferred stock as of December 31,
2011 and 2010.
There were no shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) issued and
outstanding as of December 31, 2011 and December 31, 2010.
There were 12,500,000 shares of Series B Preferred Stock issued and outstanding as of December 31, 2011
and 2010. The Series B Preferred Stock is convertible into shares of our common stock at the rate of
206.9581409 shares of common stock for each share of Series B Preferred Stock, representing approximately
40% of our outstanding shares of common stock (after giving effect to such conversion). As the holder of the
Series B Preferred Stock, Liberty Radio LLC is entitled to a number of votes equal to the number of shares of our
common stock into which such shares of Series B Preferred Stock are convertible. Liberty Radio LLC will also
receive dividends and distributions ratably with our common stock, on an as-converted basis. With respect to
dividend rights, the Series B Preferred Stock ranks evenly with our common stock and each other class or series
of our equity securities not expressly provided as ranking senior to the Series B Preferred Stock. With respect to
liquidation rights, the Series B Preferred Stock ranks evenly with each other class or series of our equity
securities not expressly provided as ranking senior to the Series B Preferred Stock, and will rank senior to our
common stock. In 2009, we accounted for the issuance of Series B Preferred Stock by recording a $227,716
increase to additional paid-in-capital for the amount of the allocated proceeds received and an additional
$186,188 increase to paid-in-capital for the beneficial conversion feature, which was recognized as a charge to
retained earnings.
There were no shares of Preferred Stock, Series C Junior (the “Series C Junior Preferred Stock”), issued and
outstanding as of December 31, 2011 and 2010. In 2009, our board of directors created and reserved for issuance
in accordance with the Rights Plan (as described below) 9,000 shares of the Series C Junior Preferred Stock. The
shares of Series C Junior Preferred Stock are not redeemable and rank, with respect to the payment of dividends
and the distribution of assets, junior to all other series of our preferred stock, unless the terms of such series shall
so provide. The Rights Plan expired on August 1, 2011.
Warrants
We have issued warrants to purchase shares of common stock in connection with distribution, programming
and satellite purchase agreements and certain debt issuances. As of December 31, 2011 and 2010 approximately
22,506,000 and 42,421,000 warrants to acquire an equal number of shares of common stock were outstanding
and fully vested. These warrants expire at various times through 2015. At December 31, 2011 and 2010, the
weighted average exercise price of outstanding warrants was $2.63 and $2.66 per share, respectively. During the
year ended December 31, 2011, 3,415,000 warrants expired. We incurred warrant related expense of $2,522 for
the year ended December 31, 2009. We did not incur warrant related expenses in 2011 or 2010.
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