<PAGE>
As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-_____
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
XM SATELLITE RADIO HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
54 1878819
(IRS employer identification number)
1250 23rd Street, N.W., Suite 57
Washington, D.C. 20037-1100
(202) 969-7100
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
________________________
XM Satellite Radio Holdings Inc. 1998 Shares Award Plan
XM Satellite Radio Holdings Inc. Employee Stock Purchase Plan
(Full Title of the Plans)
________________________
Joseph M. Titlebaum, Esq.
Senior Vice President, General Counsel and Secretary
XM Satellite Radio Holdings Inc.
1250 23rd Street, N.W., Suite 57
Washington, D.C. 20037-1100
(202) 969-7100
(Name, address and telephone number of Agent for Service)
Copy to:
David B. H. Martin, Jr.
Steven M. Kaufman
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of securities to be Offering Price Aggregate Offering Registration
to be registered Registered(1) per Share (2) Price (1)(2) Fee (1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A common stock, par value $.01
per share 2,975,700 $26.60 $79,153,620 $20,897
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Registrant is registering 2,675,700 and 300,000 shares of its Class A
common stock, par value $.01 per share ("Common Stock"), respectively, for
issuance pursuant to its 1998 Shares Award Plan and Employee Stock Purchase
Plan, respectively.
(2) Estimated pursuant to Rule 457(c) and (h) solely for purposes of
calculating the amount of registration fee, based on the average of the high and
low prices per share of the Common Stock on December 2, 1999 as reported on the
Nasdaq National Market.
==============================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
XM Satellite Radio Holdings Inc. (the "Company" or the "Registrant")
will deliver to each employee or other individual selected or eligible to
participate in the 1998 Shares Award Plan and Employee Stock Purchase Plan (the
"Plans") the documents containing the information required by Part I of Form S-8
to be included in this registration statement. In accordance with Rule 428(b)(1)
under the Securities Act of 1933, as amended (the "Securities Act"), and the
instructions to Part I of Form S-8, these documents will not be filed with the
Securities and Exchange Commission (the "Commission") as part of any prospectus
or prospectus supplement. The Company is filing copies of the 1998 Shares Award
Plan and Employee Stock Purchase Plan as exhibits to this registration
statement.
Item 2. Registrant Information and Employee Plan Annual Information.
If participants in the Plans call or write to Joseph M. Titlebaum,
Senior Vice President, General Counsel and Secretary, XM Satellite Radio
Holdings Inc., 1250 23rd Street, N.W., Suite 57, Washington, D. C. 20037-1100
(202) 969-7100, the Company will provide them with copies of the documents
incorporated by reference in Item 3 of Part II of this registration statement
and other documents required to be delivered to participants in the Plans
pursuant to Rule 428(b) under the Securities Act, without charge. The documents
incorporated by reference in Item 3 of Part II of this registration statement
are incorporated by reference in the Section 10(a) prospectuses for each of the
respective Plans.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this registration
statement the following documents filed by it with the Commission:
(a) The Registrant's prospectus, dated October 5, 1999, filed with
the Commission on October 5, 1999 pursuant to Securities Act Rule
424(b);
(b) All other reports filed with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") since December 31, 1998; and
(c) The description of the Registrant's Common Stock, contained in
the Registrant's registration statement on Form 8-A filed with
the Commission on September 23, 1999.
In addition, all documents and reports filed by the Company subsequent
to the date hereof pursuant to Sections 13(a), 13(c), 14, and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which reregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be part hereof from the date of filing of such
documents or reports. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other
2
<PAGE>
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
Item 4. Description of Securities.
The Company's Common Stock is registered with the Commission under
Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of Delaware General Corporation Law permits
indemnification of officers and directors of the Registrant under certain
conditions and subject to certain limitations. Section 145 of Delaware General
Corporation Law also provides that a corporation has the power to purchase and
maintain insurance on behalf of its officers and directors against any liability
asserted against such person and incurred by him or her in such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability under the
provisions of Section 145 of Delaware General Corporation Law.
The Restated Certificate of Incorporation and Restated Bylaws of the
Registrant provide that the Registrant shall indemnify its directors and
officers and any such directors and officers serving at the Registrant's request
as a director, officer, employee or agent of another entity to the fullest
extent not prohibited by the Delaware General Corporation Law. The Restated
Bylaws also provide that the Registrant may, but shall not be obligated to,
maintain insurance, at the Registrant's expense, for the benefit of the
Registrant and of any person to be indemnified. In addition, the Registrant has
entered or will enter into indemnification agreements with its directors and
officers that provide for indemnification in addition to the indemnification
provided in its Restated Bylaws. The indemnification agreements contain
provisions that may require the Registrant, among other things, to indemnify its
directors and executive officers against certain liabilities (other than
liabilities arising from intentional or knowing and culpable violations of law)
that may arise by reason of their status or service as directors or executive
officers of the Registrant or other entities to which they provide service at
the request of the Registrant and to advance expenses they may incur as a result
of any proceeding against them as to which they could be indemnified. The
Registrant has obtained an insurance policy covering directors and officers for
claims that such directors and officers may otherwise be required to pay or for
which the Registrant is required to indemnify them, subject to certain
exclusions.
As permitted by Section 102(b)(7) of the Delaware General Corporation
Law, the Registrant's Restated Certificate of Incorporation provides that a
director shall not be personally liable for monetary damages or breach of
fiduciary duty as a director, except for liability
. for any breach of the director's duty of loyalty to the
Registrant or its stockholders;
. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
3
<PAGE>
. under Section 174 of the Delaware General Corporation Law; or
. for any transaction from which the director derived any improper
personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
No. Exhibit
--- -------
4.1 Restated Certificate of Incorporation of the Registrant.*
4.2 Restated Bylaws of the Registrant.*
4.3 Form of Common Stock Certificate of the Registrant.**
5 Legal Opinion of Hogan & Hartson L.L.P.
23 Consent of KPMG LLP, independent certified public accountants.
24 Power of Attorney (included on signature page).
99.1 XM Satellite Radio Holdings Inc. 1998 Shares Award Plan
(as amended).
99.2 XM Satellite Radio Holdings Inc. Employee Stock Purchase Plan.
*Incorporated by reference to the Registrants' registration
statement on Form S-1, SEC Registration Statement No. 333-83619.
**Incorporated by reference to the Registrants' registration
statement on Form 8-A, filed with the Commission on September 23,
1999.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate,
4
<PAGE>
represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424
(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-8 (as in this case),
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the District of Columbia, on December 3, 1999.
XM SATELLITE RADIO HOLDINGS INC.
By: /s/ Hugh Panero
--------------------------------------
Hugh Panero
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Hugh Panero, Heinz Stubblefield and
Joseph M. Titlebaum, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, from such person and
in each person's name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this registration
statement or any registration statement relating to this registration statement
under Rule 462 and to file the same, with all exhibits thereto and all documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Hugh Panero President, Chief Executive Officer November 18, 1999
- ----------------------------------- and Director
Hugh Panero (Principal Executive Officer)
/s/ Heinz Stubblefield Senior Vice President and Chief November 11, 1999
- ----------------------------------- Financial Officer (Principal
Heinz Stubblefield Financial and Accounting Officer)
/s/ Gary M. Parsons
- ----------------------------------- Chairman of the Board of Directors November 18, 1999
Gary M. Parsons
- ----------------------------------- Director _____________ _____, 1999
Nathaniel A. Davis
- ----------------------------------- Director _____________ _____, 1999
Thomas J. Donohue
- ----------------------------------- Director _____________ _____, 1999
Randall T. Mays
/s/ Randy S. Segal
- ----------------------------------- Director December 3, 1999
Randy S. Segal
/s/ Jack Shaw
- ----------------------------------- Director November 19, 1999
Jack Shaw
- ----------------------------------- Director _____________ _____, 1999
Dr. Rajendra Singh
/s/ Ronald L. Zarrella
- ----------------------------------- Director November 22, 1999
Ronald L. Zarrella
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
No. Exhibit
---- -------
4.1 Restated Certificate of Incorporation of the Registrant.*
4.2 Restated Bylaws of the Registrant.*
4.3 Form of Common Stock Certificate of the Registrant.**
5 Legal Opinion of Hogan & Hartson L.L.P.
23 Consent of KPMG LLP, independent certified public accountants.
24 Power of Attorney (included on signature page).
99.1 XM Satellite Radio Holdings Inc. 1998 Shares Award Plan (as amended).
99.2 XM Satellite Radio Holdings Inc. Employee Stock Purchase Plan.
*Incorporated by reference to the Registrants' registration statement
on Form S-1, SEC Registration Statement No. 333-83619.
**Incorporated by reference to the Registrant's registration statement
on Form 8-A, filed with the Commission on September 23, 1999.
<PAGE>
Exhibit 5
---------
LEGAL OPINION OF HOGAN & HARTSON L.L.P.
December 3, 1999
Board of Directors
XM Satellite Radio Holdings Inc.
1250 23rd Street, N.W., Suite 57
Washington, D. C. 20037-1100
Ladies and Gentlemen:
This firm has acted as special counsel to XM Satellite Radio Holdings
Inc., a Delaware corporation (the "Company"), in connection with its
registration, pursuant to a registration statement on Form S-8 filed on or about
the date hereof (the "Registration Statement"), of 2,975,700 shares (the
"Shares") of Class A common stock, par value $.01 per share, of the Company
("Common Stock"), issuable under the Company's 1998 Shares Award Plan, as
amended (the "Shares Award Plan") and Employee Stock Purchase Plan (the "Stock
Purchase Plan"). This opinion letter is furnished to you pursuant to the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F. (S) 229.601(b)(5), in
connection with such registration.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. Copies of the Shares Award Plan and Stock Purchase Plan, as
certified on the date hereof by certain officers of the Company
as then being complete, accurate and in effect.
3. The Restated Certificate of Incorporation of the Company, as
certified on November 29, 1999 by the Secretary of State of the
State of Delaware and on the date hereof by certain officers of
the Company as then being complete, accurate and in effect.
4. The Restated Bylaws of the Company, as certified on the date
hereof by certain officers of the Company as then being complete,
accurate and in effect.
5. Resolutions of the Board of Directors of the Company adopted at
meetings held on, or by written consent dated, June 16, 1998,
February 3, 1999, June 6, 1999, July 8, 1999, July 22, 1999,
September 9, 1999 and November 11, 1999, all of the foregoing
resolutions as certified by certain officers of the Company on
the date hereof as then being complete, accurate and in effect.
6. Resolutions of the stockholders of the Company adopted at
meetings held on, or by written consent dated, June 16, 1998,
July 8, 1999 and September 27, 1999, all of the foregoing
resolutions as certified by certain officers of the Company on
the date hereof as then being complete, accurate and in effect.
<PAGE>
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents, and the conformity to authentic original documents of
all documents submitted to us as copies (including telecopies). This opinion
letter is given, and all statements herein are made, in the context of the
foregoing.
This opinion letter is based as to matters of law solely on the
corporate law of the State of Delaware. We express no opinion herein as to any
other laws, statutes, ordinances, rules, or regulations.
Based upon, subject to and limited by the foregoing, we are of the
opinion that following (i) effectiveness of the Registration Statement, (ii)
issuance of the Shares pursuant to the terms of the Shares Award Plan and Stock
Purchase Plan, as applicable, and (iii) receipt by the Company of the
consideration for the Shares specified in the resolutions of the Board of
Directors or a committee of the Board of Directors authorizing the issuance
thereof, the Shares will be validly issued, fully paid, and nonassessable.
This opinion letter has been prepared for your use in connection with
the Registration Statement and speaks as of the date hereof. We assume no
obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter.
We hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement. In giving this consent, we do not thereby admit that
we are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE>
Exhibit 23
----------
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of XM Satellite Radio Holdings Inc. of our report dated February 12,
1999, except for Note 14 which is as of September 9, 1999, relating to the
consolidated balance sheets of XM Satellite Radio Holdings Inc. and Subsidiary
(a development stage company) as of December 31, 1997 and 1998 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the years ended December 31, 1997 and 1998 and for the period from
December 15, 1992 (date of inception) to December 31, 1998, which report appears
in XM Satellite Radio Holdings Inc.'s registration statement (No. 333-83619) on
Form S-1.
Our report, dated February 12, 1999, except for Note 14 which is as of September
9, 1999, contains an explanatory paragraph that states that the Company has not
commenced operations, has negative working capital and is dependent upon
additional debt and equity financings, which raise substantial doubt about its
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of that
uncertainty.
/s/ KPMG LLP
McLean, Virginia
December 3, 1999
<PAGE>
EXHIBIT 99.1
XM SATELLITE RADIO HOLDINGS INC.
1998 SHARES AWARD PLAN
(AS AMENDED)
----------------------
Effective as of June 16, 1998
<PAGE>
XM Satellite Radio Holdings Inc.
1998 Shares Award Plan
(as amended)
INTRODUCTION
XM Satellite Radio Holdings Inc., a Delaware corporation (hereinafter
referred to as the "Corporation"), hereby establishes an incentive compensation
plan to be known as the "XM 1998 Shares Award Plan" (hereinafter referred to as
the "Plan"), as set forth in this document. The Plan permits the grant of
Incentive Stock Options, Non-Qualified Stock Options, Phantom Stock Awards,
Stock Appreciation Rights, Restricted Stock Awards and Other Stock-Based Awards.
Subject to the terms of the Plan, the Plan shall become effective on June 16,
1998.
The purpose of the Plan is to promote the success and enhance the value of
the Corporation by linking the personal interests of Participants to those of
the Corporation's shareholders by providing Participants with an incentive for
outstanding performance. The Plan is further intended to assist the Corporation
in its ability to motivate, and retain the services of, Participants upon whose
judgment, interest and special effort the successful conduct of its operations
is largely dependent.
DEFINITIONS
For purposes of this Plan, the following terms shall be defined as follows
unless the context clearly indicates otherwise:
(a) "Affiliate" shall mean (i) any parent, including American Mobile
---------
Satellite Corporation and any other entity which owns directly or indirectly at
least 50% of the total combined voting power of all classes of stock of the
Corporation and (ii) any entity in which the Corporation directly or indirectly
owns at least 50% of the total combined voting power of all classes of stock.
(b) "Award" shall mean any award to a participant of an Option, Stock
-----
Appreciation Right, Phantom Share, Restricted Stock or any other stock-based
award under the Plan.
<PAGE>
(c) "Award Agreement" shall mean the written agreement, executed by an
---------------
appropriate officer of the Corporation, pursuant to which an Award is granted.
(d) "Board of Directors" shall mean the Board of Directors of the
------------------
Corporation.
(e) "Change of Control" shall have the meaning set forth in Section
-----------------
11(d) hereof.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended,
----
and the rules and regulations thereunder.
(g) "Committee" shall mean the Board of Directors of the Corporation
---------
or any committee of two or more Non-Employee Directors (as defined under Rule
16b promulgated under the Exchange Act) designated by the Board of Directors to
serve as the Committee.
(h) "Consultant" shall mean an individual or entity who is in a
----------
consulting relationship with the Corporation or any parent or subsidiary of the
Corporation.
(i) "Corporation" shall mean XM Satellite Radio Holdings Inc., a
-----------
Delaware corporation.
(j) "Employee" shall mean a common-law employee of the Corporation or
--------
of any Affiliate.
(k) "Equivalent Award" shall mean, in connection with a Change of
----------------
Control, a continuation of the Award by the Corporation to a Participant, an
agreement by the person(s) acquiring the Corporation that to honor or assume the
Award following the Change of Control, or the substitution of a new Award with
an inherent value equivalent to that of the original Award and on terms at least
as beneficial to the Participant as those contained in the Participant's
original Award Agreement.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations thereunder.
(m) "Fair Market Value" of the Corporation's Common Shares on a
-----------------
Trading Day shall mean the last reported sale price for Common Shares or, in
case no such reported sale takes place on such Trading Day, the average of the
closing bid and asked prices for the Common Shares for such Trading Day, in
either case on the principal national securities exchange on which the Common
Shares are listed or admitted to trading, or if the Common Shares are not listed
or admitted to trading on
-2-
<PAGE>
any national securities exchange but are traded in the over-the-counter market,
the closing sale price of the Common Shares or, if no sale is publicly reported,
the average of the closing bid and asked quotations for the Common Shares, as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or any comparable system or, if the Common Shares are not
listed on NASDAQ or a comparable system, the average of the bid and asked prices
of the Common Shares or, if no sale is publicly reported, the average of the
closing bid and asked prices, as furnished by two members of the National
Association of Securities Dealers, Inc., who make a market in the Common Shares
selected from time to time by the Corporation for that purpose. In addition, for
purposes of this definition, a "Trading Day" shall mean, if the Common Shares
are listed on any national securities exchange, a business day during which such
exchange was open for trading and at least one trade of Common Shares was
effected on such exchange on such business day, or, if the Common Shares are not
listed on any national securities exchange but are traded in the over-the-
counter market, a business day during which the over-the-counter market was open
for trading and at least one "broker-dealer" quoted both a bid and asked price
for the Common Shares (if a broker-dealer quoted only a bid or only an asked
price for such day, such day will not be a Trading Day). In the event the
Corporation's Common Shares are not publicly traded, the Fair Market Value of
such Common Shares shall be determined by the Committee in good faith and in its
sole discretion.
(n) "Good Cause" shall mean, with respect to any Participant, the
----------
meaning of such term as set forth in the employment agreement between the
Corporation (or any Affiliate) and the Participant or, in the event there is no
such employment agreement (or if any such employment agreement does not contain
such a definition), such term shall mean (i) willful or gross misconduct or
willful or gross negligence in the performance of his or her duties for the
Corporation or any Affiliate, (ii) neglect of his or her duties for the
Corporation or any Affiliate after written notice and opportunity to cure, (iii)
dishonesty, fraud, theft, embezzlement or misappropriation of funds, properties
or assets of the Corporation or of any Affiliate, (iv) conviction of a felony,
(v) a direct or indirect material breach of the terms of any agreement with the
Corporation or any Affiliate or (vi) acting in a manner or making any statements
which the Committee reasonably determines to have a material adverse effect on
the reputation, operations, prospects or business relations of the Company or
its Affiliates.
(o) "Incentive Stock Option" shall mean a right to purchase Shares
----------------------
from the Corporation that is granted under Section 5 of the Plan and that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
(p) "Non-Employee Director" shall mean a member of the Board of
---------------------
Directors who is not a full-time employee of the Corporation.
-3-
<PAGE>
(q) "Non-Qualified Stock Option" shall mean a shares option which does
--------------------------
not satisfy the requirements for, or which is not intended to be eligible for,
tax-favored treatment under Section 422 of the Code.
(r) "Option" shall mean an Incentive Stock Option or a Non-Qualified
------
Stock Option.
(s) "Optionee" shall mean a Participant who is granted an Option under
--------
the terms of the Plan.
(t) "Other Stock-Based Award" shall mean any right granted under
-----------------------
Section 9 of the Plan.
(u) "Participant" shall mean any Employee, Consultant or Non-Employee
-----------
Director participating under the Plan.
(v) "Phantom Share" shall mean a hypothetical Share which is cancelled
-------------
by the delivery of an actual Share or, in the discretion of the Corporation, by
the payment of cash (or a combination of cash and Shares) in an amount equal to
the Fair Market Value of a Share on the date of surrender.
(w) "Plan" shall mean this XM 1998 Shares Award Plan as the same shall be
----
amended, revised or terminated from time to time.
(x) "Restoration Option" shall mean an Option granted under Section 5(f).
------------------
(y) "Restricted Stock" shall mean any Share granted under Section 7 of
----------------
the Plan.
(z) "Securities Act" shall mean the Securities Act of 1933, as
--------------
amended, and the rules and regulations thereunder.
(aa) "Share" shall mean a share of the Class A common stock, par value
-----
$.01 per share, of the Corporation, or such other securities of the Corporation
as may be designated by the Committee from time to time.
(bb) "Stock Appreciation Right" shall mean any right granted under
------------------------
Section 6 of the Plan.
SECTION 1
-4-
<PAGE>
ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee may establish from time to time such regulations,
provisions, proceedings and conditions of awards which, in its sole opinion, may
be advisable in the administration of the Plan. A majority of the Committee
shall constitute a quorum, and, subject to the provisions of Section 4 of the
Plan, the acts of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by a majority of the Committee,
shall be the acts of the Committee as a whole.
SECTION 2
SHARES AVAILABLE
Subject to the adjustments provided in Section 7 of the Plan, the aggregate
number of Shares with respect to which Awards may be granted under the Plan
shall be 2,675,700 shares. The Shares underlying Awards shall be counted against
the limitation set forth in the immediately preceding sentence and may be reused
to the extent that the related Award to any individual is settled in cash,
expires, is terminated unexercised, or is forfeited without the delivery of
Shares. Shares granted to satisfy Awards under the Plan may be authorized and
unissued shares, issued Shares held in the Corporation's treasury or Shares
acquired on the open market. The maximum number of Shares with respect to which
Awards may be granted under the Plan to any individual in any calendar year
shall be equal to 267,570 Shares.
SECTION 3
ELIGIBILITY
All (i) Employees who are regularly employed, (ii) Consultants and (iii)
Non-Employee Directors shall be eligible to participate in the Plan.
SECTION 4
AUTHORITY OF COMMITTEE
The Plan shall be administered by, or under the direction of, the
Committee, which shall administer the Plan so as to comply at all times with
applicable law, and shall otherwise have the sole and exclusive authority to
interpret the Plan and to make all determinations specified in or permitted by
the Plan or deemed necessary or desirable for its administration or for the
conduct of the Committee's business. Subject to the provisions of Section 12
hereof, all interpretations and determinations of the Committee may be made on
an individual or group basis and shall be final, conclusive and binding on all
persons. Subject to the express provisions of the Plan, the
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<PAGE>
Committee shall have authority, in its discretion, to determine, without
limitation, the persons to whom Awards shall be granted, the times when Awards
shall be granted, the number of Shares subject to any Awards, the terms of
Awards, any other restrictions, including any vesting requirements, and the
other provisions thereof (which need not be identical with respect to each
Award). In addition, the authority of the Committee shall include, without
limitation, the following with respect to an Award of an Option:
(a) Financing. The arrangement of temporary financing for a Participant by
---------
registered broker-dealers, under the rules and regulations of the Federal
Reserve Board, for the purpose of assisting a Participant in the exercise of an
Option, such authority to include the payment by the Corporation of the
commissions of the broker-dealer;
(b) Procedures for Exercise of Option. The establishment of procedures for
---------------------------------
a Participant (i) to exercise an Option by payment of cash or (ii) with the
consent of the Committee, (A) to have withheld from the total number of Shares
to be acquired upon the exercise of an Option that number of shares having a
Fair Market Value, which, together with such cash as will be paid in respect of
fractional shares, shall equal the Option exercise price of the total number of
Shares to be acquired, (B) to exercise all or a portion of an Option by
delivering that number of Shares already owned by him or her having a Fair
Market Value which shall equal the Option exercise price for the portion
exercised and, in cases where an Option is not exercised in its entirety, and
subject to the requirements of the Code, to permit the Participant to deliver
the Shares thus acquired by him or her in payment of Shares to be received
pursuant to the exercise of additional portions of such Option, the effect of
which shall be that a Participant can in sequence utilize such newly acquired
shares of Common Shares in payment of the exercise price of the entire Option,
together with such cash as shall be paid in respect of fractional shares or (C)
to engage in any form of "cashless" exercise.
(c) Withholding. The establishment of a procedure whereby a number of
-----------
Shares may be withheld from the total number of Shares to be issued upon
exercise of an Award or for the tender of Shares owned by any Participant to
meet any obligation of withholding for taxes incurred by the Participant upon
such exercise.
SECTION 5
SHARE OPTIONS
(a) Grant. Subject to the provisions of the Plan, the Committee shall
-----
have sole and complete discretion and authority to determine the Employees,
Consultants and Non-Employee Directors to whom Options shall be granted, the
number of Shares
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to be covered by each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option. The Committee shall have
the discretion and authority to grant Incentive Stock Options (but only to
Employees who meet the requirements of Section 422(a)(2) of the Code), Non-
Qualified Stock Options, and any combination thereof (provided that Incentive
Stock Options shall be granted only to Employees who meet the requirements of
Section 422(a)(2) of the Code). 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.
(b) Exercise Price. Subject to the requirement set forth in Section 5(a)
--------------
with respect to Incentive Stock Options, the Committee in its sole discretion
shall establish the exercise price at the time each option is granted. The
exercise price shall be subject to adjustment in accordance with the provisions
of Section 11 of the Plan.
(c) Term. Subject to the provisions of the Plan, the term of any Option
----
granted hereunder shall be not more than 10 years from the date of grant.
(d) Exercisability. Except as provided in Section 5(e) hereof, each
--------------
Option shall be exercisable in whole or in installments, and at such time(s),
and subject to the fulfillment of any conditions on, and to any limitations on,
exercisability as may be determined by the Committee at the time of the grant of
such Options. The right to purchase Shares shall be cumulative so that when the
right to purchase any Shares has accrued such Shares or any part thereof may be
purchased at any time thereafter until the expiration or termination of the
Option. Notwithstanding the above, no Option shall be exercisable by a
Participant until he or she has fully repaid any and all loans made to him or
her by the Corporation (or by any parent or subsidiary of the Corporation);
provided, however, that a repayment (whether in the form of cash or Shares) made
- -------- -------
contemporaneously with an exercise of an Option granted hereunder (including a
repayment in the form of withholding on Shares to be received upon the exercise
of such Option) shall be considered to have occurred prior to such Option
exercise.
(e) Payment of Exercise Price. The price per share of Shares with respect
-------------------------
to each Option shall be payable at the time the Option is exercised. Such price
shall be payable in cash or pursuant to any of the methods set forth in Sections
4(a) or (b) hereof, as determined by the Participant and approved by the
Committee. Common Shares delivered to the Corporation in payment of the exercise
price shall be valued at the Fair Market Value of the Common Shares on the date
preceding the date of the exercise of the Option.
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<PAGE>
(f) Restoration Options. In the event that any Participant delivers
-------------------
Shares in payment of the exercise price of any Option granted hereunder, or in
the event that the withholding tax liability arising upon exercise of any such
Option by a Participant is satisfied through the withholding by the Corporation
of Shares otherwise deliverable upon exercise of the Option, the Committee shall
have the authority to grant or provide for the automatic grant of a Restoration
Option to such Participant. The grant of a Restoration Option shall be subject
to the satisfaction of such conditions or criteria as the Committee in its sole
discretion shall establish from time to time. A Restoration Option shall entitle
the holder thereof to purchase a number of Shares equal to the number of such
Shares so delivered or withheld upon exercise of the original Option. A
Restoration Option shall have a per share exercise price of not less than 100%
of the per Share Fair Market Value as of the date of grant of such Restoration
Option and such other terms and conditions as the Committee in its sole
discretion shall determine.
SECTION 6
STOCK APPRECIATION RIGHTS
(a) Grant. Subject to the provisions of the Plan, the Committee shall
-----
have sole and complete discretion and authority to determine the eligible
persons to whom Stock Appreciation Rights shall be granted, the number of Shares
to be covered by each Stock Appreciation Right Award, the grant price thereof
and the conditions and limitations applicable to the exercise thereof. Stock
Appreciation Rights may be granted in tandem with another Award, in addition to
another Award or freestanding and unrelated to another Award. Stock Appreciation
Rights granted in tandem with or in addition to an Award may be granted either
at the same time as the Award or at a later time. Stock Appreciation Rights
shall not be exercisable earlier than six months after grant and shall have a
grant price as determined by the Committee on the date of grant.
(b) Exercise and Payment. A Stock Appreciation Right shall entitle
--------------------
the Participant to receive an amount equal to the excess of the Fair Market
Value of a Share on the date of exercise of the Stock Appreciation Right over
the grant price thereof, provided that the Committee may for administrative
convenience determine that, with respect to any Stock Appreciation Right that is
not related to an Incentive Stock Option and that can only be exercised for cash
during limited periods of time in order to satisfy the conditions of Rule 16b-3,
the exercise of such Stock Appreciation Right for cash during such limited
period shall be deemed to occur for all purposes hereunder on the day during
such limited period on which the Fair Market Value of the Shares is the highest.
Any such determination by the Committee may be changed by the Committee from
time to time and may govern the exercise of Stock Appreciation Rights granted
prior to such determination as well as Stock Appreciation Rights
-8-
<PAGE>
thereafter granted. The Committee shall determine whether a Stock Appreciation
Right shall be settled in cash, Shares or a combination of cash and Shares.
(c) Other Terms and Conditions. Subject to the terms of the Plan and any
--------------------------
applicable Award Agreement, the Committee shall determine, at or after the grant
of a Stock Appreciation Right, the term, methods of exercise, methods and form
of settlement, and any other terms and conditions of any Stock Appreciation
Right. Any such determination by the Committee may be changed by the Committee
from time to time and may govern the exercise of Stock Appreciation Rights
granted or exercised prior to such determination as well as Stock Appreciation
Rights granted or exercised thereafter. The Committee may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it shall deem
appropriate.
SECTION 7
RESTRICTED STOCK
(a) Grant. Subject to the provisions of the Plan, the Committee shall
-----
have sole and complete discretion and authority to determine the eligible
persons to whom Shares of Restricted Stock shall be granted, the number of
Shares of Restricted Stock to be granted to each Participant, the duration of
the period during which, if any, and the conditions under which, the Restricted
Stock may be forfeited to the Corporation, and the other terms and conditions of
such Awards.
(b) Transfer Restrictions. Shares of Restricted Stock may not be
---------------------
sold, assigned, transferred, pledged or otherwise encumbered, except, in the
case of Restricted Stock, as provided in the Plan or the applicable Award
Agreements. Certificates issued in respect of Shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Corporation. Upon the
lapse of the restrictions applicable to such Shares of Restricted Stock, the
Corporation shall deliver such certificates to the Participant or the
Participant's legal representative.
(c) Dividends and Distributions. Dividends and other distributions
---------------------------
paid on or in respect of any Shares of Restricted Stock may be paid directly to
the Participant, or may be reinvested in additional Shares of Restricted Stock,
as determined by the Committee in its sole discretion.
SECTION 8
PHANTOM SHARES
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<PAGE>
(a) Grant. Subject to the provisions of the Plan, the Committee shall
-----
have sole and complete discretion and authority to determine the eligible
persons to whom Phantom Shares shall be granted, the number of Phantom Shares to
be granted to each Participant, the duration of the period during which, and the
conditions under which, the Phantom Shares may be forfeited to the Corporation
and the other terms and conditions of such Awards.
(b) Surrender. Each Award Agreement with respect to a Phantom Stock
---------
Unit shall specify the date on which the Phantom Stock Unit shall be
surrendered, and thereby cancelled by delivery of a Share with respect thereto,
subject to such terms and conditions as the Committee may specify, in its sole
discretion, in the applicable Award Agreement or thereafter. The date on which
the Phantom Shares shall be surrendered may be accelerated upon the occurrence
of certain events, as determined by the Committee in its sole discretion and as
set forth in the applicable Award Agreement.
(c) Dividends and Distributions. Payments may be made to Participants
---------------------------
who have been awarded Phantom Shares in an amount equal to dividends and other
distributions paid on or in respect of an equivalent number of Shares. Such
payments may be paid directly to the Participant or may be reinvested in
additional Phantom Shares, as determined by the Committee in its sole
discretion.
SECTION 9
OTHER STOCK-BASED AWARDS
The Committee shall have the discretion and authority to grant to eligible
persons an "Other Stock-Based Award," which shall consist of any right that is
(i) not an Award described in Sections 5 through 8 above and (ii) an Award of
Shares or an Award denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares (including, without
limitation, securities or rights convertible into Shares), as deemed by the
Committee to be consistent with the purposes of the Plan. Subject to the terms
of the Plan and any applicable Award Agreement, the Committee shall determine
the terms and conditions of any such Other Stock-Based Award.
SECTION 10
TERMINATION OF SERVICES
The following provisions shall apply in the event that the Participant
ceases to provide services to the Corporation or any Affiliate, either as an
Employee, a Consultant or a Non-Employee Director, unless the Committee shall
have provided otherwise, either at the time of the grant of the Award or
thereafter.
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<PAGE>
(a) Non-Qualified Stock Options and Stock Appreciation Rights.
---------------------------------------------------------
(i) Upon Termination of Services as Employee or Consultant. The
------------------------------------------------------
Participant's right to exercise any Non-Qualified Stock Option or Stock
Appreciation Right shall terminate, and such Option or Stock Appreciation Right
shall expire, as set forth in the Award Agreement. The exercise periods and
rights to acceleration, if any, in the event of termination of employment,
including for Good Cause, or upon death, total and permanent disability or
retirement, or as a result of a change of control or otherwise shall be as set
forth in the Award Agreement as determined by the Committee in its sole
discretion.
(ii) For purposes of determining whether a Participant's employment or
consulting relationship has terminated, a Participant who is both an Employee
(or Consultant) and a director of the Corporation or any Affiliate shall be
considered to have terminated his or her employment or consulting relationship
only upon his or her termination of service both as an Employee (or Consultant)
and as a director.
(b) Incentive Stock Options.
-----------------------
(i) Except as otherwise determined by the Committee at the time of
grant, if the Participant's employment with the Corporation terminates for any
reason, the Participant shall have the right to exercise any Incentive Stock
Option and any related Stock Appreciation Right during the 90 days after such
termination of employment to the extent it was exercisable at the date of such
termination, but in no event later than the date the Option would have expired
had it not been for the termination of such employment. If the Participant does
not exercise such Option or related Stock Appreciation Right to the full extent
permitted by the preceding sentence, the remaining exercisable portion of such
Option automatically will be deemed a Non-Qualified Stock Option (except to the
extent otherwise provided by Section 421 or Section 422 of the Code), and such
Option and any related Stock Appreciation Right will be exercisable during the
period set forth in Section 10(a) of the Plan, provided that in the event that
employment terminates because of death or the Participant dies in such 90-day
period, the option will continue to be an Incentive Stock Option to the extent
provided by Section 421 or Section 422 of the Code, or any successor provisions,
and any regulations promulgated thereunder. Notwithstanding the forgoing, if a
Participant's employment is terminated by the Corporation or by any Affiliate
for Good Cause or as otherwise set forth in the Award Agreement, then the
Participant shall immediately forfeit his or her rights to exercise any and all
of outstanding Options or Stock Appreciation Rights theretofore granted to him
or her.
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<PAGE>
(ii) For purposes of determining whether a Participant's employment or
consulting relationship has terminated, a Participant who is both an Employee
(or Consultant) and a director of the Corporation or any Affiliate shall be
considered to have terminated his or her employment or consulting relationship
only upon his or her termination of service both as an Employee (or Consultant)
and as a director.
(c) Restricted Stock. Except as otherwise determined by the Committee at
----------------
the time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Corporation at the
price (if any) paid by the Participant for such Restricted Stock, provided that
in the event of a Participant's retirement, permanent and total disability or
death, or in cases of special circumstances, the Committee may, in its sole
discretion, when it finds that a waiver would be in the best interests of the
Corporation, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock.
(d) Phantom Shares and Other Stock-Based Awards. Upon termination of a
-------------------------------------------
Participant's employment or consulting relationship with the Corporation for any
reason, the Participant who has been granted Phantom Shares or Other Stock-Based
Awards under the Plan shall surrender such Awards, and such Awards shall either
be cancelled or shall be paid as determined by the Committee at the time of
grant and as set forth in the relevant Award Agreement.
SECTION 11
ADJUSTMENT OF SHARES; MERGER OR
CONSOLIDATION, ETC. OF THE CORPORATION
(a) Recapitalization, Etc. In the event there is any change in the common
---------------------
shares of the Corporation by reason of any stock dividend, stock split, adoption
of stock rights plans, split-ups, split-offs, spin-offs, liquidations,
combination or exchanges of shares, recapitalizations, mergers, consolidations
or reorganizations of or by the corporation or any distribution to common
stockholders other than ordinary cash dividends, there shall be substituted for
or added to each Share theretofore appropriated or thereafter subject, or which
may become subject, to any Award, the number and kind of shares or other
securities into which each outstanding Share shall be so changed or for which
each such Share shall be exchanged, or to which each such Share be entitled, as
the case may be, and the per share price thereof also shall be appropriately
adjusted.
(b) Merger or Consolidation of Corporation. Upon (i) the merger or
--------------------------------------
consolidation of the Corporation with or into another corporation (pursuant to
which the
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<PAGE>
shareholders of the Corporation immediately prior to such merger or
consolidation will not, as of the date of such merger or consolidation, own a
beneficial interest in shares of voting securities of the corporation surviving
such merger or consolidation having at least a majority of the combined voting
power of such corporation's then outstanding securities), if the agreement of
merger or consolidation does not provide for (1) the continuance of the Awards
granted hereunder or (2) the substitution of new awards for Awards granted
hereunder, or for the assumption of such Awards by the surviving corporation or
(ii) the dissolution, liquidation, or sale of all or substantially all the
assets of the Corporation, the holder of any such Award theretofore granted and
still outstanding (and not otherwise expired) who satisfies such other
requirements, if any, that may be required by the Committee and set forth in the
related Award Agreement, shall have the right immediately prior to the effective
date of such merger, consolidation, dissolution, liquidation or sale of assets
of the Corporation to exercise such Awards in whole or in part without regard to
any installment provision regarding exercisability that may have been made part
of the terms and conditions of such Awards. The Corporation, to the extent
practicable, shall give advance notice to affected Participants of such merger,
consolidation, dissolution, liquidation or sale of assets of the Corporation.
All such Awards which are not so exercised shall be forfeited as of the
effective time of such merger, consolidation, dissolution, liquidation or sale
of assets of the Corporation.
(c) Change of Control of the Corporation. Notwithstanding the foregoing,
------------------------------------
if a Change of Control occurs during the period commencing on the date of grant
of an Award and terminating on the date of expiration of the Award, the
Participant shall be entitled to receive an Equivalent Award. If, despite the
best efforts of the Corporation, the Participant cannot receive an Equivalent
Award in connection with such Change in Control, (i) the Participant shall be
entitled to receive immediately prior to such Change in Control, in exchange for
his or her Award, cash in an amount equal to the excess of the highest price
paid for a Share in connection with the Change of Control over the exercise
price per Share under the Award, multiplied by the total number of Shares
subject to the Award, including all Shares with respect to which the Award has
not yet become exercisable under the provisions of the Plan but excluding any
Shares with respect to which the Award has previously been exercised or (ii) if
the Participant is an insider who would be subject to suit under Section 16(b)
of the Exchange Act if the Participant were to receive the cash payment
described above, the Award may be exercised by the Participant in full beginning
on the date two weeks before such Change of Control. If the Participant receives
an Equivalent Award in connection with a Change of Control, and the Optionee's
employment with the Corporation or an Affiliate is terminated within one year
following the Change of Control by reason of involuntary termination, the
Equivalent Award may be exercised in full beginning on the date of
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<PAGE>
such termination if and for such period as the Committee, in its sole
discretion, shall determine.
(d) Definition of Change of Control of the Corporation. A "Change of
--------------------------------------------------
Control" shall be deemed to have occurred if (i) any person or group of persons
(as defined in Section 13(d) and 14(d) of the Exchange Act) together with its
affiliates, excluding employee benefit plans of the Corporation, is or becomes,
directly or indirectly, the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of securities of the Corporation representing 40% or more of
the combined voting power of the Corporation's then outstanding securities; or
(ii) individuals who at the beginning of any two-year period constitute the
Board, plus new directors of the Corporation whose election or nomination for
election by the Corporation's shareholders is approved by a vote of at least
two-thirds of the directors of the Corporation still in office who were
directors of the Corporation at the beginning of such two-year period, cease for
any reason during such two-year period to constitute at least two-thirds of the
members of the Board; or (iii) the shareholders of the Corporation approve a
merger or consolidation of the Corporation with any other corporation or entity
regardless of which entity is the survivor, other than a merger or consolidation
which would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 60% of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such merger
or consolidation; or (iv) the shareholders of the Corporation approve a plan of
complete liquidation or winding-up of the Corporation or an agreement for the
sale or disposition by the Corporation of all or substantially all of the
Corporation's assets. Notwithstanding anything herein to the contrary, in no
event shall (A) an initial public offering of the Corporation, (B) any change in
the percentage ownership of the Corporation by American Mobile Satellite
Corporation or its affiliates, or (C) a private placement of less than
$150,000,000 be deemed to constitute a Change of Control hereunder.
SECTION 12
MISCELLANEOUS PROVISIONS
(a) Administrative Procedures. The Committee may establish any procedures
-------------------------
determined by it to be appropriate in discharging its responsibilities under the
Plan. All actions and decisions of the Committee shall be final.
(b) Investment Representation. With respect to Shares received pursuant to
-------------------------
the exercise of an Option, the Committee may require, as a condition of
receiving such
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<PAGE>
securities, that the Participant furnish to the Corporation such written
representations and information as the Committee deems appropriate to permit the
Corporation, in light of the existence or nonexistence of an effective
registration statement under the Securities Act, to deliver such securities in
compliance with the provisions of the Securities Act.
(c) Withholding Taxes. The Corporation shall have the right to deduct from
-----------------
all cash payments hereunder any federal, state, local or foreign taxes required
by law to be withheld with respect to such payments. In the case of the issuance
or distribution of Common Shares upon the exercise of an Award, the Corporation,
as a condition of such issuance or distribution, may require the payment
(through withholding from the Participant's salary, reduction of the number of
Shares or other securities to be issued, or otherwise) of any such taxes. Each
Participant may satisfy the withholding obligations by paying to the Corporation
a cash amount equal to the amount required to be withheld or by tendering to the
Corporation a number of Shares having a value equivalent to such cash amount, or
by use of any available procedure as described under Section 4(c) hereof.
(d) Compliance with Applicable Law and Regulations. The adoption of the
----------------------------------------------
Plan and the grant and exercise of the Awards thereunder shall be subject to
receipt of all required regulatory approvals, including without limitation any
required approvals of the Federal Communications Commission. Should any
provision of the Plan that is intended to comply with the provisions of Rule
16b-3 under the Exchange Act at the date of the adoption of the Plan by the
Board not be necessary for such compliance, or become no longer necessary for
such compliance, such provision of the Plan shall have no force or effect under
the Plan as of the date that such provision is not required for the purpose of
satisfying the provisions of Rule 16b-3 under the Exchange Act.
(e) Costs and Expenses. The costs and expenses of administering the Plan
------------------
shall be borne by the Corporation and shall not be charged against any Award or
to any employee receiving an Award.
(f) Funding of Plan. The Plan shall be unfunded. Neither the Participants
---------------
nor any other persons shall have any interest in any fund or in any specific
asset or assets of the Corporation or any other entity by reason of any Award.
The interests of each Participant and former Participant hereunder are unsecured
and shall be subject to the general creditors of the Corporation.
(g) Other Incentive Plans. The adoption of the Plan does not preclude the
---------------------
adoption by appropriate means of any other incentive plan for employees.
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<PAGE>
(h) Plurals. Where appearing in the Plan, singular terms shall include the
-------
plural, and vice versa, unless the context clearly indicates a different
meaning.
(i) Headings. The headings and sub-headings in the Plan are inserted for
--------
the convenience of reference only and are to be ignored in any construction of
the provisions hereof.
(j) Severability. In case any provision of the Plan shall be held illegal
------------
or void, such illegality or invalidity shall not affect the remaining provisions
of the Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if said illegal or invalid provisions had never been inserted
herein.
(k) Liability and Indemnification. Neither the Corporation nor any
-----------------------------
Affiliate shall be responsible in any way for any action or omission of the
Committee, or any other fiduciaries in the performance of their duties and
obligations as set forth in the Plan. Furthermore, neither the Corporation nor
any Affiliate shall be responsible for any act or omission of any of their
agents, or with respect to reliance upon advice of their counsel provided that
the Corporation and/or the appropriate Affiliate relied in good faith upon the
action of such agent or the advice of such counsel.
(ii) Except for their own gross negligence or willful misconduct
regarding the performance of the duties specifically assigned to them under, or
their willful breach of the terms of, the Plan, the Corporation, each Affiliate
and the Committee shall be held harmless by the Participants, former
Participants, beneficiaries and their representatives against liability or
losses occurring by reason of any act or omission. Neither the Corporation, any
Affiliate, the Committee, nor any agents, employees, officers, directors or
shareholders of any of them, nor any other person shall have any liability or
responsibility with respect to the Plan, except as expressly provided herein.
(l) Cooperation of Parties. All parties to the Plan and any person
----------------------
claiming any interest hereunder agree to perform any and all acts and execute
any and all documents and papers which the Committee deems necessary or
desirable for carrying out the Plan or any of its provisions.
(m) Governing Law. All questions pertaining to the validity, construction
-------------
and administration of the Plan shall be determined in accordance with the laws
of the State of Delaware.
(n) Nonguarantee of Employment or Consulting Relationship. Nothing
-----------------------------------------------------
contained in the Plan shall be construed as a contract of employment (or as a
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<PAGE>
consulting contract) between the Corporation (or any Affiliate) and any Employee
or Participant, as a right of any Employee or Participant to be continued in the
employment of (or in a consulting relationship with) the Corporation (or any
Affiliate), or as a limitation on the right of the Corporation or any Affiliate
to discharge any of its Employees or Consultants, at any time, with or without
cause.
(o) Notices. Each notice relating to the Plan shall be in writing and
-------
delivered in person or by certified mail to the proper address. All notices to
the Corporation or the Committee shall be addressed to it at c/o General
Counsel, 1250 23rd Street, N.W., Suite 57, Washington, D.C. 20037. All
notices to Participants, former Participants, beneficiaries or other persons
acting for or on behalf of such persons shall be addressed to such person at the
last address for such person maintained in the Committee's records.
(p) Written Agreements. Each Award shall be evidenced by a signed Award
------------------
Agreement between the Corporation and the Participant containing the terms and
conditions of the Award.
SECTION 13
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Corporation shall have the right to amend,
suspend or terminate the Plan at any time except that no amendment, suspension
or termination of the Plan shall alter or impair any Award previously granted
under the Plan without the consent of the holder thereof. Any provision of the
Plan or any Award Agreement notwithstanding, the Committee may cause any Award
granted hereunder to be cancelled in consideration of a cash payment or
alternative Award made to the holder of such cancelled Award equal to the Fair
Market Value of such cancelled Award.
SECTION 14
TERM OF PLAN
The Plan shall automatically terminate on the day immediately preceding the
tenth anniversary of the date the Plan was adopted by the Board of Directors,
unless sooner terminated by the Board of Directors. No Award may be granted
under the Plan subsequent to the termination of the Plan.
SECTION 15
EFFECTIVE DATE
The Plan shall become effective as of June 16, 1998, the date as of which
it was approved by the Board of Directors.
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* * * * *
The Plan was duly adopted and approved by the Board on June 16, 1998, and
was duly adopted and approved by the stockholders of the Corporation on June 16,
1998. The Board duly adopted certain amendments to the Plan on February 3, 1999
and June 6, 1999. The Board duly adopted certain amendments to the Plan on July
8, 1999, including an amendment to increase the number of authorized Shares
under the Plan; the stockholders of the Company approved the amendment for such
increase in the number of authorized Shares on July 8, 1999.
/s/ Joseph M. Titlebaum
________________________________
Joseph M. Titlebaum
XM Satellite Radio Holdings Inc.
Senior Vice President,
General Counsel and Secretary
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EXHIBIT 99.2
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XM SATELLITE RADIO HOLDINGS INC.
EMPLOYEE STOCK PURCHASE PLAN
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ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
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1.1 Purpose
The XM Satellite Radio Holdings Inc. Employee Stock Purchase Plan is
intended to encourage employee participation in the ownership and economic
progress of the Corporation.
1.2 Definitions
Unless the context clearly indicates otherwise, the following terms have
the meaning set forth below:
"XM Benefits Administration" shall mean the Corporation's Human Resources
Group.
"Board" shall mean the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of officers or employees of the
Corporation and/or one or more of its Subsidiaries appointed by the Board, which
Committee shall administer the Plan as provided in Section 1.3 hereof.
"Common Stock" shall mean shares of Class A common stock, par value $.01
per share, of the Corporation.
"Compensation" shall mean the base salary, bonuses, overtime, and
commissions paid to an Employee by the Corporation or a Subsidiary in accordance
with established payroll procedures.
"Corporation" shall mean XM Satellite Radio Holdings Inc.
"Covered Officer" shall mean an Employee who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
"Eligible Employee" shall mean an Employee who (i) is scheduled to work at
least 20 hours per week and (ii) whose customary employment is more than five
(5) months in a calendar year.
"Employee" shall mean any employee of the Corporation or a Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exercise Date" shall mean the date as determined by the Committee.
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"Fair Market Value" of a share of Common Stock shall mean (i) with respect
to the Initial Offering Date, the price at which a share of Common Stock is sold
to the public in the Initial Public Offering, or (ii) in all other cases, the
amount equal to the average of the closing bid and asked for prices of a Share
on the applicable date as reported by the consolidated tape of the National
Association of Securities Dealers Automated Quotation (or on such other
recognized quotation system on which the trading prices of the Common Stock are
quoted on the applicable date), or, if no Share transactions are reported on
such tape (or such other system) on the applicable date, the average of the
closing bid and asked for prices of a Share on the immediately preceding date on
which Share transactions were so reported, or as determined pursuant to a
reasonable method adopted by the Committee in good faith for such purpose.
"Initial Offering" shall mean the first Option Period under the Plan, which
shall begin on the Initial Offering Date and shall end on December 31, 1999.
"Initial Offering Date" shall mean October 4, 1999.
"Offering Date" shall mean such date as shall be determined by the
Committee in accordance with the terms of the Plan.
"Option Period" shall mean (i) in the case of the Initial Offering, the
period beginning on the Initial Offering Date and ending on December 31, 1999,
or (ii) in all other cases, the period beginning on an Offering Date and ending
on the next succeeding Exercise Date.
"Option Price" shall mean the purchase price of a share of Common Stock
hereunder as provided in Section 3.1 hereof.
"Participant" shall mean any Eligible Employee who elects to participate.
"Plan" shall mean this XM Satellite Radio Holdings Inc. Employee Stock
Purchase Plan, as the same may be amended from time to time.
"Plan Account" shall mean an account established and maintained by the
Corporation in the name of each Participant.
"Plan Year" shall mean the twelve (12) month period beginning January 1 and
ending on the following December 31.
"Stock Purchase Agreement" shall mean the form prescribed by the Committee
which must be executed by an Employee who elects to participate in the Plan.
"Subsidiary" shall mean any company in which the Corporation owns, directly
or indirectly, shares possessing 50% of the total combined voting power of all
classes of stock.
1.3 Administration of Plan
The Committee shall have the authority to administer the Plan and to make
and adopt rules and regulations not inconsistent with the provisions of the
Plan, provided that, except with respect to the Initial Offering, the Committee
also is authorized to change the Offering Periods, Offering Dates and Exercise
Dates under the Plan by providing written notice to all Employees at least 15
days prior to the Exercise Date following which such changes will take effect.
The Committee shall adopt the form of Stock Purchase Agreement and all notices
required hereunder. The Committee may delegate administrative tasks under the
Plan to one or more agents. The Committee's interpretation and decisions in
respect to the Plan shall be final and conclusive.
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1.4 Effective Date of Plan
The plan shall become effective on October 4, 1999, which shall be the
Initial Offering Date, provided that the Plan is approved by the stockholders of
the Corporation within 12 months before or after the date the Plan is adopted by
the Board.
1.5 Termination of Plan
The Plan shall continue in effect through December 31, 2009 unless
terminated prior thereto pursuant to Section 4.3 hereof, or by the Board which
shall have the right to terminate the Plan at any time. Upon any such
termination, the balance of any payroll deductions in each Participant's Plan
Account shall be refunded and, except as provided in Article VI with respect to
Covered Officers, a certificate or certificates for any shares of Common Stock
in each Participant's Plan Account shall be distributed to the Participant.
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ARTICLE II
PARTICIPATION
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2.1 Eligibility
Except in the case of the Initial Offering, each person who is an Eligible
Employee on an Offering Date may become a Participant by executing and filing a
Stock Purchase Agreement at least 15 days prior to said Offering Date. In the
case of the Initial Offering, each person who is an Eligible Employee on the
Initial Offering Date may become a Participant by executing and filing a Stock
Purchase Agreement on or before the date determined by the Committee in
accordance with applicable law. An Employee may not participate in the Plan if
immediately after the applicable Offering Date or, in the case of the Initial
Offering, the Initial Offering Date, the Employee would be deemed for purposes
of Section 423(b)(3) of the Code to possess 5% or more of the total combined
voting power or value of all classes of stock of the Corporation or any
Subsidiary. Notwithstanding the foregoing, the eligibility of any Participant
who is a Covered Officer is further limited to the extent provided in Article
VI.
2.2 Payroll Deductions
Payment for shares of Common Stock purchased hereunder shall be made by
authorized payroll deductions from each payment of Compensation in accordance
with instructions received from a Participant. Payroll deductions (a) shall be
equal to at least 1% of Compensation and (b) must equal at least five dollars
($5.00) per pay period and (c) may be expressed either as (i) a whole number
percentage or (ii) a fixed dollar amount, subject to the provisions of section
3.3 hereof. A Participant may not increase or decrease the deduction during an
Option Period. A Participant may, however, change the percentage deduction for
any subsequent Option Period by filing another Stock Purchase Agreement at least
15 days prior to the Offering Date on which such subsequent Option Period
commences. Amounts deducted from a Participant's Compensation pursuant to this
Section 2.2 shall be credited to the Participant's Plan Account.
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ARTICLE III
PURCHASE OF SHARES
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3.1 Option Price
The Option Price of each share of the Common Stock shall be determined by
the Committee; provided, however, that the Option Price per share of the Common
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Stock sold to Participants hereunder shall be no less than 85% of the Fair
Market Value of such share on (i) in the case of the Initial Offering, either
the Initial Offering Date or the Exercise Date of the Option Period, whichever
is lower, or (ii) in all other cases, either the Offering Date or the Exercise
Date of the Option Period, whichever is lower, but in no event shall the Option
Price per share be less than the par value of the Common Stock.
3.2 Purchase of Shares
On each Exercise Date, the amount in a Participant's Plan Account shall be
charged with the aggregate Option Price of the largest number of whole shares of
Common Stock which can be purchased with said amount. The balance, if any, in
such Plan Account shall be carried forward to the next succeeding Offering
Period, unless the Participant has elected to withdraw from the Plan pursuant to
Section 5.1 hereof.
3.3 Limitations on Purchase
The Fair Market Value (determined on the Offering Date or the Initial
Offering Date, as the case may be) of the number of shares of Common Stock that
may be purchased under the Plan by a Participant in any calendar year shall not
exceed $25,000.
3.4 Transferability of Rights
Rights to purchase shares of Common Stock hereunder shall not be
transferable otherwise than by will or the laws of descent and distribution, and
may be exercised during the Participant's lifetime only by the Participant.
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ARTICLE IV
PROVISIONS RELATING
TO COMMON STOCK
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4.1 Common Stock Reserved
There shall be 300,000 authorized and unissued shares of Common Stock,
reissued treasury shares of Common Stock, or shares of Common Stock otherwise
acquired by the Corporation, reserved for the Plan, subject to adjustment in
accordance with Section 4.2 hereof. The aggregate number of shares which may be
purchased under the Plan shall not exceed the number of shares reserved for the
Plan.
4.2 Adjustment for Changes in Common Stock
In the event that adjustments are made in the number of outstanding shares
of Common Stock or the shares are exchanged for a different class of stock of
the Corporation or for shares of stock of any other corporation by reason of
merger, consolidation, stock dividend, stock split or otherwise, the Committee
may make appropriate adjustments in (i) the number and class of shares or other
securities that may be reserved for purchase hereunder, and
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(ii) the Option Price. All such adjustments shall be made in the sole discretion
of the Committee, and its decision shall be binding and conclusive.
4.3 Insufficient Shares
If the aggregate funds available for the purchase of Common Stock on any
Exercise Date would cause an issuance of shares in excess of the number provided
for in Section 4.1 hereof, (i) the Committee shall proportionately reduce the
number of shares that would otherwise be purchased by each Participant in order
to eliminate such excess, and (ii) the Plan shall automatically terminate
immediately after such Exercise Date.
4.4 Confirmation
Each purchase of Common Stock hereunder shall be confirmed in writing to
the Participant. A record of purchases shall be maintained by appropriate
entries on the books of the Corporation. Except as provided in Article VI with
respect to Covered Officers, Participants may obtain a certificate or
certificates for all or part of the shares of Common Stock purchased hereunder
by requesting same in writing.
4.5 Rights as Shareholders
The shares of Common Stock purchased by a Participant on an Exercise Date
shall, for all purposes, be deemed to have been issued and sold at the close of
business on such Exercise Date. Prior to that time, none of the rights or
privileges of a stockholder of the Corporation shall exist with respect to such
shares.
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ARTICLE V
TERMINATION OF PARTICIPATION
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5.1 Voluntary Withdrawal
A Participant may withdraw from the Plan at any time by filing notice of
withdrawal prior to the close of business on an Exercise Date. Upon withdrawal,
the entire amount, if any, in a Participant's Plan Account shall be refunded to
him or her, unless the Participant elects in such notice of withdrawal to have
such amount used to purchase whole shares of Common Stock pursuant to Section
3.2 hereof on said Exercise Date, and have any remaining balance refunded.
Except as provided in Article VI with respect to Covered Officers, any
Participant who withdraws from the Plan may again become a Participant in
accordance with Section 2.1 hereof.
5.2 Termination of Eligibility
If a Participant retires, he or she may elect to (i) withdraw the entire
amount, if any, in his or her Plan Account, or (ii) have the amount used to
purchase whole shares of Common Stock pursuant to Section 3.2 hereof on the next
succeeding Exercise Date, and have any remaining balance refunded.
If a Participant ceases to be eligible under Section 2.1 hereof for any
reason other than retirement, the dollar amount in such Participant's Plan
Account will be refunded and, except as provided in Article VI with respect to
Covered Officers, the number of unissued shares in such Participant's Plan
Account will be distributed to the Participant or his or her designated
beneficiary or estate.
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ARTICLE VI
SPECIAL RULES FOR COVERED OFFICERS
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6.1 Withdrawal From Plan
Unless permitted by the Committee, if a Participant who is a Covered
Officer withdraws from the Plan (i.e., ceases participation), he or she will not
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again be eligible to participate in the Plan until the expiration of six months
from the effective date of the notice of withdrawal. In the event of such
withdrawal, the entire amount, if any, in the Participant's Plan Account shall
be refunded to him or her, unless the Participant elects in the notice of
withdrawal to purchase shares of Common Stock at the end of the Option Period
and have the balance, if any, in the Participant's Plan Account refunded (in
such case, the effective date of the notice of withdrawal will be the Exercise
Date).
6.2 Obtaining Certificates for Common Stock
Unless otherwise permitted by the Committee, a Participant who is a Covered
Officer shall not be permitted to receive a certificate or certificates
representing shares of Common Stock held in his or her Plan Account until the
expiration of six months from the Exercise Date on which the shares are
purchased. If such a Participant withdraws from the Plan (i.e., ceases
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participation) or the Plan terminates, and the Participant has shares of Common
Stock in his or her Plan Account that have not been held for such six-month
period, no certificates for the shares will be issued to the Participant until
the end of that six-month period unless the Committee so permits. Unless
permitted by the Committee, if a Participant who is a Covered Officer wishes to
receive a certificate or certificates representing shares of Common Stock that
have been held in his or her Plan Account for at least six months, the
Participant also must withdraw from the Plan (i.e., cease participation) as of
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the date the certificate or certificates are issued and will not again be
eligible to participate in the Plan until the expiration of six months from that
date.
6.3 Qualification under Code Section 423
Should any provision of this Article VI cause the Plan not to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Code,
then such provision shall not be a requirement under the Plan and shall instead
be a guideline that each Participant who is a Covered Officer is urged to follow
in order to avoid possible liability to the Corporation pursuant to Section
16(b) of the Exchange Act with respect to transactions under the Plan.
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ARTICLE VII
GENERAL PROVISIONS
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7.1 Broad Based, Nondiscriminatory Plan
The Plan shall at all times be a broad based, nondiscriminatory plan within
the meaning of Rule 16b-3(d)(2)(i)(A) under the Exchange Act.
7.2 Notices
Any notice that a Participant files pursuant to the Plan shall be made on
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forms prescribed by the Committee and, except with respect to a notice of
withdrawal that is intended to take effect after the purchase of shares of
Common Stock at the end of the Option Period (see Section 5.1 above), shall be
effective when received by XM Benefits Administration.
7.3 Condition of Employment
Neither the creation of the Plan nor participation therein shall be deemed
to create any right of continued employment or in any way affect the right of
the Corporation or a Subsidiary to terminate an Employee.
7.4 Amendment of the Plan
The Board of Directors may at any time, or from time to time, amend the
Plan in any respect, except that, without approval of the stockholders, no
amendment may increase the aggregate number of shares reserved under the Plan
other than as provided in Section 4.2 hereof, materially increase the benefits
accruing to Participants, or modify the requirements as to eligibility for
participation in the Plan. Any amendment of the Plan must be made in accordance
with applicable provisions of the Code and/or any regulations issued thereunder.
7.5 Application of Funds
All funds received by the Corporation by reason of purchase of Common Stock
hereunder may be used for any corporate purpose.
7.6 Legal Restrictions
The Corporation shall not be obligated to sell shares of Common Stock
hereunder if counsel to the Corporation determines that such sale would violate
any applicable law or regulation.
7.7 Governing Law
The Plan and all rights and obligations thereunder shall be construed and
enforced in accordance with the laws of the State of Delaware.
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The Plan was duly adopted and approved by the Board on September 9, 1999,
and was duly adopted and approved by the stockholders of the Corporation on
September 27, 1999.
/s/ Joseph M. Titlebaum
____________________________________
Joseph M. Titlebaum
XM Satellite Radio Holdings Inc.
Senior Vice President,
General Counsel and Secretary
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