XM Radio 2014 Annual Report Download - page 66

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Market for such date (or if not then trading on the NASDAQ Stock Market, the closing sale price of
the Shares on the stock exchange or over-the-counter market on which the Shares are principally
trading on such date), or, if there were no sales on such date, on the closest preceding date on
which there were sales of Shares; or (2) in the event there shall be no public market for the Shares
on such date, the fair market value of the Shares as determined in good faith by the Committee.
“Good Reason” as a reason for a Participant’s termination of employment or service shall have
the meaning assigned such term in the employment, severance or similar agreement, if any,
between the Participant and the Company or an Affiliate. If the Participant is not a party to an
employment, severance or similar agreement with the Company or an Affiliate in which such term is
defined, then, unless otherwise defined in the applicable Award Agreement, for purposes of this
Plan, the Participant shall not be entitled to terminate his or her employment or service for Good
Reason.
“Incentive Stock Option” shall mean a right to purchase Shares from the Company that is
granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto. Incentive Stock Options may be granted only to
Participants who meet the definition of “employees” under Section 3401(c) of the Code.
“Negative Discretion” shall mean the discretion authorized by the Plan to be applied by the
Committee to eliminate or reduce the size of a Performance Compensation Award; provided, that
the exercise of such discretion would not cause the Performance Compensation Award to fail to
qualify as “performance-based compensation” under Section 162(m) of the Code. By way of
example and not by way of limitation, in no event shall any discretionary authority granted to the
Committee by the Plan including, but not limited to, Negative Discretion, be used to: (a) grant or
provide payment in respect of Performance Compensation Awards for a Performance Period if the
Performance Goals for such Performance Period have not been attained; or (b) increase a
Performance Compensation Award above the maximum amount payable under Section 4(a) or
11(d)(vi) of the Plan. In no event shall Negative Discretion be exercised by the Committee with
respect to any Option or Stock Appreciation Right (other than an Option or Stock Appreciation Right
that is intended to be a Performance Compensation Award under Section 11 of the Plan).
“Non-Qualified Stock Option” shall mean a right to purchase Shares from the Company that is
granted under Section 6 of the Plan and that is not intended to be an Incentive Stock Option or
does not meet the requirements of Section 422 of the Code or any successor provision thereto.
“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
“Other Stock-Based Award” shall mean any right granted under Section 10 of the Plan.
“Participant” shall mean any employee of, or consultant to, the Company or its Affiliates, or
non-employee director who is a member of the Board or the board of directors of an Affiliate,
eligible for an Award under Section 5 and selected by the Committee, or its designee, to receive an
Award under the Plan.
“Performance Award” shall mean any right granted under Section 9 of the Plan.
“Performance Compensation Award” shall mean any Award designated by the Committee as a
Performance Compensation Award pursuant to Section 11 of the Plan.
“Performance Criteria” shall mean the measurable criterion or criteria that the Committee shall
select for purposes of establishing the Performance Goal(s) for a Performance Period with respect
to any performance-based Awards under the Plan, including Performance Compensation Awards.
Performance Criteria may be described in terms of Company-wide objectives or objectives that are
related to the performance of the individual Participant or of one or more of the subsidiaries,
divisions, departments, regions, functions or other organizational units within the Company or its
Affiliates. The Performance Criteria may be made relative to the performance of other companies or
subsidiaries, divisions, departments, regions, functions or other organizational units within such
other companies, and may be made relative to an index or one or more of the performance criteria
themselves. The Committee may grant performance-based Awards subject to Performance Criteria
that are either Performance Compensation Awards or are not Performance Compensation Awards.
The Performance Criteria that will be used to establish the Performance Goal(s) for Performance
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