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As filed with the Securities and Exchange Commission on December 14, 2018Registration No. 333-228088

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2 TO

F ORM S-4 REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Sirius XM Holdings Inc. (Exact name of registrant as specified in its charter)

         

Delaware (State or other jurisdiction of incorporation or organization)

  4832 (Primary Standard Industrial Classification Code Number)

  38-3916511 (I.R.S. Employer Identification No.)

1290 Avenue of the Americas, 11 th Floor New York, New York 10104

(212) 584-5100 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Patrick L. Donnelly, Esq. Executive Vice President, General Counsel and Secretary

Sirius XM Holdings Inc. 1290 Avenue of the Americas, 11 th Floor

New York, New York 10104 (212) 584-5100

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:         

Eric Swedenburg Ravi Purushotham

Simpson Thacher & Bartlett LLP 425 Lexington Avenue

New York, New York 10017 (212) 455-2000

  Stephen Bené Pandora Media, Inc. 2100 Franklin Street

Suite 700 Oakland, California 94612

(510) 451-4100

  Martin A. Wellington Jennifer F. Fitchen Sidley Austin LLP

1001 Page Mill Road, Building 1 Palo Alto, California 94304

(650) 565-7000

Approximate date of commencement of the proposed sale of the securities to the public: AssoonaspracticableafterthisRegistrationStatementbecomeseffectiveanduponcompletionoftheapplicabletransactionsdescribedintheenclosedproxystatement/prospectus.

IfthesecuritiesbeingregisteredonthisFormarebeingofferedinconnectionwiththeformationofaholdingcompanyandthereiscompliancewithGeneralInstructionG,checkthefollowingbox.o

IfthisFormisfiledtoregisteradditionalsecuritiesforanofferingpursuanttoRule462(b)undertheSecuritiesActof1933,asamended,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.o

IfthisFormisapost-effectiveamendmentfiledpursuanttoRule462(d)undertheSecuritiesAct,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.o

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.(Checkone):

           

Largeacceleratedfiler   x   Acceleratedfiler   oNon-acceleratedfiler   o   Smallerreportingcompany   oEmergingGrowthCompany   o

       

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection7(a)(2)(B)oftheSecuritiesAct.o

Ifapplicable,placeanXintheboxtodesignatetheappropriateruleprovisionrelieduponinconductingthistransaction:

ExchangeActRule13e-4(i)(Cross-BorderIssuerTenderOffer)o

ExchangeActRule14d-1(d)(CrossBorderThird-PartyTenderOffer)o

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until theregistrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective inaccordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such dateas the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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Information in this proxy statement/prospectus is not complete and may be changed. We may not sell the securities offered bythis proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is effective.This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in anyjurisdiction where an offer or solicitation is not permitted.

Subject to completion, dated December 14, 2018     

 

PROPOSED TRANSACTION—YOUR VOTE IS VERY IMPORTANTDearStockholdersofPandoraMedia,Inc.:

YouarecordiallyinvitedtoattendaspecialmeetingofthestockholdersofPandoraMedia,Inc.,whichwewillholdon[• ],2018at[• ]a.m.,localtime,at[• ].

Aspreviouslyannounced,onSeptember23,2018,PandoraMedia,Inc.enteredintoanagreementandplanofmergerandreorganizationwithSiriusXMHoldingsInc.,pursuanttowhichSiriusXMwillacquirePandoraand,attheclosingoftheacquisition,eachholderofPandoracommonstockwillbeentitledtoreceive1.44sharesofSiriusXMcommonstockforeachshareofPandoracommonstockissuedandoutstandingimmediatelypriortotheclosing.Ifthetransactioniscompleted,SiriusXMwillacquirealloftheoutstandingsharesofPandoracommonstock.

PandorawillbeholdingaspecialmeetingofthePandorastockholdersforthepurposeofvotingoncertainmattersinconnectionwiththetransaction.NovoteofSiriusXMstockholdersisrequiredinconnectionwiththetransaction,norisanysuchvotebeingsought.

ThemarketvalueofSiriusXMcommonstockbeingissuedasmergerconsiderationwilldependonthemarketpriceofSiriusXMcommonstockontheclosingdate.BasedontheclosingpriceofSiriusXMcommonstockonSeptember21,2018,thelasttradingdaybeforethepublicannouncementoftheexecutionofthemergeragreement,thevalueofthepershareconsiderationpayabletoholdersofPandoracommonstockwouldbe$10.05.BasedontheclosingpriceofSiriusXMcommonstockon[• ],2018,thelastpracticabledatebeforethefilingoftheproxystatement/prospectusaccompanyingthisnotice,thevalueofthepershareconsiderationpayabletoholdersofPandoracommonstockwouldbe$[• ].

ThePandorastockholdersshouldobtaincurrentmarketpricequotationsforsharesofPandoracommonstockandsharesofSiriusXMcommonstock.SharesofPandoracommonstockarelistedonTheNewYorkStockExchangeunderthesymbol“P”andsharesofSiriusXMcommonstockare(andthosesharestobeissuedasmergerconsiderationwillbe)listedontheNASDAQGlobalSelectMarketunderthesymbol“SIRI”.Weexpectthatuponcompletionofthetransactionscontemplatedbythemergeragreement,formerPandorastockholderswillownapproximately[• ]%oftheoutstandingSiriusXMcommonstock(basedonthenumberofsharesofPandoracommonstockoutstandingasofthecloseofbusinesson[• ],2018,whichistherecorddateforthePandoraspecialmeeting,andthenumberofsharesofSiriusXMcommonstockoutstandingasofsuchdate).

ThePandoraboardofdirectorshasdeterminedthatthemergeragreementandthetransactionscontemplatedtherebyarefairto,andinthebestinterestsof,Pandoraanditsstockholders,hasapprovedanddeclaredadvisablethemergeragreementandthetransactionscontemplatedtherebyandrecommendsthatthePandorastockholdersvote“FOR ”themergeragreementproposaland“FOR ”eachoftheotherproposalsdescribedintheaccompanyingproxystatement/prospectus.

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the Pandora special meeting,please vote as soon as possible to make sure that your shares are represented. Submitting a proxy now will not prevent you from being able tovote in person at the Pandora special meeting.

TheobligationsofPandoraandSiriusXMtocompletethemergeraresubjecttothesatisfactionorwaiveroftheconditionssetforthinthemergeragreement,acopyofwhichisincludedaspartoftheaccompanyingproxystatement/prospectus.Theproxystatement/prospectusprovidesyouwithdetailedinformationaboutthemergeragreementandtheproposedtransactions.ItalsocontainsorreferencesinformationaboutPandoraandSiriusXMandcertainrelatedmatters.Youareencouragedtoreadtheproxystatement/prospectuscarefullyandinitsentirety.In particular, you should carefullyread the section entitled “Risk Factors” beginning on page 19 of the proxy statement/prospectus for a discussion of risks you should consider inevaluating the proposed transactions and how they will affect you .YoucanalsoobtaininformationaboutPandoraandSiriusXMfromdocumentsthathavebeenfiledwiththeSecuritiesandExchangeCommissionthatareincorporatedinthisproxystatement/prospectusbyreference.

Thankyouforyourcooperationandwelookforwardtothesuccessfulcompletionofthetransactions.   

Verytrulyyours,   Verytrulyyours,JamesE.MeyerChiefExecutiveOfficerSiriusXMHoldingsInc.

  RogerLynchChiefExecutiveOfficerPandoraMedia,Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the transactions, theadoption of the merger agreement, the issuance of the shares of Sirius XM common stock in connection with the transactions described in theaccompanying proxy statement/prospectus or determined if this proxy statement/prospectus is truthful or complete. Any representation to thecontrary is a criminal offense.

Theaccompanyingproxystatement/prospectusisdated[• ],2018andisfirstbeingmailedtothePandorastockholdersofrecordonorabout[• ],2018.

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Pandora Media, Inc. 2100 Franklin Street, Suite 700

Oakland, California 94612 (510) 451-4100

NOTICE OF SPECIAL MEETING OF STOCKHOLDERSNOTICE IS HEREBY GIVEN thataspecialmeetingofstockholdersofPandoraMedia,Inc.,aDelawarecorporation(“Pandora”),willbeheldon[•],2018,at[• ]a.m.,localtime,at[• ],forthefollowingpurposes:

1. 

toconsiderandvoteonaproposaltoadopttheagreementandplanofmergerandreorganization,datedasofSeptember23,2018(assuchagreementmaybeamendedfromtimetotime),byandamongPandora,SiriusXMHoldingsInc.,aDelawarecorporation(“SiriusXM”),WhiteOaksAcquisitionCorp.,aDelawarecorporationandwhollyownedsubsidiaryofSiriusXM(“MergerSub”),SiriusXMRadioInc.,aDelawarecorporationandwholly-ownedsubsidiaryofSiriusXM(“SiriusXMRadio”),BillboardHoldingCompany,Inc.,aDelawarecorporationandwholly-ownedsubsidiaryofPandora(“NewHoldingCompany”),andBillboardAcquisitionSub,Inc.,aDelawarecorporationandwholly-ownedsubsidiaryofNewHoldingCompany(“HoldcoMergerSub”),pursuanttowhichthefollowingtransactions,eachofwhichwilloccurontheclosingdate:•

 

themergerofHoldcoMergerSubwithandintoPandora,whereupontheseparateexistenceofHoldcoMergerSubwillceaseandPandorawillcontinueasthesurvivingcorporationandawhollyownedsubsidiaryofNewHoldingCompany,and,asaresultthereof,(i)eachshareofPandoracommonstockwillbeconvertedintooneshareofNewHoldingCompanycommonstockand(ii)eachshareofPandora’sseriesAconvertiblepreferredstockwillbeconvertedintooneshareofNewHoldingcompanypreferredstock,havingthesametermsandconditionsasimmediatelypriortotheeffectivetimeofsuchmerger;

• 

theconversionofPandoraintoalimitedliabilitycompanyformedundertheDelawareLimitedLiabilityCompanyActbyfilingwiththeSecretaryofStateoftheStateofDelawareacertificateofconversion;

• 

themergerofMergerSubwithandintoNewHoldingCompany,whereupontheseparateexistenceofMergerSubwillceaseandNewHoldingCompanywillcontinueasthesurvivingcorporationandawhollyownedsubsidiaryofSiriusXM,and,asaresultthereof,(i)eachshareofNewHoldingCompanycommonstockwillbeconvertedintotherighttoreceive1.44sharesofSiriusXMcommonstockand(ii)eachshareofNewHoldingCompanypreferredstockwillremainissuedandoutstandingandunaffectedbysuchmerger;and

• 

themergerofNewHoldingCompanywithandintoSiriusXMRadio,whereupontheseparateexistenceofNewHoldingCompanywillcease,SiriusXMRadiowillcontinueasthesurvivingcorporationandPandorawillbecomeawholly-ownedsubsidiaryofSiriusXMRadio,and,asaresultthereof,(i)eachshareofSiriusXMRadiowillremainissuedandoutstandingandunaffectedbysuchmergerand(ii)eachshareofcapitalstockofNewHoldingCompany(includingthesharesofNewHoldingCompanypreferredstock)willbecancelledfornoconsideration.

2. 

toconsiderandvoteonaproposaltoapprove,onanon-bindingadvisorybasis,certaincompensationthatmaybepaidorbecomepayabletoPandora’snamedexecutiveofficersthatisbasedonorotherwiserelatestothetransactionscontemplatedbythemergeragreement;and

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3. 

toconsiderandvoteonaproposaltoadjournorpostponethePandoraspecialmeeting,ifnecessaryorappropriate,tosolicitadditionalproxiesintheeventtherearenotsufficientvotesatthetimeofthePandoraspecialmeetingtoapprovethemergeragreementproposal.

ThePandoraboardofdirectorshasset[• ],2018astherecorddateforthePandoraspecialmeeting.OnlytheholdersofrecordofPandoracommonstockandPandora’sseriesAconvertiblepreferredstockatthecloseofbusinessontherecorddatewillbeentitledtonoticeofandtovoteatthePandoraspecialmeetingandanyadjournmentsorpostponementsthereof.

Your vote is very important. TheproposaltoadoptthemergeragreementandapprovethetransactionscontemplatedtherebymustbeapprovedbyPandorastockholdersinorderforthetransactionstobecompleted.Thefailuretovoteonthisproposalwillhavethesameeffectasavote“AGAINST”thetransactions.

Afterreadingtheaccompanyingproxystatement/prospectus,pleasemakesuretovoteyoursharesbyproxypromptlybycompleting,signinganddatingtheaccompanyingproxycardandreturningitintheenclosedprepaidenvelopeorbyvotingbyproxybytelephoneorthroughtheInternetbyfollowingtheinstructionsontheaccompanyingproxycard.Ifyouholdsharesthroughanaccountwithabank,brokerorothernominee,pleasefollowtheinstructionsyoureceivefromittovoteyourshares.

Ifyouhaveanyquestionsorneedassistancewithvoting,pleasecontactourproxysolicitor,InnisfreeM&AIncorporated,bycallingtoll-freeat(888)750-5834or(212)750-5833(collect).

BYORDEROFTHEBOARDOFDIRECTORSOFPANDORAMEDIA,INC.

SteveBenéGeneralCounselandCorporateSecretary

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ADDITIONAL INFORMATIONThisproxystatement/prospectusincorporatesimportantbusinessandfinancialinformationfromotherdocumentsthatPandoraandSiriusXMhave

filedwiththeSecuritiesandExchangeCommission,whichwerefertoastheSEC.Foramoredetaileddescriptionoftheinformationanddocumentsincorporatedbyreferenceintothisproxystatement/prospectusandhowyoumayobtainit,pleasesee“WhereYouCanFindMoreInformation”beginningonpage[• ].ThisinformationisavailableforyoutoreviewwithoutchargeattheSEC’spublicreferenceroomlocatedat100FStreet,N.E.,Room1580,Washington,D.C.20549andthroughtheSEC’swebsiteatwww.sec.gov.Youcanobtaincopiesofthisproxystatement/prospectusandanyofthedocumentsincorporatedbyreferenceinthisproxystatement/prospectusorotherinformationaboutPandoraorSiriusXM,withoutcharge,uponwrittenororalrequesttoPandora’sproxysolicitorortheapplicablecompany’sprincipalexecutiveoffice,whichareasfollows:

     

Pandora Media, Inc. 2100FranklinStreet,Suite700Oakland,California94612Attn.:InvestorRelations

(510)451-4100

  Sirius XM Holdings Inc. 1290AvenueoftheAmericas,11thFloor

NewYork,NewYork10104Attn.:InvestorRelations

(212)584-5100If you would like to request any documents, please do so by [ • ], 2018 in order to receive them before the Pandora special meeting.InvestorsmayalsoconsultthePandoraInvestorRelationswebsiteatinvestor.pandora.comortheSiriusXMwebsiteatwww.siriusxm.comfor

moreinformationconcerningthetransactionsdescribedinthisproxystatement/prospectusortoobtainanyofthedocumentsfiledwithorfurnishedtotheSECbyPandoraorSiriusXM,freeofcharge.Informationincludedonthesewebsitesisnotincorporatedbyreferenceintothisproxystatement/prospectus.

Theproxystatement/prospectusprovidesadetaileddescriptionofthemergeragreementandthetransactionscontemplatedthereby.Weurgeyoutoreadtheproxystatement/prospectus,includinganydocumentsincorporatedbyreferenceintotheaccompanyingproxystatement/prospectus,anditsannexescarefullyandintheirentirety.

Ifyouhaveanyquestionsconcerningthetransactionscontemplatedbythemergeragreement,theothermatterstobeconsideredatthePandoraspecialmeetingortheaccompanyingproxystatement/prospectusorneedassistancevotingyoursharesofPandoracommonstock,pleasecontactPandora’sproxysolicitor,InnisfreeM&AIncorporated,bytelephoneat(888)750-5834(toll-free)or(212)750-5833(collect).

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ABOUT THIS PROXY STATEMENT/PROSPECTUSThisproxystatement/prospectus,whichformspartofaregistrationstatementonFormS-4filedwiththeSECbySiriusXM,constitutesa

prospectusofSiriusXMunderSection5oftheSecuritiesActof1933,asamended,whichwerefertoastheSecuritiesAct,withrespecttothesharesofSiriusXM’scommonstock,parvalue$0.001pershare,tobeissuedtothestockholdersofPandorainconnectionwiththeacquisitionofPandorabySiriusXM.ThisdocumentalsoconstitutesaproxystatementofPandoraunderSection14(a)oftheSecuritiesExchangeActof1934,asamended,whichwerefertoasExchangeAct.ItalsoconstitutesanoticeofmeetingwithrespecttoaspecialmeetingofthePandorastockholders,atwhichtheywillbeaskedtovoteuponaproposaltoadoptthemergeragreementandcertainotherproposals.

Youshouldrelyonlyontheinformationcontainedorincorporatedbyreferenceintothisproxystatement/prospectusinconnectionwithanyvote,thegivingorwithholdingofanyproxyoranyinvestmentdecisioninconnectionwiththetransactionscontemplatedbythemergeragreement.NeitherPandoranorSiriusXMhasauthorizedanyonetoprovideyouwithinformationthatisdifferentfromthatcontainedin,orincorporatedbyreferenceinto,thisproxystatement/prospectus.Thisproxystatement/prospectusisdated[• ],2018.Youshouldnotassumethattheinformationcontainedin,orincorporatedbyreferenceinto,thisproxystatement/prospectusisaccurateasofanydateotherthansuchdate,unlessotherwisespecificallyprovidedherein,andyoushouldnotassumethattheinformationincorporatedbyreferencehereinisaccurateasofanydateotherthanthedateoftheincorporateddocument.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation ofa proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.Information contained in this proxy statement/prospectus regarding Sirius XM has been provided by Sirius XM, and information contained inthis proxy statement/prospectus regarding Pandora has been provided by Pandora.

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TABLE OF CONTENTS   

QUESTIONSANDANSWERSABOUTTHEPANDORASPECIALMEETING   

  1 SUMMARY

   

  6 TheParties

   

  6 TheTransactions

   

  7 MergerConsideration

   

  7 TreatmentofPandoraStock-BasedAwards

   

  8 RecommendationofthePandoraBoardofDirectors

   

  8 OpinionsofPandora’sFinancialAdvisors

   

  8 PandoraSpecialMeeting

   

  10 InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions

   

  10 AntitrustApprovalsRequiredfortheTransactions

   

  10 ConditionstoCompletionoftheTransactions

   

  10 Go-ShopandNon-SolicitationbyPandora

   

  11 Termination

   

  11 TerminationFee

   

  12 ComparisonofStockholders’Rights

   

  12 LitigationRelatedtotheTransactions

   

  12 AppraisalRights

   

  12 RiskFactors

   

  12 AccountingTreatmentoftheMerger

   

  12 MaterialU.S.FederalIncomeTaxConsequences

   

  12 SELECTEDHISTORICALFINANCIALDATAFORSIRIUSXM

   

  14 SELECTEDHISTORICALFINANCIALDATAFORPANDORA

   

  15 RISKFACTORS

   

  19 RisksRelatingtotheTransactions

   

  19 RisksRelatingtotheCombinedCompanyAfterClosingoftheTransactions

   

  22 CAUTIONARYSTATEMENTCONCERNINGFORWARD-LOOKINGSTATEMENTS

   

  26 THEPANDORASPECIALMEETING

   

  28 Time,PlaceandDate

   

  28 PurposeofthePandoraSpecialMeeting

   

  28 RecommendationofthePandoraBoardofDirectors

   

  28 RecordDate;StockEntitledtoVote

   

  28 Quorum

   

  28 RequiredVote;OutstandingShares

   

  28 VotingProceduresforRecordHolders

   

  29 RevokingaProxy

   

  30 VoteofPandora’sDirectorsandExecutiveOfficers

   

  30 ProxySolicitationCosts

   

  30 OtherInformation

   

  31 Assistance

   

  31 Householding

   

  32 i

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PANDORAPROPOSALS   

  33 Proposal1:TheMergerAgreementProposal

   

  33 Proposal2:TheAdvisoryCompensationProposal

   

  33 Proposal3:TheAdjournmentProposal

   

  34 THEPARTIES

   

  35 THETRANSACTIONS

   

  38 BackgroundoftheTransactions

   

  38 Pandora’sPurposeandReasonsfortheTransactions;RecommendationsofthePandoraBoardofDirectors

   

  51 CertainFinancialForecasts

   

  54 OpinionsofPandora’sFinancialAdvisors

   

  60 TheSiriusXMBoardofDirectors’ReasonsfortheTransactions

   

  78 InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions

   

  79 LitigationRelatedtotheTransactions

   

  86 MaterialU.S.FederalIncomeTaxConsequences

   

  87 AntitrustApprovalsRequiredfortheTransactions

   

  91 AccountingTreatment

   

  92 PublicTradingMarkets

   

  92 THEMERGERAGREEMENT

   

  93 UNAUDITEDPROFORMACONDENSEDCOMBINEDCONSOLIDATEDFINANCIALINFORMATION

   

  114 DESCRIPTIONOFSIRIUSXMCAPITALSTOCK  

  125 COMPARISONOFSTOCKHOLDERS’RIGHTS  

  127 APPRAISALRIGHTS  

  135 LEGALOPINIONS  

  135 EXPERTS  

  135 OTHERMATTERS  

  135 PANDORAANNUALMEETINGSTOCKHOLDERPROPOSALS  

  135 WHEREYOUCANFINDMOREINFORMATION  

  136 ANNEXA:AGREEMENTANDPLANOFMERGERANDREORGANIZATION

   

  A-1 ANNEXA1:JOINDERTOMERGERAGREEMENT

   

 A1-1 ANNEXB:OPINIONOFCENTERVIEWPARTNERSLLC

   

  B-1 ANNEXC:OPINIONOFLIONTREEADVISORSLLC

   

  C-1 ii

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QUESTIONS AND ANSWERS ABOUT THE PANDORA SPECIAL MEETINGThefollowingquestionsandanswersbrieflyaddresssomecommonlyaskedquestionsaboutthePandoraspecialmeeting.Theymaynot

includealltheinformationthatisimportanttothePandorastockholders.WeurgePandorastockholderstoreadcarefullythisentireproxystatement/prospectus,includingtheannexesandtheotherdocumentsreferredtoherein. 

Q: 

Why am I receiving these materials? 

A: 

OnSeptember23,2018,PandoraMedia,Inc.,whichwerefertoasPandora,agreedtobeacquiredbySiriusXMHoldingsInc.,whichwerefertoasSiriusXM,andwerefertosuchtransactions,collectively,astheacquisitionortransactions,pursuanttoanagreementandplanofmergerandreorganization,whichwereferto,asamendedfromtimetotime,asthemergeragreement,byandamongPandora,SiriusXM,WhiteOaksAcquisitionCorp.,awholly-ownedsubsidiaryofSiriusXMwhichwerefertoasMergerSub,SiriusXMRadioInc.,awholly-ownedsubsidiaryofSiriusXMwhichwerefertoasSiriusXMRadio,BillboardHoldingCompany,Inc.,awholly-ownedsubsidiaryofPandorawhichwerefertoasNewHoldingCompanyandBillboardAcquisitionSub,Inc.,awholly-ownedsubsidiaryofNewHoldingCompanywhichwerefertoasHoldcoMergerSub.TheacquisitioncannotbecompletedunlessthePandorastockholdersadoptthemergeragreementand,accordingly,Pandoraisholdingaspecialmeeting,whichwerefertoasthePandoraspecialmeeting,ofitsstockholderstovoteonsuchproposal.

    

Informationaboutsuchproposal,thePandoraspecialmeetingandtheotherbusinesstobeconsideredbythePandorastockholdersatthePandoraspecialmeetingiscontainedinthisproxystatement/prospectus.

    

WearedeliveringthisdocumenttoyouasbothaproxystatementofPandoraandaprospectusofSiriusXM.ItisaproxystatementbecausethePandoraboardofdirectorsissolicitingproxiesfromitsstockholders.ItisaprospectusbecauseholdersofsharesofPandoracommonstock,parvalue$0.0001pershare,whichwerefertoasPandoracommonstock,willreceiveinexchangeforsuchshares,attheclosingofthetransactions,whichwerefertoastheclosing,sharesofSiriusXMcommonstock,parvalue$0.001pershare,whichwerefertoasSiriusXMcommonstock.

 

Q: 

What will Pandora stockholders receive in the transactions? 

A: 

EachshareofPandoracommonstockissuedandoutstandingimmediatelypriortotheclosingoftheacquisitionwill,afterinitiallybeingconvertedintoashareofNewHoldingCompanycommonstock(asdefinedbelow)intheholdingcompanymerger(asdefinedbelow),entitletheholderthereoftoreceive1.44sharesofSiriusXMcommonstock,whichwerefertoastheexchangeratioandsuchsharesissuedasthemergerconsideration,asaresultofthemerger(asdefinedbelow).TheexchangeratioisfixedandwillnotbeadjustedtoreflectchangesinthestockpriceofPandoracommonstockorSiriusXMcommonstockpriortotheclosing.

    

SiriusXMwillnotissueanyfractionalsharesofSiriusXMcommonstockinconnectionwiththetransactionsandeachholderofsharesofPandoracommonstockwhowouldotherwisehavebeenentitledtoreceiveafractionofashareofSiriusXMcommonstockwillreceiveanamountofcash,withoutinterest,inlieuofsuchfractionofashare,asdescribedinthisproxystatement/prospectus.

    

Uponcompletionofthetransactions,theformerPandorastockholderswillownapproximately[• ]%oftheoutstandingSiriusXMcommonstock(basedonthenumberofsharesofPandoracommonstockoutstandingasoftherecorddateforthePandoraspecialmeetingandthenumberofsharesofSiriusXMcommonstockoutstandingasofsuchdate).SiriusXMstockholderswillcontinuetoowntheirexistingshares,whichwillnotbeaffectedbythetransactions.

    

EachshareofPandora’sSeriesAConvertiblePreferredStock,parvalue$0.0001pershare,whichwerefertoasthePandorapreferredstock,willbecancelledfornoconsideration.SiriusXMRadioisthesoleholderofsuchpreferredstock.

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Q: 

When and where will the Pandora special meeting be held? 

A: 

ThePandoraspecialmeetingwillbeheldon[• ],2018at[• ]a.m.,localtime,at[• ]. 

Q: 

Who is entitled to vote at the Pandora special meeting and how many votes do I have? 

A: 

ThePandoraboardofdirectorshasfixed[• ],2018astherecorddateforthePandoraspecialmeeting,whichwerefertoastherecorddate.    

AllholdersofrecordofsharesofPandoracommonstockandPandorapreferredstockasofthecloseofbusinessontherecorddateareentitledtoreceivenoticeof,andtovoteat,thePandoraspecialmeeting.

    

EachholderofrecordofsharesofPandoracommonstockisentitledtoonevoteforeachshareofPandoracommonstockownedasofthecloseofbusinessontherecorddate.Asofthecloseofbusinessontherecorddate,therewere[• ]sharesofPandoracommonstockissuedandoutstanding.

    

ThePandorapreferredstockisentitledtovoteonanas-convertedbasis.Asoftherecorddate,therewere480,000sharesofPandorapreferredstockissuedandoutstanding,allofwhichwereownedbySiriusXMRadio,andwhichare,intheaggregate,entitledto[• ]votes(whichnumberisequaltothenumberofsharesofPandoracommonstockintowhichthesharesofPandorapreferredstockcouldbeconvertedontherecorddateandconstitutesapproximately[• ]%ofthevotingpowerofPandorastockholders).SiriusXMhasagreedtovoteallofthesharesofPandorapreferredstockbeneficiallyownedbyitinfavorofthemergeragreementproposal(asdefinedbelow).

 

Q: 

What am I being asked to vote on? 

A: 

AtthePandoraspecialmeeting,thePandorastockholdersarebeingaskedtoconsiderandvoteupon: 

• 

aproposaltoadoptthemergeragreement,whichwerefertoasthemergeragreementproposal; 

• 

aproposaltoapprove,onanon-bindingadvisorybasis,certaincompensationthatmaybepaidorbecomepayabletoPandora’snamedexecutiveofficersthatisbasedonorotherwiserelatestothetransactions,whichwerefertoastheadvisorycompensationproposal;and

 

• 

aproposaltoadjournorpostponethePandoraspecialmeeting,ifnecessaryorappropriate,tosolicitadditionalproxiesintheeventtherearenotsufficientvotesatthetimeofthePandoraspecialmeetingtoapprovethemergeragreementproposal,whichwerefertoastheadjournmentproposal.

    

Themergeragreementproposalmustbeapprovedinorderforthetransactionstobecompleted.Theapprovaloftheadvisorycompensationproposalandtheadjournmentproposalarenotconditionstocompletionofthetransactions.

 

Q: 

What vote is required to approve each proposal? 

A: 

Themergeragreementproposal:ApprovalofthemergeragreementproposalrequirestheaffirmativevoteoftheholdersofamajorityofthecombinedvotingpoweroftheoutstandingsharesofPandoracommonstockandPandorapreferredstockentitledtovotethereon,votingtogetherasasingleclass.

    

Theadvisorycompensationproposal:Assumingaquorumispresent,approvaloftheadvisorycompensationproposalrequirestheaffirmativevoteoftheholdersofamajorityofthesharesofPandoracommonstockandPandorapreferredstockpresentinpersonorrepresentedbyproxyatthePandoraspecialmeetingandentitledtovotethereon.

    

Theadjournmentproposal:Assumingaquorumispresent,approvaloftheadjournmentproposalrequirestheaffirmativevoteoftheholdersofamajorityofthesharesofPandoracommonstockandPandorapreferredstockpresentinpersonorrepresentedbyproxyatthePandoraspecialmeetingandentitledtovotethereon.Ifaquorumisnotpresent,theadjournmentproposalmaystillbeapprovedbytheaffirmativevoteoftheholdersofamajorityinvotingpowerofthe

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sharesofPandoracommonstockandPandorapreferredstockheldbythePandorastockholderspresentinpersonorrepresentedbyproxyatthePandoraspecialmeeting.

 

Q: 

What constitutes a quorum? 

A: 

TheholdersofamajorityofthecombinedvotingpoweroftheoutstandingsharesofPandoracommonstockandPandorapreferredstockentitledtovoteatthePandoraspecialmeeting,presentinpersonorrepresentedbyproxy,shallconstituteaquorumforpurposesofthematterstobevotedonatthePandoraspecialmeeting.

    

IfyouholdsharesofPandoracommonstockinyourownnameandsubmitaproxybutfailtoprovidevotinginstructionsorabstainonanyoftheproposalslistedontheproxycard,yourshareswillbecountedforpurposesofdeterminingwhetheraquorumispresentatthePandoraspecialmeeting.

    

IfyoursharesofPandoracommonstockareheldin“streetname”byyourbroker,bankorothernomineeandyoudonottellthenomineehowtovoteyourshares,theseshareswillnotbecountedforpurposesofdeterminingwhetheraquorumispresentforthetransactionofbusinessatthePandoraspecialmeeting.

 

Q: 

How does the Pandora board of directors recommend that I vote? 

A: 

ThePandoraboardofdirectorsrecommendsthatyouvote“FOR ”themergeragreementproposal,“FOR ”theadvisorycompensationproposaland“FOR ”theadjournmentproposal.

 

Q: 

If my shares are held in “street name” by a bank, broker or other nominee, will my bank, broker or nominee vote my shares for me? 

A: 

Yourbank,brokerorothernomineedoesnothaveauthoritytovoteontheproposalsdescribedinthisproxystatement/prospectus.Yourbank,brokerorothernomineewillvoteyoursharesheldbyitin“streetname”withrespecttothesemattersONLYifyouprovideinstructionstoitonhowtovote.Youshouldfollowthedirectionsyourbank,brokerorothernomineeprovides.

 

Q: 

How do I vote? 

A: 

Ifyouareastockholderofrecord,youmaysubmitaproxytovotebeforethePandoraspecialmeetinginoneofthefollowingways: 

• 

usethetoll-freenumbershownonyourproxycard; 

• 

visitthewebsiteshownonyourproxycardtovoteviatheInternet;or 

• 

complete,sign,dateandreturntheenclosedproxycard.    

YoumayalsocastyourvoteinpersonatthePandoraspecialmeeting.    

Ifyouholdyoursharesin“streetname”throughabank,brokerorothernominee,yourbank,brokerorothernomineewillseparatelysendyouavotinginstructioncarddescribingtheprocedureforvotingyoursharesofPandoracommonstock.

 

Q: 

Can I change my vote after I have returned a proxy or voting instruction card or voted via the Internet or by telephone? 

A: 

Yes.IfyouareastockholderofrecordofPandoracommonstock,whetheryouvotebymail,viatheInternetorbytelephone,youcanchangeorrevokeyourproxybeforeitisvotedatthePandoraspecialmeetingby:

 

• 

submittinganewproxycardbearingalaterdate,whichnewproxycardmustbereceivedpriortoyoursharesofPandoracommonstockbeingvotedatthePandoraspecialmeeting;

 

• 

submittingnewvotinginstructionsviatheInternetorbytelephoneatanytimebefore11:59p.m.,EasternTime,onthedaybeforethePandoraspecialmeeting;

 

• 

deliveringawrittennoticeofyourrevocation,whichcanbedeliveredtothePandoracorporatesecretaryatPandoraMedia,Inc.,Attention:CorporateSecretary,2100FranklinStreet,Suite700,Oakland,California94612anditmustbereceivedbeforeyoursharesofPandoracommonstockarevotedatthePandoraspecialmeeting;or

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• 

votinginpersonatthePandoraspecialmeeting.PleasenotethatyourattendanceatthePandoraspecialmeetingwillnotaloneservetorevokeyourproxy.

    

Ifyouholdyoursharesin“streetname”throughabank,brokerorothernominee,youmustfollowtheinstructionsofyourbank,brokerorothernomineetorevokeorchangeyourvotinginstructions.

 

Q: 

How will my shares of Pandora common stock be voted if I return a blank proxy? 

A: 

Ifyoucomplete,sign,dateandreturnyourproxycardanddonotindicatehowyouwantyoursharesofPandoracommonstocktobevoted,thenyoursharesofPandoracommonstockwillbevoted“FOR ”themergeragreementproposal,“FOR ”theadvisorycompensationproposaland“FOR ”theadjournmentproposal,ifnecessaryorappropriatetosolicitadditionalproxiesinfavoroftheapprovalofthemergeragreement.

 

Q: 

What should I do if I receive more than one set of voting materials? 

A: 

YoumayreceivemorethanonesetofvotingmaterialsrelatingtothePandoraspecialmeetingifyouholdsharesofPandorastockin“streetname”andalsodirectlyinyournameasastockholderofrecordorotherwiseorifyouholdsharesofPandoracommonstockinmorethanonebrokerageaccount.Ifyoudoreceivemorethanonesetofvotingmaterials,youshouldfollowtheappropriateproceduresineachsetofvotingmaterialsandeachsetshouldbevotedand/orreturnedseparatelyinordertoensurethatyouvoteallofyourshares.

 

Q: 

What happens if I sell my shares of Pandora common stock before the Pandora special meeting? 

A: 

TherecorddateisearlierthanthedateofthePandoraspecialmeetingandthedatethatthetransactionsareexpectedtobecompleted.    

IfyousellorotherwisetransferyoursharesofPandoracommonstockaftertherecorddatebutbeforethePandoraspecialmeeting,youwill,unlessspecialarrangementsaremade,retainyourrighttovoteatthePandoraspecialmeetingbutwillhavetransferredtherighttoreceiveSiriusXMcommonstockasmergerconsiderationtothepersontowhomyoutransferredyoursharesofPandoracommonstock.Inordertoreceivethemergerconsideration,youmustholdyoursharesofPandoracommonstockthroughtheclosingofthetransactions.

 

Q: 

Are Pandora stockholders entitled to appraisal rights in connection with the transactions? 

A: 

No.Pandorastockholdersarenotentitledtoappraisalrightsinconnectionwiththetransactions.Formoreinformationregardingappraisalrights,see“AppraisalRights”beginningonpage[• ].

 

Q: 

What are the material U.S. federal income tax consequences of the transactions to U.S. Pandora stockholders? 

A: 

SiriusXMandPandoraintendforeachoftheholdingcompanymergerandtheconversion,takentogether,andthemergerandtheSiriusXMRadiomerger,takentogether,toqualifyasa“reorganization”withinthemeaningofSection368(a)oftheInternalRevenueCodeof1986,whichwerefertoastheCode,forU.S.federalincometaxpurposes.Ifthetransactionssoqualify,thenaU.S.holderofPandoracommonstockgenerallywillnotrecognizeanygainorlossasaresultofthetransactions(otherthangainorlosswithrespecttocashreceivedinlieuofafractionalshare).However,ifeitherPandoraorSiriusXMareunabletoreceiveanopinionofcounseltothateffect,thepartieshaveagreedtorestructurethetransactionssothatthetransactionswillbetreatedasataxablestocksale.Additionally,thepartieswillreviseandrecirculatethisproxystatement/prospectusandthePandoraboardofdirectorswillresolicitapprovalofthePandorastockholdersinfavoroftherestructuredtransaction.

    

ThetaxconsequencesofthetransactionstoPandorastockholdersmaydependonsuchstockholder’sparticularfactsandcircumstances.EachPandorastockholdershouldreadthediscussionunder“TheTransactions—MaterialU.S.FederalIncomeTaxConsequences”beginningonpage[• ]andshouldconsultitsowntaxadvisorforafullunderstandingofthetaxconsequencesofthetransactionstosuchstockholder.

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Q: 

When do you expect the transactions to be completed? 

A: 

SiriusXMandPandoracurrentlyexpecttocompletethetransactionsduringthefirstquarterof2019.However,thecompletionofthetransactionsissubjecttovariousconditions,includingapplicableantitrustapprovalandapprovalofthePandorastockholders,anditispossiblethatfactorsoutsideofthecontrolofSiriusXMandPandoracouldresultinthetransactionsbeingcompletedatalatertime,ornotatall.

    

Formoreinformation,see“TheMergerAgreement—ConditionstoCompletionoftheTransactions”beginningonpage[• ]. 

Q: 

What do I need to do now? 

A: 

Carefullyreadandconsidertheinformationcontainedinandincorporatedbyreferenceintothisproxystatement/prospectus,includingitsannexes,andreturnyourcompleted,signedanddatedproxycard(s)bymailintheenclosedpostage-paidenvelopeorsubmityourvotinginstructionsbytelephoneorviatheInternetassoonaspossiblesothatyoursharesofPandoracommonstockwillbevotedinaccordancewithyourinstructions.

    

You should not send in your Pandora stock certificates at this time .Afterthetransactionsarecompleted,ifyouholdcertificatesrepresentingsharesofPandoracommonstockimmediatelypriortotheclosingofthetransactions,youwillreceiveseparatewritteninstructionsforsurrenderingyourstockcertificatesinexchangeforthemergerconsideration.Inthemeantime,youshouldretainyourstockcertificates.

 

Q: 

Where can I find more information about the companies? 

A: 

YoucanfindmoreinformationaboutPandoraandSiriusXMfromthevarioussourcesdescribedunder“WhereYouCanFindMoreInformation”beginningonpage[• ].

 

Q: 

Whom should I contact if I have any questions about the proxy materials or voting? 

A: 

PandorastockholderswhohavequestionsaboutthetransactionsorthematterstobevotedonatthePandoraspecialmeeting,orwhodesireadditionalcopiesofthisproxystatement/prospectusshouldcontact:

InnisfreeM&AIncorporated501MadisonAvenue,20thFloor

NewYork,NY10022Pandorastockholdersmaycalltoll-free:

(888)750-5384BanksandBrokersmaycallcollect:

(212)750-5833or

PandoraMedia,Inc.2100FranklinStreet,Suite700Oakland,California94612Attn.:InvestorRelations

(510)451-4100

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SUMMARYThefollowingsummaryhighlightsselectedinformationcontainedelsewhereinthisproxystatement/prospectus.Thissummarydoesnot

containalloftheimportantinformationthatyoushouldconsiderbeforevotingontheproposals.Youshouldcarefullyreadtheentireproxystatement/prospectus,includingtheannexesandthedocumentsincorporatedbyreferenceherein.Eachiteminthissummaryincludesapagereferencedirectingyoutoamorecompletedescriptionofthatitem.

The Parties

Sirius XM, Sirius XM Radio and Merger Sub 1290AvenueoftheAmericas,11thFloorNewYork,NewYork10104(212)584-5100

SiriusXMisaDelawarecorporation.SiriusXM’scommonstockislistedontheNASDAQGlobalSelectMarket,whichwerefertoasNASDAQ,underthesymbol“SIRI”.

SiriusXMownsSiriusXMRadio,whichisaDelawarecorporation.SiriusXMRadioistheworld’slargestradiocompanymeasuredbyrevenueandhasapproximately33.5millionsubscribers.SiriusXMRadiotransmitsmusic,sports,entertainment,comedy,talk,news,trafficandweatherchannels,aswellasinfotainmentservices,intheUnitedStatesonasubscriptionfeebasisthroughitstwoproprietarysatelliteradiosystems.Subscriberscanalsoreceivemusicandotherchannels,plusfeaturessuchasSiriusXMOnDemand,overitsInternetradioservice,includingthroughapplicationsformobiledevices,homedevicesandotherconsumerelectronicequipment.SiriusXMalsoprovidesconnectedvehicleservices.SiriusXM’sconnectedvehicleservicesaredesignedtoenhancethesafety,securityanddrivingexperienceforvehicleoperatorswhileprovidingmarketingandoperationalbenefitstoautomakersandtheirdealers.

MergerSubisaDelawarecorporationandadirect,whollyownedsubsidiaryofSiriusXM.MergerSubwasformedbySiriusXMsolelyforthepurposeofengaginginthetransactionscontemplatedbythemergeragreementandhasnotcarriedonanybusinessorconductedanyotheroperations.

LibertyMediaCorporation,whichwerefertoasLibertyMedia,ownsapproximately[• ]%oftheoutstandingSiriusXMcommonstockas[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus,anduponcompletionofthetransactions,weexpectthatLibertyMediawillownapproximately[• ]%oftheoutstandingSiriusXMcommonstock(basedonthenumberofsharesofSiriusXMcommonstockoutstandingon[• ],2018thelastpracticabledatebeforethefilingofthisproxystatement/prospectus).

Pandora, New Holding Company and Holdco Merger SubPandoraisaDelawarecorporation.Pandora’scommonstockislistedonTheNewYorkStockExchange,whichwerefertoasNYSE,under

thesymbol“P”.Pandoraistheworld’smostpowerfulmusicdiscoveryplatform,offeringapersonalizedexperienceforeachofPandora’slistenerswherever

andwhenevertheywanttolistentomusic—whetherthroughmobiledevices,carspeakersorconnecteddevicesinthehome.Unliketraditionalradiothatbroadcaststhesamecontentatthesametimetoallofitslisteners,Pandoraenablesitslistenerstocreatepersonalizedstationsandplaylists,aswellassearchandplaysongsandalbumson-demand.TheMusicGenomeProject,Pandora’scontentprogrammingalgorithmsanddatacollectedfromitslistenerspowerPandora’sabilitytopredictlistenermusicpreferences,playmusiccontentsuitedtothetastesofeachindividuallistenerandintroducelistenerstothemusicitthinkstheywilllove.Foundedbymusicians,Pandoraalsoempowersartistswithvaluabledataandtoolstohelpgrowtheiraudienceandconnectwiththeirfans.

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NewHoldingCompanyisaDelawarecorporationandawhollyownedsubsidiaryofPandora,andHoldcoMergerSubisaDelawarecorporationandawhollyownedsubsidiaryofNewHoldingCompany.EachofNewHoldingCompanyandHoldcoMergerSubwasformedbyPandorasolelyforthepurposeofengaginginthetransactionscontemplatedbythemergeragreementandhasnotcarriedonanybusinessorconductedanyotheroperations.

The Transactions (page [ • ])OnSeptember23,2018,PandoraagreedtobeacquiredbySiriusXMpursuanttothetermsandconditionsofthemergeragreement.On

October25,2018,ascontemplatedbythemergeragreement,SiriusXMRadio,NewHoldingCompanyandHoldcoMergerSubenteredintoajoinderagreementtobecomepartiestothemergeragreement.

Thetermsandconditionsoftheacquisitionarecontainedinthemergeragreement,whichisattachedasAnnexAtothisproxystatement/prospectus.Weencourageyoutoreadthemergeragreementcarefully,asitisthelegaldocumentthatgovernsthetransactions.

IftherequisitePandorastockholderapprovalisobtainedandtheotherconditionstoclosingunderthemergeragreementaresatisfiedorwaived,ontheclosingdatetheacquisitionwillbeeffectedasfollows: 

• 

HoldcoMergerSubwillmergewithandintoPandora,whichwerefertoastheholdingcompanymerger,withPandorasurvivingtheholdingcompanymergerasawhollyownedsubsidiaryofNewHoldingCompanyand,asaresultthereof:

 

o 

eachshareofPandoracommonstockwillbeconvertedintooneshareofNewHoldingCompanycommonstock;and 

o 

eachshareofPandorapreferredstockwillbeconvertedintooneshareofNewHoldingcompanypreferredstock,havingthesametermsandconditionsasimmediatelypriortotheeffectivetimeoftheholdingcompanymerger;

 

• 

immediatelyfollowingtheholdingcompanymerger,Pandorawillbeconvertedintoalimitedliabilitycompany,whichwerefertoastheconversion;

 

• 

immediatelyfollowingtheconversion,MergerSubwillmergewithandintoNewHoldingCompany,whichwerefertoasthemerger,withNewHoldingCompanysurvivingthemergerasawhollyownedsubsidiaryofSiriusXMand,asaresultthereof:

 

o 

eachshareofNewHoldingCompanycommonstockwillbeconvertedintotherighttoreceive1.44sharesofSiriusXMcommonstock;and

 

o 

eachshareofNewHoldingCompanypreferredstockwillremainissuedandoutstandingandwillbeunaffectedbythemerger;and 

• 

immediatelyfollowingthemerger,NewHoldingCompanywithmergewithandintoSiriusXMRadio,whichwerefertoastheSiriusXMRadiomerger,withSiriusXMRadiosurvivingtheSiriusXMRadiomerger,whereupontheseparateexistenceofNewHoldingCompanywillceaseandPandorawillbeawholly-ownedsubsidiaryofSiriusXMRadioand,asaresultthereof:

 

o 

eachshareofSiriusXMRadiowillremainissuedandoutstandingandunaffectedbysuchmerger;and 

o 

eachshareofcapitalstockofNewHoldingCompany(includingthesharesofNewHoldingCompanypreferredstock)willbecancelledfornoconsideration.

Merger Consideration (page [ • ])Asaresultoftheclosingofthetransactions,eachshareofPandoracommonstockheldimmediatelypriortotheclosingwill,afterinitially

beingconvertedintoashareofNewHoldingCompanycommonstockintheholdingcompanymerger,entitletheholderthereoftoreceive1.44sharesofSiriusXMcommonstockasaresultofthemerger,whichnumberofshareswerefer

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toastheexchangeratio.TheexchangeratioisfixedandwillnotbeadjustedtoreflectchangesinthestockpriceofPandoracommonstockorSiriusXMcommonstockpriortotheclosing.

Treatment of Pandora Stock-Based Awards (page [ • ])StockOptions.Attheclosingofthetransactions,eachoptiongrantedbyPandoraunderitsstockincentiveplanstopurchasesharesof

Pandoracommonstockthatisoutstandingimmediatelypriortotheclosingofthetransactions,whethervestedorunvested,whichwerefertoasaPandorastockoption,willbeassumedandconvertedintoanoptiontopurchasesharesofSiriusXMcommonstock,whichwerefertoasaconvertedSiriusXMoption,withappropriateadjustments(basedontheexchangeratio)totheexerciseprice(roundeduptothenearestwholecent)andnumberofsharesofSiriusXMcommonstock(roundeddowntothenearestwholeshare)subjecttosuchconvertedSiriusXMoption,andwillhavethesamevestingscheduleandexerciseconditionsasineffectasofimmediatelypriortotheclosingofthetransactions.However,anyPandorastockoptionthathasanexercisepricepersharethatisequaltoorgreaterthanthevalue,attheclosingofthetransactions,ofSiriusXMcommonstockissuedasmergerconsiderationinexchangeforeachshareofPandoracommonstock,willbecancelledwithoutpaymenttherefor.

RestrictedStockUnits.Attheclosingofthetransactions,eachrighttoreceiveoneshareofPandoracommonstockgrantedbyPandoraunderitsstockincentiveplansintheformof“stockunits”thatisoutstandingandunvestedimmediatelypriortotheclosingofthetransactions,whichwerefertoasaPandoraRSU,willbeassumedandconvertedintoarighttoreceiveanumberofsharesofSiriusXMcommonstock,whichwerefertoasaconvertedSiriusXMRSU,withappropriateadjustments(basedontheexchangeratio)tothenumberofsharesofSiriusXMcommonstocktobereceiveduponvesting(roundeddowntothenearestwholeshare),andwillhavethesamevestingscheduleandsettlementdateasineffectasofimmediatelypriortotheclosingofthetransactions.

PerformanceAward.Attheclosingofthetransactions,eachunvestedperformanceawardgrantedbyPandoraunderitsstockincentiveplansthatisoutstandingandunvestedimmediatelypriortotheclosingofthetransactions,whichwerefertoasaPandoraperformanceaward,willbecancelledandforfeitedif,attheclosingofthetransactions,thevalueofSiriusXMcommonstockissuedasmergerconsiderationinexchangeforeachshareofPandoracommonstockislessthan$20.00.Ifsuchclosingvalueequalsorexceeds$20.00,theneachPandoraperformanceawardwillbeassumedandconvertedintoatime-vestingawardrepresentingtherighttoreceiveanumberofsharesofSiriusXMcommonstock(roundeddowntothenearestwholeshare),whichwerefertoasaconvertedSiriusXMperformanceaward,basedontheexchangeratio,andwillhavethesametime-vestingscheduleandsettlementdateasineffectasofimmediatelypriortotheclosingofthetransactions.

Recommendation of the Pandora Board of Directors (page [ • ])ThePandoraboardofdirectors(i)hasdeterminedthatthemergeragreementandthetransactionscontemplatedtherebyarefairto,andinthe

bestinterestsof,Pandoraanditsstockholders,(ii)hasapprovedanddeclaredadvisablethemergeragreementandthetransactionscontemplatedtherebyand(iii)recommendsthatPandorastockholdersvote“FOR ”themergeragreementproposaland“FOR ”eachoftheotherproposalsdescribedintheaccompanyingproxystatement/prospectus.ThememberofthePandoraboardofdirectorsthatareaffiliatedwithSiriusXMdidnotparticipateinsuchdecision.See“TheTransactions—RecommendationofthePandoraBoardofDirectorsandReasonsfortheTransactions”beginningonpage[• ].

Opinions of Pandora’s Financial Advisors (page [ • ])

Opinion of Centerview Partners LLCPandoraretainedCenterviewPartnersLLC,whichwerefertoasCenterview,asafinancialadvisortothePandoraboardofDirectorsin

connectionwiththetransactions.Inconnectionwith

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thisengagement,thePandoraboardofdirectorsrequestedthatCenterviewevaluatethefairness,fromafinancialpointofview,totheholdersofsharesofPandoracommonstock(otherthanthoseownedbyPandora(includingsharesofPandoracommonstockheldastreasurystockorotherwise)andanysharesofPandoracommonstockheldbySiriusXMoranyaffiliateofPandoraorSiriusXM(whichsharesarecollectivelyreferredtoas“excludedshares”throughoutthissectionandthesummaryofCenterview’sopinionbelowunderthecaption“OpinionofCenterviewPartnersLLC”)oftheexchangeratio.OnSeptember23,2018,CenterviewrenderedtothePandoraboardofdirectorsitsoralopinion,whichwassubsequentlyconfirmedbydeliveryofawrittenopiniondatedSeptember23,2018,that,asofsuchdateandbaseduponandsubjecttotheassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyCenterviewinpreparingitsopinion,theexchangeratiowasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstockotherthanexcludedshares.

ThefulltextofCenterview’swrittenopinion,datedSeptember23,2018,whichdescribestheassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyCenterviewinpreparingitsopinion,isattachedasAnnexBandisincorporatedhereinbyreference.In accordance with its engagement letter, Centerview’s financial advisory services and opinion wereprovided for the information and assistance of the members of the Pandora board of directors who are not designated by, or otherwiseaffiliated with, Sirius XM (which we refer to as the non-Sirius XM board members) (in their capacity as directors and not in any othercapacity) in connection with and for purposes of its consideration of the transactions, and Centerview’s opinion addressed only thefairness, from a financial point of view, as of the date thereof, to the holders of shares of Pandora common stock (other than excludedshares) of the exchange ratio. Centerview’s opinion did not address any other term or aspect of the merger agreement or the transactionsand does not constitute a recommendation to any stockholder of Pandora or any other person as to how such stockholder or other personshould vote or otherwise act with respect to the transactions or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made,procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing itsopinion.

Opinion of LionTree Advisors LLCOnSeptember23,2018,atameetingofthePandoraboardofdirectors,LionTreeAdvisorsLLC(whichwerefertoasLionTree)renderedan

oralopiniontothePandoraboardofdirectors(whichwassubsequentlyconfirmedinwritingbydeliveryofLionTree’swrittenopiniondatedSeptember23,2018)astothefairness,fromafinancialpointofview,asofsuchdate,oftheexchangeratiototheholdersofPandoracommonstock(forpurposesofsuchopinion,otherthanSiriusXManditsaffiliates,whichwerefertocollectivelyasthe“excludedparties”),baseduponandsubjecttotheproceduresfollowed,assumptionsmade,qualificationsandlimitationsonthereviewundertaken,andothermattersconsideredbyLionTreeinpreparingitsopinion.

LionTree’s opinion was provided to the Pandora board of directors and only addressed the fairness, from a financial point of view, ofthe exchange ratio to the holders of Pandora common stock (other than the excluded parties) (without giving effect to any impact of thetransactions on any particular stockholder of Pandora other than in its capacity as a holder of Pandora common stock). The summary ofLionTree’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, whichis included as Annex C to this proxy statement/prospectus and incorporated herein by reference, and sets forth the procedures followed,assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing itsopinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this proxystatement/prospectus constitute a recommendation to any holder of Pandora common stock as to how such stockholder should vote or acton any matter relating to the transactions or any other matter.

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Pandora Special Meeting (page [ • ])ThePandoraspecialmeetingwillbeheldon[• ],2018,at[• ]a.m.localtime,at[• ].AtthePandoraspecialmeeting,thePandora

stockholderswillbeaskedtoapprovethemergeragreementproposal,theadvisorycompensationproposalandtheadjournmentproposal.

Interests of Pandora’s Directors and Executive Officers in the Transactions (page [ • ])MembersofthePandoraboardofdirectorsandPandora’sexecutiveofficershavevariousinterestsinthetransactionsthatmaybeinaddition

to,ordifferentfrom,theinterestsofPandora’sstockholders.ThemembersofthePandoraboardofdirectorswereawareoftheseinterestsandconsideredthematthetimethatthePandoraboardofdirectors(otherthanMessrs.Frear,MaffeiandMeyer,whodidnotparticipateinanydeliberationsregardingthetransactions)approvedthemergeragreementandinmakingtheirrecommendationthatPandorastockholdersadoptthemergeragreement.See“TheTransactions—InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions”beginningon[• ].

Antitrust Approvals Required for the Transactions (page [ • ])Thetransactionsaresubjecttotheexpirationorterminationofthewaitingperiod(andanyextensionsthereof)undertheHart-Scott-Rodino

AntitrustImprovementsActof1976,asamended,andtheregulationspromulgatedthereunder,whichwerefertoastheHSRAct,andthereceiptofapprovalsunderthecompetitionlawsofGermanyandAustria.Nootherregulatoryapprovalsarerequiredforthetransactions.

Therecanbenoassurancesthattheseantitrustapprovalswillbeobtainedand,ifobtained,therecanbenoassurancesastothetimingofanyapprovals.Formoreinformation,pleasesee“TheMergerAgreement—RegulatoryApprovals”beginningonpage[• ].

Conditions to Completion of the Transactions (page [ • ])Theobligationsofthepartiestocompletethetransactionsaresubjecttothesatisfactionofanumberofconditions(orwaiveroftheconditions

setforthinthethirdbullet(totheextentpermittedbylaw),sixthbulletandseventhbulletbelow),including,amongothers: 

• 

thereceiptoftherequisiteapprovalofthePandorastockholdersofthemergeragreementproposal; 

• 

theexpirationorterminationofanywaitingperiod(andanyextensionsthereof)undertheHSRActandthereceiptofapprovalsunderthecompetitionlawsofGermanyandAustria;

 

• 

theabsenceofanylawororderthatprohibitsormakesillegalthetransactions; 

• 

theeffectivenessoftheregistrationstatementonFormS-4ofwhichthisproxystatement/prospectusformsapart,andtherebeingnostoporderorproceedingsrelatingthereto;

 

• 

theapprovalofNASDAQforthelistingofthesharesofSiriusXMcommonstocktobeissuedinconnectionwiththetransactions; 

• 

subjecttocertainexceptions,theaccuracyoftherepresentationsandwarrantiesofeachpartyandcompliancebythepartieswiththeirrespectivecovenants;and

 

• 

theabsenceofaPandoramaterialadverseeffectsinceSeptember23,2018.NeitherSiriusXMnorPandoracanbecertainwhen,orif,theconditionstothetransactionswillbesatisfiedorwaived,orthatthe

transactionswillbecompleted.Formoreinformation,pleasesee“TheMergerAgreement—ConditionstoCompletionoftheTransactions”beginningonpage[• ].

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Go-Shop and Non-Solicitation by Pandora (page [ • ])DuringtheperiodbeginningonSeptember23,2018andcontinuinguntil12:01a.m.(NewYorkCitytime)onOctober24,2018,whichdate

werefertoastheno-shopstartdate,Pandorahadtherightto: 

• 

initiate,solicit,facilitateandencourageanyinquiryorthemakingofanyproposalorofferthatconstitutes,orcouldreasonablybeexpectedtoleadto,acompetingacquisitionproposal;

 

• 

furnishtoanypersonthatispartytoanacceptableconfidentialityagreementanyinformationwhichisreasonablyrequestedbyanypersoninconnectionwiththeirpotentiallymakingacompetingacquisitionproposal;and

 

• 

participateorengageindiscussionsornegotiationswithsuchpersonregardingacompetingacquisitionproposal.Ontheno-shopstartdate,subjecttocertainexceptions,Pandoraceasedsuchactivitiesandissubjecttofurtherrestrictions,includingthatit

willnotsolicitproposalsoroffersthatconstitute,orcouldreasonablybeexpectedtoleadto,acompetingacquisitionproposal,orengageinanydiscussionsornegotiationsregardingacompetingacquisitionproposal.Inaccordancewiththetermsofthemergeragreement,PandoranotifiedSiriusXMontheno-shopstartdatethatPandorahadnotreceivedanyacquisitionproposalsordraftsofproposedagreements,termsheetsorlettersofintentrelatedtoanyacquisitionfromanythirdparty,writtenorotherwise,aftertheexecutionofthemergeragreementandpriortotheno-shopstartdate.

Formoreinformation,pleasesee“TheMergerAgreement—Go-ShopandNon-SolicitationbyPandora”beginningonpage[• ].

Termination (page [ • ])Themergeragreementmaybeterminatedinthefollowingcircumstances(subjecttocertainexceptionsasdescribedinfurtherdetailinthis

proxystatement/prospectus): 

• 

bymutualwrittenagreementofSiriusXMandPandora; 

• 

byeitherSiriusXMorPandoraif: 

o 

thereisafinal,non-appealablegovernmentalorderprohibitingthetransactions; 

o 

theclosinghasnotoccurredbyJune23,2019,whichdatewerefertoastheoutsidedate;or 

o 

thePandorastockholdershavenotapprovedthemergeragreementproposalatthePandoraspecialmeeting(includingatanyadjournmentorpostponementthereof).

 

• 

byPandora: 

o 

ifSiriusXMisinbreachofthemergeragreementsuchthatPandoraisnotobligatedtoclosethetransactions,andsuchbreachiseitherincurableornotcuredwithin30days;or

 

o 

inorderforPandoratoenterintoabindingdefinitiveagreementtoeffectatransactionconstitutingasuperiorproposal,subjecttoPandorapayingtoSiriusXMpriortoorconcurrentlywithsuchterminationtheterminationfeeorthego-shopterminationfee(eachasdescribedbelow).

 

• 

bySiriusXM: 

o 

ifPandoraisinbreachofthemergeragreementsuchthatSiriusXMisnotobligatedtoclosethetransactions,andsuchbreachiseitherincurableornotcuredwithin30days;or

 

o 

ifPandora,amongotherthings,haschangeditsrecommendationwithrespecttothetransactions,hasmateriallybreachedanyoftheprovisionsdescribedinthesectionsentitled“Go-ShopandNon-SolicitationbyPandora”beginningonpage[• ]orhasapprovedorenteredintoanalternativeacquisitionagreement.

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Formoreinformation,pleasesee“TheMergerAgreement—Termination”beginningonpage[• ].

Termination Fee (page [ • ])Inconnectionwithcertainoftheterminationrightsdescribedaboveandunderotherspecifiedcircumstances,Pandoramayberequiredtopay

SiriusXMaterminationfeeof$105million,whichwerefertoastheterminationfee.Formoreinformation,pleasesee“TheMergerAgreement—TerminationFees”beginningonpage[• ].

Comparison of Stockholders’ Rights (page [ • ])Followingthecompletionofthetransactions,therightsofPandorastockholderswhobecomeSiriusXMstockholderspursuanttothe

transactionswillcontinuetobegovernedbythelawsoftheStateofDelawarebutwillnolongerbegovernedbythePandoracharterorthePandorabylawsandinsteadwillbegovernedbySiriusXM’samendedandrestatedcertificateofincorporation,whichwerefertoastheSiriusXMcharter,andSiriusXM’samendedandrestatedbylaws,whichwerefertoastheSiriusXMbylaws.Formoreinformation,see“ComparisonofStockholders’Rights”beginningonpage[• ].

Litigation Related to the Transactions (page [ • ])Certainlitigationispendinginconnectionwiththetransactions.Formoreinformation,see“TheTransactions—LitigationRelatedtothe

Transactions,”beginningonpage[• ].

Appraisal Rights (page [ • ])ThePandorastockholdersarenotentitledtoappraisalrightsundertheDelawareGeneralCorporationLaw,whichwerefertoastheDGCL,

inconnectionwiththetransactions.Formoreinformation,see“AppraisalRights”beginningonpage[• ].

Risk Factors (page [ • ])Youshouldconsideralltheinformationcontainedinorincorporatedbyreferenceintothisproxystatement/prospectusindecidinghowto

votefortheproposalspresentedherein.Inparticular,youshouldconsiderthefactorsdescribedunder“RiskFactors”beginningonpage[• ].

Accounting Treatment of the Merger (page [ • ])SiriusXMwillaccountforthetransactionsasabusinesscombinationusingtheacquisitionmethodofaccountingforfinancialreporting

purposes.

Material U.S. Federal Income Tax Consequences (page [ • ])Eachoftheholdingcompanymergerandtheconversion,takentogether,andthemergerandtheSiriusXMRadiomerger,takentogether,are

intendedtobetreatedforU.S.federalincometaxpurposesasa“reorganization”withinthemeaningofSection368(a)oftheCode,inwhichcaseaU.S.HolderofPandoracommonstockgenerallywillnotrecognizeanygainorlossontheconversionofsuchholder’sPandoracommonstockintoNewHoldingCompanycommonstockintheholdingcompanymerger,andaU.S.HolderofNewHoldingCompanycommonstockwhoreceivessharesofSiriusXMcommonstockinthemergergenerallywillnotrecognizegainorlossontheexchangeofsuchholder’sNewHoldingCompanycommonstockforSiriusXMcommonstock(otherthangainorlosswithrespecttocashreceivedinlieuofafractionalshare).

SubjecttoPandoraandSiriusXMbeingabletoprovidecustomaryrepresentationsandcovenantsinrepresentationletterstobedeliveredtobothparties’counsel,SiriusXMandPandoraintendtoobtaintheopinionsoftheirrespectivecounseltotheeffectthat,onthebasisofthefacts,

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representationsandassumptionssetforthinsuchopinionswhichareconsistentwiththestateoffactsexistingasoftheclosingdate,eachoftheholdingcompanymergerandtheconversion,takentogether,andthemergerandtheSiriusXMRadiomerger,takentogether,willqualifyforU.S.federalincometaxpurposesasa“reorganization”withinthemeaningofSection368(a)oftheCode.PandoraandSiriusXMhaveagreedthatifeitheroftheopinionsdescribedabovecannotbeobtained(forexample,becausetherehasbeenachangeinfactsandcircumstances,orbecauseSiriusXMorPandoraisunabletomakecustomaryrepresentations),thepartieswillrestructurethetransactionssothattheywillbetreatedforU.S.federalincometaxpurposesasataxablestocksalebythePandorastockholders.Additionally,thepartieswillreviseandrecirculatethisproxystatement/prospectusandthePandoraboardofdirectorswillresolicitapprovalofthePandorastockholdersinfavoroftherestructuredtransaction.

ThetaxconsequencesofthetransactionstoeachPandorastockholdermaydependonsuchholder’sparticularfactsandcircumstances.Pandorastockholdersareurgedtoconsulttheirtaxadvisorstounderstandfullytheconsequencestothemofthetransactionsintheirspecificcircumstances.Formoreinformation,see“TheTransactions—MaterialU.S.FederalIncomeTaxConsequences”beginningonpage[• ].

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SELECTED HISTORICAL FINANCIAL DATA FOR SIRIUS XMThefollowingtablesummarizesfinancialresultsachievedbySiriusXMfortheperiodsandatthedatesindicatedandisderivedfrom,and

shouldbereadinconjunctionwithSiriusXM’sconsolidatedfinancialstatementsandthenotestotheconsolidatedfinancialstatementscontainedinreportsthatSiriusXMhaspreviouslyfiledwiththeSECfortheperiodsindicated.HistoricalfinancialinformationforSiriusXMcanbefoundinitsQuarterlyReportsonForm10-QforthequartersendedSeptember30,2018andSeptember30,2017anditsAnnualReportonForm10-KfortheyearendedDecember31,2017.See“WhereYouCanFindMoreInformation”beginningonpage[• ].FinancialamountsasofandfortheninemonthsendedSeptember30,2018and2017areunaudited(andarenotnecessarilyindicativeoftheresultsofoperationsforthefullyearoranyotherinterimperiod),butSiriusXMmanagementbelievesthatsuchamountsreflectalladjustments(consistingonlyofnormalrecurringadjustments)necessaryforafairpresentationofitsresultsofoperationsandfinancialpositionasofthedatesandfortheperiodsindicated.YoushouldnotassumetheresultsofoperationsforpastperiodsandfortheninemonthsendedSeptember30,2018and2017areindicativeofresultsforanyfutureperiod.                             

in thousands, except per share data 

As of and for the nine monthsended

September 30, 

As of and for the years ended December 31,

 

2018 

2017 

2017 

2016 (1) 

2015 

2014 

2013 (2)

 

  (unaudited)                   

Statement of Comprehensive Income                           

Totalrevenues   

$ 

4,274,784    

$ 

4,021,231    

$ 

5,425,129    

$ 

5,017,220    

$ 

4,570,058    

$ 

4,181,095    

$ 

3,799,095 Netincome

   

  924,841    

  684,904    

  647,908    

  745,933    

  509,724    

  493,241    

  377,215 Netincomepershare—basic(3)

   

  0.21    

  0.15    

  0.14    

  0.15    

  0.09    

  0.09    

  0.06 Netincomepershare—diluted(3)

   

  0.20    

  0.14    

  0.14    

  0.15    

  0.09    

  0.08    

  0.06 Weightedaveragecommonsharesoutstanding—basic

   

  4,482,249    

  4,660,041    

  4,637,553    

  4,917,050    

  5,375,707    

  5,788,944    

  6,227,646 Weightedaveragecommonsharesoutstanding—diluted

   

  4,586,346    

  4,734,841    

  4,723,535    

  4,964,728    

  5,435,166    

  5,862,020    

  6,384,791 Cashdividendsdeclaredpershare

   

  0.033    

  0.030    

  0.041    

  0.010    

  —    

  —    

  — Balance Sheet Data (at period end)

                           

Cashandcashequivalents   

$ 

46,044    

$ 

73,553    

$ 

69,022    

$ 

213,939    

$ 

111,838    

$ 

147,724    

$ 

134,805 Restrictedinvestments

   

  10,939    

  10,274    

  10,352    

  9,888    

  9,888    

  5,922    

  5,718 Totalassets(4)

   

  8,273,507    

  8,652,416    

  8,329,374    

  8,003,595    

  8,046,662    

  8,369,065    

  8,826,959 Long-termdebt,netofcurrentportion(4)

   

  6,562,152    

  6,728,349    

  6,741,243    

  5,842,764    

  5,443,614    

  4,487,419    

  3,088,701 Stockholders’(deficit)equity

   

  (1,375,375)     

  (1,050,101)     

  (1,523,874)     

  (792,015)     

  (166,491)     

  1,309,837    

  2,745,742 

 

(1) 

FortheyearendedDecember31,2016,SiriusXMrecorded$293,896asanincreasetoitsdeferredtaxassetsanddecreasetoitsaccumulateddeficitasaresultoftheadoptionofAccountingStandardsUpdate2016-09,Compensation-StockCompensation(Topic718).

 

(2) 

Theselectedfinancialdatafor2013includesthebalancesandapproximatelytwomonthsofactivityrelatedtotheacquisitionoftheconnectedvehiclebusinessofAgero,Inc.inNovember2013.

 

(3) 

The2017netincomeperbasicanddilutedshareincludestheimpactof$184,599inincometaxexpense,oradecreaseofapproximately$0.04pershare,recordedinthefourthquarterof2017duetothereductioninSiriusXM’snetdeferredtaxassetbalanceasaresultoftheTaxCutandJobsActsignedintolawonDecember22,2017.ForadditionalinformationrefertoNote16toSiriusXM’sconsolidatedfinancialstatementsinItem8ofSiriusXM’sAnnualReportonForm10-KfortheyearendedDecember31,2017.

 

(4) 

The2013–2015balancesreflecttheadoptionofAccountingStandardsUpdate2015-03,Interest-ImputationofInterest(Subtopic835-30):SimplifyingthePresentationofDebtIssuanceCosts,andAccountingStandardsUpdate2015-15,PresentationandSubsequentMeasurementofDebtIssuanceCostsAssociatedwithLine-of-CreditAgreements.AsaresultofSiriusXM’sadoptionoftheseaccountingstandardsupdates,totalassetswasreducedby$7,155,$6,444and$17,821fortheyearsendedDecember31,2015,2014and2013,respectively,andLong-termdebt,netofcurrentportion,wasreducedby$7,155,$6,444and$5,120fortheyearsendedDecember31,2015,2014and2013,respectively.

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SELECTED HISTORICAL FINANCIAL DATA FOR PANDORAThefollowingtablesetsforthselectedhistoricalconsolidatedfinancialdataforPandora.Thehistoricalconsolidatedfinancialinformationfor

eachoftheyearsinthefour-yearperiodendedDecember31,2017andtheelevenmonthsendedDecember31,2013isderivedfromtheauditedconsolidatedfinancialstatementsofPandoraasofandforeachoftheyearsinthefour-yearperiodendedDecember31,2017andtheelevenmonthsendedDecember31,2013.ThehistoricalconsolidatedfinancialinformationforPandoraasofSeptember30,2018andfortheninemonthsendedSeptember30,2018and2017hasbeenderivedfromPandora’sunauditedinterimcondensedconsolidatedfinancialstatementsandrelatednotescontainedinitsQuarterlyReportonForm10-QforthequarterlyperiodendedSeptember30,2018,whichisincorporatedhereinbyreference,andintheopinionofPandora’smanagement,includeallnormalandrecurringadjustmentsthatareconsiderednecessaryforthefairstatementoftheresultsfortheinterimperiods.Youshouldnotassumetheresultsofoperationsforanypastperiodsareindicativeofresultsforanyfutureperiod,includingwithrespecttothefutureperformanceofPandorafollowingthedateofthisproxystatement/prospectusorofSiriusXMfollowingthecompletionofthetransactions.YoushouldreadthisinformationinconjunctionwithPandora’sconsolidatedfinancialstatementsandrelatednotestheretoincludedinPandora’sAnnualReportonForm10-KforthefiscalyearendedDecember31,2017,whichisincorporatedbyreferenceintothisproxystatement/prospectus.See“WhereYouCanFindMoreInformation”beginningonpage[• ].                             

 

 

As of and for the nine months ended

September 30, 

As of and for the years ended December 31, 

Elevenmonths ended

December31,

 

2018 

2017 

2017 

2016 

2015 

2014 

2013Income Statement Data

                           

(in thousands, except per share data)                           

Totalrevenue   

$ 

1,121,655    

$ 

1,071,477    

$ 

1,466,812    

$ 

1,384,826    

$ 

1,164,043    

$ 

920,802    

$ 

600,233 Netloss

   

  (287,353)     

  (473,646)     

  (518,395)     

  (342,978)     

  (169,661)     

  (30,406)     

  (27,017) 

Netlossavailabletocommonstockholders   

  (309,774)     

  (506,493)     

  (558,561)     

  (342,978)     

  (169,661)     

  (30,406)     

  (27,017) 

Netlosspercommonshare,basicanddiluted   

  (1.19)     

  (2.10)     

  (2.29)     

  (1.49)     

  (0.79)     

  (0.15)     

  (0.15) 

                             

Weighted-averagebasicanddilutedcommonshares

   

  260,327    

  241,579    

  243,637    

  230,693    

  213,790    

  205,273    

  180,968 Balance Sheet Data (at period end)

                           

(dollars in thousands)                           

Cashandcashequivalents   

$ 

287,523    

$ 

493,181    

$ 

499,597    

$ 

199,944    

$ 

334,667    

$ 

175,957    

$ 

245,755 Workingcapital

   

  492,960    

  694,001    

  685,883    

  371,704    

  451,675    

  439,254    

  362,777 Totalassets

   

  1,172,803    

  1,165,531    

  1,166,322    

  1,184,810    

  1,240,657    

  749,290    

  673,335 Long-termdebt,net

   

  255,272    

  267,396    

  273,014    

  342,247    

  234,577    

  —    

  — Totalliabilities

   

  606,924    

  512,616    

  522,795    

  630,551    

  497,270    

  165,933    

  165,104 Redeemableconvertiblepreferredstock

   

  513,270    

  483,588    

  490,849    

  —    

  —    

  —    

  — Commonstockandadditionalpaid-incapital

   

  1,632,205    

  1,387,982    

  1,422,246    

  1,264,717    

  1,110,562    

  781,030    

  675,123 Totalstockholders’equity

   

  52,609    

  169,327    

  152,678    

  554,259    

  743,387    

  583,357    

  508,231 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATIONThefollowingtableshowsunauditedproformacondensedcombinedconsolidatedfinancialinformationaboutthefinancialconditionand

resultsofoperations,includingpersharedata,aftergivingeffecttothetransactionsandotherproformaadjustments.Theunauditedproformacondensedcombinedconsolidatedfinancialinformationassumesthatthetransactionsareaccountedforundertheacquisitionmethodofaccountingforbusinesscombinations,andthattheassetsandliabilitiesofPandorawillberecordedbySiriusXMattheirrespectivefairvaluesasofthedatethetransactionsarecompleted.TheunauditedproformacondensedcombinedconsolidatedbalancesheetgiveseffecttothetransactionsasifthetransactionshadoccurredonSeptember30,2018.TheunauditedproformacondensedcombinedincomestatementsfortheninemonthsendedSeptember30,2018,andtheyearendedDecember31,2017,giveeffecttothetransactionsasifthetransactionshadbecomeeffectiveatJanuary1,2017.TheunauditedselectedproformacombinedfinancialinformationhasbeenderivedfromandshouldbereadinconjunctionwiththeconsolidatedfinancialstatementsandrelatednotesofSiriusXM,whichareincorporatedinthisproxystatement/prospectusbyreference,theconsolidatedfinancialstatementsandrelatednotesofPandora,whichareincorporatedinthisproxystatement/prospectusbyreference,andthemoredetailedunauditedproformacondensedcombinedconsolidatedfinancialinformation,includingthenotesthereto,appearingelsewhereinthisproxystatement/prospectus.See“WhereYouCanFindMoreInformation”beginningonpage[• ]and“UnauditedProFormaCombinedCondensedConsolidatedFinancialInformation”beginningonpage[• ].

Theunauditedproformacondensedcombinedconsolidatedfinancialinformationispresentedforillustrativepurposesonlyanddoesnotindicatethefinancialresultsofthecombinedcompanyhadthecompaniesactuallybeencombinedatthebeginningofeachperiodpresented,northeimpactofpossiblebusinessmodelchanges.Theunauditedproformacondensedcombinedconsolidatedfinancialinformationalsodoesnotconsideranypotentialeffectsofchangesinmarketconditionsonrevenues,expenseefficiencies,assetdispositions,andsharerepurchases,amongotherfactors,includingthosediscussedinthesectionofthisproxystatement/prospectusentitled“RiskFactors”beginningonpage[• ].Inaddition,asexplainedinmoredetailintheaccompanyingnotestothe“UnauditedProFormaCombinedCondensedConsolidatedFinancialInformation”beginningonpage[• ],thepreliminaryallocationoftheproformapurchasepricereflectedintheunauditedproformacondensedcombinedconsolidatedfinancialinformationissubjecttoadjustmentandmayvarysignificantlyfromtheactualpurchasepriceallocationthatwillberecordeduponcompletionofthetransactions.         

in thousands (except per share data) 

Nine months ended September 30, 2018

 

Year ended December 31, 2017

STATEMENTS OF COMPREHENSIVE INCOME       

Totalrevenue   

$ 

5,396,439    

$ 

6,891,941 Incomefromoperations

   

  922,417    

  1,072,179 Netincomefortheperiod

   

  519,413    

  62,706          

Basicnetincomepercommonshare   

  0.107    

  0.012 Dilutednetincomepercommonshare

   

  0.104    

  0.012 Basicweightedaveragecommonsharesoutstanding  

  4,873,037   

  5,028,341 Dilutedweightedaveragecommonsharesoutstanding  

  4,977,134   

  5,114,323      

   

As of September 30, 2018BALANCE SHEET

   

Cashandcashequivalents   

$ 

333,567 Totalassets  

  11,318,936 Long-termdebt  

  6,817,424 Totalstockholders’equity  

  1,063,718 

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UNAUDITED COMPARATIVE PER COMMON SHARE DATAThefollowingtablesetsforththebasicnetincomepercommonshare,dilutednetincomepershare,dividendsdeclaredpercommonshare

andbookvalueforSiriusXMandPandoraonahistoricalbasisandonaproformacombinedbasis,fortheninemonthsendedSeptember30,2018,andthebasicnetincomepercommonshare,dilutednetincomepershareanddividendsdeclaredpercommonshareonahistoricalbasisandonaproformacombinedbasis,fortheyearendedDecember31,2017.TheunauditedproformadatawasderivedbycombiningthehistoricalfinancialinformationofSiriusXMandPandorausingtheacquisitionmethodofaccountingforbusinesscombinations,anditassumesthetransactionsarecompletedascontemplatedandrepresentsacurrentestimatebasedonavailableinformationofthecombinedcompany’sresultsofoperations.Theunauditedproformadataandequivalentpershareinformationgiveseffecttothetransactionsasifthetransactionshadbeeneffectiveonthedatespresented,inthecaseofthebookvaluedata,andasifthetransactionshadbecomeeffectiveonJanuary1,2017,inthecaseofthenetincomepercommonshareanddividendsdeclareddata.TheproformafinancialadjustmentsrecordtheassetsandliabilitiesofPandoraattheirestimatedfairvaluesandaresubjecttoadjustmentasadditionalinformationbecomesavailableandasadditionalanalysisisperformed.

TheunauditedproformadatabelowshouldbereadinconjunctionwithSiriusXM’sandPandora’sauditedfinancialstatementsfortheyearendedDecember31,2017andtheirrespectiveunauditedfinancialstatementsfortheninemonthsendedSeptember30,2018.Thisinformationispresentedforillustrativepurposesonly.Youshouldnotrelyontheunauditedproformadataorequivalentamountspresentedbelowastheyarenotnecessarilyindicativeoftheoperatingresultsorfinancialpositionthatwouldhaveoccurredifthetransactionshadbeencompletedasofthedatesindicated,noraretheynecessarilyindicativeofthefutureoperatingresultsorfinancialpositionofthecombinedcompany.Theproformainformation,althoughhelpfulinillustratingthefinancialcharacteristicsofthecombinedcompanyunderonesetofassumptions,doesnotreflectthebenefitsofexpectedcostsavings,opportunitiestoearnadditionalrevenue,theimpactoftransactions-andintegration-relatedcosts,orotherfactorsthatmayresultasaconsequenceofthetransactionsand,accordingly,doesnotattempttopredictorsuggestfutureresults.Theinformationbelowshouldbereadinconjunctionwith“UnauditedProFormaCombinedCondensedConsolidatedFinancialInformation”beginningonpage[• ].                 

   

Sirius XM As Reported

 

Pandora As Reported

 

Pro Forma Combined Sirius

XM (a) 

Pro Forma Equivalent Per

Share Information (b)

For the nine months ended September 30, 2018:               

Basicnetincome(loss)percommonshare   

$ 

0.21    

$ 

(1.19)     

$ 

0.107    

$ 

0.153 Dilutednetincome(loss)percommonshare

   

$ 

0.20    

$ 

(1.19)     

$ 

0.104    

$ 

0.150 Dividendsdeclaredpercommonshare(c)

   

$ 

0.033    

$ 

—    

$ 

0.033    

$ 

0.048 BookvalueatSeptember30,2018(d)  

 

$ 

(0.31) 

  

$ 

0.20   

$ 

0.220   

$ 

0.316 For the year ended December 31, 2017:

               

Basicnetincome(loss)percommonshare   

$ 

0.14    

$ 

(2.29)     

$ 

0.012    

$ 

0.018 Dilutednetincome(loss)percommonshare

   

$ 

0.14    

$ 

(2.29)     

$ 

0.012    

$ 

0.018 Dividendsdeclaredpercommonshare(c)

   

$ 

0.041    

$ 

—    

$ 

0.041    

$ 

0.059 BookvalueatDecember31,2017

   

$ 

(0.34)     

$ 

0.61    

  N/a    

  N/a 

 

(a) 

Proformaearningspersharearebasedonproformacombinednetincomeandproformacombinedweighted-averagecommonsharesoutstandingattheendoftheperiod.

 

(b) 

Proformaequivalentpershareinformationiscalculatedbasedonproformacombinedmultipliedbytheapplicableexchangeratioof1.44. 

(c) 

ProformadividendsdeclaredpercommonsharerepresentSiriusXM’shistoricaldividendspershare. 

(d) 

Bookvaluepercommonshareiscalculatedbasedonproformacombinedequityandproformacombinedcommonsharesoutstandingattheendoftheperiod.

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATIONThetablebelowsetsforth,forthecalendarquartersindicated,thehighandlowsalesprices,aswellasthedividenddeclared,pershareof

SiriusXMcommonstock,whichtradesonNASDAQunderthesymbol“SIRI,”andpershareofPandoracommonstock,whichtradesontheNYSEunderthesymbol“P.”                         

 

 

Sirius XM Common Stock 

Pandora Common Stock

 

High 

Low 

Dividend 

High 

Low 

Dividend2015

                       

FirstQuarter   

$ 

4.04    

$ 

3.33    

$ 

—    

$ 

18.90    

$ 

14.50    

$ 

— SecondQuarter

   

  4.00    

  3.70    

  —    

  19.20    

  15.42    

  — ThirdQuarter

   

  4.01    

  3.31    

  —    

  22.60    

  13.30    

  — FourthQuarter

   

  4.20    

  3.69    

  —    

  22.20    

  11.38    

  — 2016

                       

FirstQuarter   

$ 

4.04    

$ 

3.29    

$ 

—    

$ 

12.93    

$ 

7.10    

$ 

— SecondQuarter

   

  4.05    

  3.74    

  —    

  12.86    

  8.05    

  — ThirdQuarter

   

  4.44    

  3.92    

  —    

  14.98    

  11.61    

  — FourthQuarter

   

  4.65    

  4.05    

  0.01    

  14.95    

  10.15    

  — 2017

                       

FirstQuarter   

$ 

5.53    

$ 

4.40    

$ 

0.01    

$ 

13.72    

$ 

11.30    

$ 

— SecondQuarter

   

  5.50    

  4.73    

  0.01    

  12.13    

  6.76    

  — ThirdQuarter

   

  5.89    

  5.32    

  0.01    

  9.98    

  7.55    

  — FourthQuarter

   

  5.79    

  5.20    

  0.011    

  8.34    

  4.44    

  — 2018

                       

FirstQuarter   

$ 

6.62    

$ 

5.17    

$ 

0.011    

$ 

5.55    

$ 

4.09    

$ 

— SecondQuarter

   

  7.70    

  6.08    

  0.011    

  8.78    

  4.59    

  — ThirdQuarter

   

  7.29    

  6.16    

  0.011    

  10.07    

  6.70    

  — FourthQuarter(Through[• ],2018)

   

  [• ]    

  [• ]    

  [• ]    

  [• ]    

  [• ]    

  [• ] 

OnSeptember21,2018,thelasttradingdaybeforethepublicannouncementofthesigningofthemergeragreement,theclosingsalepricepershareofSiriusXMcommonstockonNASDAQwas$6.98andtheclosingsalepricepershareofPandoracommonstockontheNYSEwas$9.09.On[• ],2018,thelatestpracticabletradingdatebeforethedateofthisproxystatement/prospectus,thelastsalepricepershareofSiriusXMcommonstockonNASDAQwas$[• ]andthelastsalepricepershareofPandoracommonstockontheNYSEwas$[• ].

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RISK FACTORSInadditiontotheotherinformationincludedandincorporatedbyreferenceintothisproxystatement/prospectus,includingthemattersaddressed

in“CautionaryStatementConcerningForward-LookingStatements,”youshouldcarefullyconsiderthefollowingrisksbeforedecidinghowtovote.Inaddition,youshouldreadandconsidertherisksassociatedwitheachofthebusinessesofSiriusXMandPandorabecausetheseriskswillalsoaffectthecombinedcompanyfollowingcompletionofthetransactions.TheseriskscanbefoundintheAnnualReportsonForm10-KandQuarterlyReportsonForm10-QofeachofSiriusXMandPandora,eachofwhichisfiledwiththeSECandincorporatedbyreferenceintothisproxystatement/prospectus.Youshouldalsoreadandconsidertheotherinformationinthisproxystatement/prospectusandtheotherdocumentsincorporatedbyreferenceintothisproxystatement/prospectus.Formoreinformation,see“WhereYouCanFindMoreInformation.”

Risks Relating to the TransactionsThe closing of the transactions will permit certain counterparties to commercial agreements to terminate those agreements or exercise other

rights.Pandoraispartytocertainagreementsthatgivethecounterpartiestosuchagreements,includingmusiclabelsandothercopyrightholdersthatown

orcontrolrightsthatareanessentialinputtoPandora,certainrights,includingnotice,consentandotherrightsinconnectionwitha“changeofcontrol”suchasthetransactions,thatmaygiverisetoadefaultbyPandoraundertheseagreementsortherightsbythecounterpartiestoterminatetheseagreementsorchargePandoraratesthatarelessfavorabletoPandora.Thesecounterpartiesmayasserttheserightsinconnectionwiththeclosing,claimadefaultoftheagreementsbyPandora,terminatetheagreements,and/orrequestmodificationsoftheiragreementsasaconditiontograntingawaiverorconsentundertheseagreements,anyofwhichwouldadverselyaffectthebusinessandoperationsofPandoraandthevalueofSiriusXMcommonstockfollowingtheclosingofthetransactions.Inaddition,thetransactionsconstituteaneventthatwouldenableholdersofPandora’soutstandingconvertiblenotesto,ateachholder’soption,convertthosenotesinto,attheelectionofPandora,cash,sharesofPandoracommonstockoracombinationthereof.

The transactions are subject to a number of conditions and may not be completed on the terms or timeline currently contemplated, or at all.Theclosingofthetransactionsissubjecttoanumberofconditions,includingtheapprovalofthemergeragreementproposalbythePandora

stockholdersandexpirationorearlyterminationofthewaitingperiodundertheHSRAct,whichmaketheclosing(andtimingoftheclosing)ofthetransactionsuncertain.Inaddition,ifthemergerisnotcompletedbyJune23,2019,eitherSiriusXMorPandoramayterminatethemergeragreement(subjecttocertainexceptions).SiriusXMorPandoramayalsoelecttoterminatethemergeragreementincertainothercircumstances.See“TheMergerAgreement—ConditionstotheClosingoftheTransactions”beginningonpage[• ]and“TheMergerAgreement—TerminationoftheMergerAgreement”beginningonpage[• ]foradditionalinformationofthesecircumstances.

SiriusXMandPandoracannotassureyouthatthetransactionswillbeconsummatedonthetermsandtimelinecurrentlycontemplatedoratall.ManyoftheconditionstotheclosingofthetransactionsarenotwithinthecontrolofSiriusXMorPandora,andneithercompanycanpredictwhenoriftheseconditionswillbesatisfiedandcoulddelaythecompletionofthetransactionsforasignificantperiodoftimeorpreventitfromoccurring.AnydelayincompletingthetransactionscouldcauseeachofSiriusXMandPandoranottorealizesomeorallofthebenefitsthateachexpectstoachieveifthetransactionsaresuccessfullycompletedwithinitsexpectedtimeframe.

Failure to complete the transactions could adversely affect the stock prices and the future business and financial results of Sirius XM andPandora.

Ifthetransactionsarenotcompletedonatimelybasis,oratall,theongoingrespectivebusinessesofSiriusXMand/orPandoramaybeadverselyaffectedand,withoutrealizingthebenefit

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ofhavingcompletedthetransactions,SiriusXMandPandoracouldbesubjecttonumerousrisks,including:•

 

SiriusXMandPandorawillberequiredtopaytheirrespectivecostsrelatingtothetransactions,suchaslegal,accounting,financialadvisor,filing,printingandmailingfees;

• 

SiriusXM’sandPandora’srespectivemanagementhascommittedtimeandresourcestomattersrelatingtothetransactionsthatcouldotherwisehavebeendevotedtopursuingotherbeneficialopportunities;

• 

SiriusXMandPandoramayexperiencenegativereactionsfromthefinancialmarkets,includingnegativeimpactsontheirrespectivestockprices,orfromtheirrespectivecustomersandemployees;and

• 

SiriusXMandPandoramayhavereputationalharmduetotheadverseperceptionofanyfailuretosuccessfullycompletethetransactions.The exchange ratio is fixed and will not be adjusted in the event of any change in the market price of either Sirius XM common stock or

Pandora common stock.Asaresultoftheclosingofthetransactions,eachshareofPandoracommonstockheldimmediatelypriortotheclosingwill,afterinitiallybeing

convertedintoashareofNewHoldingCompanycommonstockintheholdingcompanymerger,enabletheholderthereoftoreceive1.44sharesofSiriusXMcommonstockasaresultofthemerger,withcashpaidinlieuoffractionalshares.TheexchangeratioisfixedinthemergeragreementandwillnotbeadjustedforchangesinthemarketpriceofeitherSiriusXMcommonstockorPandoracommonstock.

Becausetheexchangeratioisfixed,changesinthemarketpriceofSiriusXMcommonstockpriortotheclosingofthemergerwillaffectthevalueofthemergerconsiderationthatthePandorastockholderswillreceiveinconnectionwiththeclosing.ThemarketpriceofSiriusXMcommonstockattheclosingmayvaryfromthemarketpricesofSiriusXMcommonstockonthedatethemergeragreementwasexecuted,onthedateofthisproxystatement/prospectusandonthedateofthePandoraspecialmeeting.

Forexample,basedontherangeofclosingpricesofSiriusXMcommonstockduringtheperiodfromSeptember21,2018,thelasttradingdaybeforepublicannouncementofthemergeragreement,through[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus,themarketvalueof1.44sharesofSiriusXMcommonstockrangedfromalowof$[• ]toahighof$[• ].TheactualmarketvalueofthemergerconsiderationreceivedbythePandorastockholdersuponcompletionofthetransactionsmaybeoutsidethisrangeandmayevenbebelowthecurrentmarketpriceofPandoracommonstock.Furthermore,becausethetransactionswillbecompleted,ifatall,afterthePandoraspecialmeeting,themarketvalueofthemergerconsiderationcannotbeknownatthetimethePandorastockholdersconsiderandvoteuponthemergeragreementproposalatthePandoraspecialmeeting.ThisfluctuationanduncertaintymayadverselyimpactthewillingnessofthePandorastockholders’tovoteinfavorofthemergeragreementproposal.

Stockpricechangesmayresultfromavarietyoffactors(manyofwhicharebeyondthecontrolofSiriusXMorPandora),including:•

 

changesin,orchangesinmarketexpectationsof,thecompanies’respectivebusinesses,operations,assets,liabilitiesandprospects;•

 

investorbehaviorandstrategies,includingmarketassessmentsofthelikelihoodthatthetransactionswillbecompleted;•

 

interestrates,generalmarketandeconomicconditionsandotherfactorsgenerallyaffectingthemarketpriceofthecompanies’commonstock;•

 

federal,stateandlocallegislation,governmentalregulationandlegaldevelopmentsinthebusinessesinwhichthecompaniesoperate;and•

 

otherfactorsbeyondthecontrolofeitherSiriusXMorPandora,includingthosedescribedunderthisheading“RiskFactors.”20

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Sirius XM and Pandora expect to incur significant costs and expenses in connection with the transactions.EachofSiriusXMandPandorahaveincurred,andexpecttofurtherincur,certainnonrecurringcostsinconnectionwiththetransactions,including

advisory,legalandothertransactioncosts.Whilemanyoftheexpensesthatwillbeincurred,bytheirnature,aredifficulttoestimateaccuratelyatthepresenttime,managementofSiriusXMandPandoracontinuetoassessthemagnitudeofthesecosts,andadditionalunanticipatedcoststhatmaybeincurredinconnectionwiththetransactions.AlthoughSiriusXMandPandoraexpectthattherealizationofbenefitsrelatedtothetransactionswilloffsetsuchcostsandexpensesovertime,noassurancescanbemadethatthenetbenefitswillbeachievedinthenearterm,oratall.

The announcement and pendency of the transactions could divert the attention of management and adversely affect the business andoperations of each of Sirius XM and Pandora.

SiriusXMandPandoraarecurrentlyoperatedindependentlyofeachother.ManagementofbothSiriusXMandPandoramayberequiredtodivertattentionawayfromtheirrespectiveday-to-dayactivitiesandoperationsanddevotetimeandefforttoclosingthetransactionsandintegratingthebusinessesfollowingtheclosing.Therisks,andadverseeffects,ofsuchdisruptionsanddiversionscouldbeexacerbatedbyadelayintheclosingofthetransactions.ThesefactorscouldadverselyaffectthefinancialpositionorresultsofoperationsofSiriusXMand/orPandora,regardlessofwhetherthetransactionsarecompleted.

Furthermore,uncertaintyabouttheeffectofthetransactionsonemployees,customers,andotherthirdpartiesmayhaveanadverseeffectonPandoraand/orSiriusXM.Somecustomers,vendorsorotherthirdpartiesofeachofPandoraandSiriusXMmaychange,delayordeferdecisionswithrespecttoexistingorfuturebusinessrelationships.Similarly,currentandprospectiveemployeesofPandoraorSiriusXMmayexperienceuncertaintyabouttheirfutureroleswithPandoraorSiriusXMfollowingthemerger,whichmayadverselyaffecttheabilityofPandoraorSiriusXMtoattractandretainkeypersonnelduringthependencyofthetransactions.

Pandora is subject to contractual restrictions before the closing of the transactions, which could adversely affect Pandora’s business.ThemergeragreementimposescertainrestrictiveinterimcovenantsonPandora.Forinstance,theconsentofSiriusXMisrequiredinrespectof,

amongotherthings,amendmentstoPandora’sorganizationaldocuments,sharerepurchases,certainactionsrelatingtomaterialcontracts,certainemployeebenefitchanges,certaincapitalexpenditures,acquisitionanddispositions,paymentsofdividends,andcertainissuancesofsharesofPandoracommonstock.TheserestrictionsmaypreventPandorafromtakingcertainactionsbeforetheclosingofthetransactionsortheterminationofthemergeragreement,includingmakingcertainacquisitionsorotherwisepursuingcertainbusinessopportunities,ormakingcertainchangestoitscapitalstock,thatthePandoraboardofdirectorsmaydeembeneficial.

Sirius XM is subject to contractual restrictions while the transactions are pending, which could adversely affect Sirius XM’s business.AlthoughlessrestrictivethanthoseimposedonPandora,themergeragreementdoesimposecertainrestrictiveinterimcovenantsonSiriusXM.For

instance,theconsentofPandoraisrequiredinrespectof,amongotherthings,certainamendmentstoSiriusXM’sorganizationaldocumentsandpaymentsofdividends(otherthanregularquarterlydividends).TheserestrictionsmaypreventSiriusXMfromtakingcertainactionsbeforetheclosingofthetransactionsortheterminationofthemergeragreementthattheSiriusXMboardofdirectorsmaydeembeneficial.

Certain provisions of the merger agreement could discourage a competing proposal to acquire Pandora or could result in any competingproposal being offered at a lower price than it might otherwise be offered.

Themergeragreementcontains“no-shop”provisionsthatrestrictPandora’sabilitytosolicit,encourage,facilitateordiscusscompetingthird-partyproposalstoacquireallorasignificantpartofPandora.Inaddition,SiriusXMgenerallyhasanopportunitytooffertomodifythetermsofthemergeragreementinresponsetoanycompetingproposal.Uponterminationofthemerger

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agreementincertaincircumstances,PandoramayberequiredtopayaterminationfeetoSiriusXMof$105million.Foradditionalinformation,seethesectionsentitled“TheMergerAgreement—Go-ShopandNon-SolicitationbyPandora”beginningonpage[• ].

Theseprovisionscoulddiscourageapotentialacquirorfromconsideringorproposingthatacquisition,evenifitwerepreparedtopayconsiderationwithahigherpersharecashormarketvaluethantheSiriusXMcommonstocktobereceivedbythePandorastockholdersinconnectionwiththeclosingofthetransactions,ormightresultinapotentialacquirorproposingtopayalowerpricethanitmightotherwisehaveproposedtopaybecauseoftheaddedexpenseoftheterminationfeethatmaybecomepayablebyPandoraincertaincircumstancesunderthemergeragreement.

The directors and executive officers of Pandora have interests in the transactions that are different from, or in addition to, those of the Pandorastockholders.

ThedirectorsandexecutiveofficersofPandorahaveinterestsinthetransactionsthataredifferentfrom,orinadditionto,theinterestsofthePandorastockholdersgenerally.Theseinterestsinclude,amongothers,thetreatmentofoutstandingequityawardspursuanttothemergeragreement,potentialseveranceandotherbenefitsuponaqualifyingterminationinconnectionwiththemergerandcertainrightstoongoingindemnificationandinsurancecoverage.Foradditionalinformation,seethesectionentitled“TheTransactions—InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions”beginningonpage[• ].

The transactions may not qualify as a “reorganization,” within the meaning of Section 368(a) of the Code, and no ruling has been or will besought from the IRS regarding the U.S. federal income tax consequences of the transactions.

Itisintendedthat,forU.S.federalincometaxpurposes,thetransactionswillqualifyasa“reorganization”withinthemeaningofSection368(a)oftheCode.However,ifeitherPandoraorSiriusXMisunabletoreceiveanopinionofcounseltothateffect,thepartieshaveagreedtorestructurethetransactionssothatthetransactionswillbetreatedasataxablestocksaleandthePandoraboardofdirectorswillresolicittheapprovalofthePandorastockholdersinfavoroftherestructuredtransaction.Inaddition,neitherSiriusXMnorPandoraintendstorequestarulingfromtheIRSregardingtheU.S.federalincometaxconsequencesofthetransactions.Accordingly,noassurancecanbegiventhatthetransactionswillsoqualifyasa“reorganization.”Further,evenifSiriusXMandPandoraconcludethatthetransactionssoqualify,noassurancecanbegiventhattheIRSwillnotchallengethatconclusionorthatacourtwouldnotsustainsuchachallenge.EachPandorastockholdershouldreadthediscussionunder“TheTransactions—MaterialU.S.FederalIncomeTaxConsequences”beginningonpage[• ]andshouldconsultitsowntaxadvisorforafullunderstandingofthetaxconsequencesofthetransactionstosuchstockholder.

Risks Relating to the Combined Company After Closing of the TransactionsFollowing the transactions, Sirius XM may be unable to integrate the businesses of Sirius XM and Pandora successfully or realize the

anticipated synergies and related benefits of the merger or do so within the anticipated time frame.Thetransactionsinvolvethecombinationoftwocompanieswhichcurrentlyoperateasindependentcompanies.SiriusXMwillberequiredto

devotesignificantmanagementattentionandresourcestointegratingthebusinessesandoperationsofPandora.PotentialdifficultiesSiriusXMorPandoramayencounterintheintegrationprocessincluding:

• 

theinabilitytosuccessfullycombinethebusinessesofSiriusXMandPandorainamannerthatpermitsSiriusXMtooffercross-promotionopportunities,audiopackagesthatintegrateSiriusXMcontentandprogrammingwithPandora’sad-supportedandsubscriptionservicesandachieveotherbenefitsanticipatedtoresultfromthetransactions,inthetimeframecurrentlyanticipatedoratall;

• 

thecomplexitiesassociatedwithintegratingpersonnelfromthetwocompaniesandofcombiningtwocompanieswithdifferenthistories,culturesandcustomerbases;

• 

thefailureofSiriusXMtoretainkeyemployeesofeitherPandoraorSiriusXM;22

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• 

potentialunknownliabilitiesandunforeseenincreasedexpenses,delaysorregulatoryconditionsassociatedwiththetransactions;and•

 

performanceshortfallsatoneorbothofthetwocompaniesasaresultofthediversionofmanagement’sattentioninconnectionwithcompletingthetransactionsandintegratingthecompanies’operations.

Forallthesereasons,youshouldbeawarethatitispossiblethattheintegrationprocesscouldresultinthedistractionofSiriusXM’sorPandora’smanagement,thedisruptionofSiriusXM’songoingbusinessorinconsistenciesinSiriusXM’sservices,standards,controls,proceduresandpolicies,anyofwhichcouldadverselyaffecttheabilityofSiriusXMtomaintainrelationshipswithcustomers,vendorsandemployeesortoachievetheanticipatedbenefitsofthetransactions,orcouldotherwiseadverselyaffectthebusinessandfinancialresultsofSiriusXMfollowingtheclosingofthetransactions.

The combined company’s future results will suffer if it does not effectively manage its expanded operations following the closing of thetransactions.

Followingtheclosingofthetransactions,thesizeandscopeofoperationsofthebusinessofSiriusXMwillincreasebeyondthecurrentsizeandscopeofoperationsofeitherSiriusXM’sorPandora’scurrentbusinesses.Inaddition,SiriusXMmaycontinuetoexpanditssizeandoperationsthroughadditionalacquisitionsorotherstrategictransactions.SiriusXM’sfuturesuccessdepends,inpart,uponitsabilitytomanageitsexpandedbusiness,whichmayposesubstantialchallengesformanagement,includingchallengesrelatedtothemanagementandmonitoringofnewoperationsandassociatedincreasedcostsandcomplexity.TherecanbenoassurancesthatSiriusXMwillbesuccessfulorthatitwillrealizetheexpectedeconomiesofscale,synergiesandotherbenefitscurrentlyanticipatedfromthetransactionsoranticipatedfromanyadditionalacquisitionsorstrategictransactions.

The Pandora stockholders will have a reduced ownership and voting interest in the combined company following the transactions, and willexercise less influence over management of the combined company.

BecausesharesofSiriusXMcommonstocktobereceivedbythePandorastockholdersinthetransactionswillnotrepresentthesameproportionateequityandvotinginterestsastheirexistingsharesofPandoracommonstockrepresentinPandora,thiswillresultinthePandorastockholdershavinglessinfluenceoverthemanagementofthecombinedcompany.BaseduponthenumberofoutstandingsharesontherecorddateforthePandoraspecialmeeting,uponcompletionofthetransactions,weexpectthatformerPandorastockholderswillownapproximately[• ]%oftheSiriusXMcommonstock(basedonthenumberofsharesofSiriusXMcommonstockoutstandingon[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus).

Asof[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus,LibertyMediabeneficiallyownedapproximately[•]%oftheSiriusXMcommonstockanduponcompletionofthetransactions,weexpectthatLibertyMediawillownapproximately[• ]%oftheSiriusXMcommonstock(basedonthenumberofsharesofSiriusXMcommonstockoutstandingon[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus).Accordingly,LibertyMediahas,andwillhavefollowingtheclosingofthetransactions,theabilitytoinfluenceSiriusXM’saffairs,policiesandoperations.TwoLibertyMediaexecutivesandoneothermemberoftheboardofdirectorsofLibertyMediaaremembersoftheSiriusXMboardofdirectors.TheSiriusXMboardofdirectorscurrentlyhasthirteenmembers.GregoryB.Maffei,thePresidentandChiefExecutiveOfficerofLibertyMedia,istheChairmanofSiriusXM’sboardofdirectors.TheSiriusXMboardofdirectorsisresponsiblefor,amongotherthings,theappointmentofexecutivemanagement,futureissuancesofcommonstockorothersecurities,thepaymentofdividends,ifany,theincurrenceofdebt,andtheapprovalofvarioustransactions,includingthetransactions.

LibertyMediacanalsodeterminetheoutcomeofallmattersrequiringapprovaloftheSiriusXMstockholders,includingtheelectionoftheboardofdirectorsandchangestotheSiriusXMcertificateofincorporationorby-laws.LibertyMediacanalsocauseorpreventachangeofcontrol

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ofSiriusXMandcouldprecludeanyunsolicitedacquisitionofSiriusXM.TheconcentrationofownershipcoulddepriveSiriusXMstockholdersofanopportunitytoreceiveapremiumfortheircommonstockaspartofasaleofSiriusXMandmightultimatelyaffectthemarketpriceofSiriusXMcommonstock.Incertaincases,theinterestsofLibertyMediamaynotbealignedwiththeinterestsofotherSiriusXMstockholders.SiriusXMisalso,andfollowingtheclosingofthetransactionsisexpectedtoremain,a“controlledcompany”forthepurposesoftheNASDAQStockMarketlistingrules.Assuch,SiriusXMhaselectednottocomplywithcertainNASDAQcorporategovernancerequirements.AlthoughamajorityofthemembersoftheSiriusXMboardofdirectorsconsistsofindependentdirectors,SiriusXMdoesnothaveacompensationcommitteeandnominatingandcorporategovernancecommitteethatconsistentirelyofindependentdirectors.

The unaudited pro forma condensed combined consolidated financial statements included in this proxy statement/prospectus are for illustrativepurposes, and the actual financial condition and results of operations after the merger may differ materially.

Theunauditedproformacondensedcombinedconsolidatedfinancialstatementsinthisproxystatement/prospectusarepresentedforillustrativepurposesonlyandarenotnecessarilyindicativeofwhatthecombinedcompany’sactualfinancialconditionorresultsofoperationswouldhavebeenhadthetransactionsbeencompletedonthedatesindicated.Inaddition,theunauditedproformacondensedcombinedconsolidatedfinancialstatementsdonotpurporttoprojectthefuturefinancialpositionoroperatingresultsofthecombinedcompany.Theunauditedproformacondensedcombinedconsolidatedfinancialstatementsreflectadjustments,whicharebaseduponassumptionsandpreliminaryestimates,torecordthePandoraidentifiableassetsacquiredandliabilitiesassumedatfairvalueandtheresultinggoodwillrecognized.Thepurchasepriceallocationreflectedinthisproxystatement/prospectusispreliminary,andfinalallocationofthepurchasepricewillbebasedupontheactualpurchasepriceandthefairvalueoftheassetsandliabilitiesofPandoraasofthedateofthecompletionofthetransactions.Accordingly,thefinalacquisitionaccountingadjustmentsmaydiffermateriallyfromtheproformaadjustmentsreflectedinthisproxystatement/prospectus.Formoreinformation,see“UnauditedComparativePerShareInformation”beginningonpage[• ]and“UnauditedProFormaCondensedCombinedConsolidatedFinancialStatements”beginningonpage[• ]inthisproxystatement/prospectus.

The prospective financial forecasts for Pandora included in this proxy statement/prospectus reflect the estimates of Pandora’s management andPandora’s actual performance may differ materially from such forecasts.

TheprospectivefinancialforecastsforPandoraincludedinthisproxystatement/prospectusarebasedonassumptionsof,andinformationavailableto,Pandoraatthetimesuchprospectivefinancialforecastswereprepared.Pandoradoesnotknowwhethertheassumptionsmadewillprovecorrect.Anyorallofsuchinformationmayturnouttobewrong.Suchinformationcanbeadverselyaffectedbyinaccurateassumptionsorbyknownorunknownrisksanduncertainties,manyofwhicharebeyondPandora’scontrol.Further,prospectivefinancialforecastsofthistypearebasedonestimatesandassumptionsthatareinherentlysubjecttofactorssuchascompanyperformance,industryperformance,generalbusiness,economic,regulatory,marketandfinancialconditions,aswellaschangestothebusiness,financialconditionorresultsofoperationsofPandora,whichfactorsandchangesmaycausetheprospectivefinancialforecastsortheunderlyingassumptionstobeinaccurate.Asaresultofthesecontingencies,therecanbenoassurancethattheprospectivefinancialforecastsofPandorawillberealizedorthatactualresultswillnotbesignificantlyhigherorlowerthanprojected.Formoreinformation,seethesectionentitled“TheMerger—CertainPandoraUnauditedProspectiveFinancialInformation”beginningonpage[• ].

The market price of Sirius XM common stock may be volatile, and holders of Sirius XM common stock could lose a significant portion of theirinvestment due to drops in the market price of Sirius XM common stock following completion of the transactions.

ThemarketpriceofSiriusXMcommonstockmaybevolatile,andfollowingcompletionofthetransactions,thePandorastockholderswhoreceiveSiriusXMcommonstockmaynotbeabletoreselltheirSiriusXMcommonstockduetofluctuationsinthemarketprice,includingchangesinmarketpricecausedbyfactorsunrelatedtothecombinedcompany’soperatingperformanceor

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prospects.Inparticular,themarketpriceofSiriusXMcommonstockhasinthepastexperiencedsignificantfluctuation,includingfluctuationthatisunrelatedtoSiriusXM’sperformance,andthisfluctuationmaycontinueinthefuture.

Furthermore,althoughthecombinedcompanywillgenerallybesubjecttothesamerisksthateachofSiriusXMandPandoracurrentlyface,theresultsofoperationsaswellasthemarketpriceofSiriusXMcommonstockfollowingtheclosingmaybeaffectedbyfactorsdifferentfromthosefactorsaffectingSiriusXMandPandoraasindependentstand-alonecompanies.ThecombinedcompanymayfaceadditionalrisksanduncertaintiesthatSiriusXMorPandoramaycurrentlynotbeexposedtoasindependentcompanies.

The shares of Sirius XM common stock to be received by the Pandora stockholders will have different rights from the shares of Pandoracommon stock currently held by the Pandora stockholders.

Inconnectionwiththeclosingofthetransactions,thePandorastockholderswillbecomeSiriusXMstockholdersandtheirrightsasstockholderswillbegovernedbySiriusXM’sorganizationaldocuments.TherightsassociatedwithSiriusXMcommonstockaredifferentfromtherightsassociatedwithPandoracommonstock.Foradditionalinformation,seethesectionentitled“ComparisonofStockholders’Rights”beginningonpage[• ].

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTSThisproxystatement/prospectus,includinginformationanddocumentsincludedorincorporatedbyreferenceinthisproxystatement/prospectus,

maycontainforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Statementsinthisproxystatement/prospectus,includingtheinformationanddocumentsincludedorincorporatedbyreferenceinthisproxystatement/prospectus,thatarenothistoricalfactsareherebyidentifiedas“forward-lookingstatements”forthepurposeofthesafeharborprovidedbySection21EoftheExchangeActandSection27AoftheSecuritiesAct.Theseforward-lookingstatementsinclude,butarenotlimitedto,statementsaboutthebenefitsofthetransactions,includingSiriusXM’sand/orPandora’sexpectationsorpredictionsoffuturefinancialorbusinessperformanceorconditions;statementsaboutSiriusXM’sandPandora’splans,objectives,expectationsandintentionswithrespecttofutureoperations,productsandservices;andotherstatementsidentifiedbywordssuchas“believe,”“expect,”“anticipate,”“intend,”“target,”“estimate,”“continue,”“positions,”“plan,”“predict,”“project,”“forecast,”“guidance,”“goal,”“objective,”“prospects,”“possible”or“potential,”byfutureconditionalverbssuchas“assume,”“will,”“would,”“should,”“could”or“may,”orbyvariationsofsuchwordsorbysimilarexpressions.Theseforward-lookingstatementsaresubjecttonumerousassumptions,risksanduncertainties,whichchangeovertime,aredifficulttopredictandaregenerallybeyondthecontrolofeithercompany.Forward-lookingstatementsspeakonlyasofthedatetheyaremade,andSiriusXMandPandoraassumenodutytoupdateforward-lookingstatements,excepttotheextentrequiredbyapplicablelaworregulation.

InadditiontofactorspreviouslydisclosedinSiriusXM’sandPandora’sreportsfiledwiththeSEC,includingtherespectivecompany’srecentForms10-Kand10-Q,andthoseidentifiedelsewhereinthisproxystatement/prospectus,includingthosedisclosedunder“RiskFactors”beginningonpage[• ],thefollowingfactors,amongothers,couldcauseactualresultstodiffermateriallyfromforward-lookingstatementsorhistoricalperformance:

• 

failuretomeetordelayinmeetingtheclosingconditionstothetransactions,includingtheapprovalofPandora’sstockholders,ontheexpectedtermsandscheduleandtheriskthatregulatoryapprovalsrequiredforthetransactionsarenotobtainedorareobtainedsubjecttoconditionsthatarenotanticipated;

• 

delayinclosingthetransactions;•

 

theoccurrenceofanyevent,changeorothercircumstancesthatcouldgiverisetoarightofoneorbothofSiriusXMandPandoratoterminatethemergeragreement;

• 

difficultiesanddelaysinintegratingSiriusXMandPandorabusinessesorfullyanticipatedsynergies,costsavingsandotherbenefitsestimatedtoresultfromthetransactions;

• 

failuretorealizetheexpectedbenefitsfromtheproposedtransactions;•

 

risksrelatedtodisruptionofmanagementtimefromongoingbusinessoperationsduetotheproposedtransactions;•

 

changesinpoliticalorotherfactorssuchasmonetarypolicy,legalandregulatorychanges,generaleconomicandmarketconditionsorotherexternalfactorsoverwhichtheyhavenocontrol;

• 

theoutcomeofpendingorthreatenedlitigationorofmattersbeforeregulatoryagencies,whethercurrentlyexistingorcommencinginthefuture,includinglitigationrelatedtothemergeragreementorthetransactions;

• 

SiriusXM’sorPandora’sincreasingindustrycompetition;•

 

statementsrelatingtofuturebusinessprospects,numberofsubscribers,revenue,incomeandfinancialcondition;•

 

newserviceandproductofferings;•

 

theexpectedtimingandlikelihoodofcompletionoftheproposedtransactions,includingthetimingandsatisfactionofconditionstotheproposedtransactionsthatcouldreduceanticipatedbenefitsorcausethepartiestoabandonthetransactions;

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• 

theriskthatanyannouncementsrelatingtotheproposedtransactionscouldhaveadverseeffectsonthemarketpriceofthePandoracommonstockorSiriusXMcommonstock;

• 

theriskthatthetransactionsandtheirannouncementcouldhaveanadverseeffectontheabilityofPandoraandSiriusXMtoretainandhirepersonnelandmaintainrelationshipswiththeirsuppliersandcustomersandontheiroperatingresultsandbusinessesgenerally;

• 

changesanduncertaintiesinthemarketformusicrights;•

 

potentialchangesinaccountingprinciples,policies,practicesorguidelines;•

 

changesinthepriceofSiriusXMcommonstockbeforeclosing,includingasaresultofthefinancialperformanceofPandorapriortoclosing;•

 

SiriusXM’spotentialexposuretounknownorcontingentliabilitiesofPandora;and•

 

naturaldisasters,warorterroristactivities.You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy

statement/prospectus or the date of the applicable document incorporated by reference in this proxy statement/prospectus. Sirius XM andPandora assume no duty to update forward-looking statements, except to the extent required by applicable law or regulation. All subsequentwritten and oral forward-looking statements concerning the transactions or other matters addressed in this proxy statement/prospectus andattributable to Sirius XM or Pandora or any person acting on their behalf are expressly qualified in their entirety by the cautionary statementscontained or referred to in this section.

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THE PANDORA SPECIAL MEETINGThissectioncontainsinformationaboutthePandoraspecialmeetingandthisproxystatement/prospectusisbeingfurnishedtothePandora

stockholdersinconnectionwiththesolicitationofproxiesbythePandoraboardofdirectorsforuseatthePandoraspecialmeeting.Pandoraisfirstmailingthisproxystatement/prospectusandaccompanyingproxycardtoitsstockholdersonorabout[• ],2018.

Time, Place and DateThePandoraspecialmeetingwillbeheldon[• ],2018,at[• ]localtime,at[• ],unlessthePandoraspecialmeetingisadjournedorpostponed,if

necessaryorappropriate.

Purpose of the Pandora Special MeetingAtthePandoraspecialmeeting,thePandorastockholderswillbeaskedtoconsiderandvoteupon:•

 

themergeragreementproposal;•

 

theadvisorycompensationproposal;and•

 

theadjournmentproposal.

Recommendation of the Pandora Board of DirectorsThePandoraboardofdirectorsrecommendsthatthePandorastockholdersvote“FOR ”themergeragreementproposal;“FOR ”theadvisory

compensationproposal;and“FOR ”theadjournmentproposal.See“TheTransactions—RecommendationofthePandoraBoardofDirectorsandReasonsfortheTransactions”beginningonpage[• ].

Record Date; Stock Entitled to VoteThePandoraboardofdirectorshasset[• ],2018astherecorddateforthePandoraspecialmeeting.OnlyholdersofrecordofPandoracommon

stockandPandorapreferredstockatthecloseofbusinessontherecorddatewillbeentitledtonoticeofandtovoteatthePandoraspecialmeetingandanyadjournmentsorpostponementsthereof.

QuorumTheholdersofamajorityofthecombinedvotingpowerofalloftheoutstandingsharesofPandoracommonstockandPandorapreferredstock

entitledtovoteatthePandoraspecialmeeting,presentinpersonorrepresentedbyproxy,shallconstituteaquorumforpurposesofthematterstobevotedonatthePandoraspecialmeeting.Abstentionsandnon-votesbybrokerswillbetreatedaspresentatthePandoraspecialmeetingforpurposesofdeterminingthepresenceorabsenceofaquorum.IntheeventthataquorumisnotpresentatthePandoraspecialmeeting,theholdersofamajorityinvotingpowerofthevotinginterestrepresentedatthePandoraspecialmeeting,inpersonorrepresentedbyproxy,mayadjournthemeeting,withoutnoticeotherthanannouncementatthemeeting,toanothertimeand/orplaceuntilaquorumissopresentorrepresented.

Required Vote; Outstanding SharesApprovalofthemergeragreementproposalrequirestheaffirmativevoteoftheholdersofamajorityofthecombinedvotingpowerofthe

outstandingsharesofPandoracommonstockandPandorapreferredstockentitledtovotethereon,votingtogetherasasingleclass.Abstention,failuretovoteorfailuretoinstructyourbank,brokerorothernomineewithrespecttothemergeragreementproposalwillhavethesameeffectasavote“AGAINST ”themergeragreementproposal.Pandorastockholdersmustvotetoapprovethemergeragreementproposalinorderforthetransactionstooccur.

Assumingaquorumispresent,approvalofeachoftheadvisorycompensationproposalandtheadjournmentproposal,ifnecessaryorrequired,requirestheaffirmativevoteoftheholdersofa

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majorityofthesharesofPandoracommonstockandPandorapreferredstockpresentinpersonorrepresentedbyproxyatthePandoraspecialmeetingandentitledtovotethereon.Ifaquorumisnotpresent,theadjournmentproposalmaystillbeapprovedbytheaffirmativevoteoftheholdersofamajorityinvotingpowerofthesharesofPandoracommonstockandPandorapreferredstockheldbythePandorastockholderspresentinpersonorrepresentedbyproxyatthePandoraspecialmeeting.Abstentionswillhavethesameeffectasavote“AGAINST ”eachoftheadvisorycompensationproposalandtheadjournmentproposal,butthefailuretovoteorfailurestoinstructyourbank,brokerorothernomineewillhavenoeffectontheadvisorycompensationproposalortheadjournmentproposal.Abstentionswill,however,becountedtowardsestablishingaquorum.

EachholderofrecordofsharesofPandoracommonstockisentitledtoonevoteforeachshareofPandoracommonstockownedasofthecloseofbusinessontherecorddate.Asofthecloseofbusinessontherecorddate,therewere[• ]sharesofPandoracommonstockissuedandoutstanding.ThePandorapreferredstockisentitledtovoteonanas-convertedbasis.Asofthecloseofbusinessontherecorddate,therewere480,000sharesofPandorapreferredstockissuedandoutstanding,allofwhichwereownedbySiriusXMRadio,andwhichare,intheaggregate,entitledto[• ]votes(whichnumberisequaltothenumberofsharesofPandoracommonstockintowhichthesharesofPandorapreferredstockcouldbeconvertedandconstitutesapproximately[• ]%ofthevotingpowerofPandorastockholders).SiriusXMhasagreedtovote,orcausetobevoted,allofsuchsharesofPandorapreferredstockbeneficiallyownedbyitinfavorofthemergeragreementproposal.

Voting Procedures for Record HoldersIfyouareastockholderofrecordofPandoracommonstockasofthecloseofbusinessontherecorddate,youcansubmityourproxybeforethe

Pandoraspecialmeetinginanyofthefollowingways:•

 

Bymail:Complete,sign,dateandreturntheenclosedproxycardtoPandorausingtheenclosedpostage-paidenvelope.TheenveloperequiresnoadditionalpostageifmailedintheUnitedStates.

• 

ViatheInternet:UsetheInternettosubmitaproxytovoteyoursharesofPandoracommonstockbyaccessingthewebsite[• ]andfollowingtheinstructionsonthewebsitetoobtainyourrecordsandsubmitavoteelectronically.Pleasehaveyourproxycardandyoursocialsecuritynumberortaxidentificationnumberavailablewhenyouaccessthisvotingsite.YoumaysubmitaproxyviatheInternet24hoursaday,7daysaweekuntil11:59p.m.EasternTimeonthedaybeforethePandoraspecialmeeting.

• 

Bytelephone:Useanytouch-tonetelephonetosubmitaproxytovoteyoursharesofPandoracommonstockbycallingtoll-free[• ]andfollowingthevoicerecordedinstructions.Pleasehaveyourproxycardandyoursocialsecuritynumberortaxidentificationnumberavailablewhenyoucall.Youmaysubmitaproxybytelephone24hoursaday,7daysaweekuntil11:59p.m.,EasternTime,onthedaybeforethePandoraspecialmeeting.

Ifyouholdyoursharesin“streetname”throughabroker,bankorothernominee,yourbroker,bankorothernomineewillseparatelysendyouavotinginstructioncarddescribingtheprocedureforvotingyoursharesofPandoracommonstock,includingwhetheryoumaysubmitaproxyviatheInternetorbytelephone.

IfyousubmitanexecutedproxypriortothePandoraspecialmeetingbutdonotindicatehowyouwanttovote,yourvotewillbecountedasavote“FOR ”theapprovalforeachofthemergeragreementproposal,theadvisorycompensationproposalandtheadjournmentproposal,ifnecessaryorappropriate.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF PANDORA COMMON STOCK YOUOWN. Accordingly, each Pandora stockholder should complete, sign, date and return the enclosed proxy card in the enclosed postage-paidenvelope, or vote via the Internet or by telephone as soon as possible, whether or not such Pandora stockholder plans to attend the Pandoraspecial meeting in person.

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VotinginPersonSharesofPandoracommonstockhelddirectlyinyournameasstockholderofrecordmaybevotedinpersonbyballotatthePandoraspecial

meeting.IfyouchoosetovoteyoursharesofPandoracommonstockinpersonatthePandoraspecialmeeting,pleasebringavalid,government-issuedphotoidentification.EvenifyouplantoattendthePandoraspecialmeeting,thePandoraboardofdirectorsrecommendsthatyousubmitaproxytovoteyoursharesofPandoracommonstockinadvanceasdescribedabovesothatyourvotewillbecountedifyoulaterdecidenottoattendthePandoraspecialmeeting.

Ifyouareabeneficialholder,youwillreceiveseparatevotinginstructionsfromyourbroker,bankorothernomineeexplaininghowtovoteyourshares.PleasenotethatifyoursharesofPandoracommonstockareheldin“streetname”byabroker,bankorothernomineeandyouwishtovoteatthePandoraspecialmeeting,youwillnotbepermittedtovoteinpersonunlessyoufirstobtainalegalproxy,executedinyourfavor,fromtherecordholderofyourshares,suchasabroker,bankorothernominee.Youareencouragedtorequestalegalproxyfromyourbroker,bankorothernomineepromptlyastheprocesscanbelengthy.Inadditiontosuchlegalproxy,ifyouplantoattendthePandoraspecialmeeting,butholdyoursharesin“streetname”,pleasealsobringevidenceofyourbeneficialownershipofyourshares(e.g.,acopyofarecentbrokeragestatementshowingtheshares)andvalidphotoidentificationwithyoutothePandoraspecialmeeting.

Revoking a ProxyIfyouareastockholderofrecordofPandora,whetheryousubmitaproxytovoteyoursharesofPandoracommonstockbymail,viatheInternetor

bytelephone,youcanchangeorrevokeyourproxybeforeitisvotedatthePandoraspecialmeetingby:•

 

submittinganewproxycardbearingalaterdate,whichnewproxycardmustbereceivedpriortoyoursharesofPandoracommonstockbeingvotedatthePandoraspecialmeeting;

• 

submittingvotinginstructionsagainviatheInternetorbytelephoneatanytimebefore11:59p.m.EasternTimeonthedaybeforethePandoraspecialmeeting;

• 

deliveringawrittennoticeofyourrevocation,whichmaybedeliveredtothePandoracorporatesecretaryatPandoraMedia,Inc.,Attention:CorporateSecretary,2100FranklinStreet,Suite700,Oakland,California94612,andmustbereceivedbeforeyoursharesofPandoracommonstockarevotedatthePandoraspecialmeeting;or

• 

votinginpersonatthePandoraspecialmeeting.PleasenotethatyourattendanceatthePandoraspecialmeetingwillnotaloneservetorevokeyourproxy.

IfyouareabeneficialownerofPandoracommonstockasofthecloseofbusinessontherecorddate,youmustfollowtheinstructionsofyourbank,brokerorothernomineetorevokeorchangeyourvotinginstructions.

Vote of Pandora’s Directors and Executive OfficersAtthecloseofbusinessontherecorddate,Pandora’sdirectorsandexecutiveofficers,asagroup,ownedandwereentitledtovote[• ]sharesof

Pandoracommonstock,orapproximately[• ]%oftheoutstandingvotingpowerentitledtovoteatthePandoraspecialmeeting.Pandoracurrentlyexpectsthatallofitsdirectorsandexecutiveofficerswillvotetheirshares“FOR ”themergeragreementproposal,“FOR ”the

advisorycompensationproposaland“FOR ”theadjournmentproposal.

Proxy Solicitation CostsTheenclosedproxycardisbeingsolicitedonbehalfofthePandoraboardofdirectors.Inadditiontosolicitationbymail,Pandora’sdirectors,

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person,bytelephoneorbyelectronicmeans.Thesepersonswillnotbespecificallycompensatedfordoingthis.PandorahasretainedInnisfreeM&AIncorporated,whichwerefertoasInnisfree,toassistintheproxysolicitationprocess.Pandorawillpay

Innisfreeafeeofapproximately$25,000,aswellasreasonableanddocumentedout-of-pocketexpenses.PandoraalsohasagreedtoindemnifyInnisfreeagainstvariousliabilitiesandexpensesthatrelatetoorariseoutofitssolicitationofproxies(subjecttocertainexceptions).

Pandorawillaskbanks,brokersandothernomineestoforwardtheproxysolicitationmaterialstothebeneficialownersofsharesofPandoracommonstockheldofrecordbysuchnomineeholders.Pandorawillreimbursethesenomineeholdersfortheircustomaryclericalandmailingexpensesincurredinforwardingtheproxysolicitationmaterialstothebeneficialowners.

Stockholder ListAlistofPandorastockholdersentitledtovoteatthePandoraspecialmeetingwillbeavailableforexaminationbyanyPandorastockholderatthe

Pandoraspecialmeeting.AtleasttendayspriortothedateofthePandoraspecialmeeting,thisstockholderlistwillbeavailableforinspectionbyPandorastockholders,subjecttocompliancewithapplicableprovisionsofDelawarelaw,duringordinarybusinesshoursatthecorporateofficesofPandoralocatedat2100FranklinStreet,Suite700,Oakland,California94612.

Other BusinessTherearenoothermattersthatthePandoraboardofdirectorsintendstopresentatthePandoraspecialmeeting.Ifyouhavesubmittedaproxyto

votebeforethePandoraspecialmeetingandothermattersareproperlypresentedforvotingatthePandoraspecialmeeting,yourproxywillhavethediscretiontovoteonthosemattersforyou.

Other InformationThematterstobeconsideredatthePandoraspecialmeetingareofgreatimportancetoPandorastockholders.Accordingly,youareurgedtoread

andcarefullyconsidertheinformationcontainedinorincorporatedbyreferenceintothisproxystatement/prospectusandsubmityourproxybymail,viatheInternetorbytelephonepromptly.If you submit your proxy via the Internet or by telephone, you do not need to return the enclosed proxycard.

AssistanceIfyouneedassistanceincompletingyourproxycardorhavequestionsregardingthePandoraspecialmeeting,pleasecontact:

InnisfreeM&AIncorporated501MadisonAvenue,20thFloor

NewYork,NY10022Pandorastockholdersmaycalltoll-free:

(888)750-5384BanksandBrokersmaycallcollect:

(212)750-5833or

PandoraMedia,Inc.2100FranklinStreet,Suite700Oakland,California94612Attn.:InvestorRelations

(510)451-410031

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HouseholdingTheSEChasadoptedrulesthatpermitcompaniesandintermediariessuchasbrokerstosatisfydeliveryrequirementsforproxystatementsand

annualreportswithrespecttotwoormorestockholderssharingthesameaddressbydeliveringasingleproxystatementorannualreport,asapplicable,addressedtothosestockholders.AspermittedbytheExchangeAct,onlyonecopyofthisproxystatement/prospectusisbeingdeliveredtostockholdersresidingatthesameaddress,unlesssuchstockholdershavenotifiedPandoraoftheirdesiretoreceivemultiplecopiesoftheproxystatement/prospectus.Thisprocess,whichiscommonlyreferredtoas“householding,”potentiallyprovidesextraconvenienceforstockholdersandcostsavingsforcompanies.

BrokerswithaccountholderswhoarePandorastockholdersmaybe“householding”Pandora’sproxymaterials.Asingleproxystatement/prospectusmaybedeliveredtomultiplestockholderssharinganaddressunlesscontraryinstructionshavebeenreceivedfromtheaffectedstockholders.Onceyouhavereceivednoticefromyourbrokerthatitwillbe“householding”communicationstoyouraddress,“householding”willcontinueuntilyouarenotifiedotherwiseoruntilyounotifyyourbrokerorPandorathatyounolongerwishtoparticipatein“householding.”

If,atanytime,younolongerwishtoparticipatein“householding”andwouldprefertoreceiveaseparateproxystatement/prospectus,youmay(1)notifyyourbroker,(2)directyourwrittenrequestto:PandoraMedia,Inc.,2100FranklinStreet,Suite700,Oakland,California94612,Attention:InvestorRelationsor(3)contactPandora’sInvestorRelationsdepartmentbytelephoneat(510)842-6960.Stockholderswhocurrentlyreceivemultiplecopiesofthisproxystatement/prospectusattheiraddressandwouldliketorequest“householding”oftheircommunicationsshouldcontacttheirbroker.Inaddition,Pandorawillpromptlydeliver,uponwrittenororalrequestmadetotheaddressortelephonenumberabove,aseparatecopyofthisproxystatement/prospectustoastockholderatasharedaddresstowhichasinglecopyofthedocumentswasdelivered.

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PANDORA PROPOSALS

Proposal 1: The Merger Agreement ProposalAsdiscussedelsewhereinthisproxystatement/prospectus,PandoraisaskingthePandorastockholderstoconsiderandvoteonthemerger

agreementproposal.Youshouldcarefullyreadthisproxystatement/prospectusinitsentirety,includingitsAnnexesandtheinformationincorporatedbyreferenceinto

thisproxystatement/prospectus,formoredetailedinformationconcerningthemergeragreementandthetransactionscontemplatedthereby.Inparticular,youareurgedtoreadthesectionsentitled“TheTransactions”and“TheMergerAgreement,”aswellasthemergeragreementinitsentirety,whichisattachedasAnnexAhereto.

TheapprovalbythePandorastockholdersofthemergeragreementproposalisrequiredbytheDGCLandisaconditiontothecompletionofthetransactions.Ifthemergeragreementproposalisnotapproved,thetransactionswillnotbecompleted.

SiriusXMhasagreedtovote,orcausetobevoted,allofthesharesofPandorapreferredstockbeneficiallyownedbyit(constitutingapproximately[• ]%oftheoutstandingsharesofPandoracommonstockonanas-convertedbasisasof[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus)infavorofthemergeragreementproposal.

Required VoteApprovalofthemergeragreementproposalrequirestheaffirmativevoteoftheholdersofamajorityofthecombinedvotingpowerofthe

outstandingsharesofPandoracommonstockandPandorapreferredstockentitledtovotethereon,votingtogetherasasingleclass.Abstention,failuretovoteorfailuretoinstructyourbank,brokerorothernomineewithrespecttothemergeragreementproposalwillhavethesameeffectasavote“AGAINST ”themergeragreementproposal.

Vote RecommendationThePandoraboardofdirectorsrecommendsthatPandorastockholdersvote“FOR ”themergeragreementproposal.

Proposal 2: The Advisory Compensation ProposalPursuanttotheDodd-FrankWallStreetReformandConsumerProtectionActof2010andRule14a-21(c)oftheExchangeAct,Pandoraisseeking

non-binding,advisorystockholderapprovalofthecompensationofPandora’snamedexecutiveofficersthatisbasedonorotherwiserelatestothetransactionsasdisclosedin“TheTransactions—InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions”beginningonpage[• ].TheproposalgivesPandora’sstockholderstheopportunitytoexpresstheirviewsonthetransaction-relatedcompensationofPandora’snamedexecutiveofficers.Accordingly,Pandoraisrequestingstockholderstoadoptthefollowingresolution,onanon-binding,advisorybasis:

“RESOLVED,thatthecompensationthatmaybepaidorbecomepayabletoPandora’snamedexecutiveofficersinconnectionwiththetransactions,andtheagreementsorunderstandingspursuanttowhichsuchcompensationmaybepaidorbecomepayable,ineachcaseasdisclosedpursuanttoItem402(t)ofRegulationS-Kin“TheTransactions—InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions,”areherebyAPPROVEDonanon-binding,advisorybasis.”

ThevoteonthisproposalisavoteseparateandapartfromthevoteofthePandorastockholderstoapprovethemergeragreementproposalandapprovalofthisadvisorycompensationproposalisnotaconditiontocompletionofthetransactions.Accordingly,aPandorastockholdermayvotetonotapprovethisproposalandvotetoapprovethemergeragreementproposalorviceversa.ThevotewithrespecttothisadvisorycompensationproposalisadvisoryonlyandwillnotbebindingonPandoraorSiriusXM,regardlessofwhethertheotherproposalsareapproved.Ifthe

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transactionsarecompleted,thetransaction-relatedcompensationmaybepaidtoPandora’snamedexecutiveofficerstotheextentpayableinaccordancewiththetermsofthecompensationagreementsandarrangementsevenifPandora’sstockholdersfailtoapprovethisadvisorycompensationproposal.

Required VoteAssumingaquorumispresent,approvaloftheadvisorycompensationproposalrequirestheaffirmativevoteoftheholdersofamajorityofthe

sharesofPandoracommonstockandPandorapreferredstockpresentinpersonorrepresentedbyproxyatthePandoraspecialmeetingandentitledtovotethereon.Abstentionwillhavethesameeffectasavote“AGAINST ”theadvisorycompensationproposal,butthefailuretovoteorfailuretoinstructyourbank,brokerorothernomineewillhavenoeffectontheadvisorycompensationproposal.Abstentionswill,however,becountedtowardsestablishingaquorum.

Vote RecommendationThePandoraboardofdirectorsrecommendsthatPandorastockholdersvote“FOR ”theadvisorycompensationproposal.

Proposal 3: The Adjournment ProposalPandorastockholdersarealsobeingaskedtoconsiderandvoteonaproposaltoadjournorpostponethePandoraspecialmeeting,ifnecessaryor

appropriate,foraminimumperiodoftimereasonableunderthecircumstances,tosolicitadditionalproxiesintheeventtherearenotsufficientvotesatthetimeofthePandoraspecialmeetingtoapprovethemergeragreementproposal.

Intheadjournmentproposal,PandoraisaskingitsstockholderstoauthorizetheholderofanyproxysolicitedbythePandoraboardofdirectorstovoteinfavorofgrantingdiscretionaryauthoritytotheproxyholders,andeachofthemindividually,toadjournthePandoraspecialmeetingtoanothertimeand/orplaceforthepurposeofsolicitingadditionalproxies.IfthePandorastockholdersapprovetheadjournmentproposal,subjecttothetermsofthemergeragreement,PandoracouldadjournthePandoraspecialmeetingandusetheadditionaltimetosolicitadditionalproxies,includingthesolicitationofproxiesfromPandorastockholderswhohavepreviouslyvoted.PandoradoesnotintendtocallavoteontheadjournmentproposalifthemergeragreementproposalisadoptedatthePandoraspecialmeeting.

TheapprovalbythePandorastockholdersoftheadjournmentproposalisnotaconditiontothecompletionofthetransactions.

Required VoteAssumingaquorumispresent,approvaloftheadjournmentproposal,ifnecessaryorrequired,requirestheaffirmativevoteoftheholdersofa

majorityofthesharesofPandoracommonstockandPandorapreferredstockpresentinpersonorrepresentedbyproxyatthePandoraspecialmeetingandentitledtovotethereon.Ifaquorumisnotpresent,theadjournmentproposalmayneverthelessbeapprovedbytheaffirmativevoteoftheholdersofamajorityinvotingpowerofthesharesofPandoracommonstockheldbythePandorastockholderspresentinpersonorrepresentedbyproxyatthePandoraspecialmeeting.Anabstentionwillhavethesameeffectasavote“AGAINST ”theadjournmentproposal,butthefailuretovoteorfailuretoinstructyourbank,brokerorothernomineewillhavenoeffectontheadjournmentproposal.Abstentionswill,however,becountedtowardsestablishingaquorum.

Vote RecommendationThePandoraboardofdirectorsrecommendsthatPandorastockholdersvote“FOR ”theadjournmentproposal,ifnecessaryorappropriate.

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THE PARTIESSirius XM, Sirius XM Radio and Merger Sub 1290AvenueoftheAmericas,11thFloorNewYork,NewYork10104(212)584-5100

SiriusXMisaDelawarecorporation.SiriusXM’scommonstockislistedonNASDAQunderthesymbol“SIRI”.SiriusXMownsSiriusXMRadio,whichisaDelawarecorporation.SiriusXMRadioistheworld’slargestradiocompanymeasuredbyrevenue

andhasapproximately33.5millionsubscribers.SiriusXMRadiotransmitsmusic,sports,entertainment,comedy,talk,news,trafficandweatherchannels,aswellasinfotainmentservices,intheUnitedStatesonasubscriptionfeebasisthroughitstwoproprietarysatelliteradiosystems.Subscriberscanalsoreceivemusicandotherchannels,plusfeaturessuchasSiriusXMOnDemand,overitsInternetradioservice,includingthroughapplicationsformobiledevices,homedevicesandotherconsumerelectronicequipment.SiriusXMalsoprovidesconnectedvehicleservices.SiriusXM’sconnectedvehicleservicesaredesignedtoenhancethesafety,securityanddrivingexperienceforvehicleoperatorswhileprovidingmarketingandoperationalbenefitstoautomakersandtheirdealers.

AdditionalinformationaboutSiriusXManditssubsidiariesisincludedinthedocumentsincorporatedbyreferenceinthisproxystatement/prospectus.Seethesectionentitled“WhereYouCanFindMoreInformation”beginningonpage[• ].

MergerSubisaDelawarecorporationandadirect,whollyownedsubsidiaryofSiriusXM.MergerSubwasformedbySiriusXMsolelyforthepurposeofengaginginthetransactionscontemplatedbythemergeragreement,andhasnotcarriedonanybusinessorconductedanyotheroperations.

LibertyMediaownsapproximately[• ]%oftheoutstandingSiriusXMcommonstockasof[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus,anduponcompletionofthetransactions,weexpectthatLibertyMediawillownapproximately[• ]%oftheoutstandingSiriusXMcommonstock(basedonthenumberofsharesofSiriusXMcommonstockoutstandingon[• ],2018thelastpracticabledatebeforethefilingofthisproxystatement/prospectus).

Share RepurchasesHistorically,SiriusXM’spolicyhasbeentorepurchasesharesunderthe“safeharbor”conditionsofRule10b-18oftheSecuritiesExchangeActof

1934,asamended,whichincludesalimitationonthedailyvolumeofrepurchases.Rule10b-18imposesanadditionaldailyvolumelimitationonsharerepurchasesduringapendingmergeroracquisitioninwhichsharesofSiriusXMcommonstockwillconstitutesomeoralloftheconsideration.SiriusXMmanagementhasdeterminedthatduringthependingacquisitionofPandora,whenthesafeharborwouldotherwisebeavailable,itisinSiriusXM’sbestinteresttorepurchasesharesinexcessofthisadditionaldailyvolumelimitation.Duringthisperiod,SiriusXMintendstorepurchasesharesincompliancewiththeotherconditionsofthesafeharbor,includingthedailyvolumelimitationthatapplieswhetherornotthereisapendingmergeroracquisition.

SinceSeptember23,2018throughthecloseofbusinesson[• ],2018(whichisthelatestpracticabledatebeforethefilingofthisproxystatement/prospectus),SiriusXMhasrepurchasedanaggregateof[• ]sharesofitscommonstockatanaveragepriceof$[• ].RegulationMunderthefederalsecuritieslawsprohibitsSiriusXMfrombiddingfororrepurchasingitscommonstockduringtheperiodcommencingwiththemailingofthisproxystatement/prospectusthroughthedateofthePandoraspecialmeeting.Accordingly,fromthedateofthemailingofthisproxystatement/prospectusthroughthedateofthemeeting,SiriusXMwillsuspenditsrepurchaseprogram.SiriusXMmaymakeadditionalpurchasesofsharesofitscommonstockafterthePandoraspecialmeetingandpriortothecompletionofthetransactions,subjecttomarketconditionsandapplicablesecuritieslaws.

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Pandora, New Holding Company and Holdco Merger Sub PandoraMedia,Inc.2100FranklinStreet,Suite700Oakland,California94612(510)451-4100

PandoraisaDelawarecorporation.Pandora’scommonstockislistedonNYSEunderthesymbol“P”.Pandoraistheworld’smostpowerfulmusicdiscoveryplatform,offeringapersonalizedexperienceforeachofPandora’slistenerswhereverand

whenevertheywanttolistentomusic—whetherthroughmobiledevices,carspeakersorconnecteddevicesinthehome.Unliketraditionalradiothatbroadcaststhesamecontentatthesametimetoallofitslisteners,Pandoraenablesitslistenerstocreatepersonalizedstationsandplaylists,aswellassearchandplaysongsandalbumson-demand.TheMusicGenomeProject,Pandora’scontentprogrammingalgorithmsanddatacollectedfromitslistenerspowerPandora’sabilitytopredictlistenermusicpreferences,playmusiccontentsuitedtothetastesofeachindividuallistenerandintroducelistenerstothemusicitthinkstheywilllove.Foundedbymusicians,Pandoraalsoempowersartistswithvaluabledataandtoolstohelpgrowtheiraudienceandconnectwiththeirfans.

Pandoraisavailableasanad-supportedradioservice,aradiosubscriptionservicecalledPandoraPlusandanon-demandsubscriptionservicecalledPandoraPremium.Themajorityofitslistenerhoursoccuronmobiledevices,withthemajorityofitsrevenuegeneratedfromadvertisingonitsad-supportedradioserviceonthesedevices.WithbillionsofdatapointsthathelpPandoraunderstanditsusers’preferences,Pandoraoffersbothlocalandnationaladvertiserstheopportunitytodelivertargetedmessagestoitslistenersusingacombinationofaudio,displayandvideoadvertisements.Pandoraalsogeneratesincreasingrevenuefromitssubscriptionofferings.

AdditionalinformationaboutPandoraanditssubsidiariesisincludedinthedocumentsincorporatedbyreferenceinthisproxystatement/prospectus.Seethesectionentitled“WhereYouCanFindMoreInformation”beginningonpage[• ].

NewHoldingCompanyisaDelawarecorporationandawhollyownedsubsidiaryofPandora,andHoldcoMergerSubisaDelawarecorporationandawhollyownedsubsidiaryofNewHoldingCompany.EachofNewHoldingCompanyandHoldcoMergerSubwasformedbyPandorasolelyforthepurposeofengaginginthetransactionscontemplatedbythemergeragreementandhasnotcarriedonanybusinessorconductedanyotheroperations.

Certain Relationships Among the PartiesOnJune9,2017,PandoraenteredintoaninvestmentagreementwithSiriusXMRadiotosell480,000sharesofPandorapreferredstocktoSirius

XMRadiofor$480million.ThesharesofPandorapreferredstockwereissuedintworounds:aninitialclosingof172,500sharesfor$172.5millionthatoccurredonJune9,2017uponsigningtheagreementwithSiriusXMRadio,andanadditionalclosingof307,500sharesfor$307.5millionthatoccurredonSeptember22,2017.

Pursuanttotheinvestmentagreement,uponthesecondclosing,SiriusXMRadiodesignated,andthePandoraboardofdirectorsappointed,GregoryMaffei,JamesMeyerandDavidFreartoserveasmembersofthePandoraboardofdirectors.Mr.MaffeiwasappointedtoserveaschairmanofthePandoraboardofdirectorsandamemberoftheboard’snominatingandcorporategovernancecommittee,andMr.Meyerwasappointedtoserveasamemberoftheboard’scompensationcommittee.Mr.MaffeihasservedasadirectorandthepresidentandchiefexecutiveofficerofLibertyMedia(includingitspredecessor)sinceMay2007andhasservedasadirectorofSiriusXMsinceMarch2009andchairmanoftheSiriusXMboardofdirectorssinceApril2013.Mr.MeyerhasbeenthechiefexecutiveofficerofSiriusXMsinceDecember2012andhasservedasadirectorofSiriusXMboardofdirectorssinceJanuary2013.Mr.FrearhasservedaschieffinancialofficerofSiriusXMsinceJune2003.

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Messrs.Maffei,MeyerandFreardidnotparticipateinanydeliberationsofthePandoraboardofdirectorsrelatingtothemergeragreementortheacquisitionofPandorabySiriusXM.ThePandoraboardofdirectorswasawareoftheserelationshipsandtookthemintoaccountinconsideringwhethertoapprovethemergeragreement.Formoreinformation,see“BackgroundoftheTransactions”beginningonpage[• ].

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THE TRANSACTIONSThefollowingisadiscussionofthetransactionsandthematerialtermsofthemergeragreement.Thisdiscussionisqualifiedinitsentiretyby

referencetothemergeragreement,andyouareurgedtoreadthemergeragreementcarefullyandinitsentirety,acopyofwhichisattachedasAnnexAtothisproxystatement/prospectusandincorporatedbyreferenceintothisproxystatement/prospectus.

Background of the TransactionsThePandoraboardofdirectorsregularlyevaluatesthestrategicdirectionandongoingbusinessplanofPandorawithaviewtowardstrengthening

thebusinessandenhancingstockholdervalue.Aspartofthisevaluation,thePandoraboardofdirectors,fromtimetotime,hasconsideredvariouspotentialstrategicalternativesforPandora,includingcontinuationasastandaloneenterprise,potentialstrategicalliancesandothercommercialarrangements,modificationstoitsstrategyanddirection,strategicmergersandacquisitionsandotherbusinesscombinationsand/orapossiblesaleofPandora,includingthepossibilityofacombinationwithSiriusXM.

In2015,Pandoraundertookseveralstrategicinitiatives,undertheoversightofthePandoraboardofdirectors,tocreatesubstantialnewlinesofbusiness,includingtheacquisitionofTicketflytoentertheeventpromotionandticketsalemarkets,theacquisitionofcertaintechnologyassetstoacceleratePandora’slaunchofaninteractive,or“on-demand”,musicservicetocomplementitsnon-interactiveradioservices,andtheentryintomusiclicensingagreementswithmajormusicpublishersandownersofsoundrecordingstoenabletheon-demandservice.InDecember2015,Pandoraraised$345millioninconvertibledebttostrengthenitsbalancesheetinanticipationoffurtherinvestmentsandfinancialcommitmentsinconnectionwiththelaunchoftheon-demandservice.AlsoinDecember2015,Pandora’smanagementwascontactedbyrepresentativesofSiriusXMtoexplorewhetherPandorawouldbewillingtodiscussthepossibilityofPandorabeingacquiredbySiriusXM,whichPandora’smanagementthenraisedwiththePandoraboardofdirectors.

InJanuary2016,thePandoraboardofdirectorsengagedMorganStanley&Co.Incorporated,whichwerefertoasMorganStanley,toassistinevaluatingapossiblesaleofthecompanyasanalternativetoexecutingagainstPandora’sstrategicplan.SidleyAustin,Pandora’sprincipaloutsidecorporatecounsel,briefedthePandoraboardofdirectorsonfiduciaryandotherconsiderationsrelatedtobothseekingstrategicalternativesaswellasmaintainingPandora’sindependence.Overthenexttwomonths,attherequestofthePandoraboardofdirectors,Pandora’smanagementandMorganStanleysimultaneouslyworkedtodeveloppreliminaryassessmentsofPandora’svalueasastand-alonebusiness,andtocontactselectedpotentialpurchasersofPandora,includingSiriusXM,toassessinterestinapotentialacquisitionofPandora.OnJanuary25,2016,SiriusXMsignedaconfidentialityagreementwithPandora.SiriusXMcommencedaduediligencereviewofPandoraandengagedindiscussionswithPandoraregardingapotentialtransaction.

InMarch2016,havingrequestedindicationsofinterestfrompartiesthathadengagedintheprocess,thePandoraboardofdirectorsreceivedaverbalpreliminary,non-bindingindicationfromSiriusXMthatitwaspreparedtoacquirePandorafor$15.00pershare,whichatthetimerepresenteda$3.9billionenterprisevalue.Noneoftheotherpartiescontactedsubmittedanindicationofinterest.InMarch2016,thevolumeweightedaveragepriceofPandora’scommonstockontheNewYorkStockExchangewas$10.02pershare.InconsideringSiriusXM’soffer,thePandoraboardofdirectorstookaccountofthecompany’shistoricaloperatingresults,itsfinancialconditionanditsstrategicinitiatives,prospectsandprojections,amongotherfactors,aswellaspreliminaryvaluationandotheradviceofMorganStanleyandthelegaladviceofSidleyAustin.Takingthesefactorsintoaccount,thePandoraboardofdirectorsconcludedthatcontinuingtoexecutethecompany’sstrategicplanasastand-alonebusinessofferedthebestprospectofcreatinglong-termstockholdervalueandthereforedeterminednottofurtherpursueapossiblesaleofthecompanyatthattime.

OnMarch28,2016,PandoraannouncedtheappointmentofTimWestergren,afounderandboardmember,aschiefexecutiveofficer,followingtheresignationofBrianMcAndrewsaschiefexecutiveofficeronMarch25,2016.

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InJune2016,inresponsetosuggestionsbymajorstockholdersofthecompanythatthePandoraboardofdirectorswasnotsufficientlyaddressingtheirconcernsaboutthecompany’sstrategyandprospects,thePandoraboardofdirectorsengagedCenterviewtoadvisetheboardonstrategyandinvestorrelations.

InAugust2016,thePandoraboardofdirectorsapprovedthecompany’sentryintomulti-yearmusiclicenseagreementswithmajormusiclabelstoenablePandora’slaunchofanon-demandmusicservice.Inapprovingthelicenseagreements,thePandoraboardofdirectorsconsiderednumerousfactorsincludingtheprospectsandrisksoflaunchingsuchaservice,includingthenear-termadverseeffectsonthecompany’soperatingresultsandliquidityinadvanceofrealizingrevenuegrowth,andthepotentialimpactofthestrategyontheabilityofPandoratoincreasestockholdervalueindependentlyorthroughasaletransaction.Overthenextseveralmonths,Pandoraannounceditsentrytothesecontentagreements,aswellasenhancementstoitsexistingradiomusicservicesthatwereenabledbythesecontentagreementsandtheanticipatedlaunchofitson-demandmusicservice,PandoraPremium.

Bytheendof2016,PandorafaceddelaysinthelaunchofPandoraPremium,theneedforadditionalcapitaltofundtheminimumguaranteesunderthemusiclicenseagreementsandresistancefrommajorstockholderstoraisingadditionalcapital.Assuch,thePandoraboardofdirectorsengagedCenterviewandMorganStanleytoevaluateandpursuealternativesforraisingcapitaland,asanalternative,apotentialsaleofthebusiness.FromDecember2016throughthefirsthalfof2017,atthedirectionofthePandoraboardofdirectors,CenterviewandMorganStanleycontactednumerousstrategicpartiesinthetechnology,mediaandtelecommunicationsindustries,includingSiriusXM,aswellasfinancialsponsors,regardingpotentialinvestmentsinoranacquisitionofPandora.Atthesametime,atthedirectionofthePandoraboardofdirectors,CenterviewcontactedpotentialpurchasersofPandora’sTicketflybusiness,asthePandoraboardofdirectorshaddeterminedthatitwasnotcoretothecompany’sstrategy.

ThroughtheendofApril2017,Pandora’smanagement,togetherwithPandora’sfinancialandlegaladvisors,continuedtopursueparallelpathsofeithersecuringfinancingorfindingabuyerforPandoraatanattractiveprice.BytheendofApril2017,PandorahadidentifiedKKRastheleadingcandidateforasignificantminorityinvestmentinthecompany.

OnMay3,2017,theSiriusXMboardofdirectorsheldameetingatwhichSiriusXM’smanagementandSiriusXM’sfinancialadvisors,Allen&CompanyandBankofAmericaMerrillLynch(whichwerefertoasBofAMerrillLynch),providedupdatesondiscussionswithPandora.Attheconclusionofthemeeting,theSiriusXMboardofdirectorsapprovedSiriusXMsubmittinganon-bindingindicationofinterestforanacquisitionofPandora,andenteringintodiscussionswithPandoraregardingsuchatransaction.

OnMay4,2017,SiriusXMsubmittedalettertothePandoraboardofdirectorsindicating,onapreliminaryandnon-bindingbasis,thatitwaspreparedtodiscussacquiringPandorainexchangeforSiriusXMcommonstock,valuingPandoraat$11.00pershare.TheletterfromSiriusXMincludedaconditionthattherebenomaterialchangeinPandora’scapitalstructure,andaccordinglytheproposedKKRinvestmentwouldresultinthewithdrawalofSiriusXM’soffer.Insubsequentconversations,GregoryMaffei,thechairmanoftheboardofSiriusXM(andthechiefexecutiveofficerofLibertyMedia,SiriusXM’smajoritystockholder),toldRobertPruzanofCenterviewthatSiriusXMmaybewillingtopayupto$11.50pershareinSiriusXMstocktoacquirePandorashouldthePandoraboardofdirectorsagreetopursueatransaction.AfterseveralmeetingsheldtodiscusstheKKRinvestmentandtheSiriusXMindicationofinterest,thePandoraboardofdirectorsdeterminedthatitwasinthebestinterestofstockholderstosecurethecommitmentfromKKRtoinvestandtherebyensurePandora’sabilitytomeetneartermliquidityneeds,whileatthesametimepreservingtheabilitytoevaluatetheproposedacquisitionbySiriusXM.ThePandoraboardofdirectorsbelievedthatifitdidnotpursuesuchinvestment,therewassubstantialriskthatPandoracouldsufferaliquiditycrisispriortocompletinganagreementwithSiriusXMfortheacquisitionofPandora.ThePandoraboardofdirectorsdeterminedthattheKKRcommitmentwouldenablethePandoraboardofdirectorstoconductadisciplineddiscussionwithSiriusXMwithastablebalancesheet,providingastrongernegotiatingposition.Basedonthesedeterminations,thePandoraboard

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ofdirectorssecuredaprovisionintheinvestmentagreementwithKKRthatwouldpermitPandoratoterminatetheagreementwithoutacceptingtheinvestmentwithin30daysinordertoacceptaproposalfortheacquisitionof50%ormoreofPandorainexchangeforthepaymentofa$15millionterminationfee.

OnMay8,2017,PandoraannouncedthatKKRhadagreedtoinvest$150millioninanewissueofPandora’sSeriesAConvertiblePreferredStock,withaconversionpriceof$13.50pershareandtherighttoacumulativedividendattherateofupto8%perannum.

FollowingtheannouncementoftheproposedKKRinvestment,managementandrepresentativesofPandoraandSiriusXMheldaseriesofmeetings,conductedduediligenceandevaluatedpotentialstructuresforapossibleacquisitionofPandorabySiriusXM.Atthesametime,Pandora’smanagementworkedtocompletetheKKRtransactionandalsocontinueddiscussionswithpotentialpurchasersofTicketflyasanadditionalmeansofraisingcapital.

OnJune5,2017,onbehalfofSiriusXM,Mr.MaffeitoldMr.PruzanthatSiriusXMwasnolongerpreparedtopursuetheproposedacquisitionofPandorafor$11.50inSiriusXMstockandproposedtoMr.PruzanthatPandoraterminatetheinvestmentagreementwithKKRandacceptalargerminorityinvestmentfromSiriusXMmodeledafterthetermsoftheKKRtransaction.ThePandoraboardofdirectorsdeterminedthat,providedacceptabletermscouldbenegotiated,thepotentialtransactionwithSiriusXMwouldbeinthebestinterestofPandora’sstockholders,asitofferedthecompanysubstantiallygreatercapitalaswellasthepossibilityofstrategiccollaborationwithSiriusXM.Overthenextfewdays,representativesofPandoraandSiriusXMnegotiatedthesize,conversionprice,governanceprovisionsandothertermsoftheproposedinvestment.Atthesametime,PandoraandKKRagreedonarevisedterminationrightinfavorofPandora,whichwouldenablePandoratoaccepttheSiriusXMminorityinvestmentinexchangefora$22.5millionterminationfeeshouldthePandoraboardofdirectorsdetermineittobeinthebestinterestofthecompanytodoso.

OnJune7-8,2017,thePandoraboardofdirectorsheldseveralmeetingsatwhichPandora’smanagementandPandora’sfinancialandlegaladvisorsprovidedupdatesondiscussionswithSiriusXM,andthePandoraboardofdirectorsdiscussedthetermsandrelativemeritsoftheKKRinvestmentversustheSiriusXMinvestment,aswellasthestatusandprospectsforcompletingPandora’snegotiationstosellTicketflytoEventbritefor$200million.Attheconclusionofthesemeetings,thePandoraboardofdirectorsdeterminedthatitwasinthebestinterestofthecompany,andauthorizedtheofficersofthecompany,toterminatetheKKRinvestmentagreement,enterintotheinvestmentagreementwithSiriusXMandsellTicketflytoEventbrite.UndertheinvestmentagreementwithSiriusXM,PandoraagreedtosellSiriusXM$480millionofSeriesAConvertiblePreferredStock,whichrepresentedapproximately19.99%ofPandora’sthen-outstandingcommonstockonasas-convertedbasis,withaconversionpriceof$10.50pershareandtherighttoacumulativedividendattherateof6%perannum.TheSiriusXMinvestmentagreementprovidedthat172,500sharesofSeriesAConvertiblePreferredStockwouldinitiallybeissuedandsoldtoSiriusXMonJune9,2017andtheremaining307,500shareswouldbeissuedandsoldtoSiriusXMatasecondclosingfollowingthesatisfactionofcertaincustomaryclosingconditions,includingobtainingclearanceundertheHSRAct.UnderthetermsoftheSiriusXMinvestment,SiriusXMbecameentitledtonamethreemembersofthePandoraboardofdirectorsfollowingthesecondclosingandSiriusXMagreedtocertain“standstill”restrictionsonpurchasingadditionalsharesofPandorastockandengaginginactivitiesaimedatinfluencingthestrategyorgovernanceofPandoraotherthanthroughmembershiponthePandoraboardofdirectors.

OnJune7,2017,theSiriusXMboardofdirectorsheldameetingatwhichSiriusXM’smanagementandSiriusXM’sfinancialandlegaladvisorsprovidedupdatesondiscussionswithPandora.AttheconclusionofthemeetingtheSiriusXMboardapprovedtheinvestmentagreementwithPandoraonthetermssubmittedforconsideration.Followingtheentryintotheinvestmentagreement,SiriusXMpubliclydisclosedthatithadnointentiontopursueanacquisitionofPandoraatthattime,however,SiriusXMintendedtoreviewitsinvestmentonacontinuingbasisandwouldfromtimetotimeconsiderpursuingorproposingalternativetransactionswithPandora,subjecttotherestrictionssetforthintheinvestmentagreement.

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OnJune9,2017,PandoraterminatedtheKKRinvestmentagreement,paidKKRthe$22.5millionterminationfee,enteredintotheSiriusXMinvestmentagreementandenteredintotheagreementtosellTicketflytoEventbritefor$200million.OnJune9,2017,SiriusXMandPandoracompletedtheinitialclosingundertheinvestmentagreement,andSiriusXMpurchased$172.5millionoftheSeriesAConvertiblePreferredStock.

OnJune27,2017,PandoraannouncedthatMr.Westergrenhadresignedaschiefexecutiveofficerandasadirectorofthecompany,andthatthecompanyhadcommencedasearchforhissuccessor.

OnAugust9,2017,PandoraannouncedtheappointmentofRogerLynchaschiefexecutiveofficerandamemberofthePandoraboardofdirectors,effectiveSeptember18,2017.

OnSeptember22,2017,afterreceivingapprovalundertheHSRAct,SiriusXMandPandoracompletedthesecondclosingundertheinvestmentagreement,andSiriusXMpurchasedtheremainderoftheaggregate$480millionofSeriesAConvertiblePreferredStock.Pursuanttothetermsoftheinvestmentagreement,Mr.Maffei,JamesMeyer,thechiefexecutiveofficerofSiriusXM,andDavidFrear,thechieffinancialofficerofSiriusXMthenjoinedthePandoraboardofdirectors,andMr.MaffeibecamethechairmanofthePandoraboardofdirectors.Alsoinconnectionwiththesecondclosing,RogerFaxon,whohasservedonthePandoraboardofdirectorssince2015,wasnamedLeadDirector,andElizabethNelsonresignedfromthePandoraboardofdirectors.

WithitsbalancesheetstrengthenedbytheSiriusXMinvestmentandtheproceedsfromtheTicketflysalethatwascompletedonSeptember1,2017,thePandoraboardofdirectorsbeganevaluatingthecompany’sstrategyandassessingitsoperationsinordertoenhancetheabilityofPandoratogrowitshybridadvertising/subscriptionmodel.

InlateMarch2018,Mr.FrearadvisedMr.FaxonthatSiriusXMwasundertakingastrategicreviewofitsinvestmentinPandora,includingwhethertheSiriusXMboardofdirectorswouldbewillingtoexploreanacquisitionofPandorabySiriusXM.Messrs.FrearandFaxondiscussedthepossibilitythatSiriusXMmightwishtoexploreanacquisitionofPandoralaterintheyear,andMr.FrearadvisedMr.FaxonthatSiriusXManditsboardofdirectorshadnotdevelopedanyplanormadeanydecisiontoexplorethepossibilityofsuchatransactionatthistime.

Hereafter,Messrs.Maffei,MeyerandFrearrecusedthemselvesfromalldeliberationsandactionsofthePandoraboardofdirectors,andwaivednoticeofallmeetingsofthePandoraboardofdirectors,relatedtoanypotentialtransactionwithSiriusXM,includinganyalternativestoanysuchtransactionwithanythirdpartyandnorepresentativesofSiriusXMattendedanyclosedsessionsofthePandoraboardofdirectorsfromwhichMessrs.Maffei,MeyerandFrearwererecused.

OnApril17,2018,thePandoraboardofdirectorsheldameeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSiriusXM,duringwhichmembersofPandora’smanagementpresentedanoverviewofrecentproductfeaturelaunchesandthecompany’sproductdevelopmentroadmapfortheremainderof2018.Pandora’smanagementalsoupdatedthePandoraboardofdirectorsonthedevelopmentofthecompany’spodcastpublishingtechnologyandeffortstolicensepodcastcontent.Themeetingwasadjourneduntilthefollowingmorning.

OnApril18,2018,thePandoraboardofdirectorsresumeditsmeetingfromthepriordayand,afteraclosedsession,thefullPandoraboardofdirectorswasjoinedbyPandora’smanagement,representativesofSiriusXM,andrepresentativesfromSidleyAustin.MembersofPandora’smanagementupdatedthePandoraboardofdirectorsoncurrentaudiencetrendswithrespecttothecompany’sservices,themarketingplanfor2018andtheclosingofthecompany’sacquisitionofAdsWizz.Pandora’smanagementalsoupdatedthePandoraboardofdirectorsonthecompany’srecentandforecastedfinancialperformanceandPandora’smanagement’splansforrefinancingthecompany’soutstandingconvertibledebttoextendthematurityofthenotesandimprovePandora’sliquidity.Afterdiscussion,thePandoraboardofdirectorsapprovedtheexchangeofthecompany’s1.75%convertibleseniornotesdue2020foranewseriesofnotesandauthorizedaTransactionCommitteetodeterminethetermsofthenewnotes,theselectionoffinancialadvisorsandthe

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termsoftheexchange.Pandora’smanagementalsoreviewedwiththePandoraboardofdirectorsitsproposedplansregardingenhancedoperationalefficiencyandthestatusofongoingnegotiationsofthecompany’smusiccontent-licensingagreements.Messrs.MeyerandFrearandtherepresentativesofSiriusXMdeparted.Mr.MaffeithendiscussedwiththePandoraboardofdirectorsotherindustryparticipantsandconsolidationopportunities.Mr.Maffeithenleftthemeeting,representativesofCenterviewjoinedthemeetingandthePandoraboardofdirectorscontinuedthemeetingwithPandora’smanagementandrepresentativesofSidleyAustinandCenterviewinattendance.SidleyAustinreviewedwiththePandoraboardofdirectorsitsfiduciaryobligationswithrespecttoanyconsolidationtransactionandthevariousrolesthatSiriusXMandLibertyMediacouldplayinsuchatransaction.RepresentativesfromCenterviewalsoprovidedbusinessandstrategicobservationsandthePandoraboardofdirectorsengagedinalengthydiscussion,focusingontherecentactivitiesofSiriusXMandLibertyMediaandCenterview’sperspectiveontheirinvestmentobjective,thecompany’spendingacquisitionofAdsWizzandtheproposedconvertiblenoteexchange.Afterthediscussion,thePandoraboardofdirectorsdeterminedthatitwouldcontinuetopursueitsexistingstrategyandpendingtransactions(includingtheconvertiblenoteexchange).

OnApril26,2018,Mr.FaxonupdatedMr.FrearonthePandoraboardofdirectors’determinations,andtheydiscussedtheconvertiblenoteofferingandtheongoingvaluationanalysistobeusedtoinformthePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)onalternativestomaximizestockholdervalue,includingapotentialtransactionwithSiriusXM,aswellastimingconsiderationsrelatedtothepursuitofthesepotentialtransactions.

OnJune1,2018,Pandoracompletedtheexchangeof$192.9millionaggregateprincipalamountofits1.75%convertibleseniornotesdue2020foralikeamountof1.75%convertibleseniornotesdue2023.SiriusXMdeclinedtoexerciseitspre-emptiverightsundertheinvestmentagreementtopurchaseaportionofthenewlyissuednotes.

OnJune8,2018,Mr.FrearcalledMr.FaxontoexplorewhetherPandorawouldbeinterestedinconsideringapotentialtransactiononceSiriusXMcompletedastrategicreviewofitsinvestmentinPandora.Mr.FaxonconveyedtoMr.FrearhisviewthatanysuchconsiderationwouldbeprematureastheresultsofPandora’seffortsintheareasofimprovingPandora’sadvertisingtechnology,organizationalefficiencyandlistenershipmetricswereonlybeginningtoemerge,andthatPandora’smanagementexpectedtoupdatethestrategicplanfordiscussionattheJulyPandoraboardmeeting.Mr.FrearacknowledgedthistimingandstatedhebelievedSiriusXMmightnotdecidewhetheritwasinterestedinexploringatransactionwithPandora,inanyevent,untilitsstandstillobligationsundertheinvestmentagreementexpired.Mr.FaxonreiteratedthePandoraboardofdirectors’willingnesstoconsideranyproposalfromSiriusXMifandwhenSiriusXMchosetomakeone.

OnJune15,2018,Mr.FrearcalledMr.FaxonandencouragedthePandoraboardofdirectorstocompleteitsworkonPandora’soperatingmodelandvaluationanalysisbytheJulyboardmeetingsothatthePandoraboardofdirectorswouldbeinapositiontodiscusswhethertoexploreanacquisitionbySiriusXM.Mr.Faxonnotedthattheworkwasinprocess,andagreedtoconveyMr.Frear’smessagetothePandoraboardofdirectors.

OnJune28,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldameeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustinandCenterviewtoreceiveareportonmanagement’srevisedoperatingmodelanddiscusswhetherandhowtoengagewithSiriusXMregardingapotentialtransaction.DuringthemeetingPandora’smanagementdiscussedworkandprogresstodateonthecompany’smodelandcorporatedevelopmentstrategies,includingseveraldriversbehinditsfinancialplanningandanalysis.Pandora’smanagementdiscussedcertainstrategicconsiderations,includingtailwindsandheadwindsfacingthebusiness,andtheexpectedtimingofcertaindevelopmentsinthebusiness,ineachcaseascontextfortheassumptionsunderlyingmanagement’sforwardoperatingmodel.Pandora’smanagementthendiscussedprojectedoperatingresultsunderfourscenarios,includingtheprojectionspreviouslysharedwiththePandoraboardofdirectorsinOctober2017,anupdatedversionofsuchprojections,reflectingbothactualresultsfortheinterimperiodandupdatedassumptionsbasedonnewinformationabouttrendsandcompanyplans,andtwoadditional

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scenariosreflectingvaryingassumptionsregardinggreaterachievementofoperatingefficienciesandgreaterdeploymentofcapitalagainstgrowthstrategies.TherepresentativesofSidleyAustinadvisedthePandoraboardofdirectorsonitsfiduciarydutiesregardingitspotentialexplorationofanysaleofthecompany.ThePandoraboardofdirectorsdiscussedarangeofstrategicalternatives,includingexploringapotentialsaleofthecompanytoSiriusXMorotherparties,potentialacquisitionsbythecompanyandpotentialcapitalraisingandrefinancingactivities.RepresentativesofLionTreewereinvitedtothemeetingbythePandoraboardofdirectorstosharetheirperspectivesonthecompanyanditsprospectsandopportunities,andsothatthePandoraboardofdirectorscouldconsiderwhetherthefirm’sindustryrelationshipswouldbecomplementarytothoseofCenterview.AftertherepresentativesofLionTreeexitedthemeeting,thePandoraboardofdirectorsdiscussedLionTree’sperspectivewithPandora’smanagementandtherepresentativefromSidleyAustin.ThePandoraboardofdirectorsalsoconsideredthefactthatLionTreehadextensivepriordealingsrepresentingcompaniesinwhichtheChairmanoftheBoardofLibertyMediaownsorhasownedalargevotingposition,includingLibertyGlobalplcandotherrelatedentitiesinwhichithasasignificantdirectorindirectinterest.Beforeconcludingthemeeting,thePandoraboardofdirectorsinstructedPandora’smanagementtorequestthatCenterviewbeginpreparingapreliminaryfinancialanalysisofPandora,takingintoaccountitslong-termoperatingplans.

OnJuly2,2018,atMr.Faxon’ssuggestion,NaveenChopra,thechieffinancialofficerofPandora,calledMr.FrearandofferedtoreviewPandora’sworkonitslong-termoperatingmodelwithhiminadvanceofthescheduledJuly19,2018Pandoraboardmeeting,soastoshareasimilardiscussionashadbeenheldwiththePandoraboardofdirectorsonJune28,2018.Mr.FrearrequestedthatMr.ChoprasendhimthematerialstoreviewtoallowSiriusXMtoevaluatewhetheracallormeetingtodiscussthemodelwouldbeuseful.Mr.ChoprathensentthematerialstoMr.Frear.

OnJuly9,2018,Messrs.FrearandFaxonhadacallregardingPandora’soperatingplansandthepossibilitythatthepartiesmay,inthefuture,decidetoexploreatransaction.Mr.FrearexpressedhisviewthatPandora’scurrentstockpricedidnotadequatelyreflecttheriskthatPandorawouldnotachievelongtermresultsconsistentwithPandoramanagement’sprojections.Mr.FaxonindicatedthathebelievedthatPandora’smanagementwasexecutingastrategythatwouldbuildstockholdervalue,andthatassuchhebelievedthetimingwasnotoptimaltopursueasale.Mr.FaxonaddedthatthePandoraboardofdirectorswould,however,consideranyproposalSiriusXMwishedtomake,buthenotedthatthePandoraboardofdirectorshadnotyetreceivedCenterview’spreliminaryfinancialanalysis.

OnJuly13,2018,Mr.FrearcalledMr.FaxontoaskaboutthestatusofCenterview’spreliminaryfinancialanalysisofPandora’slong-termoperatingplans.Mr.FaxonrepliedthatCenterviewwasexpectedtopresentitsanalysistothePandoraboardofdirectorsatitsmeetingthefollowingweek.Mr.FrearaskedifthePandoraboardofdirectors(otherthantheSiriusXMboarddesignees)wasdevelopingasenseofthevalueofPandoraintheeventthatthepartiesdid,inthefuture,decidetopursueatransaction.Mr.Faxonrepliedthathedidnotwishtospeculate.Mr.FrearandMr.FaxonalsodiscussedthestandstillobligationsofSiriusXMintheinvestmentagreement.

OnJuly18,2018,theSiriusXMboardofdirectorsheldameetingatwhichtheydiscussed,amongotherthings,SiriusXM’sinvestmentinPandoraandPandora’slong-termplans.ThemeetingwasalsoattendedbySiriusXM’smanagementandSiriusXM’sfinancialadvisorswhopresentedapreliminaryvaluationanalysisofPandora.Allen&CompanyandBofAMerrillLynchhadeachadvisedSiriusXMinconnectionwiththe2017investmentinPandora’sSeriesAConvertiblePreferredStock,the2016preliminary,non-bindingindicationofinterestfromSiriusXMandothertransactionsunrelatedtoPandora.TheSiriusXMboardofdirectorsdiscussedtheinvestmentinPandora,particularlyinlightoftheinformationlearnedandperspectivesgainedoverthelastyearsincetheinvestmentwasmade,SiriusXM’sstandstillobligationsandwhetherPandorawouldbeinterestedinexploringatransactionwithSiriusXM.TheSiriusXMboardauthorizedMessrs.Maffei,MeyerandFreartodiscusswithPandoraanditsadvisorswhetherPandorawouldbeinterestedinexploringatransactionandifso,onwhatterms,inordertodeterminewhetheraviabletransactioncouldbepresentedtotheSiriusXMboardofdirectorsforitsconsideration.

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ThroughoutJuly,AugustandSeptember,Mr.MaffeiprovidedthemembersoftheSiriusXMboardperiodicupdatesregardingtheirexploratorydiscussionswithPandoraanditsadvisors.

LateronJuly18,2018,followingadinnerheldwiththefullPandoraboardofdirectors,Mr.MeyertoldTimothyLeiweke,adirectorofPandora,thatwhilehewouldpersonallysupporthavingSiriusXMevaluateanacquisitionofPandorainastock-for-stockmerger,theSiriusXMboardofdirectorshadnotmadeanydeterminationyetastowhetheritwaspreparedtoproceedwithdiscussionsregardingatransaction.Mr.Leiwekerespondedthatinhisviewanyproposalwouldneedtobehigherthan$10.00pershareorelsethePandoraboardofdirectorswouldnotengagewithSiriusXM.

OnJuly19,2018,thePandoraboardofdirectorsheldameeting,whichwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustin.Attheconclusionoftheregularbusinessofthemeeting,Messrs.Maffei,MeyerandFrearrecusedthemselves,andrepresentativesofCenterviewjoinedthemeeting.Centerviewthenpresenteditspreliminaryfinancialanalysesofthecompany’soperatingplansandassessmentofvariouspotentialaspectsofapotentialtransactionwithSiriusXM.SidleyAustinreviewedwiththePandoraboardofdirectorsarelationshipdisclosureletterfromCenterviewthatwaspreviouslycirculatedtothePandoraboardofdirectors.ThePandoraboardofdirectorsdiscussedwiththegroupwhatstockpricemightreasonablybeattainableinabidfromSiriusXMoranotherparty,howtostructureaprocessinamannerthatwouldallowthePandoraboardofdirectorstoactivelyseektoobtainthegreatestvalueforstockholdersandtherelativedesirabilityofpursuingalternativepaths.ThePandoraboardofdirectorsalsodiscussedthecompany’shistoricalfinancialperformanceandtheprospectsforAdsWizz,andthelikelytimingofthatplatformachievingsuccessonascalethatismaterialtothecompany,aswellasthelikelytimingandlevelofsuccessofthecompany’sstrategyforincreasingitsshareoflisteninginautomobiles.ThePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)alsodiscussedpriorconversationswithMessrs.Maffei,MeyerandFrearandexpressedconfidenceinPandora’smanagementteamandstrategy,althoughthePandoraboardofdirectorswaswillingtoconsideranappropriatepremiumtothecurrentstockpriceinaneartermsaleprocess.TheconsensusofthePandoraboardofdirectorswastoremainopentoconsideringapotentialcombinationwithSiriusXMatanappropriatevaluation,buttocommunicateclearlythatanytransactionwouldneedtobestructuredtoallowthedirectorstoseekandobtainoffersofhighervalueforthecompany’sstockholders.

AfterthePandoraboardmeetingonJuly19,2018,Mr.LynchhadaconversationwithMr.Meyer,duringwhichMr.Meyersuggestedthat$9.00persharewouldbeanappropriateprice.Mr.LynchexpressedskepticismtoMr.MeyerthatthePandoraboardofdirectorswouldengageindiscussionsregardingatransactionunlesstheimpliedsharepricewassubstantiallyinexcessof$10.00.Mr.LynchalsotoldMr.Meyerthathebelievedanytransactionwouldneedtoincludeappropriateprotectiveterms,suchasago-shop,thatwouldallowthePandoraboardofdirectorstoactivelyexplorewhetheramorefavorabledealfromanotherpartywasavailable.

AlsoafterthemeetingofthePandoraboardofdirectorsonJuly19,2018,Mr.FrearhadaconversationwithMichaelLynton,adirectorofPandora,inwhichMr.FrearsuggestedthatSiriusXMmightbewillingtoexploreanall-stocktransactioninwhichthePandorastockholderswouldownuptoapproximately8%ofthecombinedcompanyafterthemerger.Mr.LyntonexpressedtoMr.FrearhisviewthatPandorawouldbebetterservedwaitingatleastayearbeforeengagingwithSiriusXMsothatitcoulddemonstratefurtherexecutionagainstitsstrategicplan,andthatthereforeifSiriusXMwishedtopursueanystrategictransactionwithPandoraitshouldleadwithitshighestpossibleprice.

OnJuly20,2018,Mr.FrearcontactedMr.FaxonandstatedthatSiriusXMintendedtoconferinternallyandreverttoPandorawithaviewastowhetherSiriusXMwouldbewillingtoexploreapotentialtransactionbetweenSiriusXMandPandora,andifsowhatitsviewswereastopossiblevaluation.

OnJuly22,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustinandCenterview,duringwhichMr.Lynchrecountedhisconversation

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withMr.MeyeronJuly19,2018,Mr.LyntonrecountedhisconversationwithMr.FrearonJuly19,2018andMr.FaxonrelayedhisdiscussionswithMr.FrearonJuly20,2018.TherepresentativesofSidleyAustinbriefedthePandoraboardofdirectorsaboutitsfiduciarydutiesandotherconsiderationsintheeventatransactionwasexplored.RepresentativesofCenterviewdiscussedwiththePandoraboardofdirectorsthetransactiondynamics,negotiationleverageandtimingandcadenceofanytransactionbetweenSiriusXMandPandora.RepresentativesofCenterviewwerethenexcusedfromthemeeting.CertainmembersofthePandoraboardofdirectorsthendiscussedwhethertoengageLionTreeasafinancialadvisortothecompanyandconcludedthatitmightbedesirabletodosoinlightofLionTree’srelationshipsinthemediasectorwithcompanies(otherthanSiriusXManditsaffiliates)thatwereviewedascomplementarytothoserelationshipsofCenterview,andthePandoraboardofdirectorsthendirectedPandora’smanagementtopursuetheengagement.

OnJuly27,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustinandLionTree.Atthemeeting,LionTreeshareditsperspectiveonindustrydynamicsandconsiderationsrelatedtopotentialstrategiesandtimingforelicitingthehighestpossiblevalueforPandorainatransactionwithSiriusXMoranyotherparty.ThePandoraboardofdirectorsthendiscussedtherelativetradingmultiplesofthestockofbothSiriusXMandthecompany,potentialstrategyandtacticsforinteractionwithSiriusXMandtherelativemeritsofpursuinganystrategictransactionatthepresenttimeversusdeferringconsiderationofanytransaction.TherepresentativesofLionTreeleftthemeetingandthegroupcontinuedtodiscussthecompany’spostureincommunicatingwithSiriusXMasitconsideredwhetherornottopursueatransaction.

Overthenextfewdays,atthedirectionofthePandoraboardofdirectors,Mr.PruzanhadseveralconversationswithMr.MaffeiduringwhichtheydiscussedtheprocessforatransactionshouldPandorawishtoengagewithSiriusXM.

OnAugust1,2018,Mr.FaxonspoketoMr.Maffeiwhostatedthat,whiletheSiriusXMboardhadnotapprovedanyacquisitionproposal,hebelievedthatSiriusXMwouldconsiderapossible100%stock-for-stocktransactionwithPandoraonthebasisofavalueof$9.00pershare.

OnAugust1,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustin,duringwhichtheattendeesreviewedthepotentialengagementofLionTree.Aspartofthediscussion,SidleyAustinreviewedwiththePandoraboardofdirectorscertaindisclosuresbyLionTreeregardingpotentialconflictsofinterest.ThePandoraboardofdirectorsthenengagedinadiscussionoftherelativemeritsofengagingLionTree,includingadiscussionastowhetheranypotentialconflictsofinterestcouldcompromiseLionTree’sadvice,subsequentlyconcludingthatLionTreeshouldbeengagedasafinancialadvisortothePandoraboardofdirectors.ThePandoraboardofdirectorsalsodirectedPandora’smanagementtocontinuetomaintainCenterviewastheexclusivefinancialadvisorpointofcontactbetweenthecompanyandSiriusXM.ThePandoraboardofdirectorsinvitedrepresentativesofLionTreeandCenterviewtojointhemeetingandthegroupdiscussedthecurrentstateofdiscussionswithSiriusXM,includingthediscussionsthathadbeenheldwithMr.Maffeiduringthepriorfewdays.Followingthesediscussions,thePandoraboardofdirectorsagreedthattheydidnotseevalueinengagingwithSiriusXMregardingapotentialtransactiononthetermsgenerallydiscussedinlightoftheviewofthePandoraboardofdirectorsregardingthecompany’scurrentoperations,itsfinancialplansandforecastsanditsprospects.ThePandoraboardofdirectorsinparticularbelievedthatthepotentialmanagementdistractionofpursuinganysuchdiscussionswithSiriusXMwasnotjustified,andthatmanagementresourceswouldbebetterappliedinbuildingstockholdervaluethroughexecutionofthecompany’splans.ThePandoraboardofdirectorsinstructedCenterviewtorespondtoMr.MaffeithatwhilethePandoraboardofdirectorswouldbewillingtodiscussanyproposalSiriusXMmightactuallymake,thatitwouldnotbeinterestedinactivelyengagingregardinganyproposalunlesstheimpliedpricewassubstantiallyhigherthanthe$9.00pershareindicationfromMr.Maffei.

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OnAugust2,2018,Mr.PruzancontactedMr.MaffeitoconveythedecisionsmadeatthePandoraboardmeeting.OnAugust4,2018,Mr.MaffeicontactedMr.PruzantoaskwhetherthePandoraboardofdirectorswouldbewillingtoexploreatransactionif

SiriusXMwerepreparedtooffer$9.25inSiriusXMcommonstock.Mr.PruzansaidhewouldconveythequestiontoPandora.OnAugust5,2018,afterconferringwithMessrs.FaxonandLynch,aswellaswithSidleyAustin,Mr.PruzancontactedMr.Maffeiandadvised

himthatsuchprice,whichMr.Pruzanindicatedimpliedanexchangeratioof1.34,wasnotacceptable,andthatMr.PruzanbelievedthePandoraboardofdirectorswouldnotbeinterestedinpursuingapossibletransactionunlessitwerewellinexcessof$10.00pershare.

OnAugust23,2018,Mr.MaffeiinformedMr.PruzanthatSiriusXMmaybewillingtoexploreatransactionatapriceof$9.75pershare.OnAugust30,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalso

attendedbymembersofPandora’smanagementandrepresentativesofSidleyAustin,CenterviewandLionTreeduringwhichCenterviewsummarizedtothePandoraboardofdirectorsCenterview’sconversationwithMr.MaffeionAugust23,2018.RepresentativesofLionTreepresentedapreliminaryanalysisofpotentialrevenueandcostsynergiesthatmightbeachievedifPandorawereacquiredbyoneofseveralbuyers,includingSiriusXM.TherepresentativesofLionTreealsocautionedthattheyhadnotcontactedanypotentialbuyersandthattherewasnoassuranceanybuyerswouldemergeifthecompanyweremarketedtothirdpartiesorthatanysuchbuyerwouldhavethesameviewofsynergies,butofferedexamplesofcounterpartiesthatthecompanymightapproachintheeventofago-shop.SidleyAustinledadiscussiononatypicalgo-shopstructureandmarkettermsforduration,break-feeandlegalterms.TherepresentativesfromCenterviewdiscussedexchangeratiofloorsorcollarsthatcouldbeusedtohedgeagainstfluctuationsinstockprices.ThefinancialadvisorsandPandora’smanagementexitedthemeetingandthePandoraboardofdirectorscontinuedthemeetinginaclosedsessionwithrepresentativesofSidleyAustin,duringwhichthePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)unanimouslyagreedthatanytransactionwouldneedtoincludeanexchangeratioimplyingavaluepersharesubstantiallyinexcessof$10.00andwouldrequireago-shopandexchangeratiocollar.

OnAugust31,2018,CenterviewconveyedtoMr.MaffeithedecisionsmadeatthePandoraboardmeeting.OnSeptember3,2018,Mr.MaffeidiscussedwithMr.Pruzanthepossibilityofexploringatransactionatapriceof$9.80pershare(oranexchange

ratioof1.38basedontherespectiveclosingstockpricesofPandoraandSiriusXMonAugust31,2018)witha3%break-upfeeforacustomaryfiduciaryoutallowingthePandoraboardofdirectorstoterminatethetransactiontoacceptasuperiorproposalbutwithoutago-shopprovisioninanagreement.Mr.Pruzanagreedtoconveythediscussiontothecompany.

OnSeptember4and5,2018,Mr.PruzandiscussedwithMr.Maffeithat,followingconsultationwithMessrs.FaxonandLynch,aswellasSidleyAustin,itwasthepositionofthePandoraboardofdirectorsthatthepricewouldneedtobeinexcessof$10.00pershareforittohaveinterestinengaginginatransaction.

OnSeptember5,2018,Mr.MaffeidiscussedwithMr.LyntonthatSiriusXMwasnotinclinedtomoveanyhigheronprice,andMr.LyntoninformedMr.MaffeithatitwashissensethatthePandoraboardofdirectorswouldnotapproveatransactiononthoseterms.Afewdayslater,Mr.MaffeiinformedMr.PruzanthatSiriusXMmaybewillingtoexploreatransactionatanexchangeratioof1.425(withanimpliedpricepershareof$10.15basedontherespectiveclosingstockpricesofPandoraandSiriusXMonSeptember12,2018),withoutago-shopprovisionoracollarontheexchangeratio,butwithano-shopprovision,acustomaryfiduciaryoutandabreak-upfeeof3.0%.Mr.Pruzanagreedtoconveythediscussiontothecompany.

OnSeptember14,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalsoattendedbyrepresentativesofSidley

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AustinandCenterview.Centerviewreferredtothe1.425exchangeratioithaddiscussedwithMr.Maffeithedaybefore,notingthatitimplieda$10.25persharepricebasedonthepriorday’sclosingprice,orapproximately$10.00persharebasedontheone,twoorthreemonthvolume-weightedaverageprice,orVWAP,ofSiriusXMcommonstock.MembersofthePandoraboardofdirectorsdiscussedthecompany’soperatingperformanceandoutlookforthequarterandfullyear.CenterviewnotedthatthecompanyhadnotdonereversediligenceonSiriusXMtounderstandfutureeventsthatcouldaffectSiriusXM’sstockprice.ThePandoraboardofdirectorsconcludedthatwhiletheywerepreparedtoengagewithSiriusXMtoevaluateatransactionwithSiriusXMandhavethecompanyconductreversediligenceofSiriusXM,theystillviewedthevalueofferedbytheproposedexchangeratioastoolow,anddirectedCenterviewtoconveytoMr.MaffeithatgettingtoanyagreementwouldrequireSiriusXMtosubstantiallyincreasetheproposedexchangeratioandagreetoago-shopprovisiontoallowPandoratoaffirmativelyseekasuperioroffer.ThePandoraboardofdirectorsalsoconcludedthatanexchangeratiocollarmaybedesirabletohedgerisk,butthatitwaswillingtore-considerthenecessityofthecollardependingonthefindingsofreversediligence.MembersofPandora’smanagementthenjoinedthemeetingandupdatedthePandoraboardofdirectorsonPandora’smanagement’seffortssinceApriltoextendPandora’sexistingdebtmaturitiesandpotentiallyraiseadditionalcapitalshouldtheopportunitytodosoonfavorabletermsbeavailable.Mr.ChopranotedthatPandora’smanagementhadbeenactivelydevelopingaproposalforraisingconvertibledebtbothtorepayorrepurchaseconvertiblenotesduein2020andtostrengthenthecompany’sbalancesheet.Mr.ChopradiscussedwiththePandoraboardofdirectorstheexpectedfinancialtermsofanofferingaswellasexecutionconsiderationsandtheinterplaybetweenpursuingeitheratransactionwithSiriusXMoranewfinancing.Mr.ChopraexplainedthatPandora’smanagementhadselectedinvestmentbankingfirmstofacilitateafinancingandwaspursuingboththefinancingandapossibleacquisitionbySiriusXMinparalleltopreserveoptionalityintheeventthatSiriusXMandPandorawereunabletocometotermsonapotentialacquisitionofPandora.

LateronSeptember14,2018,basedontheinstructionsfromthePandoraboardofdirectors,Mr.PruzancontactedMr.Maffei,indicatingthatafterextensivediscussion,thePandoraboardofdirectorswouldbewillingtoexploreatransactionwithSiriusXMonlyifthetransactionwasbasedonanexchangeratioof1.44andanyagreementincludedago-shopprovision,thetermsofwhichMr.Pruzanproposedwouldincludea45daygo-shopperiodwhereina1%break-upfeewouldapply,withthebreak-upfeegoingto3%foranypartythatdidnotsubmitabonafideproposalduringthego-shopperiod.Mr.PruzanalsostatedthatthePandoraboardofdirectorscontinuedtoviewacollaredexchangeratioasimportant,butthatitwaswillingtore-engageontheissueaftercompletionofduediligence.Mr.MaffeirepliedthathewasnotoptimisticSiriusXMwouldbeinterestedinevaluatingatransactiononthoseterms.

OnSeptember16,2018,Mr.MaffeiinformedMr.Pruzanthat,basedonanalysisofprecedenttransactionsconductedbyAllen&Company,SiriusXMmaybewillingtoagreetoa30-daygo-shopperiodwitha1.5%break-upfeeduringthego-shopperiod.Mr.MaffeialsostatedthatSiriusXMwasnotinclinedtoevaluateatransactionatahigherexchangeratio.

LateronSeptember16,2018,afterconferringwithMessrs.FaxonandLynch,aswellasSidleyAustin,Mr.PruzancontactedMr.MaffeiandindicatedthatPandorawasnotpreparedtoreconvenethePandoraboardofdirectorstoconsiderwhetherthePandoraboardofdirectorswouldbewillingtoevaluateatransactionwithoutfurtherimprovementinSiriusXM’sproposedterms.Specifically,Mr.PruzanindicatedthatthePandoraboardofdirectorswouldrequireahigherexchangeratioandago-shopperiodthatwaslongerandpermittedanypartysubmittinganofferduringtheshoppingperiodtobe“grandfathered”underthelowerbreak-upfee,regardlessofwhethersuchpartyactuallysignedadefinitiveagreementduringthego-shopperiod.Mr.PruzanandMr.Maffeialsodiscussedthedesirabilityofanexchangeratiocollar.Bothagreedthatthedesirabilityofacollar,aswellasthefeasibilityofatransactiongenerally,requiredPandoratoconductduediligenceonSiriusXM.Mr.Maffeiagreedthatduediligenceworkshouldproceed,andthatSidleyAustinandSimpsonThacher,counseltoSiriusXM,shoulddiscussnextsteps,soastobetterevaluatewhetheramutuallyacceptablepotentialtransactionwasarealisticpossibility.

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OnSeptember17,2018,SidleyAustinandSimpsonThacherconferredonthestateofconversationsbetweentheirrespectiveclientsanddiscussedtheprocessformovingforwardiftheirclientsdecidedtopursueatransaction.AsdirectedbyPandora,SidleyAustinremindedSimpsonThacherofthestandstillobligationsundertheinvestmentagreement,includingthatSiriusXMwasnotpermittedtomakeanypublicdisclosurewithrespectthereto,withouttheconsentofthePandoraboardofdirectors,andthePandoraboardofdirectorshadnotprovidedsuchconsentatthistime.SimpsonThacherstatedthattheywouldconferfurtherwiththeirclientandthat,ifSiriusXMwishedtoproceed,SimpsonThacherexpectedtodeliverafirstdraftofamergeragreementforPandora’sconsiderationbythefollowingday.

OnSeptember18,2018,CenterviewcontactedBofAMerrillLynchandAllen&Companytobegincoordinatingduediligenceworkbetweentheirrespectiveclients.Therespectivemanagement,financialadvisory,legalandaccountingteamseachbeganworktoevaluatethepotentialtransaction,andtheseactivitiescontinuedforthebalanceoftheweek.

AlsoonSeptember18,2018,SimpsonThacherprovidedadraftmergeragreementtoSidleyAustin,PandoraandSiriusXMexecutedanextensiontotheirpre-existingnon-disclosureagreementtofacilitateduediligenceandBakerBotts,alsorepresentingSiriusXM,contactedSidleyAustintobeginevaluationofcompetitionlawfilingsthatmayberequiredshouldthepartiesdecidetoenterintoatransaction.Throughouttheweek,legaladvisorstothepartieswereinregularcontactregardingthetermsofapotentialtransactionwiththeobjectiveofhavingsatisfactorydocumentationreadyshouldthepartiesdecidetotransact.Tothatend,SidleyAustinsentarevisedversionofthedraftmergeragreementtoSimpsonThacherlateintheeveningofSeptember20,2018,Californiatime.NegotiationofthedefinitiveagreementandrelatedschedulescontinuedthroughSeptember23.

OnSeptember21,2018,representativesofSiriusXM,SimpsonThacher,BofAMerrillLynchandAllen&CompanymettelephonicallywithrepresentativesofPandora,SidleyAustin,CenterviewandLionTreeforpurposesoffacilitatingeachparty’sduediligenceoftheotherparty’sbusinesses,operatingresultsandfinancialcondition,legalandaccountingmatters,humanresourcesandprospects.

AlsoonSeptember21,2018,Mr.MaffeiinformedMr.LyntonthatSiriusXMremainedinterestedinpursuingatransaction.Mr.Lyntonrepliedthat,attheexchangeratiounderdiscussion,hewasnotcertainwhetherornotthePandoraboardofdirectorswouldapproveatransaction,andheencouragedSiriusXMtoraisethepriceitwouldbewillingtooffer.

OnSeptember22,2018,Mr.PruzanandMr.Maffeiwereincontactthroughoutthedaywithregardtoapotentialexchangeratio.Mr.PruzannotedthatSiriusXM’sstockpricehaddeclinedoverthecourseoftheweek,andconsistentwithinstructionsfromthePandoraboardofdirectorsexpressedconcernthatthePandoraboardofdirectorswouldnotapproveatransactionattheproposedexchangeratio.BasedoninstructionsfromthePandoraboardofdirectors,Mr.PruzanrelayedthatshouldSiriusXMofferanexchangeratioof1.45,Mr.PruzanbelievedthePandoraboardofdirectorswouldbewillingtoaccepttheproposal.

AlsoonSeptember22,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustin,CenterviewandLionTree.PriortoinvitingtherepresentativesfromCenterviewandLionTreetojointhemeeting,SidleyAustinremindedthePandoraboardofdirectorsofpriordiscussionsoffiduciaryobligationsinconsideringapotentialmergerwithSiriusXMoranyotherparty.SidleyAustinalsoreviewedwiththePandoraboardofdirectorsupdatedrelationshipdisclosurelettersfromeachofCenterviewandLionTreethatwerepreviouslycirculatedtothePandoraboardofdirectorsandremindedthePandoraboardofdirectorsofpriordiscussionsregardingthesematters.SidleyAustinalsonotedthatPandora’sseniormanagementhadnotconductedanydiscussionsoffuturerolesforthemselvespost-acquisitionwithSiriusXM,andthattherehadbeennoassurancesgiventosuchpersonsbySiriusXMinthatregard.CenterviewandLionTreethenjoinedthemeeting.SidleyAustindescribedtothePandoraboardofdirectorstheprincipaltermsofthedraftmergeragreementwithSiriusXManddiscussedconsiderationsrelatingtosuchterms,includingtheparties’positionsontheexchangeratioandthetermsthathadbeenproposedforthego-shopprovision.Regardingthego-shopprovision,Sidley

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AustinadvisedthatbothPandora’soriginalproposalandSiriusXM’scounterproposalwerewithinthemarketrangeforsuchterms.SidleyAustinalsonotedthat,afterduediligenceonSiriusXManditsprospects,Pandora’smanagementhadconcludedthattherewasarelativelylowlikelihoodofcatalystsrelatedtoSiriusXM’sbusinessthatwouldadverselyaffectthepriceofSiriusXMcommonstock.CenterviewdiscussedthepotentialeffectsonthepriceofSiriusXMcommonstockoftheannouncementoftheproposedmerger,andalsorecountedrepeatedstatementsbyMr.MaffeithatacollaredexchangeratiowouldnotbeacceptabletoSiriusXM.SidleyAustinthenexplainedthat,takingintoaccountthesefactors,andthedesirabilityofnotconstrainingtheupsideofafixedexchangeratiointheinterestofhedgingdownsiderisk,Pandora’smanagementrecommendedthatthecompanynotinsistonacollaraspartofthetransaction.ThePandoraboardofdirectorsandPandora’smanagementthendiscussedtheproposednon-executiveretentionplantobeimplementedduringtheperiodbetweenthesigningandclosingofthetransaction.Thereafter,CenterviewandLionTreeeachpresentedtheirpreliminaryfinancialanalysesoftheexchangeratiointhetransaction,assumingforpurposesoftheiranalysisthe1.425exchangeratiothensuggestedbySiriusXM.BothCenterviewandLionTreediscussedtheassumptions,methodologiesandconsiderationstakenintoaccountinpreparingtheirpreliminaryfinancialanalysesofthe1.425exchangeratio.CenterviewthenprovidedasummarytothePandoraboardofdirectorsofPandoramanagement’sreversediligencefindings,notingthatSiriusXM’shistoricaloperatingperformancecontinuallysurpassedanalysts’financialprojectionsandwasexpectedtosurpassexpectationsagaininthethirdquarterbasedonavailabledatathroughSeptember21,2018.CenterviewandLionTreereviewedwiththePandoraboardofdirectorstheoutlinedplanofoutreachandpartiestobecontactedinthego-shopprocessshouldthePandoraboardofdirectorsdeterminetoproceedwithatransaction.ThePandoraboardofdirectorsthenexcusedCenterviewandLionTreeanddiscussedwithPandora’smanagementandSidleyAustintheirviewsofthefinancialandlegaltermsoftheproposedtransactionandpotentialtrade-offsrelatedthereto,Centerview’sandLionTree’sanalysesofthetransactionandnegotiationstrategiestoincreasetheexchangeratio.PandoramanagementalsoadvisedthePandoraboardofdirectorsthat,shouldthecompanybeunabletoreachadealwithSiriusXM,thecompanywaspreparedtolaunchaconvertibledebtfinancingtheweekofSeptember24.ThePandoraboardofdirectorsdidnotapprovethetransactionatthattimebutratherinstructedCenterviewtoseekanincreaseintheexchangeratio.

OnthemorningofSeptember23,2018,theSiriusXMboardofdirectorsheldameeting,whichmeetingwasalsoattendedbymembersofSiriusXMmanagementandrepresentativesofAllen&Company,BofAMerrillLynchandSimpsonThacher.SimpsonThacherreviewedwiththeSiriusboardofdirectorsitsfiduciaryduties,andAllen&CompanyandBofAMerrillLynchpresentedafinancialanalysisofPandora.TheboarddiscussedthepotentialacquisitionofPandora.Followingdiscussion,includingtheproposedtermsofthemergeragreementsubmittedforconsideration,theSiriusXMboardofdirectorsunanimouslyadoptedresolutionstoapprovethemergeragreement,subjecttoMessrs.MaffeiandMeyerfinalizingtheexchangerationegotiations.

OnSeptember23,2018,discussioncontinuedbetweenMr.PruzanandMr.Maffei,andMr.MaffeiindicatedthatSiriusXMmaybeinterestedinenteringintoatransactionwithaproposedexchangeratioof1.435.Mr.Pruzanexpressedconcernthat,atthatexchangeratio,thePandoraboardofdirectorswouldnotapprovethetransaction.Mr.Pruzan,onbehalfofthePandoraboardofdirectors,informedMr.MaffeithatthePandoraboardofdirectorswaswillingtoaccepttheproposeddurationandbreak-feeforthego-shopifSiriusXMweretoproposeanacceptableexchangeratio.Afterfurtherdiscussion,Mr.MaffeiinformedMr.FaxonthatSiriusXMmightbewillingtoconsiderenteringintoatransactionatanincreasedexchangeratioof1.44,andMr.FaxonagreedtorecommendtothePandoraboardofdirectorsthatitacceptthisproposal.

AlsoonSeptember23,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)heldatelephonicmeeting,whichmeetingwasalsoattendedbymembersofPandora’smanagementandrepresentativesofSidleyAustin,CenterviewandLionTree.PriortoinvitingtherepresentativesfromCenterviewandLionTreetojointhemeeting,Mr.FaxondescribedtothePandoraboardofdirectorstheconversationhehadwithMr.MaffeiregardingtheincreaseoftheexchangeratioofferedbySiriusXM.Mr.Faxonnotedthatatthe1.44exchangeratioofferedbySiriusXM,theimpliedpricepershareofPandorastockwasinexcessof$10.00persharebasedon

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theclosingpriceofSiriusXMcommonstockonFriday,September21,2018,whichengenderedMr.Faxon’ssupport.SidleyAustinremindedthePandoraboardofdirectorsabouttheirfiduciarydutieswhenconsideringtheproposedtransactionwithSiriusXM.CenterviewandLionTreethenjoinedthemeetingandSidleyAustindescribedthefinaltermsofthemergeragreementtotheextenttheyvariedfromthetermsdescribedthepreviousday,notingthatbasedonanexchangeratioof1.44,thego-shopterminationfeehadbeensetat$52,500,000andthenon-go-shopterminationfeehadbeensetat$105,000,000.Pandora’smanagementdiscussedrestrictionsonthecompany’soperationsaftersigningandpriortoclosingandthenon-executiveretentionplan.CenterviewandLionTreeeachdiscussedtheirfinancialanalysisbasedonthe1.44exchangeratioandprovidedabriefrecapofitspriorfinancialanalysisrevisedtoincorporatethehigherexchangeratio.CenterviewreviewedwiththePandoraboardofdirectorsCenterview’sfinancialanalysisoftheexchangeratio,andrenderedtothePandoraboardofdirectorsanoralopinion,whichwassubsequentlyconfirmedbydeliveryofawrittenopiniondatedSeptember23,2018,that,asofsuchdateandbaseduponandsubjecttovariousassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakeninpreparingitsopinion,theexchangeratioprovidedpursuanttothemergeragreementwasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstockotherthansharesheldbythecompanyandSiriusXManditsaffiliates.ForadetaileddiscussionofCenterview’sopinion,pleaseseebelowunderthesectionentitled“OpinionofCenterviewPartnersLLC.”RepresentativesofLionTreereviewedwiththePandoraboardofdirectorsLionTree’sfinancialanalysisoftheexchangeratio,andrenderedtothePandoraboardofdirectorsanoralopinion,whichwassubsequentlyconfirmedbydeliveryofawrittenopiniondatedSeptember23,2018,that,asofsuchdateandbaseduponandsubjecttovariousassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakeninpreparingitsopinion,theexchangeratiowasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstockotherthansharesheldbythecompanyandSiriusXManditsaffiliates.ForadetaileddiscussionofLionTree’sopinion,pleaseseebelowunderthesectionentitled“OpinionofLionTreeAdvisorsLLC.”CenterviewandLionTreediscussedtheoutreachplanforthego-shopperiod,andnotedthattheywouldcommenceoutreachtoalternativebiddersimmediatelyafterannouncementofthetransaction,shoulditbeapproved.

Atthispointinthemeeting,bothCenterviewandLionTreeleftthemeetingandthePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)discussedobservationsandquestionsregardingtheadvisabilityofacceptingtheSiriusXMofferversusremaininganindependentcompany,balancingavarietyofconsiderationsincludingthefactthatthePandoraboardofdirectorshadconfidenceinPandora’smanagementteamandPandora’sprogresstowardexecutingtheoperatingplanversustheneedforgreaterfinancialresourcesandthestrategicvalueforthecompany’sstockholdersincombiningwithabettercapitalizedandmuchlargercompanyinlightofcompetitivedynamicsinthemarket.Inthisregard,thePandoraboardofdirectorsdiscussedPandora’spriordiscussionswithSiriusXMregardingapotentialmergerdatingto(asdescribedabove)SiriusXM’sofferof$15.00pershareinMarch2016,Pandora’shistoryofexecutioninanincreasinglycompetitivemarketandtherelativemeritsofcontinuingasanindependentcompanyversuscombiningwithSiriusXMonthetermsandconditionsoftheproposedmergerintermsoftheprospectforincreasingPandora’sstockholdervalue.ThePandoraboardofdirectorsalsodiscussedtherelativemeritsofeffectingatransactionnowversusdeferringtoalatertime,thelegaltermsofthetransaction,includingthego-shopprovisionsandterminationrights,theadviceofCenterviewandLionTreeastothefairnessofthetransactionfromafinancialpointofviewandeachdirector’sviewsthatthetransactionwasfairto,andinthebestinterestsof,thecompany’sstockholders.AftereachsuchmemberofthePandoraboardofdirectorsprovidedhisorheropinionandafterfurtherdiscussion,andinlightofthefactorsconsideredandevaluatedbythePandoraboardofdirectorsasdescribedin“—Pandora’sPurposeandReasonsfortheTransactions;RecommendationsofthePandoraBoardofDirectors,”thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)unanimouslyadoptedtheresolutionstoapprovethemergeragreementandthetransactionscontemplatedthereby.SidleyAustinthenexplainedtheprocesstosigningandledadiscussionregardingthecompany’sscheduleaftertheannouncementofthetransaction.

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OnSeptember24,2018,Mr.Chopraspokewiththeinvestmentbanksthathadbeenworkingontheproposedfinancingtransactiontothankthemfortheireffortstoensurethatthecompanywaspreparedtolaunchtheconvertiblenoteoffering,andadvisethemthattheofferingwouldnotgoforwardinlightofthetransactionwithSiriusXM.

OnOctober24,2018at12:01a.m.,thego-shopperiodunderthemergeragreementexpired.OnOctober24,2018,PandoraannouncedandinformedSiriusXMthatitanditsrepresentativeshadactivelysolicitedalternativeacquisitionproposalsduringthego-shopperiodfrom40potentialacquirers.Duringsuchtime,noneofthesepartiesexecutedaconfidentialityagreementorotherwiseexpressedaninterestinpursuingatransaction,andnootherpartyproposedanalternativetransaction.

Pandora’s Purpose and Reasons for the Transactions; Recommendations of the Pandora Board of DirectorsThePandoraboardofdirectorsrecommendsthatthePandorastockholdersvote“FOR ”themergeragreementproposal.Asdescribedabove,Messrs.Maffei,MeyerandFrear,whichwerefertoastheSiriusXMboarddesignees,recusedthemselvesfromall

deliberationsandactionsofthePandoraboardofdirectors,andwaivednoticeofallmeetingsofthePandoraboardofdirectors,relatedtoanypotentialtransactionwithSiriusXM,includinganyalternativestoanysuchtransactionwithanythirdparty.InreachingthedecisiontoapprovethemergeragreementandtorecommendthatthePandorastockholdersvotetoapprovethemergeragreementproposal,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)consultedextensivelywithPandora’sseniormanagementandoutsidelegalandfinancialadvisorsandalsoconsideredotherpotentialstrategicalternatives.

Aftersuchdiscussionsandconsideringsuchalternatives,atameetingonSeptember23,2018,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)unanimouslydeterminedtheproposedmergeragreementandthetransactionstobefairto,andinthebestinterestof,PandoraandthePandorastockholders.Inreachingitsdecision,thePandoraboardofdirectorsconsideredandevaluatednumerousfactorsatsuchmeetingandatothermeetingsatwhichitconsideredtheproposedtransactions.

ThereasonsconsideredbythePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)infavorofsuchdeterminationincludedthefollowing(whichfactorsarenotpresentedinorderofrelativeimportance):

• 

thePandoraboardofdirectors’andPandora’smanagement’sknowledgeofPandora’sbusiness,operations,financialcondition,andprospects,anditsandtheirunderstandingofSiriusXMandSiriusXM’soperations,financialcondition,andprospects,includingtheinformationaboutSiriusXMobtainedthroughaduediligencereviewconductedbyPandoramanagementanditsadvisors;

• 

thecurrentandprospectivecompetitiveclimateintherespectiveaudioentertainmentmarketsinwhichPandoraandSiriusXMoperateandthebeliefthatthetransactionswouldcreatetheworld’slargestaudioentertainmentcompanywithgreatercross-promotionalopportunitiestothelargestdigitalaudioaudienceintheU.S.,enhancedscaleofinvestmentsincontentandtechnologyandexpandedmonetizationopportunitiesandoptimizedprogrammingresultinginimprovedopportunitiesforgrowth,costsavingsandinnovationrelativetowhatPandoracouldachieveonastandalonebasis;

• 

thefactthatthecurrentfinancialmarketconditions,historicalmarketprices,volatilityandtradinginformationwithrespecttoPandoracommonstockandthestockofothercompaniesthatthePandoraboardofdirectorsconsideredsimilartoPandoraandSiriusXMdemonstratedthevalueofthemergerconsiderationtothePandorastockholders,includinginlightoftheanalysisofthePandoraboardofdirectorsofotherstrategicalternativesavailabletoPandora;

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• 

theaggregatevalueofthemergerconsiderationtobereceivedbythePandorastockholdersinthetransactions,which,(i)basedonthetwo-monthvolume-weightedaveragepriceof$7.03pershareofSiriusXMcommonstockasofSeptember21,2018,thelasttradingdaypriortotheannouncementofthemergeragreement,representedapremiumofapproximately19%overthetwo-monthvolume-weightedaveragepriceof$8.50pershareofPandoracommonstockonthesamedate,(ii)basedonthetwo-weekvolume-weightedaveragepriceof$7.08pershareofSiriusXMcommonstockasofSeptember21,2018,thelasttradingdaypriortotheannouncementofthemergeragreement,representedapremiumofapproximately7%overthetwo-weekvolume-weightedaveragepriceof$9.54pershareofPandoracommonstockasofthesamedateand(iii)basedonthepriceof$6.98pershareofSiriusXMcommonstockonSeptember21,2018,thelasttradingdaypriortotheannouncementofthemergeragreement,representedapremiumofapproximately11%overthepriceof$9.09pershareofPandoracommonstockonthesamedate;

• 

thattheexchangeratiorepresentsafixednumberofsharesofSiriusXMcommonstock,whichaffordsthePandorastockholderstheopportunitytobenefitfromanyincreaseinthetradingpriceofSiriusXMcommonstockbetweentheannouncementoftheexecutionofthemergeragreementandtheclosingofthetransactions;

• 

thepotentialthatthevalueofSiriusXMcommonstockthePandorastockholderswillreceiveasconsiderationforthetransactionswillincreaseafterthecompletionofthetransactionscomparedtothesharesofPandoracommonstock,andtheparticipationofthePandorastockholdersinthefuturegrowthofthecombinedcompany;

• 

thefinancialpresentationandtheopinionofCenterviewrenderedtothePandoraboardofdirectorsonSeptember23,2018,whichwassubsequentlyconfirmedbydeliveryofawrittenopiniondatedsuchdatethat,asofsuchdateandbaseduponandsubjecttotheassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyCenterviewinpreparingitsopinion,theexchangeratiowasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstock(otherthan,generally,holdersaffiliatedwithSiriusXMandLibertyMedia,ineachcaseasdescribedintheopinionofCenterviewreproducedinitsentiretyinAnnexBofthisproxystatement/prospectus);

• 

thefinancialpresentationandtheopinionofLionTreerenderedtothePandoraboardofdirectorsonSeptember23,2018,whichwassubsequentlyconfirmedbydeliveryofawrittenopiniondatedsuchdatethat,asofsuchdateandbaseduponandsubjecttotheassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyLionTreeinpreparingitsopinion,theexchangeratiowasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstock(otherthan,generally,holdersaffiliatedwithSiriusXMandLibertyMedia,ineachcaseasdescribedintheopinionofLionTreereproducedinitsentiretyinAnnexCofthisproxystatement/prospectus);

• 

theeffortsmadetonegotiateamergeragreementfavorabletoPandoraanditsstockholdersandthetermsandconditionsofthemergeragreement;

• 

theabilityofPandoraunderthetermsofthemergeragreementto,duringthe“go-shop”period,(i)initiate,solicit,facilitateandencourageanyinquiryorthemakingofanyproposalorofferthatconstitutes,orcouldreasonablybeexpectedtoleadto,acompetingacquisitionproposal,(ii)furnishtoanypersonthatisapartytoanacceptableconfidentialityagreementanyinformationthatisreasonablyrequestedbyanypersoninconnectionwiththeirpotentiallymakingacompetingacquisitionproposal,and(iii)participateorengageindiscussionsornegotiationswithsuchpersonregardingacompetingacquisitionproposal;

• 

theabilityofthePandoraboardofdirectorstochangeitsrecommendation,terminatethemergeragreementandenterintoatransactionthatthePandoraboardofdirectorsdeterminestobeasuperiorproposal,subjecttothetermsandconditionsofthemergeragreement,includingpaymentofaterminationfee;

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• 

thelikelihoodthatthetransactionswouldbecompleted;and•

 

thefactthatPandorahadnotreceivedanofferfromanyotherpersonfortheacquisitionofPandora,despiteitseffortsovertheyearstosellthecompanyasfurtherdescribedinthe“BackgroundoftheTransactions”.

Inthecourseofitsdeliberations,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)alsoweighedthefactorsdescribedaboveagainstcertainfactors,uncertaintiesandpotentialrisksassociatedwithenteringintothemergeragreement,including,amongothers,thefollowing(whichfactorsarenotpresentedinorderofrelativeimportance):

• 

thelackofopportunityforthePandorastockholderstoparticipateinPandora’spotentialupsideasastand-alonecompanyafterthetransactions,includingpotentialearningsandgrowthasaresultofPandoramanagement’srecentinitiativestoimprovePandora’sadvertisingtechnology,organizationalefficiencyandlistenershipmetrics,otherthanindirectlyaspartofthecombinedcompanythroughtheownershipofsharesofSiriusXMcommonstockreceivedasmergerconsideration;

• 

thepossibilityofsignificantcostsanddelaysresultingfromseekingregulatoryapprovalsnecessarytocompletethetransactions,thepossibilitythatthetransactionsmaynotbecompletedifsuchapprovalsarenotobtained,andthepotentialnegativeimpactsonPandora,itsbusiness,andthepriceofPandoracommonstockifsuchapprovalsarenotobtained;

• 

thepotentialdecreaseoftheimpliedvalueofthemergerconsiderationthatwouldresultfromadecreaseinthetradingpriceofSiriusXMcommonstockbecausethemergerconsiderationisbasedonafixedexchangeratioandthemergeragreementdoesnotprovidePandorawithaprice-basedterminationrightoradjustmentforfluctuationsinthetradingpriceofSiriusXMcommonstockbetweentheannouncementoftheexecutionofthemergeragreementandtheclosingofthetransactions;

• 

thefactthattheintegrationofPandoraandSiriusXMmaybecomplexandtimeconsumingandmayrequiresubstantialresourcesandeffort,andtheriskthatifPandoraandSiriusXMarenotsuccessfullyintegratedtheanticipatedstrategicandoperationalbenefitsofthetransactionsmaynotbefullyrealizedoratallormaytakelongertorealizethanexpected;

• 

therisksandcoststhatcouldbebornebyPandoraifthetransactionsarenotcompleted,includingthepotentialfordiversionofPandora’smanagementandemployeeattentionandforincreasedemployeeattritionduringtheperiodpriortocompletionofthetransactions,andthepotentialeffectofthetransactionsonPandora’sbusinessandrelationswithcustomers,vendors,andsuppliers;

• 

theriskthatcertainemployeesandcustomersofPandoramightnotchoosetoremainwiththecombinedcompany;•

 

therestrictionsontheconductofPandora’sbusinesspriortocompletionofthetransactions,requiringPandoratoconductitsbusinessonlyintheordinarycourse,subjecttospecificlimitations,whichcoulddelayorpreventPandorafromundertakingbusinessopportunitiesthatmayarisependingcompletionofthetransactionsandcouldnegativelyimpactPandora’srelationshipswithitsemployees,customers,vendors,andsuppliers;

• 

thefactthatifthemergeragreementisterminatedundercertaincircumstances,PandorawillberequiredtopaySiriusXMaterminationfeeof$105millionor$52.5million;

• 

thetransactioncoststobeincurredbyPandorainconnectionwiththetransactions;•

 

thefactthatcertainofPandora’sdirectorsmayhaveinterestsinthetransactionsorthataredifferentfrom,orinadditionto,thoseofthePandorastockholdersgenerallyandthemannerinwhichtheywouldbeaffectedbythetransactionsasmorefullydescribedinthesectionentitled“—InterestsofPandora’sDirectorsandExecutiveOfficersintheTransactions;”and

• 

variousotherrisksdescribedinthesectionentitled“RiskFactors.”ThePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)consideredallofthesefactorsasawhole,includingtheanalysesand

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theirrespectivedeterminationsthattheproposedtransactionswerefairto,andinthebestinterestsof,PandoraandthePandorastockholders.TheforegoingdiscussionoftheinformationandfactorsconsideredbythePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)isnotexhaustive.InviewofthewidevarietyoffactorsconsideredbythePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)inconnectionwiththeirevaluationofthetransactionsandthecomplexityofthesematters,thePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)didnotconsideritpracticalto,nordidtheyattemptto,quantify,rankorotherwiseassignrelativeweightstothespecificfactorsthattheyconsideredinreachingtheirrespectivedecisions.Inconsideringthefactorsdescribedaboveandanyotherfactors,individualdirectorsmayhaveviewedfactorsdifferentlyorgivendifferentweightormerittodifferentfactors.

TheforegoingdiscussionoftheinformationandfactorsconsideredbythePandoraboardofdirectors(excludingtheSiriusXMboarddesignees)isforward-lookinginnature.Thisinformationshouldbereadinlightofthefactorsdescribedinthesectionentitled“CautionaryStatementConcerningForward-LookingStatements”beginningonpage[• ].

Certain Financial ForecastsPandora,asamatterofcourse,doesnotmakepubliclong-termprojectionsastofuturerevenues,earningsorotherresultsdueto,amongother

reasons,theuncertaintyoftheunderlyingassumptionsandestimates.TheunauditedforecastedfinancialinformationsetforthbelowwaspreparedbyPandora’smanagementandmadeavailableto(i)themembersofthePandoraboardofdirectorswhoarenotaffiliatedwithSiriusXM,(ii)Centerviewand(iii)LionTree,ineachcasesolelyinconnectionwiththeevaluationofthetransactionsbythemembersofthePandoraboardofdirectorswhoarenotaffiliatedwithSiriusXM.Inaddition,followingreviewbythemembersofthePandoraboardofdirectorswhoarenotaffiliatedwithSiriusXM,theunauditedforecastedfinancialinformationsetforthbelowwithrespecttofiscalyears2018through2023only,wasalsomadeavailabletoSiriusXMandthemembersofthePandoraboardofdirectorswhoareaffiliatedwithSiriusXM.Theinclusionofthisinformationinthisproxystatement/prospectusshouldnotberegardedasanindicationthatanyofthePandoraboardofdirectors,Centerview,LionTreeoranyotherrecipientofthisinformationconsidered,ornowconsiders,ittobenecessarilypredictiveofactualfutureresults.Readersofthisproxystatement/prospectusarecautionednottoplaceunduerelianceontheunauditedforecastedfinancialinformation.

Theunauditedforecastedfinancialinformationwas,ingeneral,preparedsolelyforinternaluseandissubjectiveinmanyrespects.Asaresult,therecanbenoassurancethattheforecastedresultswillberealizedorthatactualresultswillnotbesignificantlyhigherorlowerthanestimated.Sincetheunauditedforecastedfinancialinformationcoversmultipleyears,suchinformationbyitsnaturebecomeslesspredictivewitheachsuccessiveyear.Theestimatesandassumptionsunderlyingtheunauditedforecastedfinancialinformationinvolvejudgmentswithrespectto,amongotherthings,futureeconomic,competitive,regulatoryandfinancialmarketconditionsandfuturebusinessdecisionswhichmaynotberealizedandthatareinherentlysubjecttosignificantuncertaintiesandcontingencies,allofwhicharedifficulttopredictandmanyofwhicharebeyondthecontrolofPandora.PandorastockholdersareurgedtoreviewtheSECfilingsofPandoraforadescriptionofriskfactorswithrespecttothebusinessofPandora.See“CautionaryStatementConcerningForward-LookingStatements”beginningonpage[• ]and“WhereYouCanFindMoreInformation”beginningonpage[• ].Pandorastockholdersarealsourgedtoreviewthesectionentitled“RiskFactors”beginningonpage[• ].Theunauditedforecastedfinancialinformationwasnotpreparedwithaviewtowardpublicdisclosureandisincludedinthisproxystatement/prospectusonlybecausesuchunauditedforecastedfinancialinformationwas,withrespecttofiscalyears2018through2023,madeavailabletoSiriusXMandcertainoftheirrepresentativesinconnectionwiththeirduediligencereviewofPandora,andCenterviewandLionTreeforuseinconnectionwiththeirrespectivefinancialanalyses.TheunauditedforecastedfinancialinformationalsowasnotpreparedwithaviewtowardcompliancewithpublishedguidelinesoftheSEC,theguidelinesestablishedbytheAmericanInstituteofCertifiedPublicAccountantsforpreparationandpresentationofprospectivefinancialinformationorGAAP(includingbecausecertainmetricsarenon-GAAPmeasurements)but,intheviewofPandora’smanagement,waspreparedonareasonablebasis,

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reflectedthebestcurrentlyavailableestimatesandjudgments,andpresented,tothebestofPandora’smanagement’sknowledgeandbelief,theexpectedcourseofactionandtheexpectedfuturefinancialperformanceofPandora.However,thisinformationisnotfactandshouldnotberelieduponasbeingnecessarilyindicativeoffutureresults,andreadersofthisproxystatement/prospectusarecautionednottoplaceunduerelianceontheunauditedforecastedfinancialinformation.NeithertheindependentregisteredpublicaccountingfirmofPandoranoranyotherindependentaccountants,havecompiled,examined,orperformedanyprocedureswithrespecttotheunauditedforecastedfinancialinformationcontainedherein,norhavetheyexpressedanyopinionoranyotherformofassuranceonsuchinformationoritsachievability.ThereportoftheindependentregisteredpublicaccountingfirmofPandoracontainedinitsAnnualReportonForm10-KfortheyearendedDecember31,2017,whichisincorporatedbyreferenceintothisproxystatement/prospectus,relatestothehistoricalfinancialinformationofPandora.Itdoesnotextendtotheunauditedforecastedfinancialinformationandshouldnotbereadtodoso.Furthermore,theunauditedforecastedfinancialinformationdoesnottakeintoaccountanycircumstancesoreventsoccurringafterthedateitwaspreparedanddoesnotgiveeffecttothetransactions.Further,theunauditedforecastedfinancialinformationdoesnottakeintoaccountthepotentialconsequencesshouldthetransactionsfailtobeconsummated,andshouldnotbeviewedinthatcontext.

PANDORADOESNOTINTENDTOUPDATEOROTHERWISEREVISETHEUNAUDITEDFORECASTEDFINANCIALINFORMATIONTOREFLECTCIRCUMSTANCESEXISTINGAFTERTHEDATEWHENMADEORTOREFLECTTHEOCCURRENCEOFFUTUREEVENTS,EVENINTHEEVENTTHATANYORALLOFTHEASSUMPTIONSUNDERLYINGSUCHPROSPECTIVEFINANCIALINFORMATIONARENOLONGERAPPROPRIATE,EXCEPTASMAYBEREQUIREDBYLAW.

Unaudited Forecasted Financial InformationThefollowingtablespresenttheselectedunauditedforecastedfinancialinformationofPandorapreparedbyPandora’smanagement,whichconsist

oftwodifferentfinancialandoperatingscenarios,eachforthefiscalyearsending2018through2025,andwereprovidedtothemembersofthePandoraboardofdirectors,Centerview,LionTreeand,withrespecttofiscalyears2018through2023,SiriusXM.

Atthetimetheforecastswereprepared,thePandoraboardofdirectorsandPandora’smanagementconcurredthatthePandoraScenario1aForecastsandthePandoraScenario2Forecastswerethebestapproximationsoflikelyfutureoutcomesandthattheyexpectedactualfutureresultstofallsomewherebetween.OntheSeptember21,2018diligencecallheldamongrepresentativesofSiriusXManditsadvisorsandrepresentativesofPandoraanditsadvisors,includingCenterviewandLiontree,PandoramanagementindicatedthattherewassignificantuncertaintywithrespecttotheCompany’sforecastsfor2019,andthatonthedownsidePandoramanagementbelievedthatAdjustedEBITDAfor2019couldbeasmuchas$20-30millionlowerthanprojectedinthePandoraScenario1aForecastsandthePandoraScenario2Forecasts.PandoramanagementalsopreviouslysharedthisupdatewiththePandoraboardofdirectors.

PandoraScenario1aForecastsCertainunauditedforecastedfinancialinformationwasinitiallypreparedbyPandora’smanagementinOctober2017andprovidedtothePandora

boardofdirectorsandwasupdatedinJuly2018totakeintoaccountcertainupdatedassumptionsincluding,amongotherthings,newinformationaboutmarkettrendsandPandora’splansafterOctober2017.WerefertosuchJuly2018unauditedforecastedfinancialinformationasthePandoraScenario1aForecasts.

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Pandora Unaudited Forecasted Financial Information (U.S. dollars in millions, except per share data) (a)

Fiscal Years Ending Decmber 31,

 

2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025Advertising

   

$ 

1,071    

$ 

1,152    

$ 

1,240    

$ 

1,370    

$ 

1,511    

$ 

1,629    

$ 

1,735    

$ 

1,828 Subscription&Other

   

  471    

  569    

  647    

  703    

  766    

  829    

  893    

  956                                

Total Revenue   

$ 

1,542    

$ 

1,721    

$ 

1,887    

$ 

2,073    

$ 

2,277    

$ 

2,458    

$ 

2,627    

$ 

2,784                                

%Growth   

  11.3%     

  11.7%     

  9.6%     

  9.9%     

  9.9%     

  7.9%     

  6.9%     

  6.0% 

ContentCosts   

$ 

889    

$ 

915    

$ 

992    

$ 

1,080    

$ 

1,156    

$ 

1,235    

$ 

1,305    

$ 

1,371 OtherCOGS

   

  129    

  169    

  188    

  207    

  223    

  243    

  264    

  285                                

Total COGS   

$ 

1,017    

$ 

1,084    

$ 

1,179    

$ 

1,287    

$ 

1,379    

$ 

1,478    

$ 

1,569    

$ 

1,656                                

Gross Profit   

$ 

524    

$ 

637    

$ 

707    

$ 

786    

$ 

898    

$ 

980    

$ 

1,059    

$ 

1,128 %Margin

   

  34.0%     

  37.0%     

  37.5%     

  37.9%     

  39.4%     

  39.9%     

  40.3%     

  40.5% 

ProductDevelopment   

$ 

132    

$ 

173    

$ 

173    

$ 

177    

$ 

178    

$ 

183    

$ 

188    

$ 

192 Sales&Marketing

   

  448    

  390    

  396    

  404    

  410    

  418    

  428    

  437 General&Administrative

   

  112    

  117    

  115    

  117    

  118    

  120    

  122    

  124                                

Total Operating Expenses   

$ 

693    

$ 

680    

$ 

684    

$ 

698    

$ 

706    

$ 

721    

$ 

737    

$ 

753                                

Operating Income / (Loss) (b)   

$ 

(168)     

$ 

(43)     

$ 

23    

$ 

88    

$ 

192    

$ 

259    

$ 

321    

$ 

375                                

%Margin   

  (10.9)%     

  (2.5)%     

  1.2%     

  4.2%     

  8.4%     

  10.5%     

  12.2%     

  13.5% 

Depreciation   

  49    

  54    

  53    

  55    

  49    

  49    

  52    

  55                                

Adjusted EBITDA (c)   

$ 

(119)     

$ 

11    

$ 

76    

$ 

143    

$ 

241    

$ 

307    

$ 

373    

$ 

430                                

%Growth   

  (13.2)%     

  nm    

  nm    

  87.7%     

  69.0%     

  27.5%     

  21.5%     

  15.3% 

%Margin   

  (7.7)%     

  0.7%     

  4.0%     

  6.9%     

  10.6%     

  12.5%     

  14.2%     

  15.5% 

(a) 

Certaintotalsinthetablesincludedinthisproxystatement/prospectusmaynotsumduetorounding.Tabledoesnotreflectstock-basedcompensation.

(b) 

Excludesamortizationofintangibleassets.(c)

 

AdjustedEBITDA,whichiscalculatedasconsolidatednetearningsbeforeinterest,incometaxes,stock-basedcompensationexpenseanddepreciationandamortizationexpense,isanon-GAAPfinancialmeasureasitexcludedtheseamounts,whichareincludedinnetearnings,themostdirectlycomparablemeasurecalculatedinaccordancewithGAAP.ThismeasureshouldnotbeconsideredasanalternativetonetearningsorothermeasuresderivedinaccordancewithGAAP.

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Pandora Unaudited Forecasted Financial Information (Continued) Pandora Unlevered Free Cash Flows (a)

(U.S. dollars in millions, except per share data) (b)(c)

Fiscal Years Ending December 31,

 

2H’ 2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025AdvertisingRevenue

   

$ 

586    

$ 

1,153    

$ 

1,241    

$ 

1,371    

$ 

1,512    

$ 

1,630    

$ 

1,736    

$ 

1,829 SubscriptionRevenue

   

  251    

  568    

  646    

  702    

  765    

  828    

  892    

  955                                

Total Revenue   

$ 

838    

$ 

1,721    

$ 

1,887    

$ 

2,073    

$ 

2,277    

$ 

2,458    

$ 

2,627    

$ 

2,784                                

%Growth       

  11.7%     

  9.6%     

  9.9%     

  9.9%     

  7.9%     

  6.9%     

  6.0% 

Adjusted EBITDA (d)   

$ 

(11)     

$ 

11    

$ 

76    

$ 

143    

$ 

241    

$ 

307    

$ 

373    

$ 

430 %Margin

   

  (1.3)%     

  0.7%     

  4.0%     

  6.9%     

  10.6%     

  12.5%     

  14.2%     

  15.5% 

(-)StockCompensation   

  (59)     

  (117)     

  (107)     

  (98)     

  (90)     

  (86)     

  (83)     

  (82) 

                               

Adjusted EBITDA less SBC   

$ 

(70)     

$ 

(106)     

$ 

(31)     

$ 

45    

$ 

151    

$ 

221    

$ 

290    

$ 

349                                

%Margin   

  (8.4)%     

  (6.1)%     

  (1.7)%     

  2.2%     

  6.6%     

  9.0%     

  11.0%     

  12.5% 

(-)D&A   

  (27)     

  (60)     

  (59)     

  (55)     

  (49)     

  (49)     

  (52)     

  (55) 

                               

EBIT   

$ 

(98)     

$ 

(166)     

$ 

(90)     

$ 

(11)     

$ 

102    

$ 

172    

$ 

239    

$ 

293                                

%Margin   

  (11.6)%     

  (9.6)%     

  (4.8)%     

  (0.5)%     

  4.5%     

  7.0%     

  9.1%     

  10.5% 

(-)Taxes   

  —    

  —    

  —    

  —    

  (24)     

  (41)     

  (56)     

  (69) 

                               

NOPAT   

$ 

(98)     

$ 

(166)     

$ 

(90)     

$ 

(11)     

$ 

78    

$ 

132    

$ 

182    

$ 

224                                

(+)D&A   

  27    

  60    

  59    

  55    

  49    

  49    

  58    

  55 (-)Capex

   

  (23)     

  (48)     

  (50)     

  (54)     

  (43)     

  (46)     

  (63)     

  (68) 

(+)/(-)DNWC   

  (37)     

  22    

  6    

  (20)     

  (24)     

  (19)     

  (14)     

  (14) 

                               

Unlevered Free Cash Flow   

  (131)     

$ 

(131)     

$ 

(75)     

$ 

(30)     

$ 

59    

$ 

115    

$ 

157    

$ 

198                                

(a) 

Source:Pandora’smanagement,Pandora’spublicfilings,FactSetandWallStreetresearchasofSeptember21,2018.(b)

 

ValuationdateofJune30,2018applyingmid-yearconventionthroughthefiscalyearendingDecember31,2025.TerminalvaluebasedonrangeofmultiplesappliedtoforwardEBITDAinthefiscalyearendingDecember31,2025.IncludespresentvalueoffuturecashtaxsavingsrelatedtoNOLs.

(c) 

Certaintotalsinthetablesincludedinthisproxystatement/prospectusmaynotsumduetorounding.Tabledoesnotreflectstock-basedcompensation.

(d) 

AdjustedEBITDA,whichiscalculatedasconsolidatednetearningsbeforeinterest,incometaxes,stock-basedcompensationexpenseanddepreciationandamortizationexpense,isanon-GAAPfinancialmeasureasitexcludedtheseamounts,whichareincludedinnetearnings,themostdirectlycomparablemeasurecalculatedinaccordancewithGAAP.ThismeasureshouldnotbeconsideredasanalternativetonetearningsandothermeasuresderivedinaccordancewithGAAP.ThePandoraunauditedforecastedfinancialinformationinthePandoraScenario1aForecastsisbasedonvariousassumptions,includingthe

followingkeyassumptions:•

 

approximately$80-90millionofexternalmarketingspendannuallywithincreasestoefficiencybeyondthatrealizedin2018to-date;•

 

hoursperactiveuser(“HPA”)woulddecreaseslightlyin2019andincreaseafter2020asnewusersexpandfeatureusage;•

 

thenumberofad-supportedserviceuserswouldreach77.1millionby2025;•

 

advertisingrevenueperthousandlistenerhours(“RPM”)wouldincreasefrom$67.95in2018to$80.22millionin2022,includingincreasesinaudioRPM,slightdecreasesindisplayRPMandincreasesinvideoRPM;

• 

therewouldbenomaterialimprovementinthemonthlyfree-trialstartsforPandoraPlus,whilethemonthlyfree-trialstartsforPandoraPremiumwouldimproveslightlywiththemixshiftingtowardsfamilyplansubscriptions;

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• 

thepercentageofthefamilyplansubscriptionsinthenewPandoraPremiumadditionswouldincreasefrom2%in2018to25%by2025;•

 

directPandoraPremiumacquisitionspendingwouldreach$5millionannuallyby2020;•

 

non-musiccontentsharewouldaccountfor10%oftotallisteningby2025;•

 

headcountcostswouldremainmateriallyflat,withmanyfunctionstoshifttolower-costgeographies;•

 

costssavedfromthereductioninforceplansrelativetotheendof2017runratewouldbe$70millionin2019and$100millionannuallyineachoftheyearsfrom2020to2025,withacomponentofthesavingsreinvested;and

• 

thestock-basedcompensationexpenseswoulddecreasefrom$117millionin2019to$86millionin2023.

PandoraScenario2ForecastsInJune2018,Pandora’smanagementalsoupdatedtheunauditedforecastedfinancialinformationthatwasinitiallypreparedinOctober2017to

presentamoreoptimisticviewdrivenprimarilybyaudienceandhoursgrowthfromimprovementsinmarketingefficiency,highermarketingspendingandgrowthinaudienceengagementthroughPandora’snewcontentandproductcapabilities,whichwerefertoasthePandoraScenario2Forecasts.ThePandoraScenario2ForecastsarebasedontheassumptionsofgreaterachievementofoperatingefficienciesasPandoraimplementstheseplansandgreaterdeploymentofcapitaltowardgrowthstrategies,whicharedescribedbelow.

                               

 

 

Pandora Unaudited Forecasted Financial Information (U.S. dollars in millions, except per share data) (a)

Fiscal Years Ending December 31,

 

2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025Advertising

   

$ 

1,071    

$ 

1,210    

$ 

1,357    

$ 

1,553    

$ 

1,747    

$ 

1,917    

$ 

2,083    

$ 

2,236 Subscription&Other

   

  471    

  596    

  712    

  829    

  947    

  1,064    

  1,189    

  1,303                                

Total Revenue   

$ 

1,542    

$ 

1,806    

$ 

2,069    

$ 

2,382    

$ 

2,694    

$ 

2,981    

$ 

3,272    

$ 

3,540                                

%Growth   

  11.3%     

  17.1%     

  14.6%     

  15.1%     

  13.1%     

  10.6%     

  9.8%     

  8.2% 

ContentCosts   

$ 

889    

$ 

958    

$ 

1,086    

$ 

1,240    

$ 

1,367    

$ 

1,496    

$ 

1,614    

$ 

1,725 OtherCOGS

   

  129    

  176    

  200    

  226    

  250    

  279    

  309    

  338                                

Total COGS   

$ 

1,017    

$ 

1,133    

$ 

1,286    

$ 

1,466    

$ 

1,617    

$ 

1,775    

$ 

1,923    

$ 

2,064                                

Gross Profit   

$ 

524    

$ 

673    

$ 

783    

$ 

916    

$ 

1,077    

$ 

1,205    

$ 

1,349    

$ 

1,476 %Margin

   

  34.0%     

  37.2%     

  37.8%     

  38.5%     

  40.0%     

  40.4%     

  41.2%     

  41.7% 

ProductDevelopment   

$ 

132    

$ 

174    

$ 

188    

$ 

205    

$ 

217    

$ 

233    

$ 

248    

$ 

264 Sales&Marketing

   

  448    

  418    

  425    

  450    

  471    

  490    

  511    

  531 General&Administrative

   

  112    

  111    

  116    

  120    

  123    

  128    

  133    

  137                                

Total Operating Expenses   

$ 

693    

$ 

704    

$ 

730    

$ 

775    

$ 

811    

$ 

851    

$ 

892    

$ 

932                                

Operating Income / (Loss) (b)   

$ 

(168)     

$ 

(31)     

$ 

53    

$ 

141    

$ 

265    

$ 

354    

$ 

457    

$ 

544                                

%Margin   

  (10.9)%     

  (1.7)%     

  2.6%     

  5.9%     

  9.8%     

  11.9%     

  14.0%     

  15.4% 

Depreciation   

  49    

  54    

  53    

  56    

  52    

  53    

  58    

  63                                

Adjusted EBITDA (c)   

$ 

(119)     

$ 

23    

$ 

107    

$ 

198    

$ 

317    

$ 

407    

$ 

515    

$ 

606                                

%Growth   

  (13.2)%     

  nm    

  nm    

  85.0%     

  60.3%     

  28.4%     

  26.6%     

  17.7% 

%Margin   

  (7.7)%     

  1.3%     

  5.2%     

  8.3%     

  11.8%     

  13.6%     

  15.7%     

  17.1% 

(a) 

Certaintotalsinthetablesincludedinthisproxystatement/prospectusmaynotsumduetorounding.Tabledoesnotreflectstock-basedcompensation.

(b) 

Excludesamortizationofintangibleassets.(c)

 

AdjustedEBITDA,whichiscalculatedasconsolidatednetearningsbeforeinterest,incometaxes,stock-basedcompensationexpenseanddepreciationandamortizationexpense,isanon-GAAPfinancialmeasureasitexcludedtheseamounts,whichareincludedinnetearnings,themost

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directlycomparablemeasurecalculatedinaccordancewithGAAP.ThismeasureshouldnotbeconsideredasanalternativetonetearningsorothermeasuresderivedinaccordancewithGAAP.

                               

 

 

Pandora Unaudited Forecasted Financial Information (Continued) Pandora Unlevered Free Cash Flows (a)

(U.S. dollars in millions, except per share data) (b)(c)

Fiscal Years Ending December 31,

 

2H’ 2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025AdvertisingRevenue

   

$ 

586    

$ 

1,211    

$ 

1,358    

$ 

1,554    

$ 

1,748    

$ 

1,918    

$ 

2,084    

$ 

2,237 SubscriptionRevenue

   

  251    

  595    

  711    

  828    

  946    

  1,063    

  1,188    

  1,303                                

Total Revenue   

$ 

838    

$ 

1,806    

$ 

2,069    

$ 

2,382    

$ 

2,694    

$ 

2,981    

$ 

3,272    

$ 

3,540                                

%Growth       

  17.1%     

  14.6%     

  15.1%     

  13.1%     

  10.6%     

  9.8%     

  8.2% 

Adjusted EBITDA (d)   

$ 

(11)     

$ 

23    

$ 

107    

$ 

198    

$ 

317    

$ 

407    

$ 

515    

$ 

606 %Margin

   

  (1.3)%     

  1.3%     

  5.2%     

  8.3%     

  11.8%     

  13.6%     

  15.7%     

  17.1% 

(-)StockCompensation   

  (59)     

  (120)     

  (116)     

  (109)     

  (100)     

  (93)     

  (90)     

  (89) 

                               

Adjusted EBITDA less SBC   

$ 

(70)     

$ 

(97)     

$ 

(9)     

$ 

88    

$ 

217    

$ 

314    

$ 

425    

$ 

517                                

%Margin   

  (8.4)%     

  (5.4)%     

  (0.4)%     

  3.7%     

  8.0%     

  10.5%     

  13.0%     

  14.6% 

(-)D&A   

  (27)     

  (60)     

  (59)     

  (57)     

  (52)     

  (53)     

  (58)     

  (63) 

                               

EBIT   

$ 

(98)     

$ 

(158)     

$ 

(68)     

$ 

31    

$ 

165    

$ 

261    

$ 

367    

$ 

455                                

%Margin   

  (11.6)%     

  (8.7)%     

  (3.3)%     

  1.3%     

  6.1%     

  8.8%     

  11.2%     

  12.8% 

(-)Taxes   

  —    

  —    

  —    

  (7)     

  (39)     

  (61)     

  (86)     

  (107) 

                               

NOPAT   

$ 

(98)     

$ 

(158)     

$ 

(68)     

$ 

24    

$ 

126    

$ 

200    

$ 

281    

$ 

348                                

(+)D&A   

  27    

  60    

  59    

  57    

  52    

  53    

  58    

  63 (-)Capex

   

  (23)     

  (48)     

  (53)     

  (59)     

  (47)     

  (52)     

  (72)     

  (79) 

(+)/(-)DNWC   

  (37)     

  13    

  8    

  (22)     

  (26)     

  (20)     

  (22)     

  (19) 

                               

Unlevered Free Cash Flow   

  (131)     

$ 

(133)     

$ 

(54)     

$ 

(1)     

$ 

105    

$ 

181    

$ 

244    

$ 

313                                

(a) 

Source:Pandora’smanagement,Pandora’spublicfilings,FactSetandWallStreetresearchasofSeptember21,2018.(b)

 

ValuationdateofJune30,2018applyingmid-yearconventionthroughthefiscalyearendingDecember31,2025.TerminalvaluebasedonrangeofmultiplesappliedtoforwardEBITDAinthefiscalyearendingDecember31,2025.IncludespresentvalueoffuturecashtaxsavingsrelatedtoNOLs.

(c) 

Certaintotalsinthetablesincludedinthisproxystatement/prospectusmaynotsumduetorounding.Tabledoesnotreflectstock-basedcompensation.

(d) 

AdjustedEBITDA,whichiscalculatedasconsolidatednetearningsbeforeinterest,incometaxes,stock-basedcompensationexpenseanddepreciationandamortizationexpense,isanon-GAAPfinancialmeasureasitexcludedtheseamounts,whichareincludedinnetearnings,themostdirectlycomparablemeasurecalculatedinaccordancewithGAAP.ThismeasureshouldnotbeconsideredasanalternativetonetearningsandothermeasuresderivedinaccordancewithGAAP.ThePandoraunauditedforecastedfinancialinformationinthePandoraScenario2Forecastsisbasedonvariousassumptions,includingthe

followingkeyassumptions:•

 

annualexternalmarketingspendingwouldincreaseby10%to20%comparedtothePandoraScenario1aForecastsandtherewouldbea10%efficiencyimprovementinuseracquisitioncostscomparedtothePandoraScenario1aForecasts;

• 

HPAwouldbe2.5%higherin2019thaninthePandoraScenario1aForecasts,increasingto10%higherin2025;•

 

thenumberofad-supportedserviceuserswouldreach84.3millionby2025;•

 

advertisingRPMwouldincreasefrom$67.95in2018to$78.48in2022,includingmodestincreasesinaudioRPM,decreasesindisplayRPMandincreasesinvideoRPM;

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• 

datalicensingrevenuewouldachieverobustgrowthandreach$12millionto$15millionby2025;•

 

monthlyfree-trialstartsforPandoraPluswouldincreaseby20-25%from2018to2025,and20-35%forPandoraPremiumfrom2018to2025,bothdrivenprimarilybytheimprovedon-platformmarketing;

• 

thepercentageoffamilyplansubscriptionsinthenewPandoraPremiumadditionswouldincreasefrom2%in2018to25%by2025;•

 

thetrialconversionratetoPandoraPremiumwouldimproveby1%to3%by2025,drivenprimarilybytheimprovedon-platformmarketinganduserexperience;

• 

directPandoraPremiumacquisitionspendingwouldreach$5millionannuallyby2020;•

 

non-musiccontentsharewouldaccountfor12%oftotallisteningby2025;•

 

operatingexpenseswouldincreaseby2%year-over-yearin2019,withtheannualgrowthratethereafterincreasingto5%year-over-yearin2022,withmanyfunctionsshiftingtowardslower-costgeographies;

• 

costssavedfromthereductioninforceplansrelativetotheendof2017runratewouldbe$70millionin2019and$100millionannuallyineachoftheyearsfrom2020to2025,withacomponentofthesavingsreinvested;and

• 

stock-basedcompensationexpenseswoulddecreasefrom$120millionin2019to$93millionin2023.Fortheforegoingandotherreasons,inclusionofthePandoraunauditedforecastedfinancialinformationinthisproxystatement/prospectusshould

notberegardedasarepresentationbyanypersonthattheresultscontainedinthePandoraunauditedforecastedfinancialinformationwillbeachieved.

Opinions of Pandora’s Financial Advisors

Opinion of Centerview Partners LLCOnSeptember23,2018,CenterviewrenderedtothePandoraboardofdirectorsitsoralopinion,subsequentlyconfirmedinawrittenopiniondated

suchdate,that,asofsuchdateandbaseduponandsubjecttovariousassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyCenterviewinpreparingitsopinion,theexchangeratiowasfair,fromafinancialpointofview,totheholdersofsharesofPandoracommonstockotherthanexcludedshares.

ThefulltextofCenterview’swrittenopinion,datedSeptember23,2018,whichdescribestheassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsuponthereviewundertakenbyCenterviewinpreparingitsopinion,isattachedasAnnexBandisincorporatedhereinbyreference.The summary of the written opinion of Centerview set forth below is qualified in its entirety to the full text ofCenterview’s written opinion attached as Annex B. In accordance with Centerview’s engagement letter, Centerview’s financial advisoryservices and opinion were provided for the information and assistance of the non-Sirius XM board members (in their capacity as directors andnot in any other capacity) in connection with and for purposes of its consideration of the transactions, and Centerview’s opinion only addressedthe fairness, from a financial point of view, as of the date thereof, to the holders of shares of Pandora common stock (other than excludedshares) of the exchange ratio. Centerview’s opinion did not address any other term or aspect of the merger agreement or the transactions anddoes not constitute a recommendation to any stockholder of Pandora or any other person as to how such stockholder or other person shouldvote or otherwise act with respect to the transactions or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, proceduresfollowed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

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Inconnectionwithrenderingtheopiniondescribedaboveandperformingitsrelatedfinancialanalyses,Centerviewreviewed,amongotherthings:•

 

adraftofthemergeragreementdatedSeptember23,2018,referredtointhissummaryofCenterview’sopinionasthe“draftmergeragreement”;•

 

AnnualReportsonForm10-K,asamended,ofPandorafortheyearsendedDecember31,2017,December31,2016andDecember31,2015andAnnualReportsonForm10-KofSiriusXMfortheyearsendedDecember31,2017,December31,2016andDecember31,2015;

• 

certaininterimreportstostockholdersandQuarterlyReportsonForm10-QofPandoraandSiriusXM;•

 

certainpubliclyavailableresearchanalystreportsforPandoraandSiriusXM;•

 

certainothercommunicationsfromPandoraandSiriusXMtotheirrespectivestockholders;•

 

certaininternalinformationrelatingtothebusiness,operations,earnings,cashflow,assets,liabilitiesandprospectsofPandora,includingcertainfinancialforecasts,analysesandprojectionsrelatingtoPandorapreparedbymanagementofPandoraandfurnishedtoCenterviewbyPandoraforpurposesofCenterview’sanalysis,whicharereferredtointhissummaryofCenterview’sopinionasthe“PandoraForecasts,”andwhicharecollectivelyreferredtointhissummaryofCenterview’sopinionasthe“PandoraInternalData;”

• 

certaininternalinformationrelatingtothebusiness,operations,earnings,cashflow,assets,liabilitiesandprospectsofSiriusXM(collectively,the“SiriusXMInternalData”);

• 

certainpubliclyavailableresearchanalysts’estimatesrelatingtoSiriusXMsuggestedbySiriusXMforpurposesofCenterview’sanalysisanddeemedrelevantbyCenterview(the“SiriusXMPublicForecasts”);and

• 

certaincostsavingsandoperatingsynergiesprojectedbythemanagementofPandoratoresultfromthetransactionsfurnishedtoCenterviewbyPandoraforpurposesofCenterview’sanalysis(the“Synergies”).

CenterviewalsoparticipatedindiscussionswithmembersoftheseniormanagementandrepresentativesofPandoraandSiriusXMregardingtheirassessmentofthePandoraInternalData(including,withoutlimitation,thePandoraForecasts),theSiriusXMInternalData,theSiriusXMPublicForecastsandtheSynergies,asappropriate)andthestrategicrationaleforthetransactions.Inaddition,Centerviewreviewedpubliclyavailablefinancialandstockmarketdata,includingvaluationmultiples,forPandoraandcomparedthatdatawithsimilardataforcertainothercompanies,thesecuritiesofwhicharepubliclytraded,inlinesofbusinessthatCenterviewdeemedrelevant.Centerviewalsocomparedcertainoftheproposedfinancialtermsofthetransactionswiththefinancialterms,totheextentpubliclyavailable,ofcertainothertransactionsthatCenterviewdeemedrelevant,andconductedsuchotherfinancialstudiesandanalysesandtookintoaccountsuchotherinformationasCenterviewdeemedappropriate.

Centerviewassumed,withoutindependentverificationoranyresponsibilitytherefor,theaccuracyandcompletenessofthefinancial,legal,regulatory,tax,accountingandotherinformationsuppliedto,discussedwith,orreviewedbyCenterviewforpurposesofitsopinionand,withPandora’sconsent,Centerviewrelieduponsuchinformationasbeingcompleteandaccurate.Inthatregard,Centerviewassumed,atPandora’sdirection,thatthePandoraInternalData(including,withoutlimitation,thePandoraForecasts)andtheSynergieswerereasonablypreparedonbasesreflectingthebestcurrentlyavailableestimatesandjudgmentsofthemanagementofPandoraastothematterscoveredtherebyandthattheSiriusXMPublicForecastsareareasonablebasisuponwhichtoevaluatethefuturefinancialperformanceofSiriusXM,andCenterviewrelied,atPandora’sdirection,onthePandoraInternalData(including,withoutlimitation,thePandoraForecasts),theSiriusXMInternalData,theSiriusXMPublicForecastsandtheSynergiesforpurposesofCenterview’sanalysisandopinion.CenterviewexpressednovieworopinionastothePandoraInternalData(including,withoutlimitation,thePandoraForecasts),theSiriusXMInternalData,theSiriusXMPublicForecastsortheSynergiesortheassumptionsonwhichtheywerebased.Inaddition,atPandora’sdirection,Centerviewdidnotmakeanyindependentevaluationor

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appraisalofanyoftheassetsorliabilities(contingent,derivative,off-balance-sheetorotherwise)ofPandoraorSiriusXM,norwasCenterviewfurnishedwithanysuchevaluationorappraisal,andwasnotaskedtoconduct,anddidnotconduct,aphysicalinspectionofthepropertiesorassetsofPandoraorSiriusXM.Centerviewassumed,atPandora’sdirection,thatthefinalexecutedmergeragreementwouldnotdifferinanyrespectmaterialtoCenterview’sanalysisoropinionfromthedraftmergeragreementreviewedbyCenterview.Centerviewalsoassumed,atPandora’sdirection,thatthetransactionswillbeconsummatedonthetermssetforthinthemergeragreementandinaccordancewithallapplicablelawsandotherrelevantdocumentsorrequirements,withoutdelayorthewaiver,modificationoramendmentofanyterm,conditionoragreement,theeffectofwhichwouldbematerialtoCenterview’sanalysisorCenterview’sopinionandthat,inthecourseofobtainingthenecessarygovernmental,regulatoryandotherapprovals,consents,releasesandwaiversforthetransactions,nodelay,limitation,restriction,conditionorotherchange,includinganydivestiturerequirementsoramendmentsormodifications,willbeimposed,theeffectofwhichwouldbematerialtoCenterview’sanalysisoropinion.CenterviewdidnotevaluateanddidnotexpressanyopinionastothesolvencyorfairvalueofPandoraorSiriusXM,ortheabilityofPandoraorSiriusXMtopaytheirrespectiveobligationswhentheycomedue,orastotheimpactofthetransactionsonsuchmatters,underanystate,federalorotherlawsrelatingtobankruptcy,insolvencyorsimilarmatters.Centerviewisnotalegal,regulatory,taxoraccountingadvisor,andCenterviewexpressednoopinionastoanylegal,regulatory,taxoraccountingmatters.

Centerview’sopinionexpressednoviewasto,anddidnotaddress,Pandora’sunderlyingbusinessdecisiontoproceedwithoreffectthetransactions,ortherelativemeritsofthetransactionsascomparedtoanyalternativebusinessstrategiesortransactionsthatmightbeavailabletoPandoraorinwhichPandoramightengage.Centerview’sopinionwaslimitedtoandaddressedonlythefairness,fromafinancialpointofview,asofthedateofCenterview’swrittenopinion,totheholdersofthesharesofPandoracommonstock(otherthanexcludedshares)oftheexchangeratio.Forpurposesofitsopinion,Centerviewwasnotaskedto,andCenterviewdidnot,expressanyviewon,anditsopiniondidnotaddress,anyothertermoraspectofthemergeragreementorthetransactions,including,withoutlimitation,thestructureorformofthetransactions,oranyotheragreementsorarrangementscontemplatedbythemergeragreementorenteredintoinconnectionwithorotherwisecontemplatedbythetransactions,including,withoutlimitation,thefairnessofthetransactionsoranyothertermoraspectofthetransactionsto,oranyconsiderationtobereceivedinconnectiontherewithby,ortheimpactofthetransactionson,theholdersofanyotherclassofsecurities,creditorsorotherconstituenciesofPandoraoranyotherparty.Inaddition,Centerviewexpressednovieworopinionastothefairness(financialorotherwise)oftheamount,natureoranyotheraspectofanycompensationtobepaidorpayabletoanyoftheofficers,directorsoremployeesofPandoraoranyparty,orclassofsuchpersonsinconnectionwiththetransactions,whetherrelativetotheexchangeratioorotherwise.Centerview’sopinionwasnecessarilybasedonfinancial,economic,monetary,currency,marketandotherconditionsandcircumstancesasineffecton,andtheinformationmadeavailabletoCenterviewasof,thedateofCenterview’swrittenopinion,andCenterviewdoesnothaveanyobligationorresponsibilitytoupdate,reviseorreaffirmitsopinionbasedoncircumstances,developmentsoreventsoccurringafterthedateofCenterview’writtenopinion.CenterviewexpressednovieworopinionastowhatthevalueofsharesofSiriusXMcommonstockactuallywouldbewhenissuedpursuanttothetransactionsorthepricesatwhichthesharesofPandoracommonstockorsharesofSiriusXMcommonstockwilltradeorotherwisebetransferableatanytime,includingfollowingtheannouncementorconsummationofthetransactions.Centerview’sopiniondoesnotconstitutearecommendationtoanystockholderofPandoraoranyotherpersonastohowsuchstockholderorotherpersonshouldvotewithrespecttothemergerorotherwiseactwithrespecttothetransactionsoranyothermatter.InaccordancewithCenterview’sengagementletter,Centerview’sfinancialadvisoryservicesanditswrittenopinionwereprovidedfortheinformationandassistanceofthenon-SiriusXMboardmembers(intheircapacityasdirectorsandnotinanyothercapacity)inconnectionwithandforpurposesofitsconsiderationofthetransactions.TheissuanceofCenterview’sopinionwasapprovedbytheCenterviewPartnersLLCFairnessOpinionCommittee.

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Summary of Centerview Financial AnalysisThefollowingisasummaryofthematerialfinancialanalysespreparedandreviewedwiththePandoraboardofdirectorsinconnectionwith

Centerview’sopinion,datedSeptember23,2018.The summary set forth below does not purport to be a complete description of the financialanalyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses describedrepresent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptionsmore or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized belowshould not be taken to be Centerview’s view of the actual value of Pandora. Some of the summaries of the financial analyses set forth belowinclude information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with thetext of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview.Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analysesor factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view ofthe processes underlying Centerview’s financial analyses and its opinion. Inperformingitsanalyses,Centerviewmadenumerousassumptionswithrespecttoindustryperformance,generalbusinessandeconomicconditionsandothermatters,manyofwhicharebeyondthecontrolofPandoraoranyotherpartiestothetransactions.NoneofPandora,SiriusXM,MergerSuborCentervieworanyotherpersonassumesresponsibilityiffutureresultsaremateriallydifferentfromthosediscussed.Anyestimatescontainedintheseanalysesarenotnecessarilyindicativeofactualvaluesorpredictiveoffutureresultsorvalues,whichmaybesignificantlymoreorlessfavorablethanassetforthbelow.Inaddition,analysesrelatingtothevalueofPandoradonotpurporttobeappraisalsorreflectthepricesatwhichPandoramayactuallybesold.Accordingly,theassumptionsandestimatesusedin,andtheresultsderivedfrom,thefinancialanalysesareinherentlysubjecttosubstantialuncertainty.Exceptasotherwisenoted,thefollowingquantitativeinformation,totheextentthatitisbasedonmarketdata,isbasedonmarketdataasitexistedonorbeforeSeptember21,2018(thelasttradingdaybeforethepublicannouncementofthetransactions)andisnotnecessarilyindicativeofcurrentmarketconditions.

SelectedPublicCompaniesAnalysesCenterviewperformedaselectedpubliccompaniesanalysisinwhichCenterviewreviewedcertainfinancialandstockmarketinformationrelating

toPandoraandselectedpubliclytradedcompaniesthatCenterview,initsexperienceandprofessionaljudgment,deemedrelevanttoconsiderinrelationtoPandora.ThefinancialdatathatwasusedwithrespecttotheseselectedcompanieswerebasedonWallStreetresearchconsensusestimates,publicfilingsandotherpubliclyavailableinformation.

Inperformingthisanalysis,Centerviewreviewedtheenterprisevalue(calculatedasfully-dilutedmarketcapitalizationplustotaldebt,plusminorityinterests,lesscashandcashequivalentsandinvestments),whichisreferredtointhissummaryofCenterview’sopinionas“EV,”asamultipleofthenext-twelve-monthsrevenue(“NTMRevenue”)ofthepubliccompaniesnotedbelow,referredtoastheselectedcompanies.TheoveralllowtohighestimatedEV/NTMRevenuemultiplesobservedfortheselectedcompaniesasofSeptember21,2018were3.60xto4.12x,asreflectedbelow:

     

   

EV / NTM Revenue

SpotifyTechnologyS.A.   

  4.12x TripAdvisor,Inc.

   

  3.79x YELPINC.

   

  3.60x BasedonitsanalysisandotherconsiderationsthatCenterviewdeemedrelevantinitsprofessionaljudgment(includingthefactthatPandora’s

commonstockhadhistoricallytradedatalowerEV/NTMmultiplecomparedtothoseselectedcompanies),CenterviewappliedarangeofEV/NTMRevenuemultiplesof1.25xto2.00xto(a)Pandora’sNTMRevenueasofSeptember21,

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2018of$1.67billionasreflectedinthePandoraScenario1aForecasts,whichresultedinarangeofimpliedvaluespershareofPandoracommonstockof$5.50to$9.75,andto(b)Pandora’sNTMRevenueasofSeptember21,2018of$1.73billionasreflectedinthePandoraScenario2Forecasts,whichresultedinarangeofimpliedvaluespershareofPandoracommonstockof$5.75to$10.25,ineachcase,roundedtothenearest$0.25.Centerviewthencomparedthisrangetothe$10.05persharevalueofthemergerconsiderationimpliedbytheexchangeratio,basedontheclosingpriceofSiriusXMcommonstockonSeptember21,2018(the“ImpliedConsiderationValue”).

AlthoughnoneoftheselectedcompaniesisdirectlycomparabletoPandora,thecompanieslistedabovewerechosenbyCenterview,amongotherreasons,becausetheyarepubliclytradedU.S.companiesintheconsumerinternetbusinessthathavecertainoperational,businessand/orfinancialcharacteristicsthat,forpurposesofCenterview’sanalysis,maybeconsideredsimilartothoseofPandora.However,becausenoneoftheselectedcompaniesisexactlythesameasPandora,Centerviewbelievedthatitwasinappropriateto,andthereforedidnot,relysolelyonthequantitativeresultsoftheselectedcompanyanalysis.Accordingly,Centerviewalsomadequalitativejudgments,basedonitsexperienceandprofessionaljudgment,concerningdifferencesbetweenthebusiness,financialandoperatingcharacteristicsandprospectsofPandoraandtheselectedcompaniesthatcouldaffectthepublictradingvaluesofeachinordertoprovideacontextinwhichtoconsidertheresultsofthequantitativeanalysis.

SelectedTransactionsAnalysisCenterviewperformedaselectedtransactionsanalysisinwhichCenterviewreviewedandcomparedcertaininformationrelatingtothefollowing

selectedtransactionsinthepublicconsumerinternetindustryinthepastfiveyearsinvolvingpubliclytradedtargetcompanieswithEBITDAmarginsoflessthan20%thatCenterview,basedonitsexperienceandprofessionaljudgment,deemedrelevanttoconsiderinrelationtoPandoraandthetransactions.

Theselectedtransactionswere:           

Announcement Date 

Acquiror 

Target 

EV / LTM Revenues

May2017   HomeAdvisor,Inc.   Angie’sList,Inc.   1.68xNovember2016   AdobeSystemsIncorporated   TubeMogul,Inc.   2.55xJuly2016   VerizonCommunicationsInc.   Yahoo!Inc.   0.99xMay2015   VerizonCommunicationsInc.   AOLInc.   1.71xFebruary2015   Expedia,Inc.   OrbitzWorldwide,Inc.   1.72xSeptember2014   NewsCorporation   Move,Inc.   3.96x

NocompanyortransactionusedinthisanalysisisidenticalordirectlycomparabletoPandoraorthetransactions,respectively.Thetargetcompaniesincludedintheselectedtransactionslistedabovewereselected,amongotherreasons,becausetheyhavecertaincharacteristicsthat,forthepurposesofthisanalysis,maybeconsideredsimilartocertaincharacteristicsofPandora.Thereasonsforandthecircumstancessurroundingeachoftheselectedtransactionsanalyzedwerediverseandthereareinherentdifferencesinthebusiness,operations,financialconditionsandprospectsofPandoraandthetargetcompaniesincludedintheselectedtransactionsanalysis.Accordingly,Centerviewbelievedthatitwasinappropriateto,andthereforedidnot,relysolelyonthequantitativeresultsoftheselectedtransactionsanalysis.Thisanalysisinvolvescomplexconsiderationsandqualitativejudgmentsconcerningdifferencesinfinancialandoperatingcharacteristicsandotherfactorsthatcouldaffectthepublictrading,acquisitionorothervaluesoftheselectedtargetcompaniesandPandora.

FinancialdatafortheselectedtransactionswerebasedsolelyonpubliclyavailableinformationatthetimeoftheinitialannouncementoftherelevanttransactionsasnotedintheprecedingtablethatCenterviewobtainedfromSECfilingsandotherpubliclyavailabledatasources.

Centerviewcalculated,foreachselectedtransactionsetforthabove,amongotherthings,theenterprisevalueimpliedfortheapplicabletargetcompanybasedontheconsiderationpayableintheapplicableselectedtransactions,whichisreferredtointhissummaryofCenterview’sopinionas“TEV,”asamultipleofthetargetcompany’srevenueforthelast-twelve-monthperiod(“LTM

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Revenue”)forwhichfinancialinformationhadbeenmadepublicatthetimeoftheannouncementofsuchtransactions.Theresultsofthisanalysisaresummarizedasfollows:

     

   

TEV / LTM Revenue

25thPercentile   

  1.69x Median

   

  1.71x Mean

   

  2.10x 75thPercentile

   

  2.34x BasedonitsanalysisandotherconsiderationsthatCenterviewdeemedrelevantinitsprofessionaljudgment,CenterviewappliedarangeofTEV/

LTMRevenuemultiplesof1.75xto2.50xtoPandora’slast-twelve-monthrevenueasofJune30,2018of$1.46billion(excludingrevenueofthedivestedticketservicebusiness)asreflectedinpublicfilingsofPandora,whichresultedinarangeofimpliedvaluespershareofPandoracommonstockof$7.25to$10.75,roundedtothenearest$0.25.CenterviewthencomparedthisrangetotheImpliedConsiderationValueof$10.05.

DiscountedCashFlowAnalysesCenterviewperformedadiscountedcashflowanalysisofPandorabasedonthePandoraScenario1aForecastsandthePandoraScenario2

Forecasts,respectively,otherPandoraInternalDataandinformationreflectedinpublicfilingsofPandora.Adiscountedcashflowanalysisisatraditionalvaluationmethodologyusedtoderiveavaluationofanassetbycalculatingthe“presentvalue”ofestimatedfuturecashflowsoftheasset.“Presentvalue”referstothecurrentvalueoffuturecashflowsandisobtainedbydiscountingthosefuturecashflowsbyadiscountratethattakesintoaccountmacroeconomicassumptionsandestimatesofrisk,theopportunitycostofcapital,expectedreturnsandotherappropriatefactors.

InperformingthisanalysisbasedonthePandoraScenario1aForecasts,CenterviewcalculatedarangeofillustrativeequityvaluesforPandorabydiscountingtopresentvalueasofJune30,2018,usingdiscountratesrangingfrom9.50%to11.50%(reflectingCenterview’sanalysisofPandora’sweightedaveragecostofcapitalinCenterview’sprofessionaljudgment):(a)theforecastedunleveredafter-taxfreecashflowsofPandoraovertheperiodbeginningJune30,2018andendingDecember31,2025,asreflectedinthePandoraScenario1aForecastsandtheassumptionsprovidedbyPandora’smanagement,and(b)arangeofillustrativeterminalvaluesofPandora,calculatedbyCenterviewapplyingarangeofillustrativeenterprisevaluetoearningsbeforeinterest,taxes,depreciationandamortization(adjustedtoincludestock-basedcompensationexpense),whichisreferredtointhissummaryofCenterview’sopinionas“AdjustedEBITDA,”multiplesof10.0xto12.5x,basedonCenterview’sexperienceandprofessionaljudgment,toPandora’sestimatedforwardAdjustedEBITDAasofDecember31,2025,asprovidedbyPandora’smanagementbasedonPandoraScenario1aForecasts.Centerviewthen(i)addedtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwards,asofJune30,2018,and(ii)subtractedfromtheforegoingresults(A)thevalueofPandora’snetdebt(calculatedasthefacevalueoflong-termdebtminuscashandcashequivalents)and(B)minorityinterests,eachasofJune30,2018,asreflectedinpublicfilingsofPandora.CenterviewdividedtheresultoftheforegoingcalculationsbythenumberoffullydilutedoutstandingsharesofPandoracommonstockasofSeptember21,2018toderivearangeofimpliedvaluespershareofPandoracommonstockof$4.50to$7.00,roundedtothenearest$0.25.CenterviewthencomparedthisrangetotheImpliedConsiderationValueof$10.05.

InperformingthisanalysisbasedonthePandoraScenario2Forecasts,CenterviewcalculatedarangeofillustrativeequityvaluesforPandorabydiscountingtopresentvalueasofJune30,2018,usingdiscountratesrangingfrom9.50%to11.50%(reflectingCenterview’sanalysisofPandora’sweightedaveragecostofcapitalinCenterview’sprofessionaljudgment):(a)theforecastedunleveredafter-taxfreecashflowsofPandoraovertheperiodbeginningJune30,2018andendingDecember31,2025,asreflectedinthePandoraScenario2ForecastsandtheassumptionsprovidedbyPandora’smanagement,and(b)arangeofillustrativeterminalvaluesofPandora,calculatedbyCenterviewapplyingarangeofillustrativeenterprisevaluetoAdjustedEBITDAmultiplesof10.5xto13.0x,basedonCenterview’sexperienceandprofessionaljudgment,toPandora’sestimated

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forwardAdjustedEBITDAasofDecember31,2025,asprovidedbyPandora’smanagementbasedonPandoraForecasts—Scenario2.Centerviewthen(i)addedtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwards,asofJune30,2018,and(ii)subtractedfromtheforegoingresults(A)thevalueofPandora’snetdebt(calculatedasthefacevalueoflong-termdebtminuscashandcashequivalents)and(B)minorityinterests,eachasofJune30,2018,asreflectedinpublicfilingsofPandora.CenterviewdividedtheresultoftheforegoingcalculationsbythenumberoffullydilutedoutstandingsharesofPandoracommonstockasofSeptember21,2018toderivearangeofimpliedvaluespershareofPandoracommonstockof$8.50to$11.75,roundedtothenearest$0.25.CenterviewthencomparedthisrangetotheImpliedConsiderationValueof$10.05.

OtherFactorsCenterviewalsoreviewedandconsideredotherfactors,whichwerenotconsideredpartofitsfinancialanalysisinconnectionwithrenderingits

opinion,butwerereferencedforinformationalpurposes,including,amongotherthings,thefollowing:•

 

tradingpricesforthePandoracommonstockduringthe52weekperiodendedSeptember21,2018,whichrangedfrom$4.13to$9.97;•

 

publiclyavailablestockpricetargetsofselectedresearchanalystsforPandoracommonstock,whichindicatedstockpricetargetsof$7.00to$13.00pershare;

• 

IllustrativePresentValueofFutureSharePriceAnalysisofPandoraonanEV/AdjustedEBITDAMultipleBasis.CenterviewperformedanillustrativeanalysisoftheimpliedpresentvalueofthefuturepricepershareofPandoracommonstockbasedonanEV/NTMAdjustedEBITDAmultiple(basedonthePandoraScenario1aForecastsandthePandoraScenario2Forecasts,respectively):o

 

IncalculatingtheimpliedpresentvalueoffuturesharepriceofPandoracommonstockbasedonthePandoraScenario1aForecasts,CenterviewfirstcalculatedarangeofimpliedenterprisevaluesofPandoraattheendofyear2024bymultiplyingtheestimatedNTMAdjustedEBITDAofPandora(asindicatedinthePandoraScenario1aForecasts)attheendofyear2024byanNTMAdjustedEBITDAmultiplerangeof10.0xto12.5x,basedonCenterview’sexperienceandprofessionaljudgment.CenterviewthencalculatedarangeofimpliedequityvaluesofPandoraattheendofyear2024by(i)addingtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwardsattheendofyear2024,and(ii)subtractingtheestimatednetdebtofPandoraattheendofyear2024fromtheimpliedenterprisevalues.CenterviewthendividedtheimpliedequityvaluesbythetotalnumberofoutstandingsharesofPandoracommonstockonafullydilutedbasis.CenterviewthendiscountedthoseimpliedvaluestoJune30,2018byusinganequitydiscountrateequalto11.5%,reflectingCenterview’sanalysisofPandora’scostofequity.TheanalysisresultedinarangeofimpliedpresentvaluesofoneshareofPandoracommonstockasofJune30,2018equalto$5.65to$6.70;and

o 

IncalculatingtheimpliedpresentvalueoffuturesharepriceofPandoracommonstockbasedonthePandoraScenario2Forecasts,CenterviewfirstcalculatedarangeofimpliedenterprisevaluesofPandoraattheendofyear2024bymultiplyingtheestimatedNTMAdjustedEBITDAofPandora(asindicatedinthePandoraScenario2Forecasts)attheendofyear2024byanNTMAdjustedEBITDAmultiplerangeof10.5xto13.0x,basedonCenterview’sexperienceandprofessionaljudgment.CenterviewthencalculatedarangeofimpliedequityvaluesofPandoraattheendofyear2024by(i)addingtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwardsattheendofyear2024,and(ii)subtractingtheestimatednetdebtofPandoraattheendofyear2024fromtheimpliedenterprisevalues.CenterviewthendividedtheimpliedequityvaluesbythetotalnumberofoutstandingsharesofPandoracommonstockonafullydilutedbasis.CenterviewthendiscountedthoseimpliedvaluestoJune30,2018byusinganequitydiscountrateequalto11.5%,reflectingCenterview’sanalysisofPandora’scostofequity.Theanalysisresultedinarangeofimpliedpresent

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valuesofoneshareofPandoracommonstockasofJune30,2018equalto$8.56to$9.94;•

 

IllustrativePresentValueofFutureSharePriceAnalysisofPandoraonanEV/RevenueMultipleBasis.CenterviewperformedanillustrativeanalysisoftheimpliedpresentvalueofthefuturepricepershareofPandoracommonstockbasedonEV/NTMRevenuemultiple(basedonthePandoraScenario1aForecastsandthePandoraScenario2Forecasts,respectively):o

 

IncalculatingtheimpliedpresentvalueoffuturesharepriceofPandoracommonstockbasedonthePandoraScenario1aForecasts,CenterviewfirstappliedEV/NTMRevenuemultiplesof1.50xand1.75x,respectively,basedonCenterview’sexperienceandprofessionaljudgment,toPandora’sNTMRevenueattheendofyear2020,2021and2022of$2.07billion,$2.28billionand$2.46billion,respectively,ineachcase,asprovidedbyPandora.CenterviewthencalculatedtheimpliedequityvaluesofPandoraattheendofeachsuchyearby(i)addingtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwardsattheendofeachsuchyear,and(ii)subtractingtheestimatednetdebtofPandoraattheendofeachsuchyearfromtheapplicableimpliedenterprisevalue.CenterviewthendividedtheapplicableequityvaluesbythetotalnumberofoutstandingsharesofPandoracommonstockonafullydilutedbasisattheendofeachsuchyear.CenterviewthendiscountedthoseimpliedvaluestoJune30,2018byusinganequitydiscountrateequalto11.5%,reflectingCenterview’sanalysisofPandora’scostofequity.TheanalysisresultedinarangeofimpliedpresentvaluesofoneshareofPandoracommonstockasofJune30,2018equalto$6.27to$7.55;and

o 

IncalculatingtheimpliedpresentvalueoffuturesharepriceofPandoracommonstockbasedonthePandoraScenario2Forecasts,CenterviewfirstappliedEV/NTMRevenuemultiplesof1.75xand2.00x,respectively,basedonCenterview’sexperienceandprofessionaljudgment,toPandora’sNTMRevenueattheendofyear2020,2021and2022of$2.38billion,$2.69billionand$2.98billion,respectively,ineachcase,asprovidedbyPandora.CenterviewthencalculatedtheimpliedequityvaluesofPandoraattheendofeachsuchyearby(i)addingtheestimatedvalueofthetaxbenefitsfromPandora’snetoperatinglosscarryforwardsattheendofeachsuchyear,and(ii)subtractingtheestimatednetdebtofPandoraattheendofeachsuchyearfromtheapplicableimpliedenterprisevalue.CenterviewthendividedtheapplicableequityvaluesbythetotalnumberofoutstandingsharesofPandoracommonstockonafullydilutedbasisattheendofeachsuchyear.CenterviewthendiscountedthoseimpliedvaluestoJune30,2018byusinganequitydiscountrateequalto11.5%,reflectingCenterview’sanalysisofPandora’scostofequity.TheanalysisresultedinarangeofimpliedpresentvaluesofoneshareofPandoracommonstockasofJune30,2018equalto$9.02to$10.43;and

• 

IllustrativeFutureSharePriceAnalysisofSiriusXMProFormaforthetransactionsonanEV/AdjustedEBITDAMultipleBasis.CenterviewperformedanillustrativeanalysisoftheimpliedfuturepricepershareofSiriusXMcommonstockproformaforthetransactionsbasedonEV/NTMAdjustedEBITDAmultiple(basedonboththeSiriusXMPublicForecastsandthePandoraScenario1aForecastsandthePandoraScenario2Forecasts,respectively)andassuming,atthedirectionofPandora’smanagement,approximately$50millionrun-rateSynergiestobephasedinovertwoyearsaftertheclosingofthetransactions:o

 

IncalculatingtheillustrativefuturesharepriceofSiriusXMcommonstockbasedontheSiriusXMPublicForecastsandthePandoraScenario1aForecasts,CenterviewfirstappliedEV/NTMAdjustedEBITDAmultiplesof17.4xand18.4x,respectively,basedonCenterview’sexperienceandprofessionaljudgment,toSiriusXM’sNTMproformaAdjustedEBITDAattheendofyear2018,2019,2020and2021(ineachcase,asindicatedintheSiriusXMPublicForecastsandthePandoraScenario1aForecasts).

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CenterviewthencalculatedtheimpliedproformaequityvaluesofSiriusXMattheendofeachsuchyearby(i)addingtheestimatedvalueofthetaxbenefitsfromSiriusXM’sproformanetoperatinglosscarryforwardsattheendofeachsuchyear,and(ii)subtractingtheestimatedproformanetdebtofSiriusXMattheendofeachsuchyearfromtheapplicableimpliedenterprisevalue.CenterviewthendividedtheapplicableequityvaluesbythetotalnumberofproformaoutstandingsharesofSiriusXMcommonstockonafullydilutedbasis.TheanalysisresultedinarangeofillustrativefutureproformaSiriusXMsharepricesof$6.14to$10.53,implyingillustrativefuturevaluetoPandorashareholdersof$8.84to$15.16attheexchangeratio.CenterviewcomparedtheseimpliedfutureproformapersharevaluesforPandorashareholderstoarangeof$7.06to$10.88persharebasedonanillustrativeanalysisoftheimpliedvalueofthefuturepricepershareofPandoracommonstockbasedonanEV/NTMRevenuemultiplebasis;and

o 

IncalculatingtheillustrativefuturesharepriceofSiriusXMcommonstockbasedontheSiriusXMPublicForecastsandthePandoraScenario2Forecasts,CenterviewfirstappliedEV/NTMAdjustedEBITDAmultiplesof17.4xand18.4x,respectively,basedonCenterview’sexperienceandprofessionaljudgment,toSiriusXM’sNTMproformaAdjustedEBITDAattheendofyear2018,2019,2020and2021(ineachcase,asindicatedintheSiriusXMPublicForecastsandthePandoraScenario2Forecasts).CenterviewthencalculatedtheimpliedproformaequityvaluesofSiriusXMattheendofeachsuchyearby(i)addingtheestimatedvalueofthetaxbenefitsfromSiriusXM’sproformanetoperatinglosscarryforwardsattheendofeachsuchyear,and(ii)subtractingtheestimatedproformanetdebtofSiriusXMattheendofeachsuchyearfromtheapplicableimpliedenterprisevalue.CenterviewthendividedtheapplicableequityvaluesbythetotalnumberofproformaoutstandingsharesofSiriusXMcommonstockonafullydilutedbasis.TheanalysisresultedinarangeofillustrativefutureproformaSiriusXMsharepricesof$6.17to$10.83,implyingillustrativefuturevaluetoPandorashareholdersof$8.88to$15.60attheexchangeratio.CenterviewcomparedtheseimpliedfutureproformapersharevaluesforPandorashareholderscomparedtoarangeof$9.01to$15.26persharebasedonanillustrativeanalysisoftheimpliedvalueofthefuturepricepershareofPandoracommonstockbasedonanEV/NTMRevenuemultiplebasis.

GeneralThepreparationofafinancialopinionisacomplexanalyticalprocessinvolvingvariousdeterminationsastothemostappropriateandrelevant

methodsoffinancialanalysisandtheapplicationofthosemethodstotheparticularcircumstancesand,therefore,afinancialopinionisnotreadilysusceptibletosummarydescription.Inarrivingatitsopinion,Centerviewdidnotdraw,inisolation,conclusionsfromorwithregardtoanyfactororanalysisthatitconsidered.Rather,Centerviewmadeitsdeterminationastofairnessonthebasisofitsexperienceandprofessionaljudgmentafterconsideringtheresultsofalloftheanalyses.

Centerview’sfinancialanalysesandopinionwereonlyoneofmanyfactorstakenintoconsiderationbythePandoraboardofdirectorsinitsevaluationofthetransactions.Consequently,theanalysesdescribedaboveshouldnotbeviewedasdeterminativeoftheviewsofthePandoraboardofdirectorsormanagementwithrespecttotheexchangeratioorastowhetherthePandoraboardofdirectorswouldhavebeenwillingtodeterminethatadifferentconsiderationwasfair.Theconsiderationforthetransactionswasdeterminedthrougharm’s-lengthnegotiationsbetweenPandoraandSiriusXMandwasapprovedbythePandoraboardofdirectors.CenterviewprovidedadvicetoPandoraduringthesenegotiations.Centerviewdidnot,however,recommendanyspecificamountofconsiderationtoPandoraortheBoardorthatanyspecificamountofconsiderationconstitutedtheonlyappropriateconsiderationforthetransactions.

Centerviewisasecuritiesfirmengageddirectlyandthroughaffiliatesandrelatedpersonsinanumberofinvestmentbanking,financialadvisoryandmerchantbankingactivities.Inthetwoyears

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priortothedateofitswrittenopinion,CenterviewwasengagedtoprovidefinancialadvisoryservicestoPandorafromtimetotime,includinginconnectionwithSiriusXM’spreferredequityinvestmentinPandora,Pandora’ssaleofitsTicketflybusinesstoEventbriteandPandora’songoingreviewofstrategicalternatives,andCenterviewhasreceivedcompensationofapproximately$21millionfromPandoraforsuchservices.Inthetwoyearspriortothedateofitswrittenopinion,CenterviewwasnotengagedtoprovidefinancialadvisoryorotherservicestoSiriusXMorMergerSub,andCenterviewdidnotreceivecompensationfromSiriusXM.CenterviewmayprovideinvestmentbankingandotherservicestoorwithrespecttoPandoraorSiriusXMortheirrespectiveaffiliatesinthefuture,forwhichCenterviewmayreceivecompensation.Certainof(i)Centerview’sandCenterview’saffiliates’directors,officers,membersandemployees,orfamilymembersofsuchpersons,(ii)Centerview’saffiliatesorrelatedinvestmentfundsand(iii)investmentfundsorotherpersonsinwhichanyoftheforegoingmayhavefinancialinterestsorwithwhichtheymayco-invest,mayatanytimeacquire,hold,sellortrade,indebt,equityandothersecuritiesorfinancialinstruments(includingderivatives,bankloansorotherobligations)of,orinvestmentsin,Pandora,SiriusXM,oranyoftheirrespectiveaffiliates,oranyotherpartythatmaybeinvolvedinthetransactions.

AsdisclosedtothePandoraboardofdirectorspriortoentryintoitsengagementletterwithrespecttothetransactions,CenterviewalsoactedasfinancialadvisortothespecialcommitteeoftheboardofdirectorsofHSN,Inc.inconnectionwithHSN,Inc.’ssaletoLibertyInteractiveCorporation(nowknownasQurateRetail,Inc.),anentityinwhichtheChairmanoftheBoardofLibertyMediaalsoholdsalargevotinginterest.Inconnectionwithsuchtransaction,CentervieworallyadvisedLibertyInteractiveCorporationthat,totheextentCenterviewwastobeengagedinthefuturetoprovideinvestmentbankingadvisoryservicestoLibertyInteractiveCorporationorcertainentitiescontrolledbyit,Centerviewwouldprovide,dependingonthecircumstances,acreditofupto$5,000,000towardsuchengagement.TheforegoingdiscussiondidnotincludeanycommitmentoragreementbyLibertyInteractiveCorporationoranyotherentitytohireCenterviewforfutureworkoranycommitmentoragreementbyCenterviewtoprovideanyfutureinvestmentbankingadvisoryservicestoLibertyInteractiveCorporationoranyotherentity.

ThePandoraboardofdirectorsselectedCenterviewasitsfinancialadvisorinconnectionwiththetransactionsbasedonCenterview’sreputationandexperience.Centerviewisaninternationallyrecognizedinvestmentbankingfirmthathassubstantialexperienceintransactionssimilartothetransactions.

InconnectionwithCenterview’sservicesasthefinancialadvisortothePandoraboardofdirectors,PandorahasagreedtopayCenterviewanaggregatefeethatisestimated,basedontheinformationavailableasofthedateofannouncement,tobe$21million,$3millionofwhichispayableupontheearlierof(i)theconsummationofthetransactionsand(ii)the13-monthanniversaryoftheexecutionofthemergeragreement,andtheremainderofwhichispayablecontingentuponconsummationofthetransactions.Inaddition,PandorahasagreedtoreimbursecertainofCenterview’sexpensesarising,andtoindemnifyCenterviewagainstcertainliabilitiesthatmayarise,outofCenterview’sengagement.

Opinion of LionTree Advisors LLCOnSeptember23,2018,atameetingofthePandoraboardofdirectors,LionTreerenderedanoralopiniontothePandoraboardofdirectors(which

wassubsequentlyconfirmedinwritingbydeliveryofLionTree’swrittenopiniondatedSeptember23,2018)astothefairness,fromafinancialpointofview,asofsuchdate,oftheexchangeratiototheholdersofPandoracommonstock(otherthantheexcludedparties),baseduponandsubjecttotheproceduresfollowed,assumptionsmade,qualificationsandlimitationsonthereviewundertaken,andothermattersconsideredbyLionTreeinpreparingitsopinion.

LionTree’s opinion was provided to the Pandora board of directors and only addressed the fairness, from a financial point of view, of theexchange ratio to the holders of Pandora common stock (other than the excluded parties) (without giving effect to any impact of thetransactions on any particular stockholder of Pandora other than in its capacity as a holder of Pandora common

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stock). The summary of LionTree’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of itswritten opinion, which is included as Annex C to this proxy statement/prospectus and incorporated herein by reference, and sets forth theprocedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree inpreparing its opinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this proxystatement/prospectus constitute a recommendation to any holder of Pandora common stock as to how such stockholder should vote or act onany matter relating to the transactions or any other matter.

Inarrivingatitsopinion,LionTree,amongotherthings:•

 

reviewedadraft,datedSeptember23,2018,ofthemergeragreement;•

 

reviewedcertainpubliclyavailablebusinessandfinancialinformationrelatingtoPandoraandSiriusXM;•

 

reviewedcertainhistoricalfinancialinformationandotherdatarelatingtoPandorathatwereprovidedtoLionTreebythemanagementofPandora,approvedforLionTree’susebyPandora,andnotpubliclyavailable;

• 

reviewedcertaininternalfinancialforecasts,estimates,andotherdatarelatingtothebusinessandfinancialprospectsofPandorathatwereprovidedtoLionTreebythemanagementofPandora,approvedforLionTree’susebyPandora,andnotpubliclyavailable,includingfinancialforecastsandestimatesforthefiscalyearsendingDecember31,2018throughDecember31,2025,preparedbythemanagementofPandora;

• 

conducteddiscussionswithmembersoftheseniormanagementofPandoraconcerningthebusiness,operations,historicalfinancialresults,andfinancialprospectsofPandoraandthetransactions;

• 

conductedlimiteddiscussionswithmembersoftheseniormanagementofSiriusXMconcerningneartermfinancialprospectsofSiriusXM;•

 

reviewedcurrentandhistoricalmarketpricesofPandoracommonstockandSiriusXMcommonstock;•

 

reviewedcertainpubliclyavailablefinancialandstockmarketdatawithrespecttocertainothercompanies;•

 

reviewedandcompareddataregardingthepremiumspaidincertainothertransactions;•

 

reviewedcertainfinancialperformancedataofPandoraandcomparedthatdatawithsimilardataforcertainothercompanies;and•

 

conductedsuchotherfinancialstudies,analysesandinvestigations,andconsideredsuchotherinformation,asLionTreedeemednecessaryorappropriate.

InconnectionwithLionTree’sreview,withPandora’sconsent,LionTreeassumedandreliedupon,withoutindependentverification,theaccuracyandcompletenessoftheinformationprovidedto,discussedwith,orreviewedbyLionTreeforthepurposeofitsopinion.Inaddition,withPandora’sconsent,LionTreedidnotmakeanyindependentevaluationorappraisalofanyoftheassetsorliabilities(contingentorotherwise)ofPandoraorSiriusXM,oranyoftheirrespectivesubsidiaries,norwasLionTreefurnishedwithanysuchevaluationorappraisal.Pandora’smanagementprovidedtoLionTreePandoraScenario1aForecastsandPandoraScenario2Forecasts(whichforecastsaresummarizedinthesectionentitled“TheTransactions—CertainFinancialForecasts”andwhichwerefertocollectivelyasthe“forecasts”).LionTreeassumed,withPandora’sconsent(andbasedonadviceofthemanagementofPandora),thattheforecastshavebeenreasonablypreparedingoodfaithonabasisreflectingthebestcurrentlyavailableestimatesandjudgmentsofthemanagementofPandoraastothefuturefinancialperformanceofPandoraanditssubsidiariesandwillbeachievedatthetimesandintheamountsprojected.LionTreeexpressednoopinionwithrespecttosuchforecasts.LionTreeassumed,withPandora’sconsent,thatthetransactionswillhavethetaxconsequencescontemplatedbythemergeragreement.LionTree’sopiniondidnotaddressanylegal,regulatory,taxation,oraccountingmatters,andLionTreeassumedtheaccuracyandveracityofallassessmentsmadebyPandora’sprofessionaladvisorswithrespectto

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suchmatters.LionTree’sopinionisnecessarilybasedoneconomic,monetary,market,andotherconditionsasineffecton,andtheinformationavailabletoLionTreeasof,thedateofitsopinionandLionTree’sopinionspeaksonlyasofthedatethereof.

Inrenderingitsopinion,LionTreeassumed,withPandora’sconsent,thatexceptaswouldnotbeinanywaymeaningfultoLionTree’sanalysis:(a)thefinalexecutedformofthemergeragreementwouldnotdifferfromthedraftthatLionTreereviewed,(b)therepresentationsandwarrantiesofthepartiestothemergeragreementweretrueandcorrect,(c)thepartiestothemergeragreementwillcomplywithandperformallcovenantsandagreementsrequiredtobecompliedwithorperformedbysuchpartiesunderthemergeragreement,and(d)thetransactionswillbeconsummatedinaccordancewiththetermsofthemergeragreementwithoutanywaiveroramendmentofanytermorconditionthereof.LionTreealsoassumed,withPandora’sconsent,thatallgovernmental,regulatoryorotherthird-partyconsentsandapprovalsnecessaryfortheconsummationofthetransactionsorotherwisecontemplatedbythemergeragreementwillbeobtainedwithoutanyadverseeffectonPandora,SiriusXM,orontheexpectedbenefitsofthetransactionsinanywaymeaningfultoLionTree’sanalysis.

LionTree’sopinionwasprovidedfortheinformationandassistanceofthePandoraboardofdirectors(initscapacityassuch)inconnectionwithitsevaluationofthetransactions,anddoesnotconstitutearecommendationtoanyholderofPandoracommonstockastohowsuchstockholdershouldvoteoractwithrespecttothetransactionsoranyothermatter.

LionTree’sopiniondidnotaddressPandora’sunderlyingbusinessdecisiontoengageinthetransactionsoranyrelatedtransaction,therelativemeritsofthetransactionsoranyrelatedtransactionascomparedtootherbusinessstrategiesortransactionsthatmightbeavailabletoPandora,orwhethertheconsiderationtobereceivedbytheholdersofPandoracommonstockpursuanttothemergeragreementrepresentsthebestpriceobtainable.Inconnectionwithitsengagement,LionTreedidnotnegotiatetheexchangeratiooranyothermatterwithSiriusXMoritsrepresentativesonbehalfofPandora,andLionTreewasnotaskedto,anddidnot,solicitinterestfromotherpartiespriortothedateofitsopinionwithrespecttoanacquisitionof,orotherbusinesscombinationwith,Pandoraoranyotheralternativetransaction.LionTreeexpressednoviewasto,anditsopiniondoesnotaddress,thesolvencyofPandoraoranyotherentityunderanystate,federal,orotherlawsrelatingtobankruptcy,insolvency,orsimilarmatters.LionTree’sopinionaddressedonlythefairness,fromafinancialpointofview,oftheexchangeratioasofthedateofthemergeragreement,totheholdersofPandoracommonstock(otherthantheexcludedparties).LionTreewasnotaskedto,nordidLionTree,offeranyopinionastotheterms(otherthantheexchangeratiototheextentexpresslyspecifiedtherein)ofthemergeragreementortheformofthetransactionsoranyrelatedtransaction(includinganyagreementortransactionbetweenanyexcludedpartyandPandoraorbetweenanyexcludedpartyandSiriusXM),includingthefairnessofthetransactionsto,oranyconsiderationreceivedinconnectiontherewithby,theholdersofanyotherclassofsecurities,creditors,orotherconstituenciesofPandora,SiriusXM,oranyoftheirrespectiveaffiliates.LionTreewasnotaskedto,nordidLionTree,offeranyopinionwithrespecttothefairmarketvalueofPandora,SiriusXM,thePandoracommonstock,ortheSiriusXMcommonstock.Inaddition,LionTreeexpressednoopinionastothefairnessoftheamountornatureofanycompensationtobereceivedbyanyofficers,directors,oremployeesofanypartiestothetransactions,anyexcludedparties,oranyclassofsuchpersons,whetherrelativetotheexchangeratioorotherwise.LionTreeexpressednoopinionastowhatthevalueoftheSiriusXMcommonstockwillbewhenissuedpursuanttothetransactionsorthepricesatwhichthesharesofSiriusXMcommonstockorPandoracommonstockwilltradeatanytime.

InrenderingitsopiniontothePandoraboardofdirectors,LionTreeperformedavarietyofanalyses,includingthosedescribedbelow.ThesummaryofLionTree’sanalysesisnotacompletedescriptionoftheanalysesunderlyingLionTree’sopinion.Thepreparationofafairnessopinioninvolvesvariousquantitativeandqualitativejudgmentsanddeterminationswithrespecttothefinancial,comparativeandotheranalyticalmethodsemployedandtheadaptationandapplicationofthesemethodstotheuniquefactsandcircumstancespresented.Consequently,neitherafairnessopinionnoritsunderlyinganalysesisreadilysusceptibletosummarydescription.LionTreearrivedatitsopinionbasedontheresultsofallanalysesundertakenbyit,assessedasawhole,anddidnot

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draw,inisolation,conclusionsfromorwithregardtoanyindividualanalysis,methodologyorfactor.Accordingly,LionTreebelievesthatitsanalysesandthefollowingsummarymustbeconsideredasawholeandthatselectingportionsofitsanalyses,methodologiesandfactorsorfocusingoninformationpresentedintabularformat,withoutconsideringallanalyses,methodologiesandfactorsorthenarrativedescriptionoftheanalyses,couldcreateamisleadingorincompleteviewoftheprocessunderlyingLionTree’sanalysesandopinion.Eachanalyticaltechniquehasinherentstrengthsandweaknesses,andthenatureoftheavailableinformationmayfurtheraffectthevalueofparticulartechniques.

Inperformingitsanalyses,LionTreeconsideredgeneralbusiness,economic,industry,regulatoryandmarketconditions,financialandotherwise,andothermattersastheyexistedon,andcouldbeevaluatedasof,thedateofitsopinion.LionTree’sanalysesinvolvedjudgmentsandassumptionswithregardtogeneralbusiness,economic,industry,regulatoryandmarketconditions,financialandotherwise,andothermatters,manyofwhicharebeyondthecontrolofthepartiestothemergeragreement,suchastheimpactofcompetitiononthebusinessofthepartiesandontheindustrygenerally,industrygrowthandtheabsenceofanymaterialchangeinthefinancialconditionandprospectsofthepartiesortheproposedtransactions,andanevaluationoftheresultsofthoseanalysesisnotentirelymathematical.LionTreebelievesthatmathematicalderivations(suchasdeterminingmeanandmedian)offinancialdataarenotbythemselvesmeaningfulandshouldbeconsideredtogetherwithqualities,judgments,andinformedassumptions.TheestimatescontainedintheforecastsandtheimpliedreferencerangevaluesindicatedbyLionTree’sanalysesarenotnecessarilyindicativeofactualvaluesorpredictiveoffutureresultsorvalues,whichmaybesignificantlymoreorlessfavorablethanthosesuggestedbytheanalyses.Additionally,anyanalysesrelatingtothevalueofassets,businessesorsecuritiesdonotpurporttobeappraisalsortoreflectthepricesatwhichbusinessesorsecuritiesactuallymaybesold,whichmaydependonavarietyoffactors,manyofwhicharebeyondthecontroloftheparties.Muchoftheinformationusedin,andaccordinglytheresultsof,LionTree’sanalysesareinherentlysubjecttosubstantialuncertainty.

LionTree’sopinionwasprovidedtothePandoraboardofdirectorsinconnectionwithitsevaluationofthetransactionsandwasonlyoneofmanyfactorsconsideredbythePandoraboardofdirectorsinevaluatingthetransactions.NeitherLionTree’sopinionnoritsanalysesweredeterminativeoftheconsiderationselectedforthetransactionsoroftheviewsofthePandoraboardofdirectorsorPandora’smanagementwithrespecttotheirdecisiontopursuethetransactionsortheconsiderationtobepaidthereunder.ThetypeandamountofconsiderationpayableinthetransactionsweredeterminedthroughnegotiationbetweenPandoraandSiriusXMandthedecisiontoenterintothemergeragreementwassolelythatofthePandoraboardofdirectors.LionTreedidnotrecommendanyspecifictypeoramountofconsiderationtoPandoraorthePandoraboardofdirectors,nordiditrecommendthatanyspecifictypeoramountofconsiderationconstitutedtheonlyappropriateconsiderationforthetransactions.

ThefollowingisasummaryofthematerialanalysesperformedbyLionTreeinconnectionwithLionTree’spresentationtothePandoraboardofdirectorsandopinionrenderedonSeptember23,2018.TheorderoftheanalysesdoesnotrepresentrelativeimportanceorweightgiventothoseanalysesbyLionTree.Theanalysessummarizedbelowincludeinformationpresentedintabularformat.Thetablesalonedonotconstituteacompletedescriptionoftheanalyses.Consideringthedatainthetablesbelowwithoutconsideringthefullnarrativedescriptionoftheanalyses,aswellasthemethodologiesunderlying,andtheassumptions,qualificationsandlimitationsaffecting,eachanalysis,couldcreateamisleadingorincompleteviewofLionTree’sanalyses.

Forpurposesofitsanalyses,LionTreereviewedanumberoffinancialandoperatingmetrics,including:•

 

equityvalue,calculatedasthevalueoftherelevantcompany’soutstandingequitysecurities(takingintoaccountitssharesoutstanding,outstandingrestrictedstockawards,andoutstandingvestedandunvestedoptions,warrants,andotherin-the-moneyconvertiblesecurities,basedonthetreasurystockmethod),basedontherelevantcompany’sclosingstockprice;

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• 

enterprisevalue(whichwerefertoasEV),calculatedastherelevantcompany’sequityvalueplusnetdebt(calculatedasoutstandingindebtedness,out-of-the-moneyconvertiblesecurities,preferredstock,andcapitalleaseobligationsminustheamountofcashandcashequivalentsonitsbalancesheet)plusthevalueofinterestsofothersinmajority(butnotwholly-owned)subsidiaries,orminorityinterests,minusthevalueofinterestsinentitiesforwhichtherelevantcompanyownslessthan50%oftheequity,orassociates,asofaspecifieddate;and

• 

EBITDA,calculatedastherelevantcompany’searningsbeforeinterest,taxes,depreciationandamortization,adjustedtoexcludestock-basedcompensationexpense(unlessotherwiseindicated).

Unlessthecontextindicatesotherwise,EVsandequityvaluesderivedfromtheselectedcompaniesanalysesdescribedbelowwerecalculatedusingtheclosingpriceofPandoracommonstock,SiriusXMcommonstock,andthecommonequityoftheselectedpubliclytradedcompanieslistedbelowasofmarketcloseonSeptember21,2018.Accordingly,thisinformationmaynotreflectcurrentorfuturemarketconditions.

Inaddition,unlessthecontextindicatesotherwise,pershareamountsforPandoracommonstockandSiriusXMcommonstockwerecalculatedonafullydilutedbasisusingthetreasurystockmethod,takingintoaccountoutstandingrestrictedstockawardsandoutstandingvestedandunvestedoptionsandotherin-the-moneyconvertiblesecurities.

FinancialAnalysesImpliedValueoftheMergerConsideration.LionTreecalculatedanimpliedvalueof$10.05foreachshareofPandoracommonstockreflectedby

theexchangeratio,bymultiplyingtheclosingpricepershareofSiriusXMcommonstockof$6.98onSeptember21,2018,thelastcompletedtradingdaybeforeLionTreedelivereditsopiniontothePandoraboardofdirectors,by1.44.TheclosingpricepershareofPandoracommonstockwas$9.09onSeptember21,2018.

HistoricalExchangeRatioAnalysis.LionTreereviewedthehistoricaltradingpricesforPandoracommonstockandSiriusXMcommonstockforthetwoyearperiodendedSeptember21,2018,andanalyzedtheexchangeratiocomparedtotherelativevaluesofPandoracommonstockandSiriusXMcommonstock.Thisanalysisresultedinthefollowing:

     

Historical Date or Period 

Average Exchange Ratio

during PeriodSeptember21,2018

   

  1.302x 1-Month

   

  1.275x 3-Months

   

  1.187x 6-Months

   

  1.067x 1-Year

   

  1.023x 2-Years

   

  1.647x DCFAnalysisforPandoraonaStand-AloneBasis.LionTreeperformedadiscountedcashflow(whichwerefertoasDCF)analysisofPandoraby

calculatingtheestimatednetpresentvalueoftheunlevered,after-taxfreecashflowsthatPandorawasforecastedtogeneratethroughthefiscalyearendingDecember31,2025(whichwerefertoasFY2025)foreachofthePandoraScenario1aForecastsandthePandoraScenario2Forecasts.

Scenario1aForecastsFortheDCFanalysiswithrespecttothePandoraScenario1aForecasts,LionTreecalculatedterminalvaluesforPandorabyapplyingarangeof

terminalvaluemultiplesof9.5xto11.5xtoPandora’sestimatedEBITDAforFY2025basedonthePandoraScenario1aForecasts(whichanalysisimpliedexitterminalyearEBITDA(includingstockbasedcompensationexpense)multiplesof11.7xto14.2x).TheseterminalvaluemultipleestimateswerederivedbyLionTreeutilizingitsprofessionaljudgmentandexperience,takingintoaccount,amongotherthings,estimatedoperationalmetricsforPandorabasedonthePandoraScenario1aForecastsandtheoperational

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metricsandEBITDAmultiplesforselectedpubliclytradedcompanies.Thepresentvaluesofthecashflowsandterminalvalueswerethencalculatedusingdiscountratesrangingfrom9.00%to10.50%,reflectingestimatesofPandora’sweightedaveragecostofcapital(whichwerefertoasWACC).Ineachcase,LionTreeincludedtheestimatednetpresentvalue(whichwerefertoasNPV)ofPandora’snetoperatinglosses(whichwerefertoasNOLs)of$179.4millionascalculatedandprovidedbyPandora’smanagementusingacostofequityof10.5%.LionTreethensubtractedfromtherangeofimpliedenterprisevaluesPandora’snetdebttoderivearangeofimpliedequityvaluesforPandora.LionTreedividedtherangeofimpliedequityvaluesitderivedbythenumberoffullydilutedoutstandingsharesofPandoracommonstockasofSeptember21,2018.UsingthePandoraScenario1aForecasts,theDCFanalysisindicatedastandaloneimpliedpershareequityvaluereferencerangeof$5.53to$7.81forthePandoracommonstock.

Scenario2ForecastsFortheDCFanalysiswithrespecttothePandoraScenario2Forecasts,LionTreecalculatedterminalvaluesforPandorabyapplyingarangeof

terminalvaluemultiplesof10.0xto12.0xtoPandora’sestimatedEBITDAforFY2025basedonthePandoraScenario2Forecasts(whichanalysisimpliedexitterminalyearEBITDA(includingstockbasedcompensationexpense)multiplesof11.7xto14.1x).TheseterminalvaluemultipleestimateswerederivedbyLionTreeutilizingitsprofessionaljudgmentandexperience,takingintoaccount,amongotherthings,estimatedoperationalmetricsforPandorabasedonthePandoraScenario2ForecastsandtheoperationalmetricsandEBITDAmultiplesforselectedpubliclytradedcompanies.Thepresentvaluesofthecashflowsandterminalvalueswerethencalculatedusingdiscountratesrangingfrom9.00%to10.50%,reflectingestimatesofPandora’sWACC.Ineachcase,LionTreeincludedtheestimatedNPVofPandora’sNOLsof$194.0millionascalculatedandprovidedbyPandora’smanagementusingacostofequityof10.5%.LionTreethensubtractedfromtherangeofimpliedenterprisevaluesPandora’snetdebttoderivearangeofimpliedequityvaluesforPandora.LionTreedividedtherangeofimpliedequityvaluesitderivedbythenumberoffullydilutedoutstandingsharesofPandoracommonstockasofSeptember21,2018.UsingthePandoraScenario2Forecasts,theDCFanalysisindicatedastandaloneimpliedpershareequityvaluereferencerangeof$9.41to$12.22forthePandoracommonstock.

SelectedPubliclyTradedCompaniesAnalysisforPandora.Usingpubliclyavailableinformation,LionTreecomparedselectedfinancialdataofPandoratocorrespondingfinancialdataforthefollowingpubliclytradedcompaniesinthesubcategoriesdescribedbelow:

SatelliteRadio•

 

SiriusXMHoldingsInc.DigitalMusic•

 

SpotifyTechnologyS.A.TerrestrialRadio•

 

EntercomCommunicationsCorp.•

 

TownsquareMedia,Inc.Internet•

 

AlphabetInc.•

 

eBayInc.•

 

ExpediaGroup,Inc.•

 

Facebook,Inc.•

 

GrouponInc.•

 

Netflix,Inc.•

 

Roku,Inc.•

 

TripAdvisor,Inc.•

 

Twitter,Inc.•

 

YelpInc.74

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AlthoughnoneoftheselectedcompaniesisdirectlycomparabletoPandora,thecompaniesincludedwerechosenbecausetheyarepubliclytradedcompanieswithoperationsthatforpurposesofthisanalysismay,incertainrespects,beconsideredsimilartocertainoperationsofPandora.TheanalysesnecessarilyinvolvecomplexconsiderationsandjudgmentsconcerningdifferencesinfinancialandoperationalcharacteristicsofthecompaniesinvolvedandotherfactorsthatcouldaffectthecompaniesdifferentlythantheywouldaffectPandora.

Usingpubliclyavailableinformation,foreachoftheselectedcompanies,LionTreecalculatedvaluationmultiples,including(a)EVasamultipleofsalesforthelastreportedtwelve-month(whichwerefertoasLTM)periodandestimated2018and2019sales(withrespecttoestimates,basedonconsensusequityresearchanalystestimates),(b)EVasamultipleofEBITDAfortheLTMperiod,andforestimated2018and2019EBITDA(withrespecttoestimates,basedonconsensusequityresearchanalystestimates),(c)EVasamultipleofEBITDAfortheLTMperiod(adjustedtoincludestockbasedcompensationexpense),and(d)sharepriceasamultipleofestimated2018earningspershare(whichwerefertoasEPS)andestimated2019EPS(basedonconsensusequityresearchanalystestimates).

ThemultiplesoftheselectedcompanieswerecomparedtothecorrespondingmultiplesofPandoraderivedfrom(a)thePandoraScenario1aForecastsandPandoraScenario2Forecasts,and(bthePandoraScenario1aForecastsandPandoraScenario2Forecasts,ineachcaseadjustedtoincludetheNPVofPandora’sNOLsof$179.4millionand$194.0million,respectively,ascalculatedandprovidedbyPandora’smanagementusingacostofequityof10.5%.LionTreenotedthatPandora’sEBITDAandEPSmultipleswerenegativeoruncharacteristicallyhighbecausetheforecastsincludednoprofitabilityinthefiscalyearendingDecember31,2018andlimitedprofitabilityinthefiscalyearendingDecember31,2019,whereasthemajorityoftheselectedcompanieshadmeaningfulEBITDAandEPSmultiplesbecauseofsignificantestimatedprofitabilityinsuchperiods(basedonconsensusequityresearchanalystestimates).

ThemultiplesforeachselectedcompanyintheSatelliteRadio,DigitalMusic,TerrestrialRadioandInternetsubcategories,thelow,highandmedianmultiplesfortheselectedcompaniesinthe

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Internetsubcategory,andthemultiplesforPandora(atitsclosingpriceasofSeptember21,2018)aresetforthbelow:                                   

Selected Companies 

EV / LTM Sales

 

EV / 2018E Sales

 

EV / 2019E Sales

 

EV / LTM

EBITDA 

EV / 2018E

EBITDA 

EV / 2019E

EBITDA 

EV / (EBITDA—

SBC) 

Price / 2018E

EPS 

Price /2019EEPS

Satellite Radio                                   

SiriusXMHoldingsInc.   

  6.70x     

  6.50x     

  6.14x     

  17.3x     

  17.1x     

  15.9x     

  18.4x     

  28.3x     

 25.3x 

SiriusXMHoldingsInc.(Adj.forNPVofNOLs)(1)

   

  6.65x     

  6.45x     

  6.10x     

  17.1x     

  17.0x     

  15.7x     

  18.3x     

  28.3x     

 25.3x 

Digital Music                                   

Spotify(2)   

  5.66x     

  4.98x     

  3.87x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. Terrestrial Radio

                                   

Entercom   

  1.86x     

  1.88x     

  1.87x     

  6.9x     

  7.6x     

  7.5x     

  7.2x     

  6.5x     

  6.0x 

TownsquareMedia   

  1.75x     

  1.72x     

  1.70x     

  7.9x     

  7.7x     

  7.6x     

  8.0x     

  9.2x     

  9.0x 

Internet                                   

AlphabetInc.   

  5.89x     

  5.32x     

  4.46x     

  15.6x     

  14.5x     

  12.0x     

  19.1x     

  26.3x     

 24.7x 

eBayInc.   

  3.48x     

  3.24x     

  3.01x     

  9.9x     

  9.7x     

  9.1x     

  11.6x     

  19.5x     

 16.7x 

ExpediaGroup,Inc.   

  1.95x     

  1.85x     

  1.66x     

  12.3x     

  11.0x     

  9.6x     

  13.5x     

  30.9x     

 24.9x 

Facebook,Inc.   

  9.12x     

  7.94x     

  6.36x     

  14.1x     

  13.2x     

  11.2x     

  16.1x     

  20.6x     

 18.0x 

GrouponInc.   

  0.68x     

  0.71x     

  0.70x     

  7.2x     

  6.6x     

  6.0x     

  10.2x     

  19.1x     

 15.5x 

Netflix,Inc.(2)   

 12.08x     

 10.58x     

  8.50x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. Roku,Inc.(2)

   

 14.77x     

 12.41x     

  9.20x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. TripAdvisor,Inc.

   

  4.18x     

  4.02x     

  3.70x     

  19.0x     

  17.6x     

  16.0x     

  27.8x     

  35.2x     

 31.3x 

Twitter,Inc.   

  7.50x     

  6.95x     

  6.13x     

  19.8x     

  18.9x     

  16.1x     

  30.3x     

  47.7x     

 35.9x 

YelpInc.   

  4.33x     

  4.03x     

  3.44x     

  23.8x     

  20.4x     

  15.8x     

  69.4x     

  53.7x     

 47.5x 

Low(Internetonly)   

  0.68x     

  0.71x     

  0.70x     

  7.2x     

  6.6x     

  6.0x     

  10.2x     

  19.1x     

 15.5x 

High(Internetonly)   

 14.77x     

 12.41x     

  9.20x     

  23.8x     

  20.4x     

  16.1x     

  69.4x     

  53.7x     

 47.5x 

Median(Internetonly)   

  5.11x     

  4.68x     

  4.08x     

  14.9x     

  13.8x     

  11.6x     

  17.6x     

  28.6x     

 24.8x 

Pandora (2)(3)                                   

PandoraScenario1aForecasts   

  2.15x     

  2.04x     

  1.82x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. PandoraScenario2Forecasts

   

  2.15x     

  2.04x     

  1.74x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. PandoraScenario1aForecasts(Adj.forNPVofNOLs)(1)

   

  2.03x     

  1.92x     

  1.72x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. PandoraScenario2Forecasts(Adj.forNPVofNOLs)(1)

   

  2.02x     

  1.91x     

  1.63x     

  n.m.    

  n.m.    

  n.m.    

  n.m.    

  n.m.    

 n.m. 

(1) 

Includedforreferencepurposesonly.(2)

 

ExcludesnegativeoruncharacteristicallyhighEBITDAandEPSmultiplesresultingfromnegativeorlimitedprofitability.(3)

 

BasedontheclosingpricepershareofPandoracommonstockonSeptember21,2018.EV(adjustedfortheNPVofNOLs)asamultipleofsalesbasedontheimpliedvalueforeachshareofPandoracommonstockreflectingtheexchangeratioaresetforthbelow:

             

   

EV / LTM Sales

 

EV / 2018E Sales

 

EV / 2019E Sales

PandoraScenario1aForecasts(Adj.forNPVofNOLs)   

  2.23x    

  2.11x    

  1.89x PandoraScenario2Forecasts(Adj.forNPVofNOLs)

   

  2.23x    

  2.10x    

  1.80x AnalystPriceTargetAnalysisforSiriusXM.LionTreereviewedsharepricetargetsforsharesofSiriusXMcommonstockpreparedandpublished

by12equityresearchanalystsandknowntoLionTreeasofSeptember21,2018.ThesharepricetargetsforSiriusXMcommonstockrangedfrom$5.00to$8.50pershareandtheaveragesharepricetargetforSiriusXMcommonstockwas$6.95persharecomparedtotheclosingpricepershareofSiriusXMcommonstockof$6.98onSeptember21,2018.ThesharepricetargetspublishedbyequityresearchanalystsdonotnecessarilyreflectcurrentmarkettradingpricesforSiriusXMcommonstockandtheseestimatesaresubjecttouncertainties,includingfuturefinancialperformanceofSiriusXMandfuturemarketconditions.

StockLiquidityAnalysisforSiriusXM.LionTreeusedpubliclyavailableinformationtoreviewSiriusXM’saveragedailycommonstocktradingactivityforthe5day,30dayand90dayperiodsendingSeptember21,2018.Duringthoseperiods,SiriusXM’sdailyaveragecommonstocktrading

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activityrangedfromapproximately13.8millionsharestoapproximately20.9millionsharesperday.Basedonanestimated457.8millionsharesofSiriusXMcommonstocktobeissuedinconnectionwiththetransactions,theanalysisindicatedthatitwouldtakebetweenapproximately22and33tradingdaystosellallofthesharesofSiriusXMcommonstockissuedtotheholdersofPandoracommonstockonacombinedbasis.

EarningsPerformanceHistoryAnalysisforSiriusXM.LionTreeusedpubliclyavailableinformationtocompareSiriusXM’squarterlysalesfortheperiodbeginningonJuly1,2015andendingonJune30,2018totheaverageestimatedquarterlysalesofSiriusXMpreparedandreportedbyequityresearchanalystsoverthesameperiod.TheanalysisindicatedthatSiriusXM’sactualsalesresultsovertheperiodoutperformedestimatesofequityresearchanalystsby0.8%.Inaddition,LionTreeusedpubliclyavailableinformationtocompareSiriusXM’squarterlyEBITDAfortheperiodbeginningonJuly1,2015andendingonJune30,2018totheaverageestimatedquarterlyEBITDAofSiriusXMpreparedandreportedbyequityresearchanalystsoverthesameperiod.TheanalysisindicatedthatSiriusXM’sactualEBITDAresultsovertheperiodoutperformedestimatesofequityresearchanalystsby2.6%.

OtherMattersThePandoraboardofdirectorsselectedLionTreeasitsfinancialadvisorbecauseLionTreeisaninternationallyrecognizedinvestmentbanking

firmthathassubstantialexperienceintransactionssimilartothesetransactions,andbecauseofitssignificantpriorexperiencewiththeindustriesinwhichPandoraandSiriusXMoperate.Pursuanttoitsengagementletter,PandorawillpayLionTree$4.0millionforitsserviceswhich,subjecttothefollowingsentence,iscontingentupontheconsummationofthetransactions.PandorapaidLionTree$2.0millioninconnectionwithLionTree’sdeliveryofitsfairnessopinion,whichwillbecreditedagainstthefeedescribedintheprecedingsentenceupontheclosingofthetransactions.Inaddition,PandoramaypayLionTreeanadditionalfeeinitssolediscretioninconnectionwiththeconsummationofthetransactions.PandorahasalsoagreedtoreimburseLionTreeforcertainexpensesandtoindemnifyLionTree,itsaffiliates,andcertainrelatedpartiesagainstcertainliabilitiesandexpenses.

LionTreeanditsaffiliateshaveprovidedinvestmentbankingservicesandcapitalmarketsservicestoaffiliatesofSiriusXMandtheirrelatedentitiesorentitiesinwhichsuchaffiliatesorrelatedentitieshaveasignificantdirectorindirectinterest,unrelatedtotheproposedtransactions,forwhichLionTreeanditsaffiliatesreceived,andmayreceive,compensation,includinghavingactedas(a)financialadvisortoCharterCommunications,Inc.,LibertyGlobalplc,LionsGateEntertainmentCorp.,LiveNationEntertainment,Inc.andStarzinconnectionwithanumberoftransactionsand(b)co-managerinconnectionwithcertaindebtofferingsofsuchentities(includingCharterCommunications,Inc.andLiveNationEntertainment,Inc.).Inthepasttwoyears,LionTreehasreceivedapproximately$30.4millionincompensationintheaggregateforservicesprovidedtoaffiliatesofSiriusXMandtheirrelatedentitiesorentitiesinwhichsuchaffiliatesorrelatedentitieshaveasignificantdirectorindirectinterest.LionTreeanditsaffiliatesmayinthefutureprovidesuchservicestoPandora,SiriusXM,theirrespectiveaffiliatesandtheirrelatedentitiesorentitiesinwhichtheyhaveasignificantdirectorindirectinterest,andexpecttoreceivefeesfortherenderingoftheseservices.Inaddition,fromtimetotime,JohnC.Malone,whohassignificantownershipinLibertyMedia,whichinturnownsapproximately[• ]%oftheoutstandingSiriusXMcommonstockasof[• ],2018,thelastpracticabledatebeforethefilingofthisproxystatement/prospectus,andGregMaffei,whoisChairmanofPandoraandChairmanofSiriusXM,haveinvestedin,oralongsidewith,investmentvehiclesestablishedbyoneormoreofLionTree’saffiliates.OneormoreofLionTree’saffiliatesmayestablishinvestmentvehiclesinthefutureinwhichaffiliatesofSiriusXMmayinvest.InconnectionwiththebankruptcyproceedingsofiHeartMedia,Inc.,inwhichLibertyMediaownscertaindebtsecurities,LionTreeanditsaffiliateshavebeenengagedtoactasaspecialfinancialadvisortoiHeartMedia,Inc.forwhichLionTreeanditsaffiliatesmayreceivecompensation.Intheordinarycourseofbusiness,certainofLionTree’semployeesandaffiliatesmayholdortrade,fortheirownaccountsandtheaccountsoftheirinvestors,securitiesofPandoraandSiriusXMand,accordingly,mayatanytimeholdalongorshortpositioninsuchsecurities.Inthepasttwoyears,LionTreehasnotreceivedanycompensationforservicesprovidedtoPandora,

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excludingcompensationpaidortobepaidtoLionTreepursuanttoitsengagementinconnectionwiththetransactionsasdescribedintheprecedingparagraph.

The Sirius XM Board of Directors’ Reasons for the TransactionsTheSiriusXMboardofdirectorsdeterminedthatthemergeragreementandthetransactionscontemplatedthereby,areadvisableandinthebest

interestsofSiriusXManditsstockholders.Inreachingthisconclusion,theSiriusXMboardofdirectorsconsultedwithSiriusXM’smanagementanditslegalandfinancialadvisors,andconsideredavarietyoffactors,includingthematerialfactorsdescribedbelow.

Inreachingitsconclusionthatthemergeragreementandthetransactionscontemplatedthereby,includingthetransactions,areadvisableandinthebestinterestofSiriusXManditsstockholders,theSiriusXMboardofdirectorsconsideredanumberoffactorsthatitbelievessupportitsdetermination,including(notnecessarilyinorderofimportance):

• 

theexpectationthatthetransactionswillenhancethelong-termequityvalueforSiriusXMstockholders;•

 

thein-depthknowledgeofPandora’sbusiness,operations,financialconditionandprospectsdevelopedbySiriusXMasaninvestorinPandoraandthroughitsthreeseatsonthePandoraboardofdirectors;

• 

thecurrentandprospectivebusinessclimateinwhichPandoraoperatesandwillcontinuetooperatefollowingthecompletionofthetransactions;•

 

theopportunitytoimprovethecompetitivepositionofSiriusXMrelativetootherparticipantsintheindustryinwhichSiriusXMandPandoraoperate;

• 

theexpectationofrealizingmeaningfulsynergyopportunities;•

 

theopportunitytopursueintegrationopportunitiestoenablethecombinedcompanytooperatemoreefficiently,fundinnovationandenhancecustomervalue(includingbyleveragingSiriusXM’sexclusivecontentandprogrammingwithPandora’sfreead-supportedandsubscriptiontiersandtoexpandcapabilitiesacrossbothad-supportedsubscriptionservices,inandoutofthevehicle);

• 

thebeliefthattheintegrationofPandoracanbecompletedinatimelyandefficientmannerwithminimaldisruptiontoemployees;and•

 

thelikelihoodthatthetransactionswillbecompleted,includingafterconsiderationof,amongotherthings,(i)antitrustlawsandtherisksrelatedtocertainconditionsandrequirementsthatmaybeimposedbysuchregulatoryauthoritiestoobtainthenecessaryapprovalsandclearances,and(ii)thelikelihoodofthePandorastockholdersapprovingthemergeragreementproposal.

TheSiriusXMboardofdirectorsalsoconsideredanumberofuncertainties,risksandotherpotentiallynegativefactorsinitsdeliberationsconcerningthemergeragreementandthetransactionscontemplatedthereby.Thesefactorsinclude(notnecessarilyinorderofimportance):

• 

SiriusXM’sandPandora’srespectivemanagementhascommittedtimeandresourcestomattersrelatingtothetransactionsthatcouldotherwisehavebeendevotedtopursuingotherbeneficialopportunities;

• 

SiriusXMandPandoramayexperiencenegativereactionsfromthefinancialmarkets,includingnegativeimpactsontheirrespectivestockprices,orfromtheirrespectivecustomersandemployees;

• 

SiriusXMandPandoramayhavereputationalharmduetotheadverseperceptionofanyfailuretosuccessfullycompletethetransactions;•

 

thesubstantialcoststobeincurredbySiriusXMinconnectionwiththetransactionsandthemergeragreement,regardlessofwhetherthetransactionsareconsummated,andtheimpactofsuchcostsonSiriusXM’sfinancialposition;

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• 

thefactthatnotalloftheconditionstocompletionofthetransactions,includingthereceiptoftheapprovalofthePandorastockholdersandregulatoryapprovals,arewithintheparties’control;

• 

theriskthatthependencyofthetransactionscouldresultinthedisruptionofSiriusXM’sandPandora’srespectivebusiness,includingthepossiblediversionofmanagementandemployeeattentionawayfromday-to-dayoperationsandpotentialadverseeffectsonSiriusXM’sandPandora’sbusinessrelationships;

• 

theriskthatthebenefitsexpectedtobeobtainedfollowingthecompletionofthetransactionsmaynotbefullyortimelyrealized;and•

 

theotherrisksdescribedinthesectionsentitled“RiskFactors”beginningonpage[• ]and“CautionaryStatementConcerningForward-LookingStatements”beginningonpage[• ].

Afterconsideringthepositiveandnegativefactorsdescribedabove,theSiriusXMboardofdirectorsdeterminedthattheanticipatedbenefitsofthetransactionsoutweighedtherisksandcostsandapprovedthemergeragreementandthetransactionscontemplatedthereby.

TheforegoingdiscussionsummarizesthematerialinformationandfactorsconsideredbytheSiriusXMboardofdirectorsinitsconsiderationofthemergeragreementandthetransactionscontemplatedthereby.TheSiriusXMboardofdirectorsreachedtheunanimousdecisiontoapprovethemergeragreementandthetransactionscontemplatedtherebyinlightofthefactorsdescribedaboveandotherfactorsthateachmemberoftheSiriusXMboardofdirectorsfeltwereappropriate.Inviewofthevarietyoffactorsandthequalityandamountofinformationconsidered,theSiriusXMboardofdirectorsdidnotfinditpracticableto,anddidnot,makespecificassessmentsof,quantifyorotherwiseassignrelativeweightstothespecificfactorsconsideredinreachingitsdetermination.IndividualmembersoftheSiriusXMboardofdirectorsmayhavegivendifferentweightstodifferentfactors.

ThisexplanationofSiriusXM’sreasonsforthemergeragreementandthetransactions,andotherinformationpresentedinthissectionisforward-lookinginnatureand,accordingly,shouldbereadinlightofthefactorsdescribedunder“RiskFactors”beginningonpage[• ]and“CautionaryStatementConcerningForward-LookingStatements”beginningonpage[• ].

Interests of Pandora’s Directors and Executive Officers in the TransactionsMembersofthePandoraboardofdirectorsandPandora’sexecutiveofficershavevariousinterestsinthetransactionsthatmaybeinadditionto,or

differentfrom,theinterestsofPandora’sstockholders.YoushouldkeepthisinmindwhenconsideringtherecommendationofthePandoraboardofdirectors“FOR ”theadoptionofthemergeragreement.ThemembersofthePandoraboardofdirectorswereawareoftheseinterestsandconsideredthematthetimethatthePandoraboardofdirectors(otherthanMessrs.Frear,MaffeiandMeyer,whodidnotparticipateinanydeliberationsregardingthetransactions)approvedthemergeragreementandinmakingtheirrecommendationthatPandorastockholdersadoptthemergeragreement.Theseinterestsaredescribedbelow.

Certain AssumptionsExceptasotherwisespecificallynoted,forpurposesofquantifyingthepotentialpaymentsandbenefitsdescribedinthissection,thefollowing

assumptions,aswellasthosedescribedinthefootnotestothetableinthesectiontitled“—GoldenParachuteCompensation”below,wereused:•

 

therelevantpershareequityawardconsiderationis$9.27,whichistheaverageclosingmarketpricepershareofPandoracommonstockasquotedontheNYSEoverthefirstfivebusinessdaysfollowingthefirstpublicannouncementofthetransactionsonSeptember24,2018;

• 

theeffectivetimeisOctober19,2018,whichistheassumeddateoftheeffectivetimeofthetransactionssolelyforpurposesofthedisclosureinthissection(the“assumedeffectivetime”);

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• 

theemploymentofeachexecutiveofficerofPandoraisterminatedwithout“cause”orduetotheexecutiveofficer’sresignationfor“goodreason”(aseachsuchtermisdefinedintherelevantplan(s)and/oragreement(s)),ineachcase,immediatelyfollowingtheassumedeffectivetime;and

• 

alloutstandingandunvestedPandoraperformanceawardsarecancelledwithoutpaymentbasedontheassumedpershareequityawardconsiderationof$9.27.

Treatment of Outstanding Equity AwardsAsdescribedinmoredetailunder“TheMergerAgreement—PandoraStock-BasedAwards”beginningonpage[• ],attheclosingofthe

transactions,ingeneral,alloutstandingPandorastock-basedawards,includingstockoptionsandRSUawards,willconvertintoequityawardswithrespecttoSiriusXMcommonstock.Allsuchawardsthatarethenunvestedwillcontinuetovestfollowingtheeffectivetimeinaccordancewiththeterms,time-vestingschedule,exerciseconditions,settlementdateandotherprovisionsapplicabletosuchawardasofimmediatelypriortothetransactions.Thevestingofsuchawardswillaccelerateonaterminationoftheexecutiveofficer’semploymentwithout“cause”orbytheexecutiveofficerfor“goodreason”duringthetwelvemonthperiod(oreighteenmonthperiodinthecaseofPandora’schiefexecutiveofficer)followingtheeffectivetimepursuanttothetermsofthePandoraMedia,Inc.ExecutiveSeveranceandChangeofControlPolicy,whichwerefertoastheexecutiveseverancepolicy,describedbelow.Stockoptionswithaper-shareexercisepricethatisequaltoorgreaterthanthemergerconsiderationclosingvaluewillbecancelledwithoutpaymentattheclosingofthetransactions.Inaddition,iftheper-sharemergerconsiderationclosingvalueislessthan$20.00,thenoutstandingandunvestedPandoraperformanceawardswillalsobecancelledwithoutpaymentattheclosingofthetransactions.

Treatment of Outstanding Equity Awards—Summary Tables

Non-EmployeeDirectorsThefollowingtablesetsforththeoutstandingRSUawardsheldbyeachofPandora’snon-employeedirectorsasoftheassumedeffectivetimeand

theestimatedvalueofsuchawards.UnderthetermsoftheoutstandingRSUawardagreementsheldbyPandora’snon-employeedirectors,theoutstandingRSUswillvestupontheearliertooccurof(i)May21,2019,(ii)thedateofthe2019AnnualMeetingofStockholdersofPandoraand(iii)achangeofcontrol.Dependingonwhentheeffectivetimeoccurs,certainoftheseequityawardsmayvestand/orbecancelled,ineachcase,priortotheactualeffectivetimeinaccordancewiththeirtermsandindependentoftheoccurrenceofthetransactions.Allsharenumbershavebeenroundedtothenearestwholenumber.

Non-Employee Director Equity Summary Table         

Non-Employee Directors 

Number of RSUs (#) (1)

 

Value of RSUs ($) (1)

RogerFaxon   

  39,293    

  364,246 DavidJ.Frear

   

  39,293    

  364,246 JasonHirschhorn

   

  39,293    

  364,246 TimothyLeiweke

   

  39,293    

  364,246 MichaelM.Lynton

   

  39,293    

  364,246 GregoryB.Maffei

   

  39,293    

  364,246 JamesE.Meyer

   

  39,293    

  364,246 MickieRosen

   

  39,293    

  364,246 

(1) 

Pursuanttothetermsoftheunderlyingawardagreements,uponachangeofcontrol,theunvestedRSUawardsheldbyPandora’snon-employeedirectorswillvestinfull.TheamountsreportedasthevalueofRSUsrepresentthenumberofsharesofcommonstocksubjecttothePandoraRSUawardmultipliedby$9.27,whichistheaverageclosingmarketpricepershareof

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PandoracommonstockasquotedontheNYSEoverthefirstfivebusinessdaysfollowingthefirstpublicannouncementofthetransactionsonSeptember24,2018.

ExecutiveOfficersThefollowingtablesetsforththeoutstandingvestedstockoptionawardsheldbyeachofPandora’sexecutiveofficersasoftheassumedeffective

timeandtheestimatedvalueofsuchstockoptions.Noexecutiveofficerheldanyothervestedequityawardsasoftheassumedeffectivetime.Allsharenumbershavebeenroundedtothenearestwholenumber.

Executive Officer Vested Equity Awards Summary Table         

Executive Officers 

Number of Vested Stock Options (#) (1)

 

Value of Vested Stock Options ($) (1)

RogerLynch*   

  322,062    

  347,827 NaveenChopra

   

  75,718    

  — StephenBené

   

  27,916    

  — DavidGerbitz

   

  81,666    

  — AiméeLapic

   

  —    

  — ChristopherPhillips

   

  33,750    

  — KristenRobinson

   

  75,366    

  — JohnTrimble

   

  231,813    

  76,488 

* 

AlsoadirectorofPandora.(1)

 

Attheeffectivetime,eachoutstandingvestedstockoptionwillbeassumedandconvertedintoastockoptiontopurchasethenumberofsharesofSiriusXMcommonstock(roundeddowntothenearestwholeshare)determinedbymultiplying(i)thenumberofsharesofNewHoldingCompanycommonstocksubjecttothePandorastockoptionasofimmediatelypriortotheeffectivetimeby(ii)theexchangeratio,atanexercisepricepershareofSiriusXMcommonstock(roundeduptothenearestwholecent)equaltothequotientobtainedbydividing(x)thepershareexercisepriceforthesharessubjecttosuchPandorastockoptionasofimmediatelypriortotheeffectivetimeby(y)theexchangeratio,witheachconvertedSiriusXMstockoptionsubjecttothesamevestingscheduleandexerciseconditionsasineffectasofimmediatelypriortotheclosingofthetransactions;provided,that,eachPandorastockoptionthatisoutstandingasofimmediatelypriortotheeffectivetimeandhasanexercisepricepersharethatisequaltoorgreaterthanthemergerconsiderationclosingvaluewillbecancelledwithoutpaymentattheclosingofthetransactions.Theamountsreportedasthevalueofstockoptionsrepresent(i)thenumberofsharesofcommonstocksubjecttovestedPandorastockoptionsmultipliedby$9.27,whichistheaverageclosingmarketpricepershareofPandoracommonstockasquotedontheNYSEoverthefirstfivebusinessdaysfollowingthefirstpublicannouncementofthetransactionsonSeptember24,2018,less(ii)theaggregateexercisepricewithrespecttosuchvestedoptions.Thefollowingtablesetsforththeunvestedstockoptions,RSUs,andperformanceawardsheldbysuchexecutiveofficerasoftheassumedeffective

timeandtheestimatedvalueofsuchawards.Underthetermsoftheexecutiveseverancepolicy,intheeventofaterminationwithoutcauseorduetogoodreasonwithintwelvemonthsfollowingachangeofcontrol(eighteenmonthsinthecaseofPandora’sChiefExecutiveOfficer)theexecutiveofficer’soutstandingequityawardswillaccelerateinfull,subjecttoanyspecificvestingtreatmentprovidedforinaperformance-basedawardagreement.Dependingonwhentheeffectivetimeoccurs,certainoftheseequityawardsmayvest,beexercisedand/orcancelled,ineachcase,priortotheactualeffectivetimeinaccordancewiththeirtermsandindependentoftheoccurrenceofthetransactions.Allsharenumbershavebeenroundedtothenearestwholenumber.

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Executive Officer Unvested Equity Awards Summary Table                           

Executive Officers 

Number of Unvested Stock

Options (#) (1) 

Value of Unvested

Stock Options ($) (1)

 

Number of RSUs

(#) (2) 

Value of RSUs

($) (2) 

Number of Performance Awards (#) (3)

 

Value of Performance Awards ($) (3)

 

Estimated Total Value of Unvested

Equity Awards ($)

RogerLynch*   

  2,368,013    

  6,727,740    

  510,169    

  4,729,267    

  —    

  —    

 11,457,007 NaveenChopra

   

  308,570    

  818,320    

  771,518    

  7,151,972    

  —    

  —    

  7,970,292 StephenBené

   

  136,084    

  411,280    

  424,368    

  3,933,891    

  150,000    

  —    

  4,345,171 DavidGerbitz

   

  147,334    

  525,760    

  466,014    

  4,319,950    

  175,000    

  —    

  4,845,710 AiméeLapic

   

  172,000    

  729,280    

  499,002    

  4,625,749    

  —    

  —    

  5,355,029 ChristopherPhillips

   

  199,250    

  644,480    

  559,925    

  5,190,505    

  200,000    

  —    

  5,834,985 KristenRobinson

   

  113,334    

  381,600    

  404,993    

  3,754,285    

  150,000    

  —    

  4,135,885 JohnTrimble

   

  185,250    

  585,120    

  553,787    

  5,133,605    

  200,000    

  —    

  5,718,725 

* 

AlsoadirectorofPandora.(1)

 

Attheeffectivetime,eachunvestedstockoptionwillbeassumedandconvertedintoastockoptiontopurchasethenumberofsharesofSiriusXMcommonstock(roundeddowntothenearestwholeshare)determinedbymultiplying(i)thenumberofsharesofNewHoldingCompanycommonstocksubjecttothePandorastockoptionasofimmediatelypriortotheeffectivetimeby(ii)theexchangeratio,atanexercisepricepershareofSiriusXMcommonstock(roundeduptothenearestwholecent)equaltothequotientobtainedbydividing(x)thepershareexercisepriceforthesharessubjecttosuchPandorastockoptionasofimmediatelypriortotheeffectivetimeby(y)theexchangeratio,witheachconvertedSiriusXMstockoptionsubjecttothesamevestingscheduleandexerciseconditionsasineffectasofimmediatelypriortotheclosingofthetransactions;provided,that,eachPandorastockoptionthatisoutstandingasofimmediatelypriortotheeffectivetimeandhasanexercisepricepersharethatisequaltoorgreaterthanthemergerconsiderationclosingvaluewillbecancelledwithoutpaymentattheclosingofthetransactions.Asdiscussedfurtherbelow,underthetermsoftheexecutiveseverancepolicy,unvestedoptionswillaccelerateinfulluponaqualifyingterminationofemploymentfollowingachangeofcontrol.Theamountsreportedasthevalueofstockoptionsrepresent(i)thenumberofsharesofcommonstocksubjecttounvestedPandorastockoptionsmultipliedby$9.27,whichistheaverageclosingmarketpricepershareofPandoracommonstockasquotedontheNYSEoverthefirstfivebusinessdaysfollowingthefirstpublicannouncementofthetransactionsonSeptember24,2018,less(ii)theaggregateexercisepricewithrespecttosuchunvestedoptions.

(2) 

Asoftheeffectivetime,eachoutstandingandunvestedRSUawardwillbeassumedandconvertedintotherighttoreceiveanumberofsharesofSiriusXMcommonstock(roundeddowntothenearestwholeshare)determinedbymultiplying(i)thenumberofsharesofNewHoldingCompanycommonstocksubjecttothePandoraRSUawardasofimmediatelypriortotheeffectivetimeby(ii)theexchangeratio,witheachconvertedSiriusXMRSUsubjecttothesamevestingscheduleandsettlementdateasineffectasofimmediatelypriortotheclosingofthetransactions.Asdiscussedfurtherbelow,underthetermsoftheexecutiveseverancepolicy,RSUswillaccelerateinfulluponaqualifyingterminationofemploymentfollowingachangeofcontrol.TheamountsreportedasthevalueofRSUsrepresentthenumberofsharesofcommonstocksubjecttothePandoraRSUawardmultipliedby$9.27,whichistheaverageclosingmarketpricepershareofPandoracommonstockasquotedontheNYSEoverthefirstfivebusinessdaysfollowingthefirstpublicannouncementofthetransactionsonSeptember24,2018.

(3) 

Attheeffectivetime,eachoutstandingPandoraperformanceawardwillbecancelledbyPandorawithoutpaymentpursuanttothetermsofthemergeragreementandthetermsoftheapplicableawardagreement.

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Change of Control Severance Benefits for Executive OfficersPandoramaintainsanexecutiveseverancepolicypursuanttowhicheachexecutiveofficerisentitledtocertainpaymentsandbenefitsintheevent

ofaqualifyingterminationofemployment,whetherornotinconnectionwithachangeofcontrol.Severancepaymentsundertheexecutiveseverancepolicyareenhancedifthequalifyingterminationoccurswithinaspecifiedtimeperiodfollowingachangeofcontrol.TheseverancebenefitsundertheexecutiveseverancepolicyareinlieuofanyseverancebenefitspayabletoanexecutiveofficerunderanyotherexistingarrangementheorshemayhavewithPandora.

Undertheexecutiveseverancepolicy,eachexecutiveofficerofPandorawillbecomeeligible,subjecttohisorhercontinuedcompliancewithconfidentialityobligationsandtheexecutionandnon-revocationofageneralreleaseofclaimsinfavorofPandora,tothefollowingterminationpaymentsandbenefitsifhisorheremploymentwithPandoraisterminated(i)byPandoraforanyreasonotherthan“cause”or(ii)bytheexecutiveofficerfor“goodreason”(eachasdefinedintheexecutiveseverancepolicy),ineachcase,withintwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)afterachangeofcontrol:

• 

alumpsumcashpaymentinanamountequalto(i)twelvetimes(or,inthecaseofMr.Lynch,eighteentimes)theexecutiveofficer’smonthlybasesalaryplus(ii)theexecutiveofficer’sannualtargetbonusfortheyearoftermination(includingtheexecutiveofficer’s2018supplementalbonus);

• 

reimbursementforthemonthlycostofmaintaininghealthbenefitsfortheexecutiveofficer(andtheexecutiveofficer’sspouseanddependents)underPandora’sgrouphealthplanforaperiodoftwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)followingterminationofemployment,totheextenttheexecutiveofficerelectscontinuedhealthcoverageunderCOBRA;

• 

acceleratedvestingofanyoutstandingequityawardsheldbytheexecutiveofficerasofthedateoftermination,subjecttoanyspecificvestingtreatmentprovidedforinaperformance-basedawardagreement;

• 

outplacementandcareercontinuationservicesforuptothreemonthsfollowingthedateoftermination;and•

 

theextensionofthepost-terminationexerciseperiodofoutstandingstockoptionstotwelvemonthsfollowingthedateoftermination,iftheexecutiveofficersoelects.

Theexecutiveseverancepolicycontainsa“Section280Gcontingentcutback”provision,whichprovidesthat,ifthetotalpaymentstotheexecutiveofficerundertheexecutiveseverancepolicywouldexceedtheapplicablethresholdunderSection280GoftheCode,thenthosepaymentswillbereducedtotheapplicableSection280GthresholdtoavoidtheimpositionofexcisetaxesunderSection4999oftheCodeintheevent,andonlytotheextent,suchreductionwouldresultinabetterafter-taxresultfortheexecutiveofficer.

Undertheexecutiveseverancepolicy,“cause”generallymeans:(i)awillfulfailureorarefusaltocomplyinanymaterialrespectwiththereasonablepolicies,standardsorregulationsofPandora,providedthat,Pandoraprovidestheexecutiveofficera15daycureperiodtoremedysuchfailureorrefusal;(ii)unprofessional,unethicalorfraudulentconductorconductthatmateriallydiscreditsPandoraorismateriallydetrimentaltothereputation,characterorstandingofPandora;(iii)dishonestconductoradeliberateattempttodoaninjurytoPandora;(iv)anexecutiveofficer’smaterialbreachoftheexecutiveseverancepolicyoranybreachofconfidentialityorproprietaryinformationagreementswithPandora,including,withoutlimitation,theftofPandora’sproprietaryinformation;(v)anunlawfulorcriminalactwhichreflectsbadly,orwould,ifknown,reflectbadlyonPandora,inthereasonablejudgmentofthePandoraboardofdirectors;or(vi)repeatedabsencefromworkwithoutanapprovedleave,resultinginajobabandonment.

Undertheexecutiveseverancepolicy,inconnectionwithachangeofcontrol,“goodreason”generallymeanstheexecutiveofficer’sresignationfromemploymentaftertheoccurrenceofoneofthefollowingeventswithouttheexecutiveofficer’sconsent:(i)amaterialreductionoftheexecutiveofficer’sbasesalaryortargetannualincentivebonus;(ii)anyrequirementbyPandora(orits

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successor)thattheexecutiveofficerengageinanyillegalorunethicalconduct,aftertheexecutiveofficerhasgivenPandora30days’noticeandopportunitytocure;(iii)Pandora’sfailuretofullycurewithin30daysanymaterialbreachbyPandoraoftheexecutiveseverancepolicyorofanyothermaterialagreementbetweentheexecutiveofficerandPandora,ineachcasewhichtheexecutiveofficerhasnotifiedthePandoraboardofdirectorsinwriting;(iv)arelocationoftheexecutiveofficer’sprincipalplaceofemploymentbymorethan50miles;or(v)amaterialreductionintheexecutiveofficer’sdutiesandresponsibilitiesprovidedthatinanyevent,theexecutiveofficernotifiesPandoraoftheeventconstituting“goodreason”within90daysandgivesPandora30daystocure(totheextentcapableofcure),andthentheexecutiveofficerresignswithin30daysthereafter.

Forillustrativepurposesonly,basedontheassumptionsdescribedaboveunder“—CertainAssumptions,”itiscurrentlyestimatedthatPandora’sexecutiveofficerswouldbeentitledtoreceive,intheaggregate,approximately$6,128,119incashseverancebenefitsundertheexecutiveseverancepolicy.Seethesectiontitled“—GoldenParachuteCompensation”belowforanestimateoftheamountsthatwouldbecomepayabletoeachofPandora’snamedexecutiveofficersundertheexecutiveseverancepolicy.

New Employment ArrangementsAsofthedateofthisproxystatement/prospectus,noneofPandora’sexecutiveofficershasenteredintoanyagreement,arrangementor

understandingwithSiriusXMoranyofitssubsidiariesregardingemploymentwith,ortherighttopurchaseequityof,SiriusXM.Althoughnosuchagreement,arrangementorunderstandingexistsasofthedateofthisproxystatement/prospectus,certainofPandora’sexecutiveofficersmay,priortothecompletionofthetransactions,enterintonewarrangementswithSiriusXMoritssubsidiariesregardingemploymentwith,ortherighttopurchaseequityof,SiriusXMorcertainofitssubsidiaries.

Indemnification and InsurancePursuanttothetermsofthemergeragreement,membersofthePandoraboardofdirectorsandexecutiveofficersofPandorawillbeentitledto

certainongoingindemnificationandcoverageunderdirectors’andofficers’liabilityinsurancepoliciesfollowingthetransactions.Seethesectionentitled“TheMergerAgreement—IndemnificationandInsurance”onpage[• ].

Golden Parachute CompensationTheinformationsetforthinthetablebelowisintendedtocomplywithItem402(t)ofRegulationS-K,whichrequiresdisclosureofcompensation

thateachnamedexecutiveofficercouldreceivethatisbasedonorotherwiserelatestothetransactions.Thiscompensationisreferredtoas“goldenparachute”compensationbytheapplicableSECdisclosurerules,andinthissectionweusesuchtermtodescribethetransaction-relatedcompensationpayabletoPandora’snamedexecutiveofficers.Foradditionaldetailsregardingthetermsofthepaymentsandbenefitsdescribedbelow,seethediscussionabove.Thistransaction-relatedcompensationissubjecttoanon-bindingadvisoryvoteofPandorastockholders,assetforthinProposal2:TheAdvisoryCompensationProposal.Seethesectionentitled“Proposal2:TheAdvisoryCompensationProposal”beginningonpage[• ].

Theamountssetforthbelowareestimatesofamountsthatwouldbepayabletothenamedexecutiveofficersusingtheassumptionsdescribedaboveunder“—CertainAssumptions.”Theseestimatesarebasedonmultipleassumptionsthatmayormaynotactuallyoccur,includingassumptionsdescribedinthisproxystatement/prospectus.Someoftheassumptionsarebasedoninformationnotcurrentlyavailable,andasaresulttheactualamounts,ifany,tobereceivedbyanamedexecutiveofficermaydifferinmaterialrespectsfromtheamountssetforthbelow.Alldollaramountssetforthbelowhavebeenroundedtothenearestwholenumber.

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Golden Parachute Payments (1)                           

Name 

Cash ($) (2) 

Equity ($) (3) 

Pension/ NQDC (4)

 

Perquisites/ Benefits ($) (5)

 

Tax Reimbursement (6)

 

Other 

TotalRoger Lynch

                           

ChiefExecutiveOfficerandPresident

   

  1,172,671    

  11,457,007    

  —    

  29,110    

  —    

  —    

 12,658,788 Naveen Chopra

                           

ChiefFinancialOfficer   

  833,277    

  7,970,292    

  —    

  21,368    

  —    

  —    

  8,824,937 Aimée Lapic

                           

ChiefMarketingOfficer   

  698,667    

  5,355,029    

  —    

  21,368    

  —    

  —    

  6,075,064 Christopher Phillips

                           

ChiefProductOfficer   

  788,477    

  5,834,985    

  —    

  30,307    

  —    

  —    

  6,653,769 John Trimble

                           

ChiefRevenueOfficer   

  696,363    

  5,718,725    

  —    

  30,144    

  —    

  —    

  6,445,232 Tim Westergren (7)

                           

FormerChiefExecutiveOfficer   

  —    

  —    

  —    

  —    

  —    

  —    

  — Michael Herring (7)

                           

FormerPresidentandChiefFinancialOfficer

   

  —    

  —    

  —    

  —    

  —    

  —    

  — 

(1) 

Allamountsreflectedinthetableareattributableto“double-trigger”arrangements(i.e.,theamountsaretriggeredbythechangeofcontrolthatwilloccuruponcompletionofthetransactionsandpaymentisconditioneduponthenamedexecutiveofficer’squalifyingterminationofemploymentwithintwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)followingthechangeofcontrol).

(2) 

Amountsreflectcashseverancebenefitsundertheexecutiveseverancepolicythatwouldbepayableinalumpsum,assumingaterminationofemploymentbyPandorawithoutcauseorbythenamedexecutiveofficerforgoodreasonwithintwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)followingachangeofcontrol,andsubjectineachcasetothenamedexecutiveofficer’scontinuingcompliancewithconfidentialityobligationsandtheexecutionandnon-revocationofageneralreleaseofclaimsinfavorofPandora,asfollows:(i)twelvetimes(or,inthecaseofMr.Lynch,eighteentimes)thenamedexecutiveofficer’smonthlybasesalary(Mr.Lynch,$975,000,Mr.Chopra,$490,000,Ms.Lapic,$450,000,Mr.Phillips,$475,000,andMr.Trimble,$475,000)and(ii)thenamedexecutiveofficer’sannualtargetbonusandsupplementalbonusfor2018(Mr.Lynch,$197,671,Mr.Chopra,$343,277,Ms.Lapic,$248,667,Mr.Phillips,$313,477,andMr.Trimble,$221,363).

(3) 

Amountsreflecttheaccelerationvalueoftheunvestedequityawardsheldbyeachnamedexecutiveofficer,whichwillbeassumedbySiriusXMinconnectionwiththetransactionsheldbyeachofthenamedexecutiveofficers,whichassumptionandconversionwilloccurasdescribedinmoredetailaboveinthesectionentitled“—TreatmentofOutstandingEquityAwards”,andaresubjectto“double-trigger”accelerationasdescribedbelow.

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Double Trigger Equity AccelerationPursuanttothetermsoftheexecutiveseverancepolicy,subjectineachcasetothenamedexecutiveofficer’scontinuingcompliancewith

confidentialityobligationsandtheexecutionandnon-revocationofageneralreleaseofclaimsinfavorofPandora,intheeventanamedexecutiveofficer’semploymentisterminatedbyPandoraforanyreasonotherthancauseorbythenamedexecutiveofficerforgoodreasonineachcase,withintwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)afterachangeofcontrol,eachnamedexecutiveofficerisentitledtofullvestingofanyoutstandingequityawardsheldbythenamedexecutiveofficerasofthedateoftermination,subjecttoanyspecificvestingtreatmentprovidedforinaperformance-basedawardagreement.

                           

Named Executive Officers 

Number of Unvested

Stock Options (#)

 

Value of Unvested

Stock Options ($)

 

Number of RSUs (#)

 

Value of RSUs ($)

 

Number of Performance

Awards (#) 

Value of Performance

Awards ($) 

Estimated Value of Unvested

Equity Awards ($)

RogerLynch   

  2,368,013    

  6,727,740    

  510,169    

  4,729,267    

  —    

  —    

 11,457,007 NaveenChopra

   

  308,570    

  818,320    

  771,518    

  7,151,972    

  —    

  —    

  7,970,292 AiméeLapic

   

  172,000    

  729,280    

  499,002    

  4,625,749    

  —    

  —    

  5,355,029 ChristopherPhillips

   

  199,250    

  644,480    

  559,925    

  5,190,505    

  200,000    

  —    

  5,834,985 JohnTrimble

   

  185,250    

  585,120    

  553,787    

  5,133,605    

  200,000    

  —    

  5,718,725 TimWestergren

   

  —    

  —    

  —    

  —    

  —    

  —    

  — MichaelHerring

   

  —    

  —    

  —    

  —    

  —    

  —    

  — (4)

 

Asoftheassumedeffectivetime,noneofPandora’snamedexecutiveofficersparticipateinorhaveaccountbalancesinaqualifiedornon-qualifieddefinedbenefitplanoranon-qualifieddeferredcompensationplansponsoredormaintainedbyPandora.

(5) 

Amountsreflectpayments,asprovidedforundertheexecutiveseverancepolicy,inrespectof(i)reimbursementsforthemonthlycostofmaintaininghealthbenefitsunderCOBRAforthenamedexecutiveofficerunderPandora’sgrouphealthplan,basedontheinsurancepremiumsineffectasoftheassumedeffectivetime,foraperiodoftwelvemonths(or,inthecaseofMr.Lynch,eighteenmonths)followingterminationofemployment(Mr.Lynch,$24,110,Mr.Chopra,$16,368,Ms.Lapic,$16,368,Mr.Phillips,$25,307,andMr.Trimble,$25,144)and(ii)theestimatedcostofoutplacementandcareercontinuationservicesforuptothreemonthsfollowingterminationofemployment($5,000foreachofMr.Lynch,Mr.Chopra,Ms.Lapic,Mr.Phillips,andMr.Trimble).

(6) 

Noneofthenamedexecutiveofficersareeligibletoreceiveataxreimbursementbasedonorotherwiserelatedtothetransactions.TheexecutiveseverancepolicyprovidesthatthechangeofcontrolbenefitspayabletothenamedexecutiveofficersaresubjecttoreductiontoavoidtheimpositionofexcisetaxesunderSection4999oftheCodeintheeventsuchreductionwouldresultinabetterafter-taxresultforthenamedexecutiveofficer.Theamountsabovedonotreflectanypossiblereductionsunderthatprovision.

(7) 

PertheSECexecutivecompensationdisclosurerules,thisindividualisanamedexecutiveofficerofPandorawithrespectto2017.BecausethisnamedexecutiveofficerseparatedfromPandoraandceasedhavinganyoutstandingequityawardspriortotheassumedeffectivetime,thisnamedexecutiveofficerwillnotreceiveanytransaction-relatedcompensationinconnectionwiththetransactions.

Litigation Related to the TransactionsEightputativeclassactionlawsuitschallengingthetransactionshavebeenfiledtodateonbehalfofaputativeclassconsistingofPandora

stockholders,oneofwhichhasbeendismissedwithoutprejudice.OneindividuallawsuitchallengingthetransactionshasbeenfiledtodateonbehalfofanindividualPandorastockholder.

SixlawsuitshavebeenfiledintheUnitedStatesDistrictCourtfortheNorthernDistrictofCalifornia:(i)Kapelav.PandoraMedia,Inc.,etal.(CaseNumber4:18-cv-06847),filedonNovember12,2018(whichwerefertoastheKapelamatter);(ii)Knappv.PandoraMedia,Inc.,

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etal.(CaseNumber4:18-cv-06927),filedonNovember15,2018(whichwerefertoastheKnappmatter);(iii)Gallantv.PandoraMedia,Inc.,etal.(CaseNumber4:18-cv-06974),filedonNovember16,2018(whichwerefertoastheGallantmatter);(iv)Thompsonv.PandoraMedia,Inc.,etal.(CaseNumber4:18-cv-06973),filedonNovember16,2018(whichwerefertoastheThompsonmatter);(v)Dawsonv.PandoraMedia,Inc.,etal.(CaseNumber4:18-cv-07001),filedonNovember19,2018(whichwerefertoastheDawsonmatter)and(vi)Raulv.PandoraMedia,Inc.,etal.(CaseNumber3:18-cv-07167),filedonNovember27,2018(whichwerefertoastheRaulmatter).

TwolawsuitshavebeenfiledintheUnitedStatesDistrictCourtfortheDistrictofDelaware:(i)Sciabacucchiv.PandoraMedia,Inc.,etal.(CaseNumber1:18-cv-01807),filedonNovember15,2018(whichwerefertoastheSciabacucchimatter);and(ii)Staabv.PandoraMedia,Inc.,etal.(CaseNumber1:18-cv-01830),filedonNovember20,2018(whichwerefertoastheStaabmatter)(collectively,whichwerefertoastheremaininglawsuits).

OnematterwasfiledonNovember8,2018intheSuperiorCourtofCaliforniafortheCountyofAlameda:RichardIrvinv.PandoraMedia,Inc.,etal.(CaseNumberRG18927947)(whichwerefertoastheIrvinmatter).TheIrvinmatterhasbeendismissedwithoutprejudice.

TheKapelamatter,SciabacucchimatterandDawsonmattereachnamePandora,SiriusXM,MergerSubandthePandoradirectorsasdefendants.TheKnappmatter,Thompsonmatter,Gallantmatter,StaabmatterandRaulmattereachnamePandoraandthePandoradirectorsasdefendants.Eachofthelawsuits,exceptfortheGallantmatter,isbroughtbyapurportedholderorholdersofPandoracommonstock,bothindividuallyandonbehalfofaputativeclassofPandorastockholders.TheGallantmatterisbroughtbyanindividualholderofPandoracommonstock.Theremaininglawsuitsgenerallyallege,amongotherthings,violationsofSection14(a)and20(a)oftheExchangeActinconnectionwithdisclosurerelatedtothetransactionsinthisproxystatement/prospectus.TheKapelamatteralsoallegesthatthePandoradirectorsbreachedtheirfiduciarydutiestoPandorastockholdersbyagreeingtoatransactionwithinadequateandunfairconsiderationandpursuanttoaninadequateandunfairprocessandallegethatPandora,SiriusXMandMergerSubaidedandabettedthePandoradirectorsinthebreachoftheirfiduciaryduties.Theremaininglawsuitsseek,ingeneral,(i)injunctivereliefenjoining,preliminarilyandpermanently,thetransactions,(ii)intheeventthatthetransactionsareconsummated,rescissionoranawardofrescissorydamages,(iii)anawardofplaintiffs’costs,includingfeesandexpensesofattorneysandexpertsand(iv)additionaldisclosurerelatedtothetransactionsinthisproxystatement/prospectus.

Thecourtshavenotactedonanyoftheremaininglawsuits,andnoreliefhasbeengrantedontheseremaininglawsuitsasofthistime.Thedefendantsbelievethattheremaininglawsuitsarewithoutmeritandintendtodefendagainstthemvigorously.

Material U.S. Federal Income Tax ConsequencesThefollowingdiscussionsetsforththematerialU.S.federalincometaxconsequencesofthetransactionstoU.S.Holders(asdefinedbelow)of

Pandoracommonstock,and,subjecttothequalifications,assumptionsandlimitationscontainedherein,representstheopinionofSimpsonThacher&BartlettLLP,counseltoSiriusXM,andSidleyAustinLLP,counseltoPandora.ThisdiscussiondoesnotaddressanytaxconsequencesarisingundertheunearnedincomeMedicarecontributiontaxpursuanttotheHealthCareandEducationReconciliationActof2010orundertheForeignAccountTaxComplianceAct(Sections1471through1474oftheCode,theTreasuryregulationsandadministrativeguidancethereunderoranyintergovernmentalagreemententeredintoinconnectiontherewith),nordoesitaddressanytaxconsequencesarisingunderthelawsofanystate,localorforeignjurisdiction,orunderanyU.S.federallawsotherthanthosepertainingtotheincometax.

ThisdiscussionisbasedupontheCode,theregulationspromulgatedundertheCodeandcourtandadministrativerulingsanddecisions,allasineffectonthedateofthisproxystatement/prospectus.Theseauthoritiesmaychange,possiblyretroactively,andanychangecouldaffecttheaccuracyofthestatementsandconclusionssetforthinthisdiscussion.

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ThisdiscussionaddressesonlythoseU.S.HoldersofPandoracommonstockthatholdtheirsharesofPandoracommonstockandwillholdtheirsharesoftheNewHoldingCompanycommonstockasa“capitalasset”withinthemeaningofSection1221oftheCode(generally,propertyheldforinvestment).Further,thisdiscussiondoesnotaddressallaspectsofU.S.federalincometaxationthatmayberelevanttoyouinlightofyourindividualcircumstancesorthatmaybeapplicabletoyouifyouaresubjecttospecialtreatmentundertheU.S.federalincometaxlaws,includingifyouare:

• 

afinancialinstitution;•

 

atax-exemptorganization;•

 

arealestateinvestmenttrust;•

 

anScorporationorotherpass-throughentity(oraninvestorinanScorporationorotherpass-throughentity);•

 

aninsurancecompany;•

 

aregulatedinvestmentcompanyoramutualfund;•

 

a“controlledforeigncorporation”ora“passiveforeigninvestmentcompany”;•

 

adealerorbrokerinstocksandsecurities,orcurrencies;•

 

atraderinsecuritiesthatelectsmark-to-markettreatment;•

 

aholderofPandoracommonstocksubjecttothealternativeminimumtaxprovisionsoftheCode;•

 

aholderofPandoracommonstockthatreceivedPandoracommonstockthroughtheexerciseofanemployeestockoption,throughataxqualifiedretirementplanorotherwiseascompensation;

• 

aholderofPandoracommonstockthathasafunctionalcurrencyotherthantheU.S.dollar;•

 

aholderofPandoracommonstockthatholdsPandoracommonstockaspartofahedge,straddle,constructivesale,conversionorotherintegratedtransaction;

• 

apersonthatisnotaU.S.Holder;or•

 

aU.S.expatriate.Forpurposesofthisdiscussion,theterm“U.S.Holder”meansabeneficialownerofPandoracommonstockthatisforU.S.federalincometax

purposes(1)anindividualcitizenorresidentoftheUnitedStates,(2)acorporation(oranyotherentitytreatedasacorporationforU.S.federalincometaxpurposes)organizedinorunderthelawsoftheUnitedStatesoranystatethereofortheDistrictofColumbia,(3)atrustif(a)acourtwithintheUnitedStatesisabletoexerciseprimarysupervisionovertheadministrationofthetrustandoneormoreU.S.personshavetheauthoritytocontrolallsubstantialdecisionsofthetrustor(b)suchtrusthasmadeavalidelectiontobetreatedasaU.S.personforU.S.federalincometaxpurposesor(4)anestate,theincomeofwhichisincludibleingrossincomeforU.S.federalincometaxpurposesregardlessofitssource.

IfanentityoranarrangementtreatedasapartnershipforU.S.federalincometaxpurposesholdsPandoracommonstock,theU.S.federalincometaxconsequencesofthetransactionsofapartnerinsuchpartnership(orownerofsuchentity)generallywilldependonthestatusofthepartnerandtheactivitiesofthepartnership(orentity).AnyentitytreatedasapartnershipforU.S.federalincometaxpurposesthatholdsPandoracommonstock,andanypartnersinsuchpartnership,shouldconsulttheirowntaxadvisorswithrespecttothetaxconsequencesofthetransactionsintheirspecificcircumstances.

Thetaxconsequencesofthetransactionswilldependonyourspecificsituation.Youshouldconsultwithyourowntaxadvisorastothetaxconsequencesofthetransactionsinyourparticularcircumstances,includingtheapplicabilityandeffectofthealternativeminimumtaxandanystate,local,foreignorothertaxlawsandofchangesinthoselaws.

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Tax Consequences of the Holding Company Merger, the Conversion, the Merger and the Sirius XM Radio MergerThepartiesintendforeachof(i)theholdingcompanymergerandtheconversion,takentogether,and(ii)themergerandtheSiriusXMRadio

merger,takentogether,tobetreatedasa“reorganization”forU.S.federalincometaxpurposeswithinthemeaningofSection368(a)oftheCode.PandoraintendstoobtainanopinionfromSidleyAustinLLP,oranothernationallyrecognizedlawfirm,datedasoftheclosingdate,totheeffectthateachoftheholdingcompanymergerandtheconversion,takentogether,andthemergerandtheSiriusXMRadiomerger,takentogether,willineachcasequalifyforU.S.federalincometaxpurposesasa“reorganization”withinthemeaningofSection368(a)oftheCode.SiriusXMintendstoobtainanopinionfromSimpsonThacher&BartlettLLP,oranothernationallyrecognizedlawfirm,datedasoftheclosingdate,totheeffectthateachoftheholdingcompanymergerandtheconversion,takentogether,andthemergerandtheSiriusXMRadiomerger,takentogether,willineachcasequalifyforU.S.federalincometaxpurposesasa“reorganization”withinthemeaningofSection368(a)oftheCode.PandoraandSiriusXMhaveagreedthatifeitheroftheopinionsdescribedabovecannotbeobtained(forexample,becausetherehasbeenachangeinfactsandcircumstances,orbecauseSiriusXMorPandoraisunabletomakecustomaryrepresentations),thepartieswillrestructurethetransactionssothatitwillbetreatedforU.S.federalincometaxpurposesasataxablestocksalebythePandorastockholders.Theopinionswillbebasedonfacts,representations,assumptionsandlimitationssetforthorreferredtointheopinions,includingassumptionsregardingtheabsenceofchangesinexistingfacts,andthetruthandaccuracyofcertainrepresentationsandcovenantsmadeinrepresentationletters(the“RepresentationLetters”)tobeprovidedbyPandoraandSiriusXM(the“RepresentationsandAssumptions”)inconnectionwiththeconsummationoftheholdingcompanymerger,theconversion,themergerandtheSiriusXMRadiomerger.IfanyoftheRepresentationsandAssumptionsisinaccurateinanyway,oranyofthecovenantsarenotcompliedwith,theseopinionscouldbeadverselyaffected.NeitheroftheopinionsdescribedabovewillbebindingontheInternalRevenueServiceoranycourt.PandoraandSiriusXMhavenotsoughtandwillnotseekanyrulingfromtheInternalRevenueServiceregardinganymattersrelatingtothetransactions,andasaresult,therecanbenoassurancethattheInternalRevenueServicewillnotassert,orthatacourtwouldnotsustain,apositioncontrarytoanyoftheconclusionssetforthbelow.

Basedonthefactsandrepresentationssetforthorreferredtointheopinionsincludedasexhibitstothisproxystatement/prospectusfiledwiththeSEC,andsubjecttotheRepresentationsandAssumptions(andthereceiptoftheRepresentationLetters)andthequalifications,assumptionsandlimitationsstatedinthisproxystatement/prospectus,itistheopinionofSimpsonThacherandBartlettLLPandSidleyAustinLLPthateachof(i)theholdingcompanymergerandtheconversion,takentogether,and(ii)themergerandtheSiriusXMRadiomerger,takentogether,willineachcaseconstitutea“reorganization”withinthemeaningofSection368(a)oftheCodeinwhichcase,thematerialU.S.federalincometaxconsequencesofthetransactionswillbeasfollows.

YouwillnotrecognizegainorlossuponexchangingyourPandoracommonstockfortheNewHoldingCompanycommonstock.TheaggregatetaxbasisinthesharesoftheNewHoldingCompanycommonstockthatyoureceiveintheholdingcompanymergerwillequalyouraggregateadjustedtaxbasisinthesharesofPandoracommonstockthatyousurrender.YourholdingperiodforthesharesoftheNewHoldingCompanycommonstockthatyoureceiveintheholdingcompanymergerwillincludeyourholdingperiodforthesharesofthePandoracommonstockthatyousurrender.

YouwillnotrecognizegainorlossuponexchangingyourNewHoldingCompanycommonstockforSiriusXMcommonstock,exceptforanygainorlossrecognizedwithrespecttocashreceivedinlieuofafractionalshareofSiriusXMcommonstock.TheaggregatetaxbasisinthesharesofSiriusXMcommonstockthatyoureceivepursuanttothemerger(includinganyfractionalsharedeemedreceivedandsoldasdescribedbelow)willequalyouraggregateadjustedtaxbasisinthesharesoftheNewHoldingCompanycommonstockyousurrender.SuchaggregateadjustedtaxbasiswillbeallocatedbetweentheSiriusXMcommonstockyoureceiveandanyfractionalsharebasedontheirrelativefairmarketvalues.YourholdingperiodforthesharesofSiriusXMcommon

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stockthatyoureceivepursuanttothemerger(includinganyfractionalsharedeemedreceivedandsoldasdescribedbelow)willincludeyourholdingperiodforthesharesoftheNewHoldingCompanycommonstockyousurrender.

IfyoureceivecashinsteadofafractionalshareofSiriusXMcommonstock,youwillbetreatedashavingreceivedthefractionalshareofSiriusXMcommonstockpursuanttothetransactionsandthenashavingsoldthatfractionalshareofSiriusXMcommonstockforcash.Asaresult,youwillrecognizegainorlossequaltothedifferencebetweentheamountofcashreceivedandthebasisinyourfractionalshareofSiriusXMcommonstockassetforthabove.Thisgainorlossgenerallywillbecapitalgainorloss,andwillbelong-termcapitalgainorlossif,asoftheclosingdate,theholdingperiodforsuchfractionalshare(asdescribedabove)isgreaterthanoneyear.Long-termcapitalgainsofindividualsaregenerallyeligibleforreducedratesoftaxation.Thedeductibilityofcapitallossesissubjecttolimitations.

IfyouacquireddifferentblocksofPandoracommonstockatdifferenttimesordifferentprices,youshouldconsultyourtaxadvisorregardingthemannerinwhichgainorlossshouldbedeterminedinyourspecificcircumstances.

Tax Consequences of the Alternative TransactionIntheeventthatSiriusXMandPandorarestructurethetransactionstobetreatedasataxablestocksaleasnotedabove,youwillreceiveSiriusXM

commonstockandcashinlieuoffractionalsharesinexchangeforyourPandoracommonstock,andthematerialU.S.federalincometaxconsequencesofthetransactionwillbeasfollows.Additionally,thepartieswillreviseandrecirculatethisproxystatement/prospectusandthePandoraboardofdirectorswillresolicitapprovalofthePandorastockholdersinfavoroftherestructuredtransaction.

Youwillrecognizegainorlossinanamountequaltothedifferencebetween(x)thefairmarketvalueoftheSiriusXMcommonstockyoureceiveplustheamountofcashyoureceiveinlieuoffractionalsharesand(y)youradjustedtaxbasisinthesharesofPandoracommonstockyousurrender.GainorlosswillbecalculatedseparatelyforeachblockofPandoracommonstock(generallysharesacquiredatthesamecostinasingletransaction)surrendered.Suchgainorlossgenerallywillbecapitalgainorloss,andwillbelong-termcapitalgainorlossifyourPandoracommonstockhasbeenheldformorethanoneyearatthetimeofthealternativetransaction.Long-termcapitalgainsofnon-corporateU.S.Holdersmaybeeligibleforreducedratesoftaxation.Thedeductibilityofcapitallossesislimited.YougenerallywillhaveanaggregatetaxbasisinthesharesofSiriusXMcommonstockreceivedequaltothefairmarketvalueofsuchsharesasofthedatesuchsharesarereceived,andyourholdingperiodinsuchsharesofSiriusXMcommonstockwouldbeginonthedayfollowingthedateoftherestructuredtransaction.

Backup WithholdingIfyouareanon-corporateholderofPandoracommonstockyoumaybesubject,undercertaincircumstances,tobackupwithholdingatarateof

24%onanycashpaymentsyoureceive.Yougenerallywillnotbesubjecttobackupwithholding,however,ifyou:•

 

furnishacorrecttaxpayeridentificationnumber,certifythatyouarenotsubjecttobackupwithholdingonthesubstituteFormW-9orsuccessorformincludedintheletteroftransmittalyouwillreceiveandotherwisecomplywithalltheapplicablerequirementsofthebackupwithholdingrules;or

• 

provideproofacceptabletoSiriusXMandtheexchangeagentthatyouareotherwiseexemptfrombackupwithholding.Anyamountswithheldunderthebackupwithholdingrulesarenotanadditionaltaxandwillgenerallybeallowedasarefundorcreditagainstyour

U.S.federalincometaxliability,providedyoutimelyfurnishtherequiredinformationtotheInternalRevenueService.All holders of Pandora common stock are urged to consult their tax advisors with respect to the tax consequences of the transactions in

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requirements, the applicability and effect of the alternative minimum tax, any federal tax laws other than those pertaining to income tax(including estate and gift tax laws), and any state, local, foreign or other tax laws.

Antitrust Approvals Required for the Transactions

GeneralThetransactionsaresubjecttotheexpirationorterminationofthewaitingperiod(andanyextensionsthereof)undertheHSRActandthereceiptof

approvalsunderthecompetitionlawsofGermanyandAustria.Nootherregulatoryapprovalsarerequiredforthetransactions.

HSR ActThetransactionsaresubjecttotherequirementsoftheHSRAct,whichprovidesthatcertaintransactionsmaynotbecompleteduntilrequired

informationandmaterialsarefurnishedtotheAntitrustDivisionoftheDepartmentofJustice,whichwerefertoastheDOJ,andtheFederalTradeCommission,whichwerefertoastheFTC,anduntilcertainwaitingperiodrequirementshavebeensatisfied.SiriusXM’sultimateparententityandPandorafiledNotificationandReportFormswiththeDOJandtheFTConOctober18,2018,whichwerefertoastheHSRNotification.Aspartoftheparties’continuingcooperationwiththeDOJandinordertoprovidetheDOJwithadditionaltimeforreview,onNovember19,2018,PandoraandSiriusXM’sultimateparententityvoluntarilywithdrewtheirrespectiveHSRNotificationsandre-filedtheirrespectiveHSRNotificationsonNovember21,2018,whichwerefertoastheRefiledNotification.ThewaitingperiodundertheHSRActwithrespecttotheRefiledNotificationisscheduledtoexpireonDecember21,2018,unlessextendedbyarequestforfurtherinformationorterminatedearlier.

TheDOJ,theFTC,stateattorneysgeneralandothersmaychallengethetransactionsonantitrustgroundsaftertheexpirationorterminationoftheapplicablewaitingperiod.Accordingly,atanytimebeforeorafterthecompletionofthetransactions,anyoftheDOJ,theFTCorotherscouldtakeactionundertheantitrustlaws,includingseekingtoenjointhecompletionofthetransactionsorpermittingcompletionsubjecttoregulatoryconcessionsorconditions.NeitherSiriusXMnorPandorabelievesthatthetransactionsviolateU.S.antitrustlaws,buttherecanbenoassurancethatachallengetothetransactionsonantitrustgroundswillnotbemadeor,ifsuchachallengeismade,thatitwouldnotbesuccessful.

AustriaThetransactionsaresubjecttothereceiptofapprovalundertheAustrianCartelAct(Kartellgesetz),whichprovidesthatcertaintransactionsmay

notbecompleteduntilrequiredinformationandmaterialsarefurnishedtotheFederalCompetitionAuthority(whichwerefertoastheFCA)andtheFederalCartelProsecutor(whichwerefertogetherwiththeFCAtoastheOfficialParties),anduntilcertainwaitingperiodrequirementshavebeensatisfied.SiriusXMfiledamergernotificationwiththeFCAonOctober18,2018.Thestandard(PhaseI)waitingperiodexpiredonNovember15,2018at11:59p.m.,CentralEuropeanTime.

GermanyThetransactionsaresubjecttothereceiptofapprovalunderthecompetitionlawofGermany(GermanActagainstRestraintsofCompetition),

whichprovidesthatcertaintransactionsmaynotbecompleteduntilrequiredinformationandmaterialsarefurnishedtotheFederalCartelOffice,whichwerefertoastheFCO,anduntilcertainwaitingperiodrequirementshavebeensatisfied.SiriusXMfiledamergernotificationwiththeFCOonOctober17,2018.Thestandard(PhaseI)waitingperiodexpiredonNovember19,2018at11:59p.m.,CentralEuropeanTime.

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Accounting TreatmentInaccordancewithcurrentaccountingguidance,thetransactionswillbeaccountedforasabusinesscombinationusingtheacquisitionmethodof

accounting.Asaresult,therecordedassetsandliabilitiesofSiriusXMwillbecarriedforwardattheirrecordedamounts,thehistoricaloperatingresultswillbeunchangedforthepriorperiodsbeingreportedonandtheassetsandliabilitiesofPandorawillbeadjustedtofairvalueatthedateoftheclosingofthetransactions.Inaddition,allidentifiedintangibleassetswillberecordedatfairvalueandincludedaspartofthenetassetsacquired.Totheextentthatthepurchaseprice,atfairvalue,exceedsthefairvalueofthenetassetsincludingidentifiedintangibleassetsofPandoraonthedatethetransactionsarecompleted,suchamountwillbereportedasgoodwill.Inaccordancewithcurrentaccountingguidance,goodwillwillnotbeamortizedbutwillbeevaluatedforimpairmentannually.Identifiedfinitelifeintangibleassetswillbeamortizedovertheirestimatedlives.Further,theacquisitionmethodofaccountingwillresultintheoperatingresultsofPandorabeingincludedintheoperatingresultsofSiriusXMbeginningfromthedateofcompletionofthetransactions.

Public Trading MarketsSiriusXMcommonstockislistedonNASDAQunderthesymbol“SIRI.”PandoracommonstockislistedontheNYSEunderthesymbol“P.”

Uponcompletionofthetransactions,PandoracommonstockwillbedelistedfromtheNYSEandthereafterwillbederegisteredundertheExchangeActandPandorawillnolongerberequiredtofileperiodicreportswiththeSECwithrespecttothePandoracommonstock.TheSiriusXMcommonstockissuableinthetransactionswillbelistedonNASDAQ.

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THE MERGER AGREEMENTThefollowingisasummaryofthematerialprovisionsofthemergeragreement,acopyofwhichisattachedtothisdocumentasAnnexAandwhich

isincorporatedbyreferenceintothisproxystatement/prospectus.Thissummarydoesnotpurporttobecompleteandmaynotcontainalloftheinformationaboutthemergeragreementthatisimportanttoyou.Weencourageyoutocarefullyreadthemergeragreementinitsentirety,astherightsandobligationsofthepartiestheretoaregovernedbytheexpresstermsofthemergeragreementandnotbythissummaryoranyotherinformationcontainedinthisproxystatement/prospectus.

Structure of the Transactions and Effect of the Transactions on Pandora’s Capital StockAttheclosing:•

 

Theholdingcompanymergerwillbeconsummatedand,asaresultthereof,(i)eachshareofPandoracommonstock(otherthanthoseownedbyPandora(includingsharesheldastreasurystockorotherwise),whichwillbeautomaticallycancelledandwillceasetoexistandnoconsiderationwillbedeliveredinexchangetherefor)willbeconvertedintooneshareofNewHoldingCompanycommonstockand(ii)eachshareofPandorapreferredstockwillbeconvertedintooneshareofNewHoldingCompanypreferredstock,havingthesametermsandconditionsasimmediatelypriortotheeffectivetimeoftheholdingcompanymerger;o

 

allstockcertificateswhichrepresentedsharesofPandoracommonstockpriortotheholdingcompanymergerandallsharesofPandoracommonstockheldinbook-entryformpriortotheholdingcompanymergerwill,ineachcase,followingtheholdingcompanymerger,representtheapplicablesharesofNewHoldingCompanycommonstockintowhichsuchsharesofPandoracommonstockwereconverted;

• 

immediatelyfollowingtheholdingcompanymerger,Pandorawillbeconvertedintoalimitedliabilitycompany(withitssolememberbeingNewHoldingCompany);

• 

immediatelyfollowingsuchconversion,themergerwillbeconsummatedand,asaresultthereof,(i)eachshareofNewHoldingCompanycommonstock(otherthananysharesofNewHoldingCompanycommonstockheldbyanysubsidiaryofSiriusXM,whichwillremainissuedandoutstandingandunaffectedbythemerger)willbeconvertedintotherighttoreceivethemergerconsiderationand(ii)eachshareofNewHoldingCompanypreferredstockwillremainissuedandoutstandingandunaffectedbythemerger;o

 

allstockcertificateswhichrepresentedsharesofPandoracommonstockpriortotheholdingcompanymergerandallsharesofPandoracommonstockheldinbook-entryformpriortotheholdingcompanymergerwill,ineachcase,followingthemerger,ceasetohaveanyrightswithrespectthereto,excepttheright,subjecttocompliancewithproceduressetforthinthemergeragreement,toreceivethemergerconsiderationwithrespecttotheapplicablesharesofNewHoldingCompanycommonstockintowhichsuchsharesofPandoracommonstockwereconverted;and

• 

immediatelyfollowingthemerger,theSiriusXMRadiomergerwillbeconsummated,whereupontheseparateexistenceofNewHoldingCompanywillceaseandPandorawillbecomeawholly-ownedsubsidiaryofSiriusXMRadioand,asaresultthereof,(i)eachshareofSiriusXMRadiocapitalstockwillremainissuedandoutstandingandunaffectedbytheSiriusXMRadiomergerand(ii)eachshareofcapitalstockofNewHoldingCompany(includingthesharesofNewHoldingCompanypreferredstock)willbecancelledfornoconsideration.

Certificate of Incorporation; BylawsImmediatelypriortotheholdingcompanymerger,thecertificateofincorporationofNewHoldingCompanywillbeamendedandrestatedinits

entiretytobethesame(exceptforthenameandincorporatorofthecompany)asthecertificateofincorporationofPandorathenineffectandthebylawsofNewHoldingCompanywillbeamendedandrestatedinitsentiretytobethesame

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(exceptforthenameandincorporatorofthecompany)asthebylawsofPandorathenineffect.Byvirtueoftheholdingcompanymerger,thecertificateofincorporationofPandorawillbeamendedandrestatedsoastoreadinitsentiretyassetforthinAnnexAofthemergeragreementandthebylawsofPandorawillbeamendedandrestatedsoastoreadinitsentiretyassetforthinAnnexBofthemergeragreement.

UpontheconversionofPandoratoalimitedliabilitycompany,PandoraandNewHoldingCompany(asitssolemember)willenterintoalimitedliabilitycompanyagreementwithcustomarytermsforasinglemember,member-managedlimitedliabilitycompanywithindemnityandexculpationprovisionsinaccordancewiththetermsofthemergeragreement.

Byvirtueofthemerger,thecertificateofincorporationofNewHoldingCompanywillbeamendedandrestatedsoastoreadinitsentirety(exceptforthenameandincorporatorofthecompany)assetforthinAnnexAofthemergeragreementandthebylawsofNewHoldingCompanywillbeamendedandrestatedsoastoreadinitsentirety(exceptforthenameandincorporatorofthecompany)assetforthinAnnexBofthemergeragreement.

TherewillbenochangetothecertificateofincorporationorbylawsofSiriusXMRadioasaresultoftheSiriusXMRadiomerger.

Directors and OfficersThedirectorsandofficersofPandoraimmediatelypriortotheholdingcompanymergerwillbethedirectorsandofficersofPandoraaftersuch

mergeruntiltheconversionofPandoratoalimitedliabilitycompany.ThedirectorsandofficersofPandoraimmediatelypriortotheholdingcompanymergerwillbethedirectorsandofficersofNewHoldingCompanyaftersuchmergeruntiltheSiriusXMRadiomerger.ThedirectorsandofficersofSiriusXMRadioimmediatelypriortotheSiriusXMRadiomergerwillbethedirectorsandofficersofSiriusXMRadioimmediatelyaftertheSiriusXMRadiomerger,untiltheearlieroftheirdeath,resignationorremovaloruntiltheirrespectivesuccessorsaredulyelectedandqualified,asthecasemaybe.

When the Transactions Will CloseUnlessSiriusXMandPandoraagreeonanotherdate,theclosingofthetransactionswilltakeplacenolaterthanthesecondbusinessdayfollowing

thesatisfactionorwaiveroftheclosingconditionssetforthinthemergeragreement(otherthanthoseconditionsthatbytheirnaturearetobesatisfiedattheclosing,butsubjecttothesatisfactionofsuchconditionsorwaiverofthoseconditions).

Attheclosing,PandorawillfilewiththeSecretaryofStateoftheStateofDelawareacertificateofmergerfortheholdingcompanymerger,whichwillbecomeeffectiveatthetimethatsuchcertificatehasbeenfiledoratsuchlatertimeontheclosingdateasspecifiedbyPandoraandSiriusXMinsuchcertificate.TheconversionofPandoraintoalimitedliabilitycompanywillbeeffectedimmediatelyfollowingtheeffectivenessoftheholdingcompanymergerbythefilingofacertificateofconversionwiththeSecretaryofStateoftheStateofDelaware.ThemergerwillbeeffectedimmediatelyfollowingtheeffectivenessoftheconversionofPandoraintoalimitedliabilitycompanybythefilingofacertificateofmergerforthemergerwiththeSecretaryofStateoftheStateofDelaware.TheSiriusXMRadiomergerwillbeeffectedimmediatelyfollowingtheeffectivenessofthemergerbythefilingofacertificateofmergerfortheSiriusXMRadiomergerwiththeSecretaryofStateoftheStateofDelaware.

Payment of Merger ConsiderationPriortotheclosing,SiriusXMwillenterintoanexchangeagreement(whichwillbereasonablyacceptabletoPandora)withSiriusXM’stransfer

agentoranothernationallyrecognizedfinancialinstitutiondesignatedbySiriusXMandreasonablyacceptabletoPandora,whichwerefertoastheexchangeagent.

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Attheclosing,SiriusXMwilldepositorcausetobedepositedwiththeexchangeagentforthebenefitoftheholdersofsharesofNewHoldingCompanycommonstockimmediatelyaftertheholdingcompanymerger(whoarethesameastheholdersofPandoracommonstockimmediatelypriortosuchmerger):(i)thenumberofsharesofSiriusXMcommonstock(inbook-entryform)issuableasmergerconsiderationand(ii)anamountofcashsufficienttopaytheaggregatecashinlieuoffractionalsharesofSiriusXMcommonstock.

ThecashdepositedwiththeexchangeagentmaybeinvestedbytheexchangeagentasdirectedbySiriusXM;providedthatnosuchinvestmentorlossthereonwillaffecttheamountspayableinconnectionwiththetransactions.Ifforanyreason(includinglosses)thecashheldbytheexchangeagentisinsufficienttofullysatisfyallofsuchcashpaymentobligations,SiriusXMwillpromptlydepositwiththeexchangeagenttheamountofcashrequiredtofullysatisfysuchcashpaymentobligations.

Theexchangeagentwillmail,assoonasreasonablypracticableaftertheclosing,toeachholderofrecordofsharesofPandoracommonstockthatwererepresentedbyastockcertificateimmediatelypriortotheclosingaletteroftransmittalandinstructionsforuseineffectingthesurrenderofsuchcertificatesinexchangeforthemergerconsideration.

AnyholderofsharesofPandoracommonstockthatwereregisteredinbook-entryformimmediatelypriortotheclosingwillnotberequiredtodeliverastockcertificate,executedletteroftransmittalorotherdocumentsinordertoreceivethemergerconsiderationthatsuchholderisentitledtoreceiveinrespectofsuchshares(unlesstheexchangeagentreasonablyrequiresaletteroftransmittalorotherdocuments).

UntilaformerholderofsharesofPandoracommonstockproperlysurrendersitsstockcertificate(s)orexchangesitsbook-entryshares,asapplicable,nodividendsorotherdistributionswithrespecttoSiriusXMcommonstockthatsuchformerholderofsharesofPandoracommonstockisentitledtoreceiveasmergerconsiderationwillbepaidtosuchformerholderofsharesofPandoracommonstock.Uponthepropersurrenderofsuchcertificate(s)orexchangeofsuchbook-entryshares,suchformerholderofsharesofPandoracommonstockwillbeentitledtoreceiveanydividendsorotherdistributionswithrespecttosuchsharesofSiriusXMcommonstockwitharecorddateaftertheclosingandpaymentdatepriortothetimeeachsuchcertificatewassurrenderedorsuchbook-entrysharesexchanged.

Fractional SharesNofractionalshares(orscriprepresentingfractionalshares)ofSiriusXMcommonstockwillbeissuedinconnectionwiththemerger.Eachholder

ofsharesofPandoracommonstockwhowouldotherwisehavebeenentitledtoreceiveafractionofashareofSiriusXMcommonstock(afteraggregatingallsharesofSiriusXMcommonstockthatsuchpersonisentitledtoreceive)willreceive,inlieuofsuchfractionofashare,cash(withoutinterest)inanamountdeterminedbymultiplying(i)suchfractionofashare(roundedtothenearestone-thousandthwhenexpressedindecimalform)by(ii)anamountequaltotheaverageofthevolumeweightedaveragepricepershare,roundedtofourdecimalplaces(withamounts0.00005andaboveroundedup),ofSiriusXMcommonstockonNASDAQ(asreportedbyBloombergL.P.or,ifnotreportedtherein,inanotherauthoritativesourcemutuallyselectedbySiriusXMandPandora)forthefiveconsecutivetradingdayperiodthatendsonthesecondcompletetradingdayendingimmediatelypriortothedateonwhichtheclosingoccurs,whichwerefertoastheSiriusXMmeasurementprice.

Pandora Stock-Based AwardsAttheeffectivetimeoftheholdingcompanymerger,thePandorastockoptions,thePandoraRSUsandthePandoraperformanceawards

outstandingasofimmediatelypriortheretowillbeadjustedtogiveeffecttotheconversionofsharesofPandoracommonstockintosharesofNewHoldingCompanycommonstockandthentheconversionofsharesofNewHoldingCompanycommonstockintosharesofSiriusXMcommonstockasdescribedabove.

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Stock OptionsAttheeffectivetimeofthemerger,eachPandorastockoptionthatisoutstandingimmediatelypriortotheclosingwill,withoutanyfurtheraction

onthepartofanyholderthereof,beassumedandconvertedintoaconvertedSiriusXMoption.EachconvertedSiriusXMoptionwillhavethesamevestingscheduleandpost-terminationexerciseperiodasthePandorastockoptionasineffect

asofimmediatelypriortotheclosingandwillbesubjecttoallofthematerialtermsandconditionsofthePandorastockincentiveplanunderwhichthePandorastockoptionwasoriginallygrantedandtheapplicablegrantagreement,totheextentadministrativelypracticable.Notwithstandingtheforegoing,eachPandorastockoptionthatis(x)outstandingasofimmediatelypriortotheclosingand(y)hasanexercisepricepersharethatisequaltoorgreaterthantheproductoftheexchangeratioandtheSiriusXMmeasurementprice,whichwerefertoasthemergerconsiderationclosingvalue,willbecancelledwithoutpaymentthereforandwillhavenofurtherforceoreffect.

Restricted Stock UnitsAttheeffectivetimeofthemerger,eachPandoraRSUthatisoutstandingimmediatelypriortotheclosing,will,withoutanyfurtheractiononthe

partofanyholderthereof,beassumedandconvertedintoaconvertedSiriusXMRSU.EachconvertedSiriusXMRSUwillhavethesamevestingscheduleandsettlementdateasthePandoraRSUandwillbesubjecttoallofthe

materialtermsandconditionsofthePandorastockincentiveplanunderwhichthePandoraRSUwasoriginallygrantedandtheapplicablegrantagreement,totheextentadministrativelypracticable.

Performance AwardsAttheeffectivetimeofthemerger,ifthemergerconsiderationclosingvalueislessthan$20.00then,eachPandoraperformanceawardthatis

outstandingimmediatelypriortotheclosingwill,withoutanyfurtheractiononthepartofanyholderthereof,inaccordancewiththetermsoftheapplicablegrantagreement,becancelledbyPandoraandforfeited.Ifthemergerconsiderationclosingvalueequalsorexceeds$20.00then,eachPandoraperformanceawardthatisoutstandingimmediatelypriortotheclosing,will,withoutanyfurtheractiononthepartofanyholderthereof,(x)beconvertedintoatime-vestingawardwhichwillvestinaccordancewiththevestingschedulesetforthintheapplicablegrantagreementand(y)beassumedandconvertedintoaconvertedSiriusXMperformanceaward.EachconvertedSiriusXMperformanceawardwillhavethesametime-vestingscheduleandsettlementdateasthePandoraperformanceawardandwillbesubjecttoallofthematerialtermsandconditionsofthePandorastockincentiveplanunderwhichthePandoraRSUwasoriginallygrantedandtheapplicablegrantagreement,totheextentadministrativelypracticable.

Employee Stock Purchase PlanAsofthedateofthemergeragreement,nonewOfferingPeriod(asdefinedintheEmployeeStockPurchasePlan,whichwerefertoastheESPP)

orPurchasePeriod(asdefinedintheESPP)willcommence.Priortotheclosing,Pandorawill(x)causeanyPurchasePeriodthatwouldotherwisebeoutstandingattheclosing,ifany,tobeterminatednolaterthanonebusinessdaypriortotheclosingdate;(y)makeanyprorataadjustmentsthatmaybenecessarytoreflecttheshortenedOfferingPeriod,butotherwisetreatsuchshortenedOfferingPeriodasafullyeffectiveandcompletedPurchasePeriodforallpurposespursuanttotheESPP;and(z)causetheexercise(asofnolaterthanonebusinessdaypriortotheclosingdate)ofeachoutstandingpurchaserightpursuanttotheESPP.Onsuchexercisedate,ifany,PandorawillapplythefundscreditedasofsuchdatepursuanttotheESPPwithineachparticipant’spayrollwithholdingaccounttothepurchaseofwholesharesofPandoracommonstockinaccordancewiththetermsoftheESPPandwillcausetheremainingaccumulatedbutunusedpayrolldeductionstobedistributedtotherelevantparticipantswithoutinterestaspromptlyaspracticablefollowingsuchexercisedate.Sharesof

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PandoracommonstockpurchasedundertheESPPwillbeconvertedtosharesofSiriusXMcommonstock,asdiscussedabove.Immediatelypriortoandeffectiveasoftheclosing,PandorawillterminatetheESPP.

Registration of Converted AwardsNotlaterthanthedateonwhichtheclosingoccurs,SiriusXMwillhaveonfilewiththeSECaregistrationstatementonanappropriateform,ora

post-effectiveamendmenttoaregistrationstatementpreviouslyfiledundertheSecuritiesAct,withrespecttothesharesofSiriusXMcommonstocksubjecttotheconvertedSiriusXMoptions,theconvertedSiriusXMRSUsand,ifapplicable,theconvertedSiriusXMperformanceawardsandwilldistributeaprospectusrelatingtosuchregistrationstatement.

Representations and Warranties; Material Adverse EffectThemergeragreementcontainsrepresentationsandwarrantiesofPandora,subjecttocertainexceptionsintheconfidentialdisclosureletter

deliveredinconnectionwiththemergeragreementandcertainofPandora’spublicfilingswiththeSEC,asto,amongotherthings:•

 

Pandora’sanditssubsidiaries’corporateexistenceandpower;•

 

capitalization;•

 

ownershipofPandora’ssubsidiaries;•

 

corporateauthorizationandtherecommendationofthePandoraboardofdirectors;•

 

consentsandapprovalsofgovernmentalentitiesandotherthirdpartiesrelatingtotheexecution,deliveryorperformanceofthemergeragreementandthetransactionscontemplatedthereby;

• 

absenceofconflictswithlaws,Pandora’sorganizationaldocumentsandcontractstowhichPandoraoranyofitssubsidiariesisaparty;•

 

Pandora’sSECfilingsandinternalcontrols;•

 

financialstatements;•

 

theabsenceofcertainundisclosedliabilities;•

 

theabsenceofamaterialadverseeffectandcertainotherchangesorevents;•

 

legalproceedings;•

 

compliancewithapplicablelaws,includingpermitrequirementsandotherregulatorymatters;•

 

materialcontracts;•

 

employeebenefitplanmatters;•

 

employeeandlabormatters;•

 

taxmatters;•

 

intellectualpropertyandprivacy;•

 

environmentalmatters;•

 

realpropertymatters;•

 

insurancematters;•

 

theaccuracyandcompletenessoftheinformationsuppliedforthepurposesofthisproxystatement/prospectus;•

 

transactionswithaffiliates;•

 

anti-takeoverstatutes;•

 

stockholderapprovals;97

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• 

brokers’fees;and•

 

receiptoffairnessopinionsfromCenterviewandLionTree.ThemergeragreementcontainsrepresentationsandwarrantiesofSiriusXM,subjecttocertainexceptionsintheconfidentialdisclosureletter

deliveredinconnectionwiththemergeragreementandcertainofSiriusXM’spublicfilingswiththeSEC,asto,amongotherthings:•

 

corporateexistenceandpower;•

 

capitalization;•

 

corporateauthorization;•

 

governmentalandthirdpartyconsentsandapprovalsrelatingtotheexecution,deliveryandperformanceofthemergeragreement;•

 

absenceofconflictswithlaws,SiriusXMorMergerSub’sorganizationaldocumentsandcontractstowhichSiriusXMorMergerSubisaparty;•

 

SiriusXM’sSECfilingsandinternalcontrols;•

 

financialstatements;•

 

theabsenceofcertainundisclosedliabilities;•

 

theabsenceofamaterialadverseeffectandcertainotherchangesorevents;•

 

legalproceedings;•

 

taxmatters;•

 

compliancewithapplicablelaws;•

 

theaccuracyandcompletenessoftheinformationsuppliedforthepurposesofthisproxystatement/prospectus;•

 

ownershipofPandora’scommonstock;•

 

stockholderapproval;and•

 

brokers’fees.Someoftherepresentationsandwarrantiesinthemergeragreementarequalifiedbymaterialityorknowledgequalificationsora“Pandoramaterial

adverseeffect”qualificationwithrespecttoPandoraora“SiriusXMmaterialadverseeffect”withrespecttoSiriusXM,asdiscussedbelow.Forpurposesofthemergeragreement,a“Pandoramaterialadverseeffect”meansanyevent,change,condition,occurrenceoreffectthat,

individuallyorintheaggregate:(x)hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectontheassets,business,financialconditionorresultsofoperationsofPandoraanditssubsidiaries,takenasawhole,or(y)thatpreventsormateriallydelaysormateriallyimpairs,orthatwouldreasonablybeexpectedtoprevent,materiallydelayormateriallyimpair,Pandora’sabilitytoperformitsobligationsunderthemergeragreementorconsummatethetransactionsonatimelybasis.IndeterminingwhetheraPandoramaterialadverseeffecthasoccurredpursuanttoclause(x)immediatelyabove,anyeffectresultingfromthefollowingeventswillbeexcluded(except,inthecaseofthefirst,second,third,andseventhbulletsbelow,totheextentPandoraanditssubsidiariesaremateriallyanddisproportionatelyimpactedtherebyrelativetootherentitiesoperatinginthesameindustryorindustriesinwhichPandoraanditssubsidiariesoperate):

• 

changesingeneraleconomicorpoliticalconditionsorfinancial,creditorsecuritiesmarketsingeneral(includingchangesininterestorexchangerates);

• 

changesinapplicablelawsorchangesinGAAP;•

 

acts,declarationsorescalationsofwar,armedhostilities,sabotage,terrorism,earthquakes,floods,hurricanes,tropicalstorms,firesorothernaturaldisastersoranynational,internationalorregionalcalamity;

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• 

thenegotiation,execution,announcement,consummationorpendencyofthemergeragreementorthetransactionscontemplatedthereby(includingtheimpactonPandora’sanditssubsidiaries’relationshipswithcustomers,vendors,lendersoremployees);

• 

anychangesinthecreditratingofPandora,themarketpriceortradingvolumeofsharesofPandoracommonstockoranyfailurebyPandoratomeetinternalorpublishedprojections,forecastsorrevenueorearningspredictions(providedhoweverthatanyunderlyingeventcausingsuchchangesorfailuresinwholeorinpartmaybetakenintoaccountindeterminingwhetheraPandoramaterialadverseeffecthasoccurred);

• 

anylitigationbyholdersofPandoracommonstockarisingfromallegationsofabreachoffiduciarydutyrelatingtothemergeragreementorthetransactionscontemplatedbythemergeragreement;

• 

anysuspensionoftradinggenerallyontheNYSE;or•

 

anyactionorinactionbyPandoraoritssubsidiariesexpresslyrequiredbythemergeragreement(otherthancertainobligations,includingtheobligationtooperateintheordinarycourseofbusiness)oranyactiontakenornottakenbyPandoraoritssubsidiariesuponthewrittenrequestofSiriusXM.

Forpurposesofthemergeragreement,a“SiriusXMmaterialadverseeffect”meansanyevent,change,condition,occurrenceoreffectthat,individuallyorintheaggregate:(x)hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectontheassets,business,financialconditionorresultsofoperationsofSiriusXManditssubsidiaries,takenasawholeor(y)thatpreventsormateriallydelaysormateriallyimpairs,orthatwouldreasonablybeexpectedtoprevent,materiallydelayormateriallyimpair,SiriusXM’sabilitytoperformitsobligationsunderthemergeragreementorconsummatethetransactionsonatimelybasis.IndeterminingwhetheraSiriusXMmaterialadverseeffecthasoccurredpursuanttoclause(x)immediatelyabove,anyeffectresultingfromthefollowingeventswillbeexcluded(except,inthecaseofthefirst,second,third,andseventhbulletsbelow,totheextentSiriusXManditssubsidiaries,takenasawhole,aremateriallyanddisproportionatelyimpactedtherebyrelativetootherentitiesoperatinginthesameindustryorindustriesinwhichSiriusXManditssubsidiariesoperate):

• 

changesingeneraleconomicorpoliticalconditionsorfinancial,creditorsecuritiesmarketsingeneral(includingchangesininterestorexchangerates);

• 

changesinapplicablelawsorchangesinGAAP;•

 

actsofwar,armedhostilities,sabotage,terrorismornaturaldisasters;•

 

thenegotiationorannouncementofthemergeragreement(includingtheimpactonSiriusXM’srelationshipswithcustomers,vendors,lendersoremployees);

• 

anychangesinthecreditratingofSiriusXM,themarketpriceortradingvolumeofsharesofSiriusXMcommonstockoranyfailurebySiriusXMtomeetinternalorpublishedprojections,forecastsorrevenueorearningspredictionsforanyperiod(providedhoweverthatanyunderlyingeventcausingsuchchangesorfailuresinwholeorinpartmaybetakenintoaccountindeterminingwhetheraSiriusXMmaterialadverseeffecthasoccurred);

• 

anylitigationbyholdersofSiriusXMcommonstockarisingfromallegationsofabreachoffiduciarydutyrelatingtothemergeragreementorthetransactionscontemplatedbythemergeragreement;

• 

anysuspensionoftradinggenerallyontheNASDAQ;or•

 

anyactionorinactionbySiriusXMoritssubsidiariesexpresslyrequiredbythemergeragreement(otherthancertainobligations,includingtheobligationtooperateintheordinarycourseofbusiness)oranyactiontakenornottakenbySiriusXMoritssubsidiariesuponthewrittenrequestofPandora.

AssumingthesatisfactionoftheclosingconditionsrequiringPandorastockholderapproval,theexpirationorterminationofthewaitingperiodundertheHSRAct,approvalunderthecompetitionlawsofGermanyandAustria,theeffectivenessofthisregistrationstatementonFormS-4andthe

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approvalofNASDAQforthelistingofSiriusXMcommonstocktobeissuedinconnectionwiththetransactions,neitherSiriusXMorPandoraisawareofanyregulatoryapprovalrequiredforthetransactionsoranylawororderthatwouldprohibitthetransactions.

Intheeventanylawwereenactedororderpromulgatedthatpurportedtoprohibitormakeillegalthetransactions,SiriusXMandPandorawouldassesssuchlawororder,anylegaldefensestothevalidityofsuchlawororderandtheconsequencesofviolatingsuchlawororderascomparedtotheconsequencesoffailingtoconsummatethetransactions.SiriusXMandPandoraareeachreservingtherighttowaivesuchconditionintheeventsuchpartydeterminesthatitwouldbeinthebestinterestsofsuchcompanyanditsstockholderstowaivesuchcondition.

Intheeventthatsuchconditioniswaived,SiriusXMandPandorawillprovidesupplementaldisclosuretotheirstockholdersatleastfivebusinessdayspriortothePandorastockholdermeetingofanywaiverofthiscondition,includingthefactorsthateitherboardofdirectorstookintoaccountindeterminingtowaivesuchconditionandanymaterialconsequencesofsuchwaiver.IntheeventsuchconditioniswaivedfollowingthePandorastockholdermeeting,SiriusXMandPandorawillprovidesupplementaldisclosuretotheirstockholders,includingthefactorsthateitherboardofdirectorstookintoaccountindeterminingtowaivesuchconditionandanymaterialconsequencesofsuchwaiverandwouldre-circulatetheproxystatement/prospectusandresolicitthePandorastockholderapprovalintheeventsuchwaiverwouldrenderthedisclosurepreviouslyprovidedtoPandorastockholdersmateriallymisleading.

Conduct of Business Prior to the Closing

Pandora’s Conduct of Business Prior to the ClosingThemergeragreementprovidesthatexcept(i)assetforthintheconfidentialdisclosureletterdeliveredinconnectionwiththemergeragreement,

(ii)withthepriorwrittenconsentofSiriusXM,(iii)asexpresslycontemplatedbythemergeragreementor(iv)asrequiredbyapplicablelaw,duringtheperiodfromthedateofthemergeragreementtotheearlieroftheeffectivetimeofthemergerandtheterminationofthemergeragreement,Pandorawill,andwillcauseitssubsidiariesto,conductitsbusinessintheordinarycourseconsistentwithpastpracticeanduseitscommerciallyreasonableeffortstomaintainandpreserveitspresentbusinessorganization,maintainineffectallcontractsandpermitsasnecessarytooperatetheirbusinesses,keepavailabletheservicesofofficersandkeyemployeesandmaintainrelationshipswithcustomers,suppliersandothershavingmaterialbusinessrelationshipswithitand,subjecttocertainexceptions,Pandorawillnot,andwillcauseitssubsidiariestonot,amongotherthings:

• 

amendorotherwisechangePandora’sorganizationaldocuments;•

 

adjust,split,combineorreclassifyanycapitalstockorotherequityinterestofPandora;•

 

issue,grant,sell,disposeof,redeemorrepurchaseanyequitysecuritiesorequity-basedawardinPandora,otherthantheissuanceofsharesofPandoracommonstock(x)upontheexerciseofPandorastockoptionsandoptionsundertheESPP,(y)tosatisfythevestingandsettlementofanyPandoraRSUsorPandoraperformanceawardsor(z)tosatisfytheconversionofPandora’sconvertiblenotes;

• 

declare,setaside,makeorpayanydividendwithrespecttothePandoracommonstock;•

 

sell,license,transfer,subjecttoalien,abandonorallowtolapseorexpireorotherwisedisposeofmaterialassetsorbusinessesofPandora;•

 

subjecttocertainexceptionssetforthinthemergeragreement,acquireanycorporation,partnershiporotherbusinessorganizationordivisionthereof;

• 

incur,assume,refinanceorguaranteeanyindebtednessforborrowedmoneyotherthanordinarycourseborrowingsunderPandora’sexistingcreditfacility;

• 

makeanymaterialloans,advancesorcapitalcontributionsto,orinvestmentsin,anythirdpartyinexcessofthethresholdsetforthinthemergeragreement;

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• 

enterinto,amendinanymaterialrespect,waivecompliancewithanymaterialrightswithrespectto,orcancel,failtoreneworterminateanymaterialcontract,otherthancontractsrelatingtolicensesofcontentrights;

• 

exceptforthescheduledcapitalexpenditures,make,orcommittomake,orotherwiseauthorizeanymaterialcapitalexpendituresinexcessofthethresholdsetforthinthemergeragreement;

• 

(i)increasethecompensationorbenefitsofPandoraemployees,exceptforordinarycourseincreasesforemployeesbelowthelevelofPandora’sseniorleadershipteam,(ii)grantanyrightstochange-in-control,retention,severanceorterminationpayorotherterminationbenefitstoanyPandoraemployee,exceptinconnectionwithordinarycoursepromotionsornewhiresbelowthelevelofPandora’sseniorleadershipteamorthefillingofvacanciesbelowthelevelofPandora’sseniorleadershipteam,(iii)establish,adopt,enterinto,amend,terminateorgrantanywaiverorconsentunderanyPandorabenefitplan,exceptforordinarycourseamendmentsthatdonotincreasethecostofsucharrangement,(iv)grantanyequityorequity-basedawards,exceptinconnectionwithordinarycoursehiresorpromotionawards,(v)terminatetheemploymentofanyexecutiveofficers(otherthanforcause)orhireanynewemployees,exceptintheordinarycourseofbusinesswithrespecttoemployeeswithtotalsalaryandbonusopportunitiesbeneaththethresholdsetforthinthemergeragreement,(vi)takeanyactiontoacceleratethevestingortimeofpaymentofanycompensationorbenefitunderanyPandorabenefitplanorpayanycashbonusor(vii)loanoradvanceanymoneyorotherpropertytoanyemployeeotherthanordinarycoursereimbursementofbusinessexpenses;

• 

enterintoanysettlementagreementformaterialclaimsorthreatenedclaims;•

 

(i)announce,implementoreffectanyreductioninforce,layofforotherprogramresultingintheterminationofemployeesofPandora,ineachcase,thatwouldtriggertheWARNActor(ii)recognizeanyunionorotherlabororganizationastherepresentativeofanyemployees,orenterintoanyneworamendedcollectivebargainingagreementwithanyunionorotherlabororganization;

• 

makeanychangesinitsmethods,practicesorpoliciesoffinancialaccounting;•

 

(i)make,changeorrevokeanytaxelection,(ii)fileanyamendedmaterialtaxreturns,(iii)settleorcompromiseanytaxliability,(iv)agreetoanextensionorwaiverofthestatuteoflimitationswithrespecttotheassessmentordeterminationofamaterialamountoftaxes,(v)enterintoanyclosingagreementwithrespecttoanymaterialtaxorsurrenderanyrighttoclaimamaterialtaxrefund,or(vi)failtofilewhendue(takingintoaccountanyavailableextensions)anymaterialtaxreturn;

• 

(i)takeanyactionorcauseanyactiontobetakenthatwouldreasonablybeexpectedtoprevent(x)themergerandtheSiriusXMRadiomerger,takentogetheror(y)theholdingcompanymergerandtheconversion,takentogether,fromineithercaseconstitutinga“reorganization”underSection368(a)andrelatedprovisionsoftheCodeor(ii)failtotakeanycommerciallyreasonableactionorfailtocauseanycommerciallyreasonableactiontobetakenthatisreasonablyexpectedtobenecessarytocause(x)themergerandtheSiriusXMRadiomerger,takentogetherand(y)theholdingcompanymergerandtheconversion,takentogether,toineachcaseconstitutea“reorganization”underSection368(a)andrelatedprovisionsoftheCode;

• 

failtouseitsreasonablebesteffortstomaintaininfullforceandeffectPandora’sexistinginsurancepoliciesortoreplacesuchinsurancepolicieswithcomparableinsurancepolicies;

• 

makeanymaterialchangestoanyprivacypolicy,excepttocomplywithapplicablelaw;or•

 

agree,resolveorcommittotakeanyoftheprohibitedactionsdescribedabove.101

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Sirius XM Conduct of Business Prior to the ClosingThemergeragreementprovidesthatexcept(i)assetforthintheconfidentialdisclosureletterdeliveredinconnectionwiththemergeragreement,

(ii)withthepriorwrittenconsentofPandora,(iii)asexpresslycontemplatedbythemergeragreementor(iv)asrequiredbyapplicablelaw,duringtheperiodfromthedateofthemergeragreementtotheearlieroftheeffectivetimeofthemergerandtheterminationofthemergeragreement,SiriusXMwill,andwillcauseitssubsidiariesto,conductitsbusinessintheordinarycourseconsistentwithpastpracticeanduseitscommerciallyreasonableeffortstomaintainandpreserveitspresentbusinessorganization,maintainineffectallcontractsandpermitsasnecessarytooperatetheirbusinesses,keepavailabletheservicesofofficersandkeyemployeesandmaintainrelationshipswithcustomers,suppliersandothershavingmaterialbusinessrelationshipswithitand,subjecttocertainexceptions,SiriusXMwillnot,amongotherthings:

• 

amendSiriusXM’sconstituentdocumentsinanymannerthatwouldadverselyaffecttheholdersofPandoracommonstockwhowouldreceiveSiriusXMcommonstockinconnectionwiththeclosingofthetransactionsinamannerdifferentfromholdersofSiriusXMcommonstockpriortotheclosingofthetransactions;

• 

adjust,split,combineorreclassifySiriusXMcommonstockorenterintoanyagreementorplantoeffectareorganization,dissolutionorliquidation;

• 

declare,setaside,makeorpayanydividendwithrespecttoSiriusXMcommonstockotherthanitsregularquarterlydividend;•

 

(i)takeanyactionorcauseanyactiontobetakenthatwouldreasonablybeexpectedtoprevent(x)themergerandtheSiriusXMRadiomerger,takentogether,or(y)theholdingcompanymergerandtheconversion,takentogether,fromineithercaseconstitutinga“reorganization”underSection368(a)andrelatedprovisionsoftheCodeor(ii)failtotakeanycommerciallyreasonableactionorfailtocauseanycommerciallyreasonableactiontobetakenthatisreasonablyexpectedtobenecessarytocause(x)themergerandtheSiriusXMRadiomerger,takentogetherand(y)theholdingcompanymergerandtheconversion,takentogether,toineachcaseconstitutea“reorganization”underSection368(a)andrelatedprovisionsoftheCode;or

• 

agree,resolveorcommittotakeanyoftheprohibitedactionsdescribedabove.

Go-Shop and Non-Solicitation by PandoraUntiltheno-shopstartdate,Pandora,itssubsidiariesandtheirrespectiverepresentativeshadtherightto:•

 

initiate,solicit,facilitateandencourageanyinquiryorthemakingofanyproposalorofferthatconstitutesanacquisitionproposal(asdescribedbelowonpage[• ]);

• 

furnishtoanypersonanyinformationwhichisreasonablyrequestedinconnectionwiththeirpotentiallymakinganacquisitionproposal;and•

 

participateorengageindiscussionsornegotiationsregardinganacquisitionproposal.Priortoparticipatingorengaginginsuchdiscussionsornegotiationsorfurnishingsuchinformation,Pandoramusthaveenteredintoanacceptable

confidentialityagreementwithsuchpersonandPandoraagreedtoprovidetoSiriusXManyinformationthatwasnotpreviouslyprovidedtoSiriusXMpriortoorconcurrentlywiththetimeitisfurnishedtosuchperson.Priortotheno-shopstartdate,PandoraagreedtoprovideawrittenreporttoSiriusXMeverytenbusinessdayssettingforth(i)thetotalnumberofpartiescontactedtodatepursuanttotheprovisionsdescribedabove,(ii)thenumberofpartiesthathaveaffirmativelydeclinedtoreceiveinformationorenterintodiscussionsregardinganacquisitionproposal,(iii)thenumberofpartiesthathaveaffirmativelyexpressedinterestinreceivinginformationorenteringintodiscussionsregardinganacquisitionproposaland(iv)thenumberofpartiesthathaveexecutedanacceptableconfidentialityagreement.

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Ontheno-shopstartdate,PandorawasrequiredtonotifySiriusXMofeachexcludedpartyfromwhomPandorareceivedawrittenacquisitionproposalaftertheexecutionofthemergeragreementandpriortotheno-shopstartdate,whichnoticewasrequiredtoincludecopiesofdraftsofproposedagreements,termsheetsorlettersofintentrelatedtheretoprovidedtoPandora.Inaccordancewiththeseterms,PandoradeliveredsuchnoticetoSiriusXMontheno-shopstartdateconfirmingthatPandoradidnotreceiveanysuchproposals.

Onandaftertheno-shopstartdate,exceptasotherwisepermittedbythemergeragreement,Pandoraanditsrepresentativeswillnot,directlyorindirectly:

• 

initiate,solicit,knowinglyfacilitateorencourage(includingbywayofprovidinginformation)anyinquiry,proposalorofferwithrespecttoanyacquisitionproposal,

• 

participateorengageinanydiscussionsornegotiationsregardinganacquisitionproposalorfurnishtoanypersonanyinformationordatawithrespecttoanacquisitionproposal,or

• 

enterintoanyletterofintent,agreementinprincipleorcontractrelatingtoorprovidingforanacquisitionproposal(otherthanaconfidentialityagreement)orrequiringPandoratoabandonorterminatethetransactionscontemplatedbythemergeragreement.

Inaddition,onandaftertheno-shopstartdate,PandorawillnotifySiriusXMpromptly(andinanyeventwithinonebusinessday):•

 

afterreceiptofanyacquisitionproposaloranyrequestfornon-publicinformationortoengageindiscussionsornegotiationsthatcouldreasonablybeexpectedtoleadtoanacquisitionproposal;and

• 

ofanychangetothefinancialorothermaterialtermsandconditionsofanyacquisitionproposal(includinganyacquisitionproposalfromanexcludedparty).

PandorawillkeepSiriusXMreasonablyinformedonareasonablycurrentbasisofmaterialchangesinthestatusofanysuchacquisitionproposal(includingfromanexcludedparty).

Beginningontheno-shopstartdateandpriortoobtainingthestockholderapproval,ifPandoraoritsrepresentativesreceivesanunsolicitedbonafidewrittenacquisitionproposalthatdidnotresultfromabreachoftheprovisionsdescribedinthissectionandthePandoraboardofdirectorsconcludesingoodfaith(afterconsultationwiththePandora’soutsidelegalandfinancialadvisors)thatsuchacquisitionproposalconstitutesasuperiorproposal(asdescribedbelowonpage[• ])orisreasonablylikelytoresultinasuperiorproposal,Pandoraanditsrepresentativesmay:

• 

participateorengageindiscussionsornegotiationswithsuchpersonoritsrepresentativesregardingsuchacquisitionproposal,and•

 

furnishinformationtothepersonmakingsuchacquisitionproposalwhichisreasonablyrequestedbysuchpersoninconnectionwithsuchacquisitionproposal.

Pandoramayalsoengageintheactivitiesdescribedabovewithrespecttoanyexcludedparty.Priortoparticipatingorengaginginsuchdiscussionsornegotiationsorfurnishingsuchinformation(whetherwithanexcludedpartyorotherwise),PandoramusthaveenteredintoanacceptableconfidentialityagreementwithsuchpersonandPandorawillprovidetoSiriusXManyinformationthatwasnotpreviouslyprovidedtoSiriusXMpriortoorconcurrentlywiththetimeitisfurnishedtosuchperson.

Exceptasdescribedbelowonpage[• ]inthesectionentitled“TerminationoftheMergerAgreementandChangeofRecommendationuponaSuperiorProposal”,neitherPandoranorthePandoraboardofdirectors(oranycommitteethereof)will,directlyorindirectly,(i)failtomakeorwithdraw(ormodifyorqualifyinanymanneradversetoSiriusXMorpubliclyproposetowithdraw,modifyorqualifyinanymanneradversetoSiriusXM)therecommendationofthePandoraboardofdirectorstoPandora’sstockholdersinfavorofthemergeragreementor(ii)adopt,approve,orpubliclyrecommend,endorseorotherwisedeclareadvisabletheadoptionofanyCompanyAcquisitionProposal,whichwerefertoasachangeofrecommendation.

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“acquisitionproposal”meansanyinquiry,proposal,indicationofinterestorofferfromanyperson(otherthanSiriusXMoranyofitssubsidiaries)relatingto,orthatcouldreasonablybeexpectedtoleadto,inonetransactionoraseriesoftransactions,anydirectorindirect(i)acquisition,purchaseorsaleofabusinessorassetsthatconstitute15%ormoreoftheconsolidatedbusiness,revenues,netincomeorassets(includingstockofPandora’ssubsidiaries)ofPandoraanditssubsidiaries,(ii)merger,reorganization,shareexchange,consolidation,businesscombination,recapitalization,liquidation,dissolutionorsimilartransactioninvolvingPandoraor(iii)purchaseorsaleof,ortenderorexchangeoffer(includingaself-tenderoffer)for,securitiesofPandorathat,ifconsummated,wouldresultinanyperson(orthestockholdersofsuchperson)beneficiallyowningsecuritiesrepresenting15%ormoreoftheequityortotalvotingpowerofPandora.

• 

“superiorproposal”meansanybonafidewrittenacquisitionproposal(exceptthatallreferencesto“15%”inthedefinitionof“acquisitionproposal”summarizedimmediatelyaboveshallbereplacedby“50%”)madebyanyperson(otherthanSiriusXM)afterSeptember23,2018,whichinthegoodfaithjudgmentofthePandoraboardofdirectors(afterconsultationwithitsoutsidelegalcounselandfinancialadvisors)is,ifaccepted,likelytobeconsummatedandwouldresult,ifconsummatedonthetermsproposedonatimelybasis,inatransactionthatismorefavorablefromafinancialpointofviewtothePandorastockholdersthanthetransactions,aftertakingintoaccount(a)thelikelihoodandtimingofconsummation(ascomparedtothetransactions),(b)suchothermattersthatthePandoraboardofdirectorsconsidersrelevant,includinglegal,financial(includingthefinancingtermsofanysuchacquisitionproposal),regulatoryandotheraspectsandrisksofsuchacquisitionproposal(includingtheconditionstoclosing,anyrequirementofastockholdervoteofthepersonmakingtheproposal,andanyfinancingrequirementsofsuchperson)andtheidentityofthepersonmakingsuchacquisitionproposaland(c)anychangestothetermsofthemergeragreementproposedbySiriusXM.

• 

“excludedparty”meansanypersonfromwhomPandoraoranyofitsrepresentativeshasreceivedawrittenacquisitionproposalaftertheexecutionofthemergeragreementandpriortotheno-shopstartdate,whichwrittenacquisitionproposalthePandoraboardofdirectorshasdeterminedingoodfaithpriortothestartoftheno-shopstartdate(afterconsultationwithitsoutsidecounselanditsfinancialadvisor)isorwouldreasonablybeexpectedtoleadtoasuperiorproposal;provided,however,thatapersonwillimmediatelyceasetobeanexcludedpartyif(A)suchacquisitionproposalmadebysuchpersonpriortothestartoftheno-shopstartdateiswithdrawn(itbeingunderstoodthatanyamendment,modificationorreplacementofsuchacquisitionproposalwillnot,inandofitself,bedeemedawithdrawalofsuchacquisitionproposal)or(B)suchacquisitionproposal,inthegoodfaithdeterminationofthePandoraboardofdirectors(afterconsultationwithitsoutsidecounselanditsfinancialadvisor),nolongerisorwouldreasonablybeexpectedtoleadtoasuperiorproposal.

Termination of Merger Agreement and Change of Recommendation upon a Superior ProposalAtanytimepriortoobtainingthestockholderapproval(whetherbeforeoraftertheno-shopstartdate),andonlyfollowingcompliancewiththe

provisionsdescribedinthissectionandinthesectionentitled“Go-ShopandNon-SolicitationbyPandora”immediatelyabove,thePandoraboardofdirectorsmayterminatethemergeragreementtoenterintoanagreementwithrespecttoasuperiorproposal(andeffectachangeofrecommendationwithrespectthereto),if:

• 

Pandorareceivesabonafidewrittenacquisitionproposal(includingfromanexcludedparty)aftertheexecutionofthemergeragreementthatdidnotresultfromabreachoftheprovisionsdescribedinthesectionentitled“Go-ShopandNon-SolicitationbyPandora”immediatelyabovethatthePandoraboardofdirectorshasdeterminedingoodfaith(afterconsultationwithitsoutsidelegalandfinancialadvisors)constitutesasuperiorproposal;

• 

PandoraprovidesSiriusXMwithwrittennoticeadvisingSiriusXMitintendstoterminatethemergeragreement,whichnoticeshallincludethematerialtermsandconditionsofsuchacquisitionproposal,theidentityofthepersonmakinganysuchacquisitionproposaland

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copiesofallwrittenagreements,or,ifnotfinal,themostrecentdraftthereof,reflectingsuchacquisitionproposal(includingdrafts(orfinalversions)ofanyagreements,commitmentletters,termsheetsorlettersofintentrelatedthereto(includinganycoverletterwithrespectthereto));

• 

foratleastathreebusinessdayperiodcommencingonthebusinessdayfollowingthedateSiriusXMreceivessuchnotice,Pandoraanditsfinancialandlegaladvisors(andotherrepresentatives)havenegotiatedwithSiriusXMingoodfaith(totheextentSiriusXMdesirestonegotiate)changestothetermsofthemergeragreementsuchthatsuchacquisitionproposalwouldnolongerconstituteasuperiorproposal(providedthatanyrevisionstothefinancialterms(includingtotheamountorformofconsideration)orothermaterialtermsofsuchacquisitionproposalrequirePandoratocomplyagainwiththeproceduresdescribedinthissection,includingprovidinganewnoticetoSiriusXMandanewnegotiationperiod,whichperiodwouldbeshortenedtotwobusinessdays);and

• 

following11:59p.m.,NewYorkCitytime,onthelastbusinessdayoftheapplicablenegotiationperiod(s)referredtointheimmediatelyprecedingbullet,thePandoraboardofdirectorsdeterminesingoodfaith(afterconsultationwithitsoutsidelegalandfinancialadvisors)thatsuchacquisitionproposalstillconstitutesasuperiorproposalaftergivingeffecttoallofthechangestothemergeragreementwhichhavebeenproposedbySiriusXM.

Change of Recommendation upon an Intervening EventAtanytimepriortoobtainingthestockholderapproval,thePandoraboardofdirectorsmayalsoeffectachangeofrecommendation(otherthanin

responsetoanacquisitionproposalasdescribedabove)if:•

 

amaterialdevelopmentormaterialchangeincircumstancesrelatingtoPandoraoritssubsidiariesoccursaftertheexecutionofthemergeragreement(orfirstbecomesknowntothePandoraboardofdirectorsaftertheexecutionofthemergeragreement)thatwasnotreasonablyforeseeable,whichwerefertoasaninterveningevent;providedthat,innoeventwill(A)anyactiontakenbyPandorainordertocomplywiththemergeragreement,andtheconsequencesofanysuchaction,constituteaninterveningeventand(B)anychangesinthemarketpriceortradingvolumeofsharesofPandoracommonstockorSiriusXMcommonstockconstituteaninterveningevent;

• 

thePandoraboardofdirectorsdeterminesingoodfaith(afterconsultationwithitsoutsidelegalandfinancialadvisors)that,inlightofsuchinterveningevent,thefailuretowithdrawormodifyitsrecommendationwouldbeinconsistentwithitsfiduciaryobligationstoPandora’sstockholdersunderapplicablelaw;

• 

PandorawillhaveprovidedSiriusXMwithwrittennoticeadvisingSiriusXMthatthePandoraboardofdirectorsintendstomakeachangeofrecommendation,whichnoticewilldescribeinreasonabledetailtheinterveningevent;

• 

foratleastathreebusinessdayperiodcommencingonthebusinessdayfollowingthedateSiriusXMreceivessuchnotice,Pandoraanditsfinancialandlegaladvisors(andotherrepresentatives)havenegotiatedwithSiriusXMingoodfaith(totheextentSiriusXMdesirestonegotiate)tomakesuchadjustmentsinthetermsandconditionsofthemergeragreementsothattheneedformakingsuchchangeofrecommendationwouldbeobviated;and

• 

attheendoftheperiodreferredtointheimmediatelyprecedingbullet,aftertakingintoaccountanychangestothetermsofthemergeragreementofferedbySiriusXMinwritingtoPandora,thePandoraboardofdirectorshasdeterminedingoodfaith(afterconsultationwithitsoutsidelegalandfinancialadvisors)thatthefailuretowithdrawormodifyitsrecommendationwouldbeinconsistentwiththePandoraboardofdirectors’fiduciaryobligationstoPandorastockholdersunderapplicablelawinlightofsuchinterveningevent.

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Reasonable Best EffortsSubjecttothetermsandconditionsofthemergeragreement,PandoraandSiriusXMwillusetheirreasonablebesteffortstotakeactionsnecessary

underapplicablelawtoclosethetransactions,including:•

 

preparingaspromptlyaspracticableallnecessaryapplications,noticesorfilingstobemadeorfiledbysuchparty(andcooperatingwiththeotherpartywithrespecttoanyapplicationsorfilingstobemadeorfiledbytheotherparty)inconnectionwiththetransactions;

• 

obtainingaspromptlyaspracticableallconsents,approvals,clearances,permits,authorizations,registrations,filingsornoticesfromanygovernmentalentity(orotherperson)whicharerequiredtobeobtainedinconnectionwiththetransactions;

• 

complyingpromptlywithallrequirementsunderapplicablelawwhichmaybeimposedonsuchpartywithrespecttothetransactions;•

 

defendingalllawsuitsorotherproceedingstowhichitisapartychallengingoraffectingthemergeragreementortheclosingofthetransactions,ineachcaseuntiltheissuanceofafinal,non-appealableorderwithrespecttoeachsuchlawsuitorotherproceeding;

• 

havingliftedorrescindedanyinjunctionorrestrainingorderwhichmayadverselyaffecttheabilityofthepartiestoclosethetransactions,ineachcaseuntiltheissuanceofafinal,non-appealableorderwithrespectthereto;and

• 

resolvinganyobjectionorassertionbyanygovernmentalentitychallengingthemergeragreementorthetransactions.Subjecttotheotherprovisionsofthemergeragreement,PandoraandSiriusXMwill:•

 

totheextentpermittedbyapplicablelaw,promptlyinformtheotherpartyofanysubstantivecommunication(oralandwritten)receivedbysuchpartyfrom,orgivenbysuchpartyto,anygovernmentalentityinconnectionwiththetransactions(includingkeepingtheotherpartiesapprised,onacurrentbasisofthestatusthereof);

• 

totheextentpermittedbyapplicablelaw,promptlyinformtheotherpartyofanysubstantivecommunication(oralandwritten)receivedbysuchpartyfrom,orgivenbysuchpartyto,anypersonthatisnotagovernmentalentityinconnectionwithanyproceeding(orthreatenedproceeding)bysuchpersonregardingorarisingoutofthemergeragreementorthetransactions;

• 

consultwiththeotherparty(subjecttoapplicablelawrelatingtotheexchangeofinformation)inconnectionwithanyanalyses,appearances,presentations,memoranda,briefs,arguments,opinionsandproposalsmadeorsubmittedbyoronbehalfofanypartyinconnectionwiththetransactions;

• 

usereasonablebesteffortstofurnishtotheotherpartyand,uponrequest,toanygovernmentalentitiessuchinformationandassistanceasmaybereasonablyrequestedinconnectionwiththeforegoing,includingbyrespondingpromptlytoandusingreasonablebesteffortstocomplyfullywithanyrequestforadditionalinformationordocumentsunderanyapplicablelaw;and

• 

notindependentlyparticipateinanymeeting(includingtelephonicmeetings)withanygovernmentalentityinconnectionwiththeforegoingwithoutgivingtheotherpartysufficientpriornoticeofthemeeting(includingtelephonicmeetings)and,totheextentpermittedbysuchgovernmentalentity,theopportunitytoattendand/orparticipateinsuchmeeting(includingtelephonicmeetings).

Notwithstandinganythingtothecontraryinthemergeragreement,innocasewillSiriusXMorPandorabeobligatedto(andPandorawillnot,withoutthewrittenconsentofSiriusXM)sell,toholdseparateorotherwisedisposeof,ortoconduct,restrict,operate,investorotherwisechangeitsrespectiveassetsorbusiness(includingthoseofitsrespectiveaffiliatesexcludingcertainrelatedentitiesofSiriusastowhomnosuchrequirementsorconditionsshallapply)inanymannerthat,eitherindividuallyorintheaggregate,(A)materiallyadverselyaffectsthefinancialcondition,

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business,ortheoperationsof(x)Pandoraanditssubsidiaries,onaconsolidatedbasis,or(y)SiriusXManditsaffiliatesor(B)prohibitsormateriallylimitstheownership,controloroperationby(x)Pandoraanditssubsidiariesor(y)SiriusXManditsaffiliatesofanymaterialportionofitsortheirrespectivebusinessesorassets,orcompelsPandoraorSiriusXMoranyoftheirrespectiveaffiliatestodisposeoforholdseparateanyoftheirrespectivematerialbusinessesorassetsoranyportionthereof.NeitherSiriusXMnorPandorawillacquireoragreetoacquireanybusinesswherethatacquisition,ifcompleted,wouldhaveamaterialadverseeffectontheprospectsofobtaininganyregulatoryapprovalsoughtinrelationtothemergeragreement.

PandoraandSiriusXMwillalsousetheirrespectivereasonablebesteffortstoobtainanyconsentsorapprovalsfromanypersons(otherthangovernmentalentities)thatarenecessaryoradvisableinconnectionwiththetransactions.Intheeventthatthepartiesfailtoobtainanysuchthirdpartyconsent,Pandorawilluseitsreasonablebestefforts,andwilltakesuchactionsasarereasonablyrequestedbySiriusXM,tominimizeanyadverseeffectuponPandoraanditssubsidiariesresulting,orwhichwouldreasonablybeexpectedtoresult,aftertheclosingofthetransactions,fromthefailuretoobtainsuchconsent.Inconnectionwithobtaininganysuchapprovalorconsent(i)Pandoraanditssubsidiarieswillnotberequiredto,and,withoutthepriorwrittenconsentofSiriusXM,Pandoraanditssubsidiarieswillnot,payorcommittopaytosuchpersonwhoseapprovalorconsentisbeingsolicitedanycashorotherconsideration,makeanycommitmentorincuranyliabilityorotherobligationand(ii)SiriusXManditsaffiliateswillnotberequiredtopayorcommittopaytosuchpersonwhoseapprovalorconsentisbeingsolicitedanycashorotherconsideration,makeanycommitmentorincuranyliabilityorotherobligation.

Company Stockholders MeetingPandorawillholdthePandoraspecialmeetingassoonaspracticablefollowingthedateonwhichtheSECdeclarestheeffectivenessofthisproxy

statement/prospectusregistrationstatement.PandorawillusereasonablebesteffortstosolicitfromitsstockholdersproxiesinfavorofapprovalofthemergeragreementproposalandwillkeepSiriusXMreasonablyupdatedwithrespecttoproxysolicitationresults.

Post-Closing Employee MattersFromtheclosinguntilDecember31,2019,PandorawillprovideindividualswhoareemployeesofPandoraoranyofitssubsidiariesimmediately

priortotheclosingandcontinuetobeemployeesofSiriusXMoritssubsidiaries(includingPandora)followingtheclosing,butonlyforsolongassuchindividualsaresoemployed(werefertoeachsuchemployeeasacontinuingemployee):

• 

abasesalary,regularhourlywage,orcommissionopportunities,asapplicable,thatarenotlessthanthebasesalary,regularhourlywage,orcommissionopportunities,asapplicable,providedtosuchcontinuingemployeeonSeptember23,2018;

• 

targetcashincentivecompensationopportunities(excludingequity-basedincentivecompensationopportunities)thatarenotlessthanthetargetcashincentivecompensationopportunities(excludingequity-basedincentives)providedtosuchcontinuingemployeeonSeptember23,2018;and

• 

employeebenefits(otherthanequity-basedawards)thatareeither(A)substantiallycomparabletotheemployeebenefits(otherthanequity-basedawards,includingundertheESPP)providedbyPandoraoranyofitssubsidiariesonSeptember23,2018or(B)substantiallycomparabletotheemployeebenefits(otherthanequity-basedawards)providedtosimilarly-situatedemployeesofSiriusXMoritssubsidiaries.

Fromandaftertheclosing,Pandorawillhonor,inaccordancewiththeirterms,(i)the2018CorporateIncentivePlanandtheExecutiveLeadershipTeam2018SupplementalBonusProgramand(ii)allemployment,severance,incomecontinuityandchangeofcontrolprograms,plansoragreementsbetweenPandoraoritssubsidiariesandcontinuingemployeesinexistenceonSeptember23,2018ortotheextentamendedinaccordancewiththetermsofthemergeragreement.

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Indemnification and InsuranceFromandaftertheclosing,Pandorawillindemnify,defendandholdharmless,tothefullestextentpermittedbythecertificateofincorporationand

bylawsofPandoraasineffectonSeptember23,2018andaspermittedunderapplicablelaw,allpastandpresentdirectorsandofficersofPandoraanditssubsidiariesagainstanyliabilities,damages,costsorexpenses(includingreasonableattorneys’feesandexpenses)incurredinconnectionwithanyproceedingarisingoutofactsoromissionsoccurringatorpriortotheclosinginconnectionwithsuchindemnifiedpartyserviceassuchadirectororofficer.

Foraperiodofsixyearsaftertheclosing,SiriusXMorPandorawillmaintainforthebenefitofsuchpersonsadirectors’andofficers’liabilityinsurancepolicythatprovidescoverageforactsoromissionsoccurringpriortotheclosing,withtermsandconditionswhichare,intheaggregate,notlessadvantageoustosuchindemnifiedpartythanthetermsandconditionsoftheexistingdirectors’andofficers’liabilityinsurancepolicyofPandora.AtSiriusXM’soption,inlieuoftheforegoinginsurancecoverage,SiriusXMor,withSiriusXM’sconsent,Pandoramayatorpriortotheclosingsubstitutesuchinsurancepolicyforasinglepremiumtailcoveragewithrespecttothedirectors’andofficers’liabilityinsurancethatprovidessuchcoverageforperiodofsixyearsaftertheclosing.Forsuchtailpolicy,PandoraandSiriusXMdonotneedtospendmorethan300%ofthemostrecentannualpremiumpaidbyPandoraforitsexistingdirectors’andofficers’liabilityinsurancepolicy.

Foraperiodofsixyearsaftertheclosing,PandorawillmaintainineffecttheprovisionsregardingeliminationofliabilityofdirectorsthatareinPandora’scertificateofincorporationasineffectonSeptember23,2018.

Stockholder LitigationPriortotheclosing,intheeventthatanystockholderlitigationrelatedtothemergeragreementorthetransactionsisbroughtorthreatenedagainst

anyofPandoraand/orthemembersofthePandoraboardofdirectors,PandorawillpromptlynotifySiriusXMofanysuchlitigationandwillkeepSiriusXMreasonablyinformedonareasonablycurrentbasiswithrespecttothestatusthereof.PandorawillconsultwithSiriusXMonaregularbasiswithrespectto,andshallgiveSiriusXMtheopportunitytoparticipateinthedefenseorsettlementof,anysuchlitigationorclaims,andnosuchsettlementorcompromisewillbeagreedtowithoutSiriusXM’spriorwrittenconsent(whichconsentwillnotbeunreasonablywithheld,delayedorconditioned).

Other Covenants and AgreementsThemergeragreementalsocontainsadditionalcovenants,including,amongothers,covenantsrelatingtoaccesstoinformation,preparationofthe

formS-4andtheproxystatement,noticeoffailurestocomplywithrepresentationsandcovenants,publicannouncementsrelatingtothemerger,listingofSiriusXMcommonstockonNASDAQ,exemptionsunderRule16b-3oftheExchangeAct,actionstominimizetheeffectofanyanti-takeoverlaws,certaintaxmatters,cooperationwithrespecttotheassumptionoftheconvertiblenotesandpayoffofthecreditagreement.

Conditions to Completion of the Transactions

Mutual ConditionsTheobligationsofPandoraandSiriusXMtoclosethetransactionsaresubjecttothesatisfactionofthefollowingconditions(orwaiverofthe

conditioninthethirdbulletbelowtotheextentpermittedbylaw):•

 

Pandora’sstockholderswillhaveapprovedthemergeragreementproposal;•

 

thesharesofSiriusXMcommonstocktobeissuedasmergerconsideration(andanyothersharestobereservedforissuanceinconnectionwiththemerger)willhavebeenapprovalforlistingonNASDAQ,subjecttoofficialnoticeofissuance;

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• 

nolawororderwillhavebeenenactedorissuedbyanygovernmentalentitythatprohibitsormakesillegaltheclosingofthetransactions;providedthatpriortoapartyassertingthisconditionwithrespecttoanyordersuchpartywillhaveuseditsreasonablebesteffortstoopposeanysuchorder;

• 

theFormS-4willhavebecomeeffectivebytheSECundertheSecuritiesAct,willnotthesubjectofanystoporderineffectandnoproceedingsseekingastoporderwillbependingbeforetheSEC;and

• 

anywaitingperiod(andanyextensionsthereof)undertheHSRActapplicabletothetransactionswillhaveexpiredorbeenterminatedandapprovalsunderthecompetitionlawsofGermanyandAustriawillhavebeengranted.

Additional Conditions to the Obligations of Sirius XMTheobligationsofSiriusXMtoclosethetransactionsaresubjecttothesatisfaction(orwaiverbySiriusXM)ofthefollowingadditional

conditions,amongothers:•

 

theaccuracyoftherepresentationsandwarrantiesofPandoratotheextentrequiredbythemergeragreement,includingthat:o

 

representationsandwarrantiesregardingPandora’sauthoritytoenterintothetransactionscontemplatedbythemergeragreement,theabsenceofaPandoramaterialadverseeffect,applicationoftakeoverlaws,stockholdervoterequirementsandtheopinionoffinancialadvisorsmustbetrueandcorrectinallrespects;

o 

representationsandwarrantiesrelatedtothecapitalizationofPandoraandPandora’sbroker’sfeesmustbetrueandcorrectinallbutdeminimisrespects;

o 

Pandora’sotherrepresentationsandwarrantiesmustbetrueandcorrect,subjecttoaPandoramaterialadverseeffectstandard;•

 

Pandorahasperformedinallmaterialrespectsitsobligationsunderthemergeragreement;•

 

sinceSeptember23,2018,therehasnotbeenaPandoramaterialadverseeffect;•

 

PandorahasdeliveredtoSiriusXMacertificatesignedbyanexecutiveofficerofPandoracertifyingthattheconditionsdescribedinbulletsabovehavebeensatisfied;and

• 

PandorahasdeliveredtoSiriusXMaFIRPTAcertificate.

Additional Conditions to the Obligations of PandoraTheobligationsofPandoratoclosethetransactionsaresubjecttothesatisfaction(orwaiverbyPandora)ofthefollowingadditionalconditions,

amongothers:•

 

theaccuracyoftherepresentationsandwarrantiesofSiriusXMtotheextentrequiredbythemergeragreement,includingthat:o

 

representationsandwarrantiesregardingSiriusXM’sauthoritytoenterintothetransactionscontemplatedbythemergeragreement,theabsenceofaSiriusXMmaterialadverseeffectandstockholdervoterequirementsmustbetrueandcorrectinallrespects;

o 

representationsandwarrantiesrelatedtothecapitalizationofSiriusXM,SiriusXM’sownershipofPandora’scapitalstockandSiriusXM’sbroker’sfeesmustbetrueandcorrectinallbutdeminimisrespects;

o 

SiriusXM’sotherrepresentationsandwarrantiesmustbetrueandcorrectsubjecttoaSiriusXMmaterialadverseeffectstandard;•

 

SiriusXMhasperformedinallmaterialrespectsallitsobligationsunderthemergeragreement;•

 

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SiriusXMhasdeliveredtoPandoraacertificatesignedbyanauthorizedofficerofSiriusXMdatedasoftheclosingdatecertifyingthattheconditionsdescribedinthethreebulletsabovehavebeensatisfiedbelow.

Tax OpinionsItisaconditiontothetransactionsbeingeffectedasa“reorganization”withinthemeaningofSection368(a)oftheCodethat:•

 

SiriusXMreceivefromSimpsonThacher&BartlettLLP,oranothernationallyrecognizedlawfirm,awrittenopiniondatedasoftheclosingdatetotheeffectthatforU.S.federalincometaxpurposes(x)themergerandtheSiriusXMRadiomerger,takentogether,and(y)theholdingcompanymergerandtheconversion,takentogether,willineachcaseconstitutea“reorganization”withinthemeaningofSection368(a)oftheCode;and

• 

PandorareceivefromSidleyAustinLLP,oranothernationallyrecognizedlawfirm,awrittenopiniondatedasoftheclosingdatetotheeffectthatforU.S.federalincometaxpurposes(x)themergerandtheSiriusXMRadiomerger,takentogether,and(y)theholdingcompanymergerandtheconversion,takentogether,willineachcaseconstitutea“reorganization”withinthemeaningofSection368(a)oftheCode.

SiriusXMandPandorashallusereasonablebesteffortstoobtainsuchopinions,includingnegotiatingingoodfaithsuchamendmentstothemergeragreementasmaybereasonablyrequiredinordertorestructurethetransactionsifsuchrestructuringwouldbenecessarytoallowPandoraorSiriusXMtoobtainsuchopinion.Ifeitheropinioncannotbeobtaineddespitesuchreasonablebestefforts,theclosingconditionsdescribedinthissectionwillnotapplyandthepartieswillexecuteonlyamergerofMergerSubwithandintoPandora,withPandorasurvivingsuchmerger,withouteffectingtheconversionofPandoraintoalimitedliabilitycompany,theholdingcompanymergerortheSiriusXMRadiomergerand,ifnecessary,willnegotiateingoodfaithsuchamendmentstothemergeragreementasmaybereasonablyrequiredtoexecutesuchmergerofMergerSubwithandintoPandoraandtonoteffecttheconversionofPandoraintoalimitedliabilitycompany,theholdingcompanymergerortheSiriusXMRadiomerger.Foradditionalinformation,see“TheTransactions—MaterialFederalU.S.IncomeTaxconsequences”beginningonpage[• ].

TerminationThemergeragreementmaybeterminatedatanytimepriortotheclosing,inthefollowingways:•

 

bymutualwrittenagreementofSiriusXMandPandora;•

 

byeitherSiriusXMorPandora,bywrittennoticetotheother,if:o

 

thereisagovernmentalorderprohibitingthetransactionsandsuchorderhasbecomefinalandnon-appealable;providedthatapartywillnotbeabletoexercisethisterminationrightunlesssuchpartyhasuseditsreasonablebesteffortstoopposeanysuchorder;

o 

theclosinghasnotoccurredonorbeforetheoutsidedate;providedthatapartywillnotbeabletoexercisethisterminationrightifsuchparty’sfailuretoperforminallmaterialrespectsitsobligationsunderthemergeragreementwastheprimarycauseofthefailureoftheclosingtooccurbysuchdate;or

o 

thestockholderapprovalhasnotbeenobtainedatthePandoraspecialmeeting(includingatanyadjournmentorpostponementthereof)(whichwerefertoasthefailuretoobtainstockholderapprovalterminationright).

• 

byPandora,bywrittennoticetoSiriusXMif:o

 

SiriusXMbreachesanyrepresentationorwarrantyorfailstoperformanycovenantoragreementthatwouldcausePandora’sclosingconditionstobeincapableofbeingsatisfiedorcuredbytheoutsidedateor,ifcurable,isnotcuredbySiriusXMbythe

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earlierof(x)30daysafterreceiptofwrittennoticeofsuchbreachorfailureand(y)thebusinessdaybeforetheoutsidedate;providedthatPandorawillnotbeabletoexercisethisterminationrightifPandoraisinmaterial,uncuredbreachofitsobligationsunderthemergeragreement;

o 

(i)thePandorastockholdershavenotapprovedthemergeragreementproposalatthePandoraspecialmeeting,(ii)thePandoraboardofdirectorsauthorizesPandora,subjecttocomplyingwiththeprovisionsdescribedaboveonpage[• ]inthesectionentitled“TerminationofMergerAgreementandChangeofRecommendationuponaSuperiorProposal”,toenterintoabindingdefinitiveagreementtoeffectatransactionconstitutingasuperiorproposal,(iii)PandorapriortoorconcurrentlywithsuchterminationpaystoSiriusXMinimmediatelyavailablefundstheterminationfeeorthego-shopterminationfee(eachasdescribedbelowonpage[• ]),asapplicable,and(iv)Pandoraentersintosuchbindingdefinitiveagreementsubstantiallyconcurrentlywithsuchtermination(whichwerefertoasPandora’ssuperiorproposalterminationright).

• 

bySiriusXM,bywrittennoticetoPandora,if:o

 

PandorabreachesanyrepresentationorwarrantyorfailstoperformanycovenantoragreementthatwouldcauseSiriusXM’sclosingconditionstobeincapableofbeingsatisfiedorcuredbytheoutsidedateor,ifcurable,isnotcuredbyPandorabytheearlierof(x)30daysafterreceiptofwrittennoticeofsuchbreachorfailureand(y)thebusinessdaybeforetheoutsidedate;providedthatSiriusXMwillnotbeabletoexercisethisterminationrightifSiriusXMisinmaterial,uncuredbreachofitsobligationsunderthemergeragreement;

o 

(i)achangeofrecommendationhasoccurred,whetherornotmadeinaccordancewiththemergeragreement,(ii)Pandorahasbreacheditsobligationtocallandholdthespecialstockholdersmeeting,(iii)Pandorahasmateriallybreachedanyoftheprovisionsdescribedinthesectionsentitled“Go-ShopandNon-SolicitationbyPandora”,“TerminationofMergerAgreementandChangeofRecommendationuponaSuperiorProposal”,and”ChangeofControluponanInterveningEvent”aboveonpages[• ],[• ]and,[• ],respectively,(iv)Pandorahasapprovedorenteredintoanalternativeacquisitionagreement;(v)thePandoraboardofdirectorshasfailedtopubliclyrecommendagainstanytenderofferorexchangeofferthatconstitutesanacquisitionproposalwithintenbusinessdaysafterthecommencementofsuchoffer;or(vi)afterthedateofthemergeragreement,anypersonhaspubliclyannouncedanacquisitionproposaloranyplanorintention(whetherornotconditional)tomakeanacquisitionproposalorsuchacquisitionproposalorintentionhasotherwisebecomepubliclydisclosed,andthePandoraboardofdirectorsfailstopubliclyreaffirmitsrecommendationinfavorofthemergeragreementwithintenbusinessdaysfollowingSiriusXM’swrittenrequesttodoso(whichwerefertoasSiriusXM’sacquisitionproposalterminationright).

Effect of TerminationIntheeventoftheterminationofthemergeragreement,subjecttocertainexceptionssetforthinthemergeragreement,themergeragreementwill

becomevoidandhavenoeffect,andtherewillnotbeanyliabilityorobligationonthepartofanypartythereto(oranyofitsrepresentativesoraffiliates)toanotherparty,exceptthatnosuchterminationwillrelieveanypartyfromliabilitytoanyotherpartyforfraudorwillfulandmaterialbreachofthemergeragreement.

Termination FeesPandoraisrequiredtopaySiriusXM(oritsdesignee)aterminationfeeof$52.5million,whichwerefertoasthego-shopterminationfee,ifthe

mergeragreementisterminatedbyPandorapursuanttoPandora’ssuperiorproposalterminationrightinordertoenterintoadefinitive111

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agreementtoeffectasuperiorproposalwithanexcludedparty,providedthatsuchdefinitiveagreementisenteredintoby11:59p.m.(NewYorkCitytime)onNovember22,2018.

PandoraisrequiredtopaySiriusXM(oritsdesignee)aterminationfeeof$105million,whichwerefertoastheterminationfee,ifthemergeragreementisterminatedasfollows:

• 

Pandoraterminatesthemergeragreementpursuanttotheparagraphabovereferredtoasthe“Pandora’ssuperiorproposalterminationright”inacircumstanceinwhichthego-shopterminationfeeisnotpayable;

• 

SiriusXMterminatesthemergeragreementpursuanttoclauses(i),(ii),(iv),(v)or(vi)describedintheparagraphabovereferredtoasthe“SiriusXM’sacquisitionproposalterminationright”inacircumstanceinwhichPandoraisnotentitledtoterminatethemergeragreementpursuanttotheparagraphreferredtoaboveasthe“Pandora’ssuperiorproposalterminationright”andthego-shopterminationfeeisnotpayable,

• 

SiriusXMorPandoraterminatethemergeragreementasaresultofthefailureofthePandorastockholderstoapprovethemergeragreementproposalatatimewhenthemergeragreementisterminablepursuanttoclauses(i),(ii),(iv),(v)or(vi)describedintheparagraphabovereferredtoasthe“SiriusXM’sacquisitionproposalterminationright”inacircumstanceinwhichPandoraisnotentitledtoterminatethemergeragreementpursuanttotheparagraphreferredtoaboveasthe“Pandora’ssuperiorproposalterminationright”andthego-shopterminationfeeisnotpayable;or

• 

(A)themergeragreementisterminatedbyPandoraorSiriusXMasaresultoftheoutsidedatehavingoccurredorthefailureofPandorastockholderstoapprovethemergeragreementproposal,(B)afterSeptember23,2018,anypersonhasmadeanacquisitionproposal(whetherornotconditional)orhaspubliclyproposed,announcedorcommunicatedanyplanorintention(whetherornotconditional)tomakeanacquisitionproposalandsuchacquisitionproposalisnotunconditionallywithdrawnpriortotheoutsidedate(inthecaseofaterminationasaresultoftheoutsidedatehavingoccurred)orthetimethePandorastockholdersvoteatthePandoraspecialmeeting(inthecaseofaterminationasaresultofthefailureofthePandorastockholderstoapprovethemergeragreementproposal),and(C)withintwelvemonthsofthedateoftheterminationofthemergeragreement,Pandoraentersintoanagreementwithrespecttoanacquisitionproposalorclosesanacquisitionproposal(ineachcase,whetherornotwithapersonthatmadeanacquisitionproposalreferencedinclause(B));providedthatsolelyforthepurposesofclause(C),allreferencesinthedefinitionof“acquisitionproposal”(summarizedonpage[• ])to“15%”willbeconsideredreferencesto“50%”.

Iftheterminationfeebecomespayable(exceptpursuanttotheimmediatelyprecedingbulletabove)orthego-shopterminationfeebecomespayable,suchfeewillbepaidonthedatethemergeragreementisterminated.Iftheterminationfeebecomespayablepursuanttotheimmediatelyprecedingbulletabove,theterminationfeewillbepaidonthedatePandoraentersintoanagreementwithrespecttoanacquisitionproposal(or,ifearlier,thedateatransactioninrespectofanacquisitionproposalcloses).

IfPandorafailspromptlytopaytheterminationfeeorthego-shopterminationfee,and,inordertoobtainsuchpayment,SiriusXMcommencesasuitthatresultsinajudgmentagainstPandoraforthepaymentthereoforasettlementinwhichPandorapaysalloranyportionoftheterminationfeeorthego-shopterminationfee,PandorawillpaytoSiriusXMitsreasonablecostsandexpenses(includingreasonableattorneys’feesandexpenses)inconnectionwithsuchsuit,togetherwithinterestontheterminationfeeorthego-shopterminationfee,asapplicable,fromthedateoftheterminationfeeorthego-shopterminationfeewaspayableatarateperannumequaltotheprimerateaspublishedinTheWallStreetJournalonthedatesuchpaymentwasrequiredtobemade.

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ExpensesExceptasotherwiseprovidedinthemergeragreement,allfeesandexpensesincurredbythepartieswillbebornesolelybythepartythathas

incurredsuchfeesandexpenseswhetherornotthetransactionsclose.

AmendmentSubjecttoapplicablelaw,themergeragreementmaybeamended,modifiedandsupplementedinanyandallrespects,whetherbeforeorafterany

voteofthePandorastockholders,bywrittenagreementofthepartiesatanytimepriortotheclosingdatewithrespecttoanyofthetermscontainedtherein;provided,thatfollowingreceiptofsuchstockholderapproval,noamendment,modificationorsupplementofthemergeragreementwillbemadethatbyapplicablelawortherulesorregulationsoftheNYSErequiresanyfurtherapprovalorauthorizationofsuchstockholders,withoutsuchapprovalorauthorizationbysuchstockholders.

Governing LawThemergeragreementandanyclaimsandcausesofactionarisingthereunder,whetherintort,contractorotherwise,willbegovernedand

construedinaccordancewiththelawsoftheStateofDelaware.

Specific PerformancePandoraandSiriusXMwillbeentitledtoaninjunctionorinjunctionstopreventbreachesorthreatenedbreachesofthemergeragreementandto

enforcespecificallythetermsandprovisionsofthemergeragreementintheCourtofChanceryoftheStateofDelawareor,ifunderapplicablelawexclusivejurisdictionoversuchmatterisvestedinthefederalcourts,anyfederalcourtlocatedintheStateofDelawarewithoutproofofactualdamagesorotherwise(and,tothefullestextentpermittedbylaw,eachofPandoraandSiriusXMwaivesanyrequirementforthesecuringorpostingofanybondinconnectionwithsuchremedy),thisbeinginadditiontoanyotherremedytowhichtheyareentitledatlaworinequity.

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UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

ThefollowingunauditedproformacondensedcombinedfinancialinformationandrelatednotespresentthehistoricalfinancialstatementsofSiriusXMandPandoraasifthecompletionofthetransactionshadoccurredonthedatesspecifiedbelow.

OnSeptember23,2018,SiriusXMenteredintoanagreementandplanofmergerandreorganizationamongSiriusXM,PandoraandMergerSub,pursuanttowhich,subjecttothetermsandconditionsofthemergeragreement,SiriusXMwillacquirePandora.OnOctober25,2018,ascontemplatedbythemergeragreement,SiriusXMRadio,NewHoldingCompanyandHoldcoMergerSubenteredintojoinderagreementstobecomepartytothemergeragreement.Pursuanttothetermsandconditionsofthemergeragreement,attheclosingofthetransactions,eachoutstandingshareofPandoracommonstockwillbeconvertedintotherighttoreceive1.44sharesofSiriusXMcommonstock.

Theunauditedproformacondensedcombinedconsolidatedfinancialinformationreflectstheestimatedaggregateconsiderationofapproximately$3.0billion,whichrepresentsthefairvalueofSiriusXMcommonstocktobeissuedontheclosingofthetransactions,estimatedvalueofSiriusXMreplacementequityawardsattributabletopre-combinationserviceandthefairvalueofthePandorapreferredstockinvestment,ineachcaseasvaluedasofDecember10,2018.ThePandorapreferredstockinvestment,whichisallownedbySiriusXMandisaccountedforasarelatedpartyfairvalueinstrument,willbecancelledinconnectionwiththecompletionofthetransactionsandtherefore,toreflectthecosttoSiriusXMofsuchcancellation,thefairvalueofthePandorapreferredstockinvestmentisincludedinthecalculationoftotalestimatedconsiderationbeingpaidbySiriusXM.Theconsiderationusedintheapplicationofacquisitionaccounting,uponthetransactionsclosing,willbebasedonthefairvalueofSiriusXMcommonstocktobeissuedasoftheacquisitiondateandthefairvalueofthePandorapreferredstockinvestment,whichmaydiffersignificantlyfromtheamountdeterminedasofDecember10,2018.

TheunauditedproformacondensedcombinedconsolidatedfinancialinformationrelatedtothetransactionswaspreparedusingtheacquisitionmethodofaccountingandisbasedontheassumptionthatthetransactionstookplaceasofSeptember30,2018forpurposesoftheunauditedproformabalancesheetandasofJanuary1,2017forpurposesoftheunauditedproformacondensedcombinedconsolidatedstatementsofoperationsfortheyearendedDecember31,2017andtheninemonthperiodendedSeptember30,2018.

Inaccordancewiththeacquisitionmethodofaccounting,theactualconsolidatedfinancialstatementsofSiriusXMwillreflectthetransactionsonlyfromandafterthedateofthecompletionofthetransactions.SiriusXMhasnotyetundertakenadetailedanalysisofthefairvalueofPandora’sassetsandliabilitiesandwillnotcompletethefinalpurchasepriceallocationrelatedtothetransactionsuntilafterthetransactionsarecompleted.Thepreliminaryallocationofthepurchasepricetotheacquiredassetsandassumedliabilitiessetforthbelowwasbaseduponthepreliminaryestimateoffairvaluesofcertainintangibleassetsasdiscussedbelow.Forthepreliminaryestimateoffairvalueoftheseassetsassumed,SiriusXMusedpubliclyavailablebenchmarkinginformationaswellasavarietyofothercompanyspecificassumptions,includingmarketparticipantassumptions.Accordingly,theunauditedproformaadjustmentsarepreliminaryandsubjecttochangeasadditionalinformationbecomesavailableandadditionalanalysesoftheseassets,aswellasotherassetsandliabilitiestobeassumed,areperformed.Thefinalacquisitionaccountingcouldresultinmaterialdifferences,whichcouldhaveamaterialimpactontheaccompanyingunauditedproformacondensedcombinedconsolidatedfinancialstatementsandSiriusXM’sfutureresultsofoperationsandfinancialposition.

TheunauditedproformacondensedcombinedconsolidatedfinancialinformationispresentedforillustrativepurposesonlyanddoesnotpurporttorepresentwhattheresultsofoperationsorfinancialpositionofSiriusXMwouldactuallyhavebeenhadthetransactionsoccurredonthedatesnotedabove,ortoprojecttheresultsofoperationsorfinancialpositionofSiriusXMforanyfutureperiods.TheunauditedproformaadjustmentsarebasedonavailableinformationandcertainassumptionsthatSiriusXM’smanagementbelievesarereasonable.Theunauditedproforma

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adjustmentsaredirectlyattributabletothetransactionsandareexpectedtohaveacontinuingimpactontheresultsofoperationsofSiriusXM.IntheopinionofSiriusXM’smanagement,alladjustmentsnecessarytopresentfairlytheunauditedproformacondensedcombinedconsolidatedfinancialinformationhavebeenmade.

TheaccompanyingunauditedproformacondensedcombinedconsolidatedfinancialinformationshouldbereadinconjunctionwiththenotesheretoalongwithSiriusXM’sandPandora’smostrecenthistoricalfinancialinformationincorporatedbyreferenceherein.See“WhereYouCanFindMoreInformation”beginningonpage[• ].

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SIRIUS XM AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED

CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2018

                           

in thousands 

Sirius XM As Reported

 

Pandora As Reported

 

Pro Forma Adjustments

 

Ref 

Reclassification and Others

 

Ref 

Pro Forma Combined Sirius XM

ASSETS                           

Currentassets:                           

Cashandcashequivalents  

$ 

46,044    

$ 

287,523                

 

$ 

333,567 Short-terminvestments     —   

 

  100,119                

 

  100,119 Receivables,net  

  245,768    

  373,418                

 

  619,186 Inventory,net  

  19,514    

  —                

 

  19,514 Relatedpartycurrentassets  

  10,087    

  —                

 

  10,087 Prepaidcontentacquisitioncosts     —   

 

  32,219                

 

  32,219 Prepaidexpensesandothercurrentassets  

  173,035    

  25,673                

 

  198,708                            

Totalcurrentassets  

  494,448    

  818,952                

 

  1,313,400 Propertyandequipment,net  

  1,498,297    

  107,802            

  (39,257) 

  Note(2)  

  1,566,842 Intangibleassets,net  

  2,505,384    

  55,557    

  1,367,889    (b)   

  39,257    Note(2)  

  3,968,087 Goodwill  

  2,289,985    

  178,917   

  695,419    (c)       

 

  3,164,321 Relatedpartylong-termassets  

  1,018,740    

  —    

  (554,352) 

  (d)       

 

  464,388 Deferredtaxassets  

  330,998    

  —    

  363,670    (e)       

 

  694,668 Otherlong-termassets  

  135,655    

  11,575                

 

  147,230                            

Total assets  

$ 

8,273,507    

$ 

1,172,803   

$ 

1,872,626        

$ 

—    

 

$ 

11,318,936                            

Currentliabilities:                           

Accountspayableandaccruedexpenses  

$ 

799,094    

$ 

28,406            

  239,865    (f)  

$ 

1,067,365 Accruedliabilities     —   

 

  72,311            

  (72,311) 

  (f)     — Accruedcontentacquisitioncosts     —   

 

  123,910    

  —        

  (123,910) 

  (f)     — Accruedinterest  

  84,973    

  —            

  2,043    (f)  

  87,016 Accruedcompensation     —   

 

  45,687            

  (45,687) 

  (f)     — Currentportionofdeferredrevenue  

  1,921,517    

  55,678                

 

  1,977,195 Currentmaturitiesoflong-termdebt  

  4,411    

  —                

 

  4,411 Relatedcurrentliabilities  

  4,380    

  —                

 

  4,380                            

Totalcurrentliabilities  

  2,814,375    

  325,992    

  —        

  —    

 

  3,140,367 Deferredrevenue  

  154,145    

  —                

 

  154,145 Long-termdebt  

  6,562,152    

  255,272                

 

  6,817,424 Relatedpartylong-termliabilities  

  5,889    

  —    

  —            

 

  5,889 Deferredtaxliabilities  

  8,169    

  —    

  —            

 

  8,169 Otherlong-termliabilities  

  104,152    

  25,660    

  (588) 

  (e)       

 

  129,224                            

Totalliabilities  

  9,648,882    

  606,924    

  (588)         

  —    

 

  10,255,218                            

Redeemableconvertiblepreferredstock     —    

  513,270    

  (513,270) 

  (d)       

    — Stockholders’(deficit)equity

                           

Commonstock  

  4,449    

  27    

  364    (g)       

 

  4,840 Accumulatedothercomprehensiveincome(loss),netoftax  

  12,448    

  (471)     

  471            

 

  12,448 Additionalpaid-incapital  

  922,376    

  1,632,178   

  841,665    (g)       

 

  3,396,219 Treasurystock,atcost  

  (6,287) 

                  

 

  (6,287) 

Accumulateddeficit  

  (2,308,361) 

  

  (1,579,125) 

 

  1,543,984    (g)       

 

  (2,343,502) 

                           

Total stockholders’ (deficit) equity  

  (1,375,375) 

  

  52,609   

  2,386,484        

  —    

 

  1,063,718                            

Total liabilities, redeemable convertibleprefered stock and stockholders’ (deficit)equity  

$ 

8,273,507    

$ 

1,172,803   

$ 

1,872,626        

$ 

—    

 

$ 

11,318,936                            

Seeaccompanyingnotestounauditedproformacombinedcondensedconsolidatedfinancialstatements.

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SIRIUS XM AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

                               

in thousands, except per share data 

Sirius XM As Reported

 

Pandora As Reported

 

Pro Forma Adjustments for Pandora

 

Ref 

Reclassifications and Other

Adjustments 

Ref 

Pro Forma Combined Sirius XM

 

RefRevenue:

                               

Subscriberrevenue   

$ 

3,418,485    

$ 

344,175    

  —        

$ 

(673) 

  (f)   

$ 

3,761,987    

Advertisingrevenue   

  135,477    

  777,480    

  —                

  912,957    

Equipmentrevenue   

  112,628    

  —    

  —                

  112,628    

Otherrevenue   

  608,194    

  —    

  —        

  673    (f)   

  608,867    

                           

Totalrevenue   

  4,274,784    

  1,121,655    

  —        

  —        

  5,396,439    

Operatingexpenses:                               

Costofservices*   

  1,736,055    

  765,515    

  (13,523) 

  (a)  

  2,480    (f)  

  2,490,527   

Subscriberacquisitioncosts   

  351,940    

  —                    

  351,940    

Salesandmarketing   

  344,426    

  374,351    

  (250) 

  (a)  

  (12,807) 

  (f)  

  705,720   

Engineering,designanddevelopment   

  89,133    

  118,788    

  (291) 

  (a)   

  (5,870) 

  (f)   

  201,760    

Generalandadministrative   

  263,110    

  142,521    

  (550) 

  (a)  

  (30,029) 

  (f)  

  375,052   

Depreciationandamortization   

  222,345    

  —    

  97,125    (a)  

  29,553    (f)  

  349,023   

                           

Totaloperatingexpenses   

  3,007,009    

  1,401,175    

  82,511        

  (16,673)         

  4,474,022    

                           

Income(loss)fromoperations   

  1,267,775    

  (279,520)     

  (82,511)         

  16,673        

  922,417    

Otherincome(expense):                               

Interestexpense   

  (262,924)     

  (20,799)     

  —        

  —        

  (283,723)     

Lossonextinguishmentofdebt   

  —    

  —    

  —        

  (16,673) 

  (f)   

  (16,673)     

Otherincome(expense)   

  82,334    

  6,033    

  —        

  (73,880) 

  (d)   

  14,487    

                           

Totalotherexpense   

  (180,590)     

  (14,766)     

  —        

  (90,553)         

  (285,909)     

                           

Income(loss)beforeincometaxes   

  1,087,185    

  (294,286)     

  (82,511)         

  (73,880)         

  636,508    

Incometax(expense)benefit   

  (162,344)     

  6,933    

  20,215    (h)   

  18,101    (h)   

  (117,095)     

                           

Netincome(loss)   

$ 

924,841    

$ 

(287,353)     

$ 

(62,296)         

$ 

(55,779)         

$ 

519,413    

                           

Foreigncurrencytranslation   

  (9,972)     

  (241)     

  —        

  —        

  (10,213)     

Changeinnetunrealizedlossonmarketablesecurities

   

  —    

  (13)     

  —        

  —        

  (13)     

                           

Totalcomprehensiveincome(loss)   

$ 

914,869    

$ 

(287,607)     

$ 

(62,296)         

$ 

(55,779)         

$ 

509,187    

                           

Basicnetincome(loss)percommonshare   

$ 

0.21    

$ 

(1.19)                     

$ 

0.107    

                           

Dilutednetincome(loss)percommonshare   

$ 

0.20    

$ 

(1.19)                     

$ 

0.104    

                           

Basicweightedaveragecommonsharesoutstanding

   

  4,482,249    

  260,327                

 

  4,873,037  (i)                           

Dilutedweightedaveragecommonsharesoutstanding

   

  4,586,346    

  260,327                

 

  4,977,134  (i)                           

Dividendsdeclaredpercommonshare   

$ 

0.033    

$ 

—                    

$ 

0.033    

                           

* 

Costofservicesexcludestheimpactofdepreciationandamortization.

Seeaccompanyingnotestounauditedproformacombinedcondensedconsolidatedfinancialstatements.

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SIRIUS XM AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2017

                               

in thousands, except per share data 

Sirius XM As Reported

 

Pandora As Reported

 

Pro Forma Adjustments for Pandora

 

Ref 

Reclassifications and Other

Adjustments 

Ref 

Pro Forma Combined Sirius XM

 

RefRevenue:

                               

Subscriberrevenue   

$ 

4,472,522    

$ 

315,853    

  —        

$ 

(744) 

  (f)   

$ 

4,787,631    

Advertisingrevenue   

  160,347    

  1,074,927    

  —                

  1,235,274    

Equipmentrevenue   

  131,586    

  —    

  —                

  131,586    

Otherrevenue   

  660,674    

  76,032    

  —        

  744    (f)   

  737,450    

                           

Totalrevenue   

  5,425,129    

  1,466,812    

  —        

  —        

  6,891,941    

Operatingexpenses:                               

Costofservices*   

  2,101,982    

  967,067    

  (15,290) 

  (a)  

  14,180    (f)  

  3,067,939   

Subscriberacquisitioncosts   

  499,492    

  —                    

  499,492    

Salesandmarketing   

  437,739    

  492,542    

  (3,049) 

  (a)  

  (22,601) 

  (f)  

  904,631   

Engineers,designanddevelopment   

  112,427    

  154,325    

  (2,270) 

  (a)   

  (8,144) 

  (f)   

  256,338    

Generalandadministrative   

  334,023    

  190,711    

  (733)     

 

  (34,345) 

  (f)  

  489,656   

Depreciationandamortization   

  298,602    

  —    

  129,500    (a)  

  41,607    (f)  

  469,709   

Impairmentofgoodwill   

  —    

  131,997                    

  131,997    

Contractterminationfees   

  —    

  23,044            

  (23,044) 

  (f)   

  —    

                           

Totaloperatingexpenses   

  3,784,265    

  1,959,686    

  108,158        

  (32,347)         

  5,819,762    

                           

Income(loss)fromoperations   

  1,640,864    

  (492,874)     

  (108,158)         

  32,347        

  1,072,179    

Otherincome(expense):                               

Interestexpense   

  (345,820)     

  (29,335)     

  —        

  —        

  (375,155)     

Lossonextinguishmentofdebt

   

  (43,679)     

  —    

  —    

    —     

  (43,679) 

  

Otherincome(expense)   

  12,844    

  3,024    

  —    

 

  (32,819) 

  (d)(f)  

  (16,951) 

  

                           

Totalotherexpense   

  (376,655)     

  (26,311)     

  —        

  (32,819)         

  (435,785)     

                           

Income(loss)beforeincometaxes   

  1,264,209    

  (519,185)     

  (108,158)         

  (472)         

  636,394    

Incometax(expense)benefit   

  (616,301)     

  790    

  41,641    (h)   

  182    (h)   

  (573,688)     

                           

Netincome(loss)   

$ 

647,908    

$ 

(518,395)     

$ 

(66,517)         

$ 

(290)         

$ 

62,706    

                           

Foreigncurrencytranslation   

  18,546    

  553    

  —        

  —        

  19,099    

Changeinnetunrealizedlossonmarketablesecurities

   

  —    

  52    

  —        

  —        

  52    

                           

Totalcomprehensiveincome(loss)   

$ 

666,454    

$ 

(517,790)     

$ 

(66,517)         

$ 

(290)         

$ 

81,857    

                           

Basicnetincome(loss)percommonshare   

$ 

0.14    

$ 

(2.29)                     

$ 

0.012    

                           

Dilutednetincome(loss)percommonshare   

$ 

0.14    

$ 

(2.29)                     

  0.012    

                           

Basicweightedaveragecommonsharesoutstanding

   

  4,637,553    

  243,637                

 

  5,028,341  (i)                           

Dilutedweightedaveragecommonsharesoutstanding

   

  4,723,535    

  243,637                

 

  5,114,323  (i)                           

Dividendsdeclaredpercommonshare   

$ 

0.041    

$ 

—                    

$ 

0.041    

                           

* 

Costofservicesexcludestheimpactofdepreciationandamortization.Seeaccompanyingnotestounauditedproformacombinedcondensedconsolidatedfinancialstatements.

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Note 1—Basis of Pro Forma PresentationTheunauditedproformacondensedcombinedconsolidatedbalancesheetasofSeptember30,2018andtheunauditedproformacondensed

combinedconsolidatedstatementsofoperationsfortheninemonthsendedSeptember30,2018andfortheyearendedDecember31,2017arebasedon(i)thehistoricalunauditedconsolidatedfinancialstatementsofSiriusXMasofandfortheninemonthsendedSeptember30,2018containedinSiriusXM’sQuarterlyReportonForm10-QfiledwiththeSEConOctober24,2018,(ii)thehistoricalauditedconsolidatedfinancialinformationofSiriusXMfortheyearendedDecember31,2017containedinSiriusXM’sAnnualReporton10-KfiledwiththeSEConJanuary31,2018,(iii)thehistoricalunauditedconsolidatedfinancialstatementsofPandoraasofandfortheninemonthsendedSeptember30,2018containedinPandora’sQuarterlyReportonForm10-QfiledwiththeSEConNovember5,2018and(iv)thehistoricalauditedconsolidatedfinancialinformationofPandorafortheyearendedDecember31,2017containedinPandora’sAnnualReportonForm10-KfiledwiththeSEConFebruary26,2018.

Theproformaadjustmentsareincludedonlytotheextenttheyare(i)directlyattributabletothetransactions(ii)factuallysupportableand(iii)withrespecttotheunauditedproformastatementsofoperations,expectedtohaveacontinuingimpactonthecombinedresults.

TheunauditedproformacondensedcombinedconsolidatedfinancialinformationispresentedforillustrativepurposesonlyanddoesnotpurporttorepresentwhattheresultsofoperationsorfinancialpositionofSiriusXMwouldactuallyhavebeenhadthetransactionsoccurredinpriorperiods,ortoprojecttheresultsofoperationsorfinancialpositionofSiriusXMforanyfutureperiods.TheunauditedproformaadjustmentsarebasedonavailableinformationandcertainassumptionsthatSiriusXM’smanagementbelievesarereasonable.TheunauditedproformaadjustmentsaredirectlyattributabletothetransactionsandareexpectedtohaveacontinuingimpactontheresultsofoperationsofSiriusXM.IntheopinionofSiriusXM’smanagement,alladjustmentsnecessarytopresentfairlytheunauditedproformacondensedcombinedfinancialinformationhavebeenmade.

Note 2—Estimated Consideration and Pro Forma Purchase Price Allocation

Estimated ConsiderationAsrequiredbyacquisitionaccounting,anestimateofsuchconsiderationhasbeenmadeatestimatedfairvalueofapproximately$3.0billion,which

representsthefairvalueofSiriusXMcommonstocktobeissuedontheclosingofthetransactions,estimatedvalueofSiriusXMreplacementequityawardsattributabletopre-combinationserviceandthefairvalueofthePandorapreferredstockinvestment,ineachcaseasvaluedasofDecember10,2018.ThePandorapreferredstockinvestment,whichisallownedbySiriusXMandisaccountedforasarelatedpartyfairvalueinstrument,willbecancelledinconnectionwiththecompletionofthetransactionsandtherefore,toreflectthecosttoSiriusXMofsuchcancellation,thefairvalueofthePandorapreferredstockinvestmentisincludedinthecalculationoftotalestimatedconsiderationbeingpaidbySiriusXM.Theconsiderationusedintheapplicationofacquisitionaccounting,uponthetransactionsclosing,willbebasedonthefairvalueofSiriusXMcommonstocktobeissuedasoftheclosingofthetransactionsandthefairvalueofthePandorapreferredstockinvestment,whichmaydiffersignificantlyfromtheamountdeterminedasofDecember10,2018.

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Theestimatedconsiderationisasfollows:     

(in thousands except for share data)   

PandoracommonstockoutstandingatDecember10,2018  

  271,380,290 Exchangeratio

   

  1.44      

SiriusXMcommonstocktobeissued  

  390,787,618 Pricepershare

   

$ 

6.20      

Estimated value of Sirius XM common stock to be issued to Pandora stockholders pursuant tothe transactions   $

 

2,422,883 Estimated value of Sirius XM replacement equity awards attributable to pre-combination

service*   $ 

51,351      

Estimated consideration of Sirius XM common stock and replacement equity awards for pre-combination service   $

 

2,474,234      

SiriusXM’sPandorapreferredstockinvestment(relatedpartyfairvalueinstrument)tobecancelled  

$ 

519,211      

Total estimated consideration for transactions   $ 

2,993,445      

Valueattributedtoparat$0.001parvalue   

$ 

391 Balancetocapitalinexcessofparvalue  

$ 

2,422,492 

* 

TheestimatedvalueofSiriusXMreplacementequityawardsattributabletopre-combinationserviceisbasedontheestimatedfairvalueofrestrictedstockunitsandstockoptionsthatwillbeassumedbySiriusXMuponcompletionofthetransactions.ASC805requiresthatthefairvalueofreplacementawardsattributabletopre-combinationservicebeincludedintheconsiderationtransferred.ThemajorityofthisamountisrelatedtorestrictedstockunitsandisbasedonthemarketpriceofPandoracommonstockof$8.64asofDecember10,2018.

Thefollowingtableshowstheimpactofa10%changeinthepricepershareofSiriusXMcommonstock,estimatedconsiderationandgoodwill:           

Change in Price per Share of Sirius XM Common Stock

 

Price per Share of Sirius XM Common Stock

 

Estimated Consideration 

Estimated GoodwillIncreaseof10%  

$ 

6.82   

$ 

2,722,395   

$ 

1,122,497 Decreaseof10%  

$ 

5.58   

$ 

2,226,128   

$ 

626,230 

Preliminary Purchase Price AllocationInaccordancewiththeacquisitionmethodofaccounting,theactualconsolidatedfinancialstatementsofSiriusXMwillreflectthetransactionsonly

fromandafterthedateofthecompletionoftheacquisition.SiriusXMhasnotyetundertakenadetailedanalysisofthefairvalueofPandora’sassetsandliabilitiesandwillnotcompletethepurchasepriceallocationrelatedtothetransactionsuntilafterthetransactionsarecompleted.Thepreliminaryallocationofthepurchasepricetotheacquiredassetsandassumedliabilitieswasbaseduponthepreliminaryestimateoffairvaluesofcertainintangibleassetsasdiscussedbelow.Forthepreliminaryestimateoffairvaluesoftheseassetsassumed,SiriusXMusedpubliclyavailablebenchmarkinginformationaswellasavarietyofothercompanyspecificassumptions,includingmarketparticipantassumptions.Accordingly,theunauditedproformaadjustmentsarepreliminaryandsubjecttochangeasadditionalinformationbecomesavailableandadditionalanalysesoftheseassets,aswellasotherassetsandliabilitiestobeassumed,areperformed.Thefinalacquisitionaccountingcouldresultinmaterialdifferences,whichcouldhaveamaterialimpactontheaccompanyingunauditedproformacondensedcombinedconsolidatedfinancialstatementsandSiriusXM’sfutureresultsofoperationsandfinancialposition.

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ThefollowingtablesetsforthapreliminaryallocationofthepurchasepricetotheidentifiabletangibleandintangibleassetsacquiredandliabilitiesassumedofPandorausingPandora’sunauditedconsolidatedbalancesheetasofSeptember30,2018,withtheexcessrecordedtogoodwill:

     

(in thousands)   

Currentassets   

$ 

818,952 Propertyandequipment

   

  68,545 Intangibleassets(estimatedfairvalue)

   

  1,462,703 DeferredTaxAssets

   

  363,670 Longtermassets

   

  11,575      

Totalassets   

  2,725,445 Currentliabilities

   

  (325,992) 

Long-termdebt   

  (255,272) 

Otherlongtermliabilities   

  (25,072) 

     

Totalliabilities   

  (606,336) 

Netassetsacquired(a)   

  2,119,109 Estimatedmergerconsideration(b)  

  2,993,445      

Estimatedgoodwill(b)-(a)  

$ 

874,336      

EliminationofexistingGoodwillrecordedbyPandora   

$ 

(178,917) 

AdditionalGoodwillrecordedasaresultofthetransactions  

$ 

695,419 

Intangible AssetsPreliminaryidentifiableintangibleassetsintheunauditedproformacondensedcombinedconsolidatedfinancialinformationconsistofthe

following:                       

(in thousands, except for estimated useful life) Intangible Assets

 

Book Value as of September 30,

2018 (Excluding AdsWizz)

(a) 

Reclassifications from Property and Equipment

(b) 

Estimated Fair Value as of

September 30, 2018

(Excluding AdsWizz)

(c) 

Pro Forma Adjustment

(c - a - b) 

Estimated Useful Life

 

Fair Value RangeTrademark

   

$ 

77    

$ 

—    

$ 

470,000    

$ 

469,923    

  Indefinite    

 $280,000-$660,000 CustomerRelationships

   

  —    

  —    

  632,000    

  632,000    

  8-10years    

 $330,000-$935,000 DevelopedTechnology

   

  14,777    

  39,257    

  320,000    

  265,966    

  5years    

 $120,000-$520,000                

Total   

$ 

14,854    

$ 

39,257    

$ 

1,422,000    

$ 

1,367,889        

         

   

Book Value as of September 30, 2018

(AdsWizz) (d)

 

Estimated Fair Value as of

September 30, 2018 (Total) (c + d)

Trademark   

$ 

547    

$ 

470,547 CustomerRelationships

   

  10,952    

  642,952 DevelopedTechnology

   

  29,204    

  349,204          

Total   

$ 

40,703    

$ 

1,462,703 SiriusXMhasassessedthevalueofintangibleassetsrelatedtoPandora’sacquisitionofAdsWizzInc.onMay25,2018atcarryingvalueasof

September30,2018,$40,703.AccordinglyafairvalueanalysiswasperformedbyanindependentthirdpartytodeterminethefairvalueofthenetassetsacquiredfromAdsWizz.ThisvaluationwascompletedonJuly31,2018andrepresentsthebestavailableinformationatthistime.Forpurposesoftheproformafinancialstatements,weincludedthisamountatcarryingvalue.

TheamortizationrelatedtotheidentifiableintangibleassetsisreflectedasaproformaadjustmentintheunauditedproformacondensedcombinedconsolidatedstatementsofoperationsbasedontheestimatedusefullivesaboveandasfurtherdescribedinNote3(a).Theidentifiableintangibleassetsandrelatedamortizationarepreliminaryandarebasedonmanagement’sestimatesafterconsiderationofsimilartransactions.Asdiscussedabove,theamountthatwillultimatelybeallocatedtoidentifiableintangibleassets,andtherelatedamountofamortization,maydiffer

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materiallyfromthispreliminaryallocation.Inaddition,theamortizationimpactswillultimatelybebasedupontheperiodsinwhichtheassociatedeconomicbenefitsordetrimentsareexpectedtobederivedor,whereappropriate,basedontheuseofastraight-linemethod.Therefore,theamountofamortizationfollowingthetransactionsmaydiffersignificantlybetweenperiodsbaseduponthefinalvalueassignedandamortizationmethodologyusedforeachidentifiableintangibleasset.

Property and EquipmentThefollowingtablepresentsthenetbookvalue,reclassificiationadjustmentsandproformafairvalueofpropertyandequipmentbyassetclassin

theunauditedproformacombinedcondensedconsolidatedbalancesheetasofSeptember30,2018.Wereclassifiedthenetbookvalueof‘Softwaredevelopedforinternaluse—customerfacing’toIntangibleAssets,asthistechnologywasincludedintheestimatedfairvalueofDevelopedTechnologydeterminedabove.SiriusXMhasnotyetundertakenadetailedanalysisoftheparvalueofPandora’spropertyandequipmentandthereforeallotherpropertyandequipmenthasbeenrecordedatcostbasisintheunauditedproformacombinedcondensedconsolidatedbalancesheetasofSeptember30,2018.

           

   

Book Value as of September 30,

2018 

Reclassification to Intangible Assets

 

Pro Forma Fair Value

as of September 30, 2018

Propertyandequipment,net           

Servers,computersandotherrelatedequipment   

$ 

18,864    

$ 

—    

$ 

18,864 Softwaredevelopedforinternaluse—customerfacing

   

  39,257    

  (39,257)     

  — Softwaredevelopedforinternaluse—other

   

  10,462    

  —    

  10,462 Leaseholdimprovements

   

  18,678    

  —    

  18,678 Constructioninprogress

   

  17,482    

  —    

  17,482 Officefurnitureandequipment

   

  3,059    

  —    

  3,059            

Totalpropertyandequipment,net   

$ 

107,802    

$ 

(39,257)     

$ 

68,545 

Note 3—Pro Forma Adjustments(a)

 

DepreciationandamortizationTheadjustmentfortheninemonthsendedSeptember30,2018andyearendedDecember31,2017reverseshistoricaldepreciationofdevelopedtechnologyandhistoricalamortizationofintangibleassets,andincludestheadditionforestimatedamortizationofproformaintangibleassetsbasedontheirestimatedusefullife.

         

   

Pro Forma Nine Months Ended

September 30, 2018 

Pro Forma 12 Months Ended

December 31, 2017ReversalofPandora’shistoricaldepreciationrelatedtodevelopedtechnology

   

$ 

(10,059)     

$ 

(8,258) 

ReversalofPandora’shistoricalamortizationrelatedtointangibleassets   

  (4,555)     

  (13,084) 

Amortizationofpurchasedidentifiableintangibleassets   

  97,125    

  129,500          

Netchangetodepreciationandamortization   

$ 

82,511    

$ 

108,158          

(b) 

Reflectstheestimatedfairvalueofadditionalintangibleassetsidentifiedandtheeliminationofcertainexistingintangibles.See“IntangibleAssets”discussioninNote2above.

(c) 

Reflectstheimpactofproformaadjustmentstogoodwillbasedonthepreliminarypurchasepriceallocationdiscussedabove.(d)

 

TheadjustmenteliminatestheimpactofthePandorapreferredstockinvestment,whichincludeda$73,880and$472unrealizedgainrecordedinSiriusXM’sfinancialstatementsduringtheninemonthsendedSeptember30,2018andyearendedDecember31,2017,respectively.

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(e) 

SiriusXMmanagementhasperformedapreliminaryanalysisofPandora’snetoperatinglossesofapproximately$973millionasofDecember31,2017andadditionalestimatednetoperatinglossesofapproximately$294millionfortheninemonthsendedSeptember30,2018.Basedonthispreliminaryanalysis,nolimitationastothetotalvalueofsuchnetoperatinglosseswasidentifiedunderSection382oftheCode.However,theremaybelimitationsontheamountofnetoperatinglossesthatcanbeusedbySiriusXMwithinaspecificyear.TheproformaadjustmentconsiderstheestimatedtaxableincomeofthecombinedentitythroughSeptember30,2018andtherefore,thevaluationallowancepreviouslyrecordedinPandora’sfinancialstatementsrelatedtosuchnetoperatinglosseswillnolongerberecordedpost-combination.Uponcompletionofthefinalanalysis,theproformafinancialinformationpresentedabovewillbeupdated.

(f) 

TheadjustmentrepresentsreclassificationstoconformPandora’sfinancialstatementpresentationandaccountingpoliciestothoseofSiriusXM.Specifically,withintheunauditedproformacombinedcondensedconsolidatedbalancesheet,currentliabilitieshavebeenreclassifiedbetweenfinancialstatementcaptionstoconformtoSiriusXM’spresentation.Specifically,withintheunauditedproformacombinedcondensedconsolidatedstatementsofcomprehensiveincome,refertothetablebelowforthereclassificationsandadjustmentsmadetotheconsolidatedstatementsofcomprehensiveincomefortheninemonthsendedSeptember30,2018andyearendedDecember31,2017.SiriusXMisstillintheprocessofevaluatingtheproformaadjustmentsnecessarytoconformtheaccountingpoliciesofPandoratothoseofSiriusXMandexpectsfurtheradjustmentsmaybenecessaryasSiriusXMconductsamoredetailedreviewofPandora’saccountingpolicies.

                         

 

 

For the Nine Months Ended September 30, 2018 

Reclassifications and other adjustments

 

Bad debt expense, credit card

fees, and other customer service and billing costs

 

Depreciation and amortization

 

Loss on extinguishment

of debt 

Elimination of SXM Unrealized

Gain on Investment Ref (d)

 

Other Revenue

 

Total Ref (d)(f)

Revenue:                       

Subscriberrevenue               

 

$ 

(673) 

 

$ 

(673) 

Advertisingrevenue                   

    — Equipmentrevenue  

                 

    — Otherrevenue  

             

 

  673   

  673                          

Totalrevenue     —      —      —      —      —      — Operatingexpenses:  

                     

Costofservices  

  12,220   

  (9,740) 

          

 

  2,480 Subscriberacquisitioncosts  

                 

    — Salesandmarketing  

  (2,299) 

 

  (10,508) 

          

 

  (12,807) 

Engineering,designanddevelopment   

 

  (5,870) 

          

 

  (5,870) 

Generalandadministrative  

  (9,921) 

 

  (3,435) 

 

  (16,673) 

      

 

  (30,029) 

Depreciationandamortization   

 

  29,553            

 

  29,553 Impairmentofgoodwill  

                 

    — Contractterminationfees  

                 

    —                          

Totaloperatingexpenses     —      —   

  (16,673) 

    —      —   

  (16,673) 

                         

Incomefromoperations     —      —   

  16,673      —      —   

  16,673 Otherincome(expense):  

                     

Interestexpense                   

    — Lossonextinguishmentofdebt  

     

 

  (16,673) 

      

 

  (16,673) 

Otherincome(expense)           

 

  (73,880) 

  

 

  (73,880) 

                         

Totalotherexpense     —      —   

  (16,673) 

 

  (73,880) 

    —   

  (90,553) 

                         

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For the Year Ended December 31, 2017 

Reclassifications and other adjustments

 

Bad debt expense, credit card

fees, and other customer service and billing costs

 

Depreciation and amortization

 

Contract Termination

Fees 

Loss on sales of

subsidiaries 

Elimination of SXM Unrealized

Gain on Investment Ref (d)

 

Other Revenue

 

Total Ref (d)(f)

Revenue:                           

Subscriberrevenue                   

 

$ 

(744) 

 

$ 

(744) 

Advertisingrevenue                       

    — Equipmentrevenue  

                     

    — Otherrevenue  

                 

 

  744   

  744                              

Totalrevenue     —      —      —      —      —      —      — Operatingexpenses:  

                         

Costofservices  

  22,877   

  (8,697) 

              

 

  14,180 Subscriberacquisitioncosts  

                     

    — Salesandmarketing  

  (3,057) 

 

  (19,544) 

              

 

  (22,601) 

Engineering,designanddevelopment  

 

 

  (8,144) 

              

 

  (8,144) 

Generalandadministrative  

  (19,820) 

 

  (5,222) 

  

 

  (9,303) 

      

 

  (34,345) 

Depreciationandamortization   

 

  41,607                

 

  41,607 Impairmentofgoodwill  

                     

    — Contractterminationfees  

     

 

  (23,044) 

          

 

  (23,044) 

                             

Totaloperatingexpenses     —      —   

  (23,044) 

 

  (9,303) 

    —      —   

  (32,347) 

                             

Incomefromoperations                       

 

  32,347 Otherincome(expense):  

                         

Interestexpense                       

    — Lossonextinguishmentofdebt  

                     

    — Otherincome(expense)  

     

 

  (23,044) 

 

  (9,303) 

 

  (472) 

  

 

  (32,819) 

                             

Totalotherexpense     —      —   

  (23,044) 

 

  (9,303) 

 

  (472) 

    —   

  (32,819) 

                             

(g) 

Reflectstheimpactofthefollowingequityactivity:     

EliminationofPandoracommonstock   

$ 

(27) 

EstimatedvalueofSiriusXMcommonstock   

  391      

Totaladjustmentofcommonstock   

  364 EliminationofPandoraadditionalpaid-incapital

   

$ 

(1,632,178) 

EstimatedvalueofSiriusXMadditionalpaid-incapital  

  2,422,492 EstimatedvalueofSiriusXMreplacementequityawardsattributabletothepre-combinationservice  

  51,351      

Totaladjustmenttoadditionalpaid-incapital  

  841,665 EliminationofPandoraaccumulateddeficit

   

$ 

1,579,125 LossoncancellationofPandorapreferredstockinvestment(relatedpartynotereceivable)  

  (35,141) 

     

Totaladjustmenttoaccumulateddeficit  

  1,543,984 (h)

 

TheadjustmenttoincometaxeswascalculatedbyapplyingSiriusXM’sstatutorytaxrateatSeptember30,2018andDecember31,2017ofapproximately24.5%and38.5%,respectively,tothetaxableproformaadjustments.

(i) 

AsofDecember10,2018,SiriusXMintendstoissueapproximately391millionsharesofSiriusXMcommonstocktoPandorastockholdersandPandoraemployeesuponcompletionofthetransactions.Therefore,proformasharesusedtocomputeearningspersharewerecalculatedusingSiriusXM’shistoricalweightedaveragesharesoutstandingatSeptember30,2018andDecember31,2017,plustheapproximately391millionsharesthatwillbeissuedinconnectionwiththetransactions.

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DESCRIPTION OF SIRIUS XM CAPITAL STOCKThefollowingsummaryisadescriptionofthematerialtermsofSiriusXM’scapitalstockandshouldbereadinconjunctionwiththesection

entitled“ComparisonofStockholders’Rights,”beginningonpage[• ].ThissummaryisnotmeanttobecompleteandisqualifiedbyreferencetotheapplicableprovisionsoftheDGCL,theSiriusXMcharterandtheSiriusXMbylaws.CopiesoftheSiriusXMcharterandSiriusXMbylawsareincorporatedbyreferenceinthisproxystatement/prospectus.Formoreinformation,see“WhereYouCanFindMoreInformation,”beginningonpage[• ].

GeneralSiriusXM’sauthorizedcapitalstockconsistsof9,000,000,000sharesofSiriusXMcommonstockand50,000,000sharesofpreferredstock,par

value$0.001pershare,whichwerefertoastheSiriusXMpreferredstock.

Sirius XM Common Stock

Voting RightsExceptasotherwiseprovidedbylaw,assetforthintheSiriusXMcharterorasotherwiseprovidedinanydesignationofanyoutstandingseriesof

SiriusXMpreferredstock,theholdersofSiriusXMcommonstockwillhavegeneralvotingpoweronallmattersasasingleclass.HoldersofSiriusXMcommonstockareentitledtoonevotepershareheldofrecordonallmatterstobevotedonbytheholdersofSiriusXM

commonstock.SiriusXMstockholdersarenotentitledtocumulativevotingoftheirsharesinelectionsofdirectors.

Liquidation RightsIntheeventofthevoluntaryorinvoluntaryliquidation,dissolutionorwindingupofSiriusXM,thepriorrightsofcreditorsandtheaggregate

liquidationpreferenceofanySiriusXMpreferredstockthenoutstandingmustfirstbesatisfied.TheholdersofSiriusXMcommonstockwillbeentitledtoshareintheremainingassetsofSiriusXMonaproratabasis.

DividendsSharesofSiriusXMcommonstockareentitledtoparticipateequallyindividendswhenandasdividendsmaybedeclaredbytheSiriusXMboard

ofdirectorsoutoffundslegallyavailable.

Preemptive RightsNoholderofsharesofanyclassorseriesofcapitalstockofSiriusXMorholderofanysecurityorobligationconvertibleintosharesofanyclassor

seriesofcapitalstockofSiriusXMwillhaveanypreemptiverighttosubscribefor,purchaseorotherwiseacquiresharesofanyclassorseriesofcapitalstockofSiriusXM.

Transfer Agent and RegistrarThetransferagentandregistrarforSiriusXMcommonstockisComputershareInc.

No Stockholder Rights PlanSiriusXMcurrentlydoesnothaveastockholderrightsplan.

Description of Sirius XM Preferred StockTheSiriusXMboardofdirectorsisauthorizedtoprovidefortheissuanceofsharesofSiriusXMpreferredstockinoneormoreseriesandtofix

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designationofsuchseries,thevotingpowers(ifany),andthepreferencesandrelative,participating,optionalorotherspecialrights,ifany,andanyqualifications,limitationsorrestrictionsthereof,ofthesharesofsuchseries,byresolutionorresolutionsadoptedbytheSiriusXMboardofdirectorsprovidingfortheissueofsuchseries.Thisauthorizationincludestherighttofixthedesignationoftheseriesandthenumberofsharesinit,dividendratesandrights,votingrights,conversionrights,redemptionrights,sinkingfundprovisionsliquidationrights,andanyotherrelativerights,preferences,andlimitations.Asoftherecorddate,therewerenosharesofSiriusXMpreferredstockissuedandoutstanding.

TheissuanceofsharesofSiriusXMpreferredstockcouldadverselyaffecttheavailabilityofearningsfordistributiontotheholdersofSiriusXMcommonstockifthepreferredstockprovidesforcumulativedividends,dividendpreferences,conversionrightsorexchange,redemptionorothersimilarrightsorpreferences.

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COMPARISON OF STOCKHOLDERS’ RIGHTSIfthetransactionsareconsummated,PandorastockholderswillhavetheirsharesofPandoracommonstockautomaticallyconvertedintosharesof

SiriusXMcommonstock.TherightsofPandorastockholdersarecurrentlygovernedbytheDGCL,thePandoracharterandthePandorabylaws.TherightsofholdersofsharesofSiriusXMcommonstockarecurrentlygovernedbytheDGCL,theSiriusXMcharterandtheSiriusXMbylaws.

ThefollowingisasummaryofcertainmaterialdifferencesbetweentherightsofholdersofsharesofPandoracommonstockandholdersofsharesofSiriusXMcommonstock,butdoesnotpurporttobeacompletedescriptionofthosedifferences,nordoesitincludeacompletedescriptionofthespecificrightsofsuchholders.Furthermore,theidentificationofsomeofthedifferencesintherightsofsuchholdersasmaterialisnotintendedtoindicatethatotherdifferencesthatmaybeequallyimportantdonotexist.YouareurgedtoreadcarefullytherelevantprovisionsoftheDGCL,aswellastheapplicablegoverningcorporateinstrumentsofSiriusXMandPandora,copiesofwhichareavailable,withoutcharge,toanyperson,includinganybeneficialownertowhomthisproxystatement/prospectusisdelivered,byfollowingtheinstructionslistedunder“WhereYouCanFindMoreInformation”beginningonpage[• ].Thefollowingsummaryisqualifiedinitsentiretybyreferencetotherelevantprovisionsof(a)theDGCL,(b)thePandoracharter,(c)thePandorabylaws,(d)theSiriusXMcharterand(e)theSiriusXMbylaws.

   

Rights of Pandora Stockholders 

Rights of Sirius XM StockholdersAuthorized Capital Stock

ThePandoracharterauthorizesPandoratoissue1,000,000,000sharesofcommonstock,parvalue$0.0001pershare,and10,000,000sharesofpreferredstock,parvalue$0.0001pershare.

  TheSiriusXMcharterauthorizesSiriusXMtoissue9,000,000,000sharesofcommonstock,parvalue$0.001pershare,and50,000,000sharesofpreferredstock,parvalue$0.001pershare.

Asoftherecorddate,therewere[• ]sharesofPandoracommonstockissuedandoutstandingand480,000sharesofPandorapreferredstockissuedandoutstanding.

  AsoftheSiriusXMrecorddate,therewere[• ]sharesofSiriusXMcommonstockissuedandoutstandingandnosharesofSiriusXMpreferredstockissuedandoutstanding.

Voting Rights   

HoldersofPandoracommonstockareentitledtoonevotepershareheldofrecordonallmatterstobevotedonbytheholdersofPandoracommonstockandvotetogetherwiththeholdersofPandorapreferredstock,whoareentitledto[• ]votes,whichisequaltothenumberofsharesofcommonstockintowhichthesharesofpreferredstockcouldbeconvertedontherecorddate,roundedtothenearestshare.HoldersofPandoracommonstockdonothavecumulativevotingrightsintheelectionofdirectors.

  HoldersofSiriusXMcommonstockareentitledtoonevotepershareheldofrecordonallmatterstobevotedonbytheholdersofSiriusXMcommonstock.HoldersofSiriusXMcommonstockdonothavecumulativevotingrightsintheelectionofdirectors.

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Number of Directors   

ThePandorabylawsprovidethatthenumberofdirectorswhichshallconstitutethePandoraboardofdirectorsshallinitiallybeeight(8)and,thereafter,shallbefixedexclusivelybyoneormoreresolutionsadoptedfromtimetotimebytheaffirmativevoteofamajorityofthePandoraboard.ThePandoraboardofdirectorspresentlyconsistsofnine(9)directors.

  TheSiriusXMbylawsprovidethattheSiriusXMboardofdirectorsconsistofnofewerthan3andnomorethan15directors,asdeterminedfromtimetotimebytheaffirmativevoteofamajorityoftheSiriusXMdirectors.TheSiriusXMboardofdirectorspresentlyconsistsof13directors.

Classes of Directors   

ThePandoraboardofdirectorsisdividedintothreeclasses,designatedClassI,ClassIIandClassIII.Eachclassconsists,asnearlyasmaybepossible,ofone-thirdofthetotalnumberofdirectorsconstitutingtheentirePandoraboardofdirectors.EachdirectorservesforatermendingonthedateofthethirdannualmeetingofPandorastockholdersfollowingtheannualmeetingatwhichsuchdirectorwaselected.

  TheSiriusXMboardofdirectorsisnotclassified.TheSiriusXMbylawsprovideforannualelectionofdirectors.

Removal of Directors   

ThePandorabylawsprovidethatnoPandoradirectormayberemovedfromofficebythePandorastockholdersexceptforcausewiththeaffirmativevoteoftheholdersofnotlessthanamajorityofthetotalvotingpowerofalloutstandingsecuritiesofPandorathenentitledtovotegenerallyintheelectionofdirectors,votingtogetherasasingleclass.

  UndertheDGCL,adirectormayberemovedwithorwithoutcausebyamajorityofthesharesentitledtovoteatanelectionofthedirectors.

Filling Vacancies on the Board of Directors   

UnderthePandorabylaws,vacanciesonthePandoraboardofdirectorsresultingfromdeath,resignation,removalorotherwiseandnewlycreateddirectorshipsresultingfromanyincreaseinthenumberofdirectorsmaybefilledsolelybyamajorityofthedirectorstheninoffice(althoughlessthanaquorum)orbythesoleremainingdirector.

  UndertheDGCLandtheSiriusXMbylaws,anyvacancyontheboardofdirectors(whetherresultingfromanincreaseinthetotalnumberofdirectors,thedepartureofoneofthedirectors)maybefilledbytheaffirmativevoteofamajorityofthedirectorstheninofficeorbyasoleremainingdirector.

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Notice of Certain Stockholder Action   

ThePandorabylawsstatethatastockholdermayonlynominatedirectorsforelectionorpresentanactiontobetakenatanannualstockholders’meetingifthestockholdergivesadvancenoticenotlessthan90daysnormorethan120dayspriortothefirstanniversaryoftheprecedingyear’sannualmeetingofstockholders;provided,however,thatintheeventthatthedateoftheannualmeetingisadvancedmorethan30dayspriortosuchanniversarydateordelayedmorethan70daysaftersuchanniversarydatethentobetimelysuchnoticemustbereceivedbyPandoranoearlierthan120dayspriortosuchannualmeetingandnolaterthanthelaterof70dayspriortothedateofthemeetingorthe10thdayfollowingthedayonwhichpublicannouncementofthedateofthemeetingwasfirstmadebyPandora.Innoeventshallthepublicannouncementofanadjournmentorpostponementofanannualmeetingcommenceanewtimeperiod(orextendanytimeperiod)forthegivingofastockholder’snoticeasdescribedabove.Notwithstandinganythingintheprevioustwosentencestothecontrary,thenoticerequirementswithrespecttodirectornominationsorotherbusinessshallbedeemedsatisfiedbyastockholderifsuchstockholderhassubmittedaproposaltoPandora,anominationincompliancewithRule14a-11oraproposalincompliancewithRule14a-8undertheExchangeAct,andsuchstockholder’snominationorproposal,asthecasemaybe,hasbeenincludedinaproxystatementthathasbeenpreparedbyPandoratosolicitproxiesforthemeetingofstockholders.

  TheSiriusXMbylawsstatethatastockholdermayonlynominatedirectorsforelectionorpresentanactiontobetakenatanannualstockholder’smeetingifthestockholdergivesadvancenoticenotlessthan70daysandnotmorethan90daysbeforethefirstanniversaryoftheprecedingyear’sannualmeeting;provided,however,thatintheeventthatthedateoftheannualmeetingisadvancedbymorethan20days,ordelayedbymorethan70days,fromsuchanniversarydate,noticebythestockholdertobetimelymustbesodeliverednotearlierthanthe90thdaypriortosuchannualmeetingandnotlaterthanthecloseofbusinessonthelaterofthe70thdaypriortosuchannualmeetingorthetenthdayfollowingthedayonwhichpublicannouncementofthedateofsuchmeetingisfirstmade.Notwithstandinganythingintheprevioussentencetothecontrary,intheeventthatthenumberofdirectorstobeelectedtotheSiriusXMboardofdirectorsofthecorporationisincreasedandthereisnopublicannouncementnamingallofthenomineesfordirectororspecifyingthesizeoftheincreasedboardofdirectorsmadebySiriusXMatleasteightydayspriortothefirstanniversaryoftheprecedingyear’sannualmeeting,astockholder’snoticerequiredbythisbylawshallalsobeconsideredtimely,butonlywithrespecttonomineesforanynewpositionscreatedbysuchincrease,ifitshallbedeliveredtothecorporatesecretaryattheprincipalexecutiveofficesofSiriusXMnotlaterthanthecloseofbusinessonthetenthdayfollowingthedayonwhichsuchpublicannouncementisfirstmadebySiriusXM.

Calling Special Meetings of Stockholders   

UndertheDGCL,aspecialmeetingofacorporation’sstockholdersmaybecalledbytheboardorbyanyotherpersonauthorizedbythecorporation’scharterorbylaws.Allstockholdersofrecordentitledtovotemustreceivenoticeofallstockholdermeetingsnotlessthan10normorethan60daysbeforethedateofthestockholdermeeting.

ThePandorabylawsprovidethatspecialmeetingsofthestockholdersmaybecalledbyamajorityofthePandoraboardofdirectors,theChairmanofthePandoraboardofdirectors,thePresidentortheSecretaryandmaynotbecalledbyanyotherperson.Thepurposeorpurposesoftheproposedmeetingshallbeincludedinthenoticesettingforthsuchcall.

  TheSiriusXMbylawsprovidethatspecialmeetingsofthestockholdersshallbecalledatanytimebytheSecretaryoranyotherofficer,wheneverdirectedbynotlessthantwomembersoftheBoardofDirectorsorbytheChiefExecutiveOfficer.Thepurposeorpurposesoftheproposedmeetingshallbeincludedinthenoticesettingforthsuchcall.

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Action by Written Consent   

TheDGCLallowsactiontobetakenbystockholdersbywrittenconsenttobemadebytheholdersoftheminimumnumberofvotesthatwouldbeneededtoapproveamatteratanannualorspecialmeetingofstockholders,unlessthisrighttoactbywrittenconsentisdeniedinthecorporation’scharter.

ThePandoracharterprovidesthatsubjecttotherightsoftheholdersofanyseriesofPandorapreferredstockthenoutstanding,anyactionrequiredorpermittedtobetakenatanyannualorspecialmeetingofstockholdersmaybetakenonlyuponthevoteofstockholdersatanannualorspecialmeetingdulynoticedandcalledinaccordancewiththeDGCL,thePandoracharterandthePandorabylawsandmaynotbetakenbywrittenconsentofstockholderswithoutameeting.

  TheSiriusXMcharterdoesnotlimittherightofSiriusXM’sstockholderstotakeactionbywrittenconsentwithoutanannualorspecialmeetingofstockholders.

Quorum at Stockholders Meetings   

ThePandorabylawsprovidethat,unlessotherwiseprovidedunderthePandoracharterorthePandorabylawsandsubjecttotheDGCL,thepresence,inpersonorbyproxy,oftheholdersofamajorityoftheoutstandingcapitalstockofPandoraentitledtovoteatameetingofstockholdersshallconstituteaquorumforthetransactionofbusiness.If,however,suchquorumshallnotbepresentorrepresentedatanymeetingofthestockholders,amajorityinvotinginterestofthestockholderspresentinpersonorrepresentedbyproxymayadjournthemeeting,withoutnoticeotherthanannouncementatthemeeting,untilaquorumshallbepresentorrepresented.Atsuchadjournedmeetingatwhichaquorumshallbepresentorrepresentedanybusinessmaybetransactedwhichmighthavebeentransactedatthemeetingasoriginallynotified.Iftheadjournmentisformorethan30days,oraftertheadjournmentanewrecorddateisfixedfortheadjournedmeeting,anoticeoftheadjournedmeetingshallbegiventoeachstockholderofrecordentitledtovoteatthemeeting.

  TheSiriusXMbylawsprovidethat,unlessotherwiserequiredbylawortheSiriusXMcharter,holdersofamajorityinvotingpoweroftheSiriusXMcapitalstockissuedandoutstandingandentitledtovotethereat,presentinpersonorrepresentedbyproxy,shallconstituteaquorumatallmeetingsofthestockholdersforthetransactionofbusiness.If,however,atanyregularlycalledmeetingofstockholdersthereshallbelessthanaquorumpresent,thestockholderspresentmayadjournthemeetingfromtimetotimewithoutfurthernoticeotherthanannouncementatthemeetinguntilaquorumshallbepresentorrepresented.Atsuchadjournedmeetingatwhichaquorumshallbepresentorrepresentedanybusinessmaybetransactedwhichmighthavebeentransactedattheoriginalmeeting.Iftheadjournmentisformorethan30days,orif,aftertheadjournment,anewrecorddateisfixedfortheadjournedmeeting,anoticeoftheadjournedmeetingshallbegiventoeachstockholderofrecordentitledtovoteatthemeeting.

Stockholder Rights Plan   

Pandorahasnotadoptedastockholderrightsplan.   SiriusXMhasnotadoptedastockholderrightsplan.

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Anti-Takeover Provisions and Other Stockholder Protections   

BothSiriusXMandPandoraaresubjecttoSection203oftheDGCL,whichundercertaincircumstancesmaymakeitmoredifficultforapersonwhowouldbean“InterestedStockholder”(definedgenerallyasapersonwith15%ormoreofacorporation’soutstandingvotingstock)toeffecta“BusinessCombination”(definedgenerallyasmergers,consolidationsandcertainothertransactions,includingsales,leasesorotherdispositionsofassetswithanaggregatemarketvalueequalto10%ormoreoftheaggregatemarketvalueofthecorporation)withthecorporationforathree-yearperiod.UnderSection203,acorporationmayundercertaincircumstancesavoidtherestrictionsimposedbySection203.Moreover,acorporation’scharterorbylawsmayexcludeacorporationfromtherestrictionsimposedbySection203.NeithertheSiriusXMorPandoracharterorbylawsexcludethecompaniesfromtherestrictionsimposedunderSection203.

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Indemnification of Directors and Officers   

ThePandoracharterprovidesthatadirectorofPandorashallnotbeliabletoPandoraoritsstockholdersformonetarydamagesforbreachoffiduciarydutyasadirectortothefullestextentpermittedbyDelawarelaw.Pandoraindemnifies,tothefullestextentpermittedbyDelawarelaw,eachperson(andtheheirs,executorsoradministratorsofsuchperson)whowasorisapartyoristhreatenedtobemadeapartyto,orisinvolvedinanythreatened,pendingorcompletedaction,suitorproceeding,whethercivil,criminal,administrativeorinvestigative,byreasonofthefactthatsuchpersonisorwasadirectororofficerofPandoraorisorwasservingattherequestofPandoraasadirectororofficerofanothercorporation,partnership,jointventure,trustorotherenterprise.PandorapaystheexpensesincurredinconnectionwithanysuchproceedinginadvanceofitsfinaldispositiontothefullestextentauthorizedbyDelawarelaw.Pandoramay,byactionofthePandoraboardofdirectors,provideindemnificationtosuchoftheemployeesandagentsofPandoratosuchextentandtosucheffectasthePandoraboardofdirectorsshalldeterminetobeappropriateandauthorizedbyDelawarelaw.Pandorahasthepowertopurchaseandmaintaininsuranceonbehalfofanypersonwhoisorwasadirector,officer,employeeoragentofPandora,orisorwasservingattherequestofPandoraasadirector,officer,employeeoragentofanothercorporation,partnership,jointventure,trustorotherenterpriseagainstanyexpense,liabilityorlossincurredbysuchpersoninanysuchcapacityorarisingoutofsuchperson’sstatusassuch,whetherornotPandorawouldhavethepowertoindemnifysuchpersonagainstsuchliabilityunderDelawarelaw.Theindemnificationisnotexclusiveofanyotherrightthatanypersonmayotherwisehaveoracquire.

  TheSiriusXMcharterprovidesthatnoSiriusXMdirectorshallbepersonallyliabletoSiriusXMoritsstockholdersformonetarydamagesforbreachoffiduciarydutybythatdirectorasadirector.However,thislimitationdoesnoteliminateorlimittheliabilityofadirectortotheextentprovidedbyapplicablelaw(i)foranybreachofthedirector’sdutyofloyaltytoSiriusXMoritsstockholders,(ii)foractsoromissionsnotingoodfaithorwhichinvolveintentionalmisconductoraknowingviolationoflaw,(iii)forviolationoftheDGCLregardingunlawfulpaymentofdividendsorunlawfulstockpurchasesorredemptionsor(iv)foranytransactionfromwhichthedirectorderivedanimproperpersonalbenefit.SiriusXMindemnifies,tothefullextentpermittedbylaw,anyperson(ortheestateofanyperson)whowasorisapartyto,oristhreatenedtobemadeapartyto,anythreatened,pendingorcompleteaction,suitorproceeding,andwhethercivil,criminal,administrative,investigativeorotherwise,byreasonofthefactthatsuchpersonisorwasadirector,officeroremployeeofSiriusXM,orisorwasservingattherequestofSiriusXMasadirector,officeroremployeeofanothercorporation,limitedliabilitycompany,partnership,jointventure,trustorotherenterprise.SiriusXMmay,tothefullextentpermittedbylaw,purchaseandmaintaininsuranceonbehalfofanysuchpersonagainstanyliabilitywhichmaybeassertedagainsthimorher.Tothefullextentpermittedbylaw,theindemnificationincludesexpenses(includingattorneys’fees),judgments,finesandamountspaidinsettlement,andanysuchexpensesmaybepaidbySiriusXMinadvanceofthefinaldispositionofsuchaction,suitorproceeding.TheindemnificationdoesnotlimitSiriusXMrighttoindemnifyanyotherpersonforanysuchexpensestothefullextentpermittedbylaw,norisitexclusiveofanyotherrightstowhichanypersonseekingindemnificationfromSiriusXMmaybeentitledunderanyagreement,voteofstockholdersordisinteresteddirectorsorotherwise,bothastoactioninhisorherofficialcapacityandastoactioninanothercapacitywhileholdingsuchoffice.

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Amendments to Charter and Bylaws   

UndertheDGCL,anamendmenttothecharterrequiresapprovalbyboththeboardofdirectorsandtheholdersofamajorityofthevotesentitledtobecast.Anyproposedamendmenttothecertificateofincorporationthatwouldincreaseordecreasetheauthorizedsharesofaclassofstock,increaseordecreasetheparvalueofthesharesofaclassofstock,oralterorchangethepowers,preferencesorspecialrightsofthesharesofaclassofstock(soastoaffectthemadversely)requiresapprovaloftheholdersofamajorityoftheoutstandingsharesoftheaffectedclass,votingasaseparateclass,inadditiontotheapprovaloftheholdersofamajorityofthesharesentitledtovoteonthatproposedamendment.Ifanyproposedamendmentwouldalterorchangethepowers,preferencesorspecialrightsofanyseriesofaclassofstocksoastoaffectthemadversely,butdoesnotaffecttheentireclass,thenonlythesharesoftheseriesaffectedbytheproposedamendmentisconsideredaseparateclassforpurposesoftheimmediatelyprecedingsentence.

ThePandoracharterprovidesthattheprovisionssetforthinArticlesIV(B)(VotingRights),V(Bylaws),VI(BoardofDirectors),VII(Indemnification),VIII(MeetingofStockholders),IX(ForumSelection)andX(Amendments)ofthePandorachartermaynotberepealedoramendedinanyrespect,andnootherprovisionmaybeadopted,amendedorrepealedwhichwouldhavetheeffectofmodifyingorpermittingthecircumventionoftheprovisionssetforthinArticlesIV(B),V,VI,VII,VIII,IXandXofthePandoracharter,unlesssuchactionisapprovedbytheaffirmativevoteoftheholdersofnotlessthansixty-sixandtwo-thirdpercent(66-2/3%)ofthetotalvotingpowerofalloutstandingsecuritiesofPandorathenentitledtovotegenerallyintheelectionofdirectors,votingtogetherasasingleclass.ThePandoraboardofdirectorshasthepowertoadopt,amendorrepealthePandorabylaws.ThePandorastockholdersmayadopt,amendorrepealthePandorabylawsonlywiththeaffirmativevoteoftheholdersofnotlessthansixty-sixandtwo-thirdspercent(66-2/3%)ofthetotalvotingpowerofalloutstandingsecuritiesofPandorathenentitledtovotegenerallyintheelectionofdirectors,votingtogetherasasingleclass.

  TheSiriusXMcharterdoesnotcontainanyspecialprovisionsregardingapprovalofamendmentstothecharter.TheSiriusXMbylawsmaybeamendedorrepealedbytheSiriusXMboardofdirectorsortheSiriusXMstockholders.However,theaffirmativeholdersofatleast80percentinvotingpowerofallsharesofSiriusXMentitledtovotegenerallyintheelectionofdirectors,votingtogetherasasingleclass,arerequiredinorderforthestockholderstoamend,repealormodifySection2(“SpecialMeetings”)andSection11(“Nominations,etc.”)ofArticle1orthissentence.

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Appraisal Rights   

UnderSection262oftheDGCL,astockholdermaydissentfrom,andreceivepaymentsincashfor,thefairvalueofhisorhersharesasappraisedbytheDelawareCourtofChanceryintheeventofcertainmergersandconsolidations.However,stockholdersdonothaveappraisalrightsifthesharesofstocktheyhold,attherecorddatefordeterminationofstockholdersentitledtovoteatthemeetingofstockholderstoactuponthemergerorconsolidation,orontherecorddatewithrespecttoactionbywrittenconsent,areeither(i)listedonanationalsecuritiesexchangeor(ii)heldofrecordbymorethan2,000holders.Further,noappraisalrightsareavailabletostockholdersofthesurvivingcorporationifsuchmergerdidnotrequirethevoteofthestockholdersofthesurvivingcorporation.Notwithstandingtheforegoing,appraisalrightsaregenerallyavailableforstockholdersrequiredbythetermsofamergeragreementtoacceptanythinginrespectoftheirsharesotherthan(a)sharesofstockofthesurvivingcorporation,(b)sharesofstockthat,attheeffectivedateofthemerger,willbelistedonanationalsecuritiesexchangeorheldofrecordbymorethan2,000holders,(c)cashinlieuofanyfractionalsharesor(d)anycombinationoftheforegoing.

HoldersofPandoracommonstockarenotentitledtoappraisalrightsinconnectionwiththetransactions.

  SiriusXMstockholdersdonothaveanyappraisalrightsinconnectionwiththetransactions.

Dividends   

TheDGCLpermitsacorporationtodeclareandpaydividendsoutof“surplus”or,ifthereisno“surplus,”outofitsnetprofitsforthefiscalyearinwhichthedividendisdeclaredand/ortheprecedingfiscalyear.“Surplus”isdefinedastheexcessofthenetassetsofthecorporationovertheamountdeterminedtobethecapitalofthecorporationbytheboardofdirectors.Thecapitalofthecorporationcannotbelessthantheaggregateparvalueofallissuedsharesofcapitalstock.Netassetsequalstotalassetsminustotalliabilities.TheDGCLalsoprovidesthatdividendsmaynotbepaidoutofnetprofitsif,afterthepaymentofthedividend,capitalislessthanthecapitalrepresentedbytheoutstandingstockofallclasseshavingapreferenceuponthedistributionofassets.

Mergers, Consolidations and Other Transactions   

UndertheDGCL,theboardofdirectorsandtheholdersofamajorityofthesharesentitledtovotemustapproveamerger,consolidationorsaleofallorsubstantiallyallofacorporation’sassets.However,unlessthecorporationprovidesotherwiseinitscharter,nostockholdervoteofaconstituentcorporationsurvivingamergerundercertaincircumstances.

ThePandoracharterdoesnotcontainanysuper-majorityvotingrequirementsgoverningmergers,consolidations,salesofsubstantiallyalloftheassets,liquidations,reclassificationsorrecapitalizations.

  TheSiriusXMcharterdoesnotcontainanysuper-majorityvotingrequirementsgoverningmergers,consolidations,salesofsubstantiallyalloftheassets,liquidations,reclassificationsorrecapitalizations.

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APPRAISAL RIGHTSDissenters’rightsarestatutoryrightsthat,ifapplicableunderlaw,enablestockholderstodissentfromanextraordinarytransaction,suchasa

merger,andtodemandthatthecorporationpaythefairvaluefortheirsharesasdeterminedbyacourtinajudicialproceedinginsteadofreceivingtheconsiderationofferedtostockholdersinconnectionwiththeextraordinarytransaction.UndertheDGCL,holdersofPandoracommonstockwillnotbeentitledtodissenters’orappraisalrightsinconnectionwiththetransactions.

LEGAL OPINIONSThelegalityofsharesofSiriusXMcommonstockofferedbythisproxystatement/prospectuswillbepasseduponforSiriusXMbySimpson

Thacher&BartlettLLP.ThematerialU.S.federalincometaxconsequencesrelatingtothetransactionswillbepasseduponforPandorabySidleyAustinLLPandforSirius

XMbySimpsonThacher&BartlettLLP.See“TheTransactions—MaterialU.S.FederalIncomeTaxConsequences”beginningonpage[• ].

EXPERTSTheconsolidatedfinancialstatementsofSiriusXManditssubsidiariesasofDecember31,2017and2016,andforeachoftheyearsinthethree-

yearperiodendedDecember31,2017,andmanagement’sassessmentoftheeffectivenessofinternalcontroloverfinancialreportingasofDecember31,2017areincludedinthe2017AnnualReportofSiriusXManditssubsidiariesfiledonForm10-KandhavebeenincorporatedbyreferencehereinandintheregistrationstatementinrelianceuponthereportsofKPMGLLP,independentregisteredpublicaccountingfirm,incorporatedbyreferenceherein,andupontheauthorityofsaidfirmasexpertsinaccountingandauditing.TheauditreportcoveringtheDecember31,2017consolidatedfinancialstatementsofSiriusXManditssubsidiariesreferstoachangeinthemethodofaccountingforshare-basedpaymentsin2016duetotheadoptionofASU2016-09,Compensation-StockCompensation(Topic718):ImprovementstoEmployeeShare-BasedPaymentAccounting.

TheconsolidatedfinancialstatementsofPandoraappearinginPandora’sAnnualReport(Form10-K)fortheyearendedDecember31,2017,andtheeffectivenessofPandora’sinternalcontroloverfinancialreportingasofDecember31,2017,havebeenauditedbyErnst&YoungLLP,independentregisteredpublicaccountingfirm,assetforthintheirreportsthereon,includedtherein,andincorporatedhereinbyreference.Suchconsolidatedfinancialstatementsareincorporatedhereinbyreferenceinrelianceuponsuchreportsgivenontheauthorityofsuchfirmasexpertsinaccountingandauditing.

OTHER MATTERSAsofthedateofthisproxystatement/prospectus,thePandoraboardofdirectorsknowsofnomattersthatwillbepresentedforconsiderationatthe

Pandoraspecialmeetingsotherthanasdescribedinthisproxystatement/prospectus.IfanyothermattersproperlycomebeforethePandoraspecialmeeting,oranyadjournmentorpostponementthereof,andarevotedupon,theenclosedproxywillbedeemedtoconferdiscretionaryauthorityontheindividualsthatitnamesasproxiestovotethesharesrepresentedbytheproxyastoanyofthesematters.

PANDORA ANNUAL MEETING STOCKHOLDER PROPOSALSIfthetransactionsarenotconsummatedintheexpectedtimeframe,oratall,Pandoramayholda2019annualmeetingofstockholders,whichwe

refertoasthe2019AnnualMeeting,andeligiblePandorastockholdersmaysubmitproposalsforconsiderationatPandora’sfutureannualstockholdermeetings.Inorderforastockholderproposaltobeconsideredforinclusionintheproxymaterialsforthe2019AnnualMeeting,proposalsmustbereceivedbyPandora’sCorporateSecretarynolaterthanDecember10,2018andmustcomplywiththeprovisionsofRule14a-8oftheExchangeAct.

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Pandorastockholdersintendingtopresentaproposalatthe2019AnnualMeeting,butnottoincludetheproposalinPandora’sproxystatement,mustcomplywiththerequirementssetforthinPandora’sbylaws,whichrequire,amongotherthings,thataPandorastockholdersubmitawrittennoticeofintenttopresentsuchaproposaltoitsCorporateSecretaryatitsprincipalexecutiveofficesnotlessthan90daysandnomorethan120dayspriortothefirstanniversaryoftheprecedingyear’sAnnualMeetingofStockholders(aslongasthedateoftheAnnualMeetingisnotadvancedmorethan30daysordelayedmorethan70daysaftertheanniversarydate).Therefore,Pandora’sCorporateSecretarymustreceivenoticeofsuchproposalforthe2019AnnualMeetingnolaterthanthecloseofbusinessonFebruary20,2019andnotearlierthanthecloseofbusinessonJanuary21,2019.IfthenoticeisreceivedafterFebruary20,2019orbeforeJanuary21,2019itwillbeconsidereduntimelyandPandorawillnotberequiredtopresentitatthe2019AnnualMeeting.

WHERE YOU CAN FIND MORE INFORMATIONSiriusXMandPandorafileannual,quarterlyandcurrentreports,proxystatementsandotherinformationwiththeSECundertheExchangeAct.

Youmayreadandcopyanyreports,statementsorotherinformationonfilewiththeSECatthePublicReferenceRoomoftheSECat100FStreet,N.E.,Room1580,Washington,D.C.20549.PleasecalltheSECat1-800-SEC-0330forfurtherinformationonthePublicReferenceRoom.TheSECalsomaintainsanInternetwebsitethatcontainsreports,proxyandinformationstatements,andotherinformationregardingissuers,includingSiriusXMandPandora,whofileelectronicallywiththeSEC.Theaddressofthatsiteiswww.sec.gov.

InvestorsmayalsoconsultthewebsiteofSiriusXMorPandoraformoreinformationconcerningthetransactions.ThewebsiteofSiriusXMiswww.siriusxm.com.TheinvestorrelationswebsiteofPandoraisinvestor.pandora.com.Informationincludedonthesewebsitesisnotincorporatedbyreferenceintothisproxystatement/prospectus.

SiriusXMhasfiledaregistrationstatementonFormS-4toregisterwiththeSECthesharesofSiriusXMcommonstockthatPandora’sstockholderswillreceiveinconnectionwiththetransactions.Thisproxystatement/prospectusformsapartoftheregistrationstatementofSiriusXMonFormS-4andisaprospectusofSiriusXMandaproxystatementofPandoraforthePandoraspecialmeeting.TheregistrationstatementonFormS-4,includingtheattachedexhibitsandschedules,containsadditionalrelevantinformationaboutSiriusXMcommonstock.TherulesandregulationsoftheSECallowSiriusXMandPandoratoomitcertaininformationincludedintheregistrationstatementfromthisproxystatement/prospectus.

Inaddition,theSECallowsSiriusXMandPandorato“incorporatebyreference”informationintothisproxystatement/prospectus.ThismeansthatSiriusXMandPandoracandiscloseimportantinformationtoyoubyreferringyoutootherdocumentsfiledseparatelywiththeSEC.Thisinformationincorporatedbyreferenceisconsideredtobeapartofthisproxystatement/prospectus,exceptforanyinformationthatissupersededbyinformationincludeddirectlyinthisproxystatement/prospectus.

Thisproxystatement/prospectusincorporatesbyreferencethedocumentslistedbelowthathavebeenpreviouslyfiledwiththeSEC;provided,however,thatwearenotincorporatingbyreference,ineachcase,anydocuments,portionsofdocumentsorinformationdeemedtohavebeenfurnishedandnotfiledinaccordancewithSECrules.ThefollowingdocumentsmaycontainimportantinformationaboutSiriusXMandPandoraandtheirfinancialconditionorothermatters:

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Sirius XM’s SEC Filings (SEC File Number 001-34295):

 

Period or Date FiledAnnualReportonForm10-K   YearendedDecember31,2017

QuarterlyReportsonForm10-Q   QuartersendedMarch31,2018,June30,2018andSeptember30,2018

CurrentReportsonForm8-K   FiledonJanuary11,2018,January23,2018,April17,2018,June5,2018,June11,2018,July3,2018,July18,2018,August16,2018,September24,2018,September24,2018andNovember19,2018(otherthantheportionsofthosedocumentsnotdeemedtobefiled)

DefinitiveProxyStatementonSchedule14A   FiledonApril23,2018

DescriptionofSiriusXM’scommonstockcontainedinSiriusXM’sRegistrationStatementonForm8-Aandanyamendmentorreportfiledforthepurposeofupdatingthesedescriptions

  FiledonApril29,2009

   

Pandora SEC Filings (SEC File Number 001-35198):

 

Period or Date FiledAnnualReportonForm10-K   YearendedDecember31,2017

QuarterlyReportsonForm10-Q   QuartersendedMarch31,2018,June30,2018andSeptember30,2018

CurrentReportsonForm8-K   FiledonJanuary4,2018,January31,2018,May24,2018,May29,2018,June1,2018,June5,2018,July20,2018(amendment),September24,2018,October24,2018,November5,2018andNovember20,2018(otherthantheportionsofthosedocumentsnotdeemedtobefiled)

DefinitiveProxyStatementonSchedule14A   FiledonApril10,2018

Inaddition,SiriusXMandPandoraalsoincorporatebyreferenceintothisproxystatement/prospectusanyfuturefilingsthateithercompanymaymakewiththeSECunderSections13(a),13(c),14or15(d)oftheExchangeActbetweenthedateofthisproxystatement/prospectusandthedateofthePandoraspecialmeeting.Suchdocumentswillbeconsideredtobeapartofthisproxystatement/prospectus,effectiveasofthedatesuchdocumentsarefiled.Intheeventofconflictinginformationinthesedocuments,theinformationinthelatestfileddocumentshouldbeconsideredcorrect.NeitherSiriusXMnorPandoraareincorporatingbyreferenceanyinformationfurnishedto,butnotfiledwith,theSEC.

Exceptwherethecontextotherwiseindicates,theinformationcontainedinthisproxystatement/prospectuswithrespecttoSiriusXMwasprovidedbySiriusXM,andtheinformationcontainedinthisproxystatement/prospectuswithrespecttoPandorawasprovidedbyPandora.

DocumentsincorporatedbyreferenceareavailablefromSiriusXMandPandora,withoutcharge,excludingallexhibitsunlessanexhibithasbeenspecificallyincorporatedbyreferenceintothisproxystatement/prospectus.Youcanobtaindocumentsincorporatedbyreferenceinthisproxystatement/prospectusbyrequestingtheminwritingorbytelephonefromtheappropriatecompanyatthefollowingaddressesandtelephonenumbers:

     

Pandora Media, Inc.   Sirius XM Holdings Inc.2100FranklinStreet,Suite700Oakland,California94612Attn.:InvestorRelations

(510)451-4100

  1290AvenueoftheAmericas,11thFloorNewYork,NewYork10104Attn.:InvestorRelations

(212)584-5100137

 Table of Contents

Toobtaintimelydeliveryofthesedocuments,youmustrequestthemnolaterthanfivebusinessdaysbeforethedateofthePandoraspecialmeeting.ThismeansthatPandora’sstockholdersrequestingdocumentsmustdosoby[• ],2018,inordertoreceivethembeforethePandoraspecialmeeting.

Neither Sirius XM nor Pandora has authorized anyone to give any information or make any representation about the merger or thePandora special meeting that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materialsthat are incorporated by reference into this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you shouldnot rely on it. This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offeredby this proxy statement/prospectus, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it isunlawful to make such offer, solicitation of an offer or proxy solicitation in such jurisdiction. Neither the delivery of this proxystatement/prospectus nor any distribution of securities pursuant to this proxy statement/prospectus shall, under any circumstances, create anyimplication that there has been no change in the information set forth or incorporated into this proxy statement/prospectus by reference or inour affairs since the date of this proxy statement/prospectus. The information contained in this proxy statement/prospectus speaks only as ofthe date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

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Annex A

ExecutionVersion

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

among

SIRIUS XM HOLDINGS INC.,

WHITE OAKS ACQUISITION CORP.,

and

PANDORA MEDIA, INC.

Dated as of September 23, 2018

 Table of Contents

TABLE OF CONTENTS       

       

PageARTICLEITHEMERGER

   

  A-1 Section1.1.   TheRestructuring

   

  A-1 Section1.2.   Closing

   

  A-2 Section1.3.   EffectiveTime

   

  A-2 Section1.4.   EffectsoftheMerger

   

  A-3 Section1.5.   OrganizationalDocuments

   

  A-3 Section1.6.   DirectorsandOfficersoftheSurvivingCorporation

   

  A-4 Section1.7.   FurtherAssurances

   

  A-4 ARTICLEIICONSIDERATION

   

  A-4 Section2.1.   EffectonCapitalStock

   

  A-4 Section2.2.   StockCertificatesandBook-EntryShares

   

  A-5 Section2.3.   ExchangeofCompanyCommonStock

   

  A-5 Section2.4.   FractionalShares

   

  A-7 Section2.5.   CertificatesinAnotherPerson’sName

   

  A-7 Section2.6.   LostCertificates

   

  A-7 Section2.7.   NoFurtherTransfers

   

  A-7 Section2.8.   CompanyStockOptionsandOtherStock-BasedAwards

   

  A-8 Section2.9.   CertainAdjustments

   

 A-10 Section2.10.   Withholding

   

 A-10 ARTICLEIIIREPRESENTATIONSANDWARRANTIESOFTHECOMPANY

   

 A-10 Section3.1.   OrganizationandCorporatePower

   

 A-11 Section3.2.   Capitalization

   

 A-11 Section3.3.   Authority

   

 A-12 Section3.4.   ConsentsandApprovals;NoConflicts

   

 A-13 Section3.5.   SECDocumentsandInternalControls

   

 A-13 Section3.6.   FinancialStatementsandUndisclosedLiabilities

   

 A-14 Section3.7.   AbsenceofCertainChangesorEvents

   

 A-15 Section3.8.   LegalProceedings

   

 A-15 Section3.9.   CompliancewithLaws;Permits

   

 A-15 Section3.10.   CompanyMaterialContracts

   

 A-15 Section3.11.   CompanyBenefitPlans

   

 A-17 Section3.12.   LaborMatters

   

 A-19 Section3.13.   Taxes

   

 A-19 Section3.14.   IntellectualPropertyandPrivacy

   

 A-20 Section3.15.   EnvironmentalMatters

   

 A-21 Section3.16.   RealProperty

   

 A-21 Section3.17.   Insurance

   

 A-22 Section3.18.   InformationSupplied

   

 A-22 Section3.19.   TransactionswithAffiliates

   

 A-22 Section3.20.   TakeoverLaws

   

 A-22 Section3.21.   StockholderVoteRequired

   

 A-22 Section3.22.   Brokers

   

 A-22 Section3.23.   OpinionsofFinancialAdvisors

   

 A-23 Section3.24.   NoOtherRepresentationsorWarranties

   

 A-23 ARTICLEIVREPRESENTATIONSANDWARRANTIESOFPARENTANDMERGERSUB

   

 A-23 Section4.1.   OrganizationandCorporatePower

   

 A-23 Section4.2.   ParentCapitalization

   

 A-24 Section4.3.   Authority

   

 A-24 A-i

 Table of Contents

       

Section4.4.   ConsentsandApprovals;NoConflicts   

 A-24 Section4.5.   SECDocuments

   

 A-25 Section4.6.   FinancialStatementsandUndisclosedLiabilities

   

 A-26 Section4.7.   AbsenceofCertainChangesorEvents

   

 A-26 Section4.8.   LegalProceedings

   

 A-26 Section4.9.   Taxes

   

 A-26 Section4.10.   CompliancewithLaws

   

 A-26 Section4.11.   InformationSupplied

   

 A-26 Section4.12.   OwnershipofCompanyCommonStock

   

 A-27 Section4.13.   NoVoteofParentStockholders

   

 A-27 Section4.14.   Brokers

   

 A-27 Section4.15.   NoOtherRepresentationsorWarranties

   

 A-27 ARTICLEVCOVENANTS

   

 A-27 Section5.1.   CompanyConductofBusinessPriortotheEffectiveTime

   

 A-27 Section5.2.   ParentConductofBusinessPriortotheEffectiveTime

   

 A-30 Section5.3.   AccesstoInformation

   

 A-31 Section5.4.   PreparationoftheFormS-4andtheProxyStatement

   

 A-31 Section5.5.   Go-ShopandNoSolicitationbytheCompany

   

 A-33 Section5.6.   ReasonableBestEfforts

   

 A-36 Section5.7.   NotificationofCertainMatters

   

 A-38 Section5.8.   Publicity

   

 A-38 Section5.9.   Indemnification

   

 A-38 Section5.10.   EmployeeMatters

   

 A-40 Section5.11.   StockExchangeListing

   

 A-41 Section5.12.   Section16Matters

   

 A-41 Section5.13.   StockholderLitigation

   

 A-41 Section5.14.   TakeoverLaws

   

 A-41 Section5.15.   CompanyCooperationonCertainMatters

   

 A-41 Section5.16.   CertainTaxMatters

   

 A-41 Section5.17.   CompanyConvertibleNotesandCreditAgreement

   

 A-42 Section5.18.   ParentVote

   

 A-43 ARTICLEVICONDITIONSTOTHEMERGER

   

 A-43 Section6.1.   ConditionstoObligationsofEachParty

   

 A-43 Section6.2.   ConditionstoObligationsofParentandMergerSubtoEffecttheMerger

 

 

 A-43 Section6.3.   ConditionstoObligationsoftheCompanytoEffecttheMerger

   

 A-44 ARTICLEVIITERMINATION

   

 A-45 Section7.1.   Termination

   

 A-45 Section7.2.   EffectofTermination

   

 A-46 Section7.3.   TerminationFee

   

 A-46 ARTICLEVIIIMISCELLANEOUS

   

 A-47 Section8.1.   AmendmentandModification

   

 A-47 Section8.2.   Extension;Waiver

   

 A-47 Section8.3.   NoSurvival

   

 A-48 Section8.4.   Expenses

   

 A-48 Section8.5.   Notices

   

 A-48 Section8.6.   EntireAgreement

   

 A-48 Section8.7.   ThirdPartyBeneficiaries

   

 A-49 Section8.8.   Severability

   

 A-49 Section8.9.   Assignment

   

 A-49 Section8.10.   GoverningLaw

   

 A-49 A-ii

 Table of Contents

       

Section8.11.   ExclusiveJurisdiction   

 A-49 Section8.12.   SpecificPerformance

   

 A-50 Section8.13.   WAIVEROFJURYTRIAL

   

 A-50 Section8.14.   Counterparts

   

 A-50 Section8.15.   Interpretation

   

 A-50 Section8.16.   Definitions

   

 A-51 AnnexA—CertificateofIncorporationoftheNewHoldingCompany

   

AnnexB—BylawsoftheNewHoldingCompany   

A-iii

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INDEX OF DEFINED TERMS (OTHER THAN TERMS DEFINED IN SECTION 8.16)

   

Agreement   

  Preamble AlternativeAcquisitionAgreement

   

  Section5.5(c) AlternativeReverseSubsidiaryMerger

   

  Section5.16(c) Book-EntryShares

   

  Section2.2 CancelledShares

   

  Section2.1(a)(ii) CapitalExpenditureBudget

   

  Section5.1(j) Certificate

   

  Section2.2 CertificateofConversion

   

  Section1.1(c) CertificateofMerger

   

  Section1.3(b),Section1.3(a) CertificateofSiriusXMRadioMerger

   

  Section1.3(c) ChangeofRecommendation

   

  Section5.5(f) Closing

   

  Section1.2 ClosingDate

   

  Section1.2 Company

   

  Preamble CompanyDisclosureLetter

   

  ArticleIIIPreamble CompanyIndemnifiedParty

   

  Section5.9(a) CompanyMaterialContracts

   

  Section3.16(b) CompanyNegotiationPeriod

   

  Section5.5(g)(iii) CompanyPerformanceAward

   

  Section2.8(c)(i) CompanyRecommendation

   

  Section3.3(b) CompanyRSU

   

  Section2.8(b)(i) CompanySECDocuments

   

  Section3.5(a) CompanyStockOption

   

  Section2.8(a)(i) CompanyTerminationFee

   

  Section7.3(b) ConfidentialityAgreement

   

  Section5.3(b) ContentRights

   

  Section3.10(a)(i) ContinuingEmployees

   

  Section5.10(a) Conversion

   

  Section1.1(c) ConversionEffectiveTime

   

  Section1.1(c) ConvertedParentOption

   

  Section2.8(a)(i) ConvertedParentPerformanceAward

   

  Section2.8(c)(i) ConvertedParentRSU

   

  Section2.8(b)(i) D&OInsurance

   

  Section5.9(b) DGCL

   

  Section1.1(b) EffectiveTime

   

  Section1.3(b) EnvironmentalLaws

   

  Section3.15 ESPP

   

  Section2.8(e) ExchangeAgent

   

  Section2.3(a) ExchangeFund

   

  Section2.3(b) ExchangeRatio

   

  Section2.1(b)(i) ExcludedShares

   

  Section2.1(b)(i) Go-ShopTerminationFee

   

  7.1(a) HoldcoMergerSub

   

  Section1.1(a) HoldingCompanyMerger

   

  Section1.1(b) HoldingCompanyMergerEffectiveTime

   

  Section1.3(a) Infringe

   

  Section3.14(b) InsuranceAmount

   

  Section5.9(b) InterveningEvent

   

  5.5(h)(ii) InterveningEventNotice

   

  5.5(h)(iii) IPSafeHarbors

   

  Section3.14(c) Leases

   

  Section3.16(a) Merger

   

  Section1.1(d) MergerConsideration

   

  Section2.1(b)(i) MergerSub

   

  Preamble NewHoldcoCompany

   

  Section1.1(a) 

NewHoldingCompanyCommonStock   

  Section2.1(a)(i) NewHoldingCompanyPreferredStock

   

  Section2.1(a)(iii) No-ShopPeriodStartDate

   

  5.5(a) OutsideDate

   

  Section7.1(b)(ii) Parent

   

  Preamble ParentDisclosureLetter

   

  ArticleIVPreamble ParentSECDocuments

   

  Section4.5(a) PartyorParties

   

  Preamble ProposalDocuments

   

  5.5(e) SiriusXMRadioMerger

   

  Section1.1(e) SiriusXMRadioMergerEffectiveTime

   

  Section1.3(c) SuperiorProposalNotice

   

  Section5.5(g)(ii) SurvivingCompany

   

  Section1.1(b) A-iv

 Table of Contents

AGREEMENT AND PLAN OF MERGER AND REORGANIZATIONThisAGREEMENTANDPLANOFMERGERANDREORGANIZATION,datedasofSeptember23,2018(this“Agreement”),ismadeand

enteredintobyandamongSiriusXMHoldingsInc.,aDelawarecorporation(“Parent”),WhiteOaksAcquisitionCorp.,aDelawarecorporationandawholly-ownedSubsidiaryofParent(“MergerSub”),andPandoraMedia,Inc.,aDelawarecorporation(the“Company”).Parent,MergerSubandtheCompanyarereferredtoindividuallyasa“Party”andcollectivelyasthe“Parties.”

RecitalsWHEREAS,theBoardsofDirectorsofParent,MergerSubandtheCompanyhaveeachdetermineditisadvisabletoengageinthetransactions

contemplatedhereby;WHEREAS,forU.S.federalincometaxpurposes,itisintendedthattheHoldingCompanyMergerandtheConversion,takentogether,qualifyasa

“reorganization”withinthemeaningofSection368(a)(1)(F)oftheCode,andtherulesandregulationspromulgatedthereunder,andthisAgreementshallconstitutea“planofreorganization”withinthemeaningofTreasuryRegulationSection1.368-2(g);

WHEREAS,forU.S.federalincometaxpurposes,itisintendedthattheMergerandtheSiriusXMRadioMerger,takentogether,qualifyasa“reorganization”withinthemeaningofSection368(a)oftheCode,andtherulesandregulationspromulgatedthereunder,andthisAgreementshallconstitutea“planofreorganization”withinthemeaningofTreasuryRegulationSection1.368-2(g);and

WHEREAS,Parent,theCompanyandMergerSubdesiretomakecertainrepresentations,warranties,covenantsandagreementsspecifiedhereininconnectionwiththisAgreement.

NOW,THEREFORE,inconsiderationoftheforegoingandtherepresentations,warranties,covenantsandagreementscontainedherein,andintendingtobelegallyboundhereby,thePartiesagreeasfollows:

ARTICLE I

THE MERGERSection1.1.TheRestructuring.

(a)PriortotheClosing,(i)theCompanyshallformaDelawarecorporationasawhollyownedsubsidiaryoftheCompany(the“NewHoldingCompany”)and(ii)theNewHoldingCompanyshallformaDelawarecorporationasawhollyownedsubsidiaryoftheNewHoldingCompany(“HoldcoMergerSub”).Exceptforobligationsorliabilitiesincurred,oractivities,agreementsorarrangementsengaged,inconnectionwithitsincorporationandthetransactionscontemplatedbythisAgreement,theNewHoldingCompanyandHoldcoMergerSubwillnothaveincurred,directlyorindirectly,anyobligationsorliabilitiesorengagedinanybusinessactivitiesofanytypeorkindwhatsoeverorenteredintoanyagreementsorarrangementswithanyperson.

(b)UponthetermsandsubjecttotheconditionssetforthinthisAgreement,andinaccordancewiththeGeneralCorporationLawoftheStateofDelaware(the“DGCL”),attheClosing,HoldcoMergerSubshallbemergedwithandintotheCompany(the“HoldingCompanyMerger”),whereupontheseparateexistenceofHoldcoMergerSubwillceaseandtheCompanyshallcontinueasthesurvivingcorporation(followingtheconversionsetforthbelow,the“SurvivingCompany”).AsaresultoftheHoldingCompanyMerger,theCompanyshallbecomeawholly-ownedSubsidiaryoftheNewHoldingCompany.

(c)ImmediatelyaftertheHoldingCompanyMergerEffectiveTime(asdefinedbelow),theCompanyshallbeconvertedintoalimitedliabilitycompanyformedundertheDelawareLimitedLiabilityCompanyActbyfilingwiththeSecretaryofStateoftheStateofDelawareacertificateofconversion(the“CertificateofConversion”),executedinaccordancewiththerelevantprovisionsoftheDGCLandtheDelawareLimitedLiabilityCompanyAct.Theconversionofthe

A-1

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Companytoalimitedliabilitycompany(the“Conversion”)shallbecomeeffectiveatthetimethattheCertificateofConversionhasbeendulyfiledwiththeSecretaryofStateoftheStateofDelaware,oratsuchlatertimeontheClosingDateasParentandtheCompanyshallagreeandspecifyintheCertificateofConversion(thetimetheConversionbecomeseffective,the“ConversionEffectiveTime”).

(d)ImmediatelyaftertheConversionEffectiveTime,uponthetermsandsubjecttotheconditionssetforthinthisAgreement,andinaccordancewiththeDGCL,attheEffectiveTime(asdefinedbelow),MergerSubshallbemergedwithandintotheNewHoldingCompany(the“Merger”),whereupontheseparateexistenceofMergerSubwillceaseandNewHoldingCompanyshallcontinueasthesurvivingcorporation.AsaresultoftheMerger,theNewHoldingCompanyshallbecomeawholly-ownedSubsidiaryofParent.

(e)ImmediatelyaftertheEffectiveTime,uponthetermsandsubjecttotheconditionssetforthinthisAgreement,andinaccordancewiththeDGCL,attheSiriusXMRadioMergerEffectiveTime(asdefinedbelow),theNewHoldingCompanyshallbemergedwithandintoSiriusXMRadioInc.,aDelawarecorporationandawhollyownedsubsidiaryofParent(“SiriusXMRadio”andthemergerdescribedintheimmediatelyprecedingsentence,the“SiriusXMRadioMerger”),whereupontheseparateexistenceofNewHoldingCompanywillceaseandSiriusXMRadioshallcontinueasthesurvivingcorporation.

Section1.2.Closing.TheclosingofthetransactionscontemplatedbySection1.1(the“Closing”)shalltakeplaceattheofficesofSimpsonThacher&BartlettLLP,425LexingtonAvenue,NewYork,NewYork10017,at9:00a.m.,NewYorkCitytime,nolaterthanthesecondBusinessDayfollowingthesatisfactionorwaiveroftheconditionssetforthinArticleVI(otherthanthoseconditionsthatbytheirnaturearetobesatisfiedattheClosing,butsubjecttothesatisfactionofsuchconditionsorwaiverofthoseconditions),oratsuchotherplace,timeanddateasmaybeagreedtobyParentandtheCompany.ThedateonwhichtheClosingoccursisreferredtohereinasthe“ClosingDate.”

Section1.3.EffectiveTime.(a)OntheClosingDate,theCompanyshallfilewiththeSecretaryofStateoftheStateofDelawarethecertificateofmergerrelatingto

theHoldingCompanyMerger(the“CertificateofHoldingCompanyMerger”),executedinaccordancewiththerelevantprovisionsoftheDGCL.TheHoldingCompanyMergershallbecomeeffectiveatthetimethattheCertificateofHoldingCompanyMergerhasbeendulyfiledwiththeSecretaryofStateoftheStateofDelaware,oratsuchlatertimeontheClosingDateasParentandtheCompanyshallagreeandspecifyintheCertificateofHoldingCompanyMerger(thetimetheHoldingCompanyMergerbecomeseffective,the“HoldingCompanyMergerEffectiveTime”).FollowingtheHoldingCompanyMergerEffectiveTimeandpriortotheSiriusXMRadioMergerEffectiveTime,theNewHoldingCompanyshalltakenoactionsotherthanassetforthinthisAgreement.

(b)ImmediatelyfollowingtheConversionEffectiveTime,theCompanyshallfilewiththeSecretaryofStateoftheStateofDelawarethecertificateofmergerrelatingtotheMerger(the“CertificateofMerger”),executedinaccordancewiththerelevantprovisionsoftheDGCL.TheMergershallbecomeeffectiveatthetimethattheCertificateofMergerhasbeendulyfiledwiththeSecretaryofStateoftheStateofDelaware,oratsuchlatertimeontheClosingDate(andafterboththeHoldingCompanyMergerEffectiveTimeandConversionEffectiveTime)asParentandtheCompanyshallagreeandspecifyintheCertificateofMerger(thetimetheMergerbecomeseffective,the“EffectiveTime”).

(c)ImmediatelyfollowingtheEffectiveTime,theNewHoldingCompanyshallfilewiththeSecretaryofStateoftheStateofDelawarethecertificateofmergerrelatingtotheSiriusXMRadioMerger(the“CertificateofSiriusXMRadioMerger”),executedinaccordancewiththerelevantprovisionsoftheDGCL.TheSiriusXMRadioMergershallbecomeeffectiveatthetimethattheCertificateofSiriusXMRadioMergerhasbeendulyfiledwiththeSecretaryofStateoftheStateofDelaware,oratsuchlatertimeontheClosingDateasParentandtheCompanyshallagreeandspecifyintheCertificateofSiriusXMRadioMerger(thetimetheSiriusXMRadioMergerbecomeseffective,the“SiriusXMRadioMergerEffectiveTime”).

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Section1.4.EffectsoftheMerger.(a)AtandaftertheHoldingCompanyMergerEffectiveTime,theHoldingCompanyMergershallhavetheeffectssetforthinthis

AgreementandtheapplicableprovisionsoftheDGCL.Withoutlimitingthegeneralityoftheforegoing,attheHoldingCompanyMergerEffectiveTime,thesurvivingcorporationtosuchmergershallpossessalltherights,powers,privilegesandfranchisesandbesubjecttoalloftheobligations,liabilitiesanddutiesoftheCompanyandHoldcoMergerSub,allasprovidedundertheDGCL.

(b)AtandaftertheEffectiveTime,theMergershallhavetheeffectssetforthinthisAgreementandtheapplicableprovisionsoftheDGCL.Withoutlimitingthegeneralityoftheforegoing,attheEffectiveTime,thesurvivingcorporationtotheMergershallpossessalltherights,powers,privilegesandfranchisesandbesubjecttoalloftheobligations,liabilitiesanddutiesoftheNewHoldingCompanyandMergerSub,allasprovidedundertheDGCL.

(c)AtandaftertheSiriusXMRadioMergerEffectiveTime,theSiriusXMRadioMergershallhavetheeffectssetforthinthisAgreementandtheapplicableprovisionsoftheDGCL.Withoutlimitingthegeneralityoftheforegoing,attheSiriusXMRadioMergerEffectiveTime,SiriusXMRadioshallpossessalltherights,powers,privilegesandfranchisesandbesubjecttoalloftheobligations,liabilitiesanddutiesofSiriusXMRadioandtheNewHoldingCompany,allasprovidedundertheDGCL.

Section1.5.OrganizationalDocuments.(a)ImmediatelypriortotheHoldingCompanyMerger:(i)thecertificateofincorporationoftheNewHoldingCompanyshallbeamended

andrestatedinitsentiretytobethesame(exceptforthenameandincorporatorofthecompany)asthecertificateofincorporationoftheCompanyasineffectimmediatelypriortotheHoldingCompanyMergerEffectiveTime,andassoamendedshallbethecertificateofincorporationoftheNewHoldingCompanyuntilthereafteramendedinaccordancewithapplicableLawand(ii)thebylawsoftheNewHoldingCompanyshallbeamendedandrestatedtobethesame(exceptforthenameofthecompany)asthebylawsoftheCompanyasineffectimmediatelypriortotheHoldingCompanyMergerEffectiveTime,andassoamendedshallbethebylawsoftheNewHoldingCompanyuntilthereafteramendedinaccordancewithapplicableLaw.

(b)ByvirtueoftheHoldingCompanyMerger:(i)thecertificateofincorporationoftheCompanyshallbeamendedandrestatedasoftheHoldingCompanyMergerEffectiveTimesoastoreadinitsentiretyassetforthinAnnexA,andassoamendedshallbethecertificateofincorporationoftheCompanyuntilthereafteramendedinaccordancewithapplicableLawand(ii)thebylawsoftheCompanyshallbeamendedandrestatedasoftheHoldingCompanyMergerEffectiveTimesoastoreadinitsentiretyassetforthinAnnexB,andassoamendedshallbethebylawsoftheCompanyuntilthereafteramendedinaccordancewithapplicableLaw.AttheConversionEffectiveTime,NewHoldingCompanyandtheSurvivingCompanyshallenterintoalimitedliabilitycompanyagreement,tobereasonablyagreedbytheparties,inaformcustomaryforasinglemember,member-managedlimitedliabilitycompany,withindemnificationandexculpationprovisionsinaccordancewithSection5.9.

(c)ByvirtueoftheMerger:(i)thecertificateofincorporationoftheNewHoldingCompanyshallbeamendedandrestatedsoastoreadinitsentiretyassetforthinAnnexA(exceptforthenameofthecompanyandtheincorporator),andassoamendedandrestatedshallbethecertificateofincorporationofthesurvivingcorporationoftheMergeruntilthereafteramendedinaccordancewithapplicableLawand(ii)thebylawsoftheNewHoldingCompanyshallbeamendedandrestatedsoastoreadinitsentiretyassetforthinAnnexB(exceptforthenameofthecompany),andassoamendedandrestatedshallbethebylawsofthesurvivingcorporationoftheMergeruntilthereafteramendedinaccordancewithapplicablelaw.

(d)ImmediatelyfollowingtheSiriusXMRadioMergerEffectiveTime:(i)thecertificateofincorporationofSiriusXMRadio,asofimmediatelypriortotheSiriusXMRadioMergerEffectiveTime,shallbethecertificateofincorporationofthesurvivingcorporationoftheSiriusXMRadioMergeruntilthereafteramendedinaccordancewithapplicableLawand(ii)the

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bylawsofSiriusXMRadio,asofimmediatelypriortotheSiriusXMRadioMergerEffectiveTime,shallbethebylawsofthesurvivingcorporationoftheSiriusXMRadioMergeruntilthereafteramendedinaccordancewithapplicableLaw.

Section1.6.DirectorsandOfficersoftheSurvivingCorporation.(a)ThepartiesshalltakeallrequisiteactionsnecessarysothatthedirectorsandofficersoftheCompanyimmediatelypriortotheHolding

CompanyMergerEffectiveTimeshallbethedirectorsandofficersoftheCompanyfollowingtheHoldingCompanyMergeruntiltheConversionEffectiveTime.

(b)ThepartiesshalltakeallrequisiteactionsnecessarysothatthedirectorsandofficersoftheCompanyimmediatelypriortotheHoldingCompanyMergerEffectiveTimeshallbethedirectorsandofficersoftheNewHoldingCompanyfromtheHoldingCompanyMergerEffectiveTimeuntiltheSiriusXMRadioMergerEffectiveTime.

(c)ThedirectorsandofficersofSiriusXMRadioimmediatelypriortotheSiriusXMRadioMergershallthedirectorsandofficersofSiriusXMRadioimmediatelyaftertheSiriusXMRadioMergerEffectiveTime,untiltheearlieroftheirdeath,resignationorremovaloruntiltheirrespectivesuccessorsaredulyelectedandqualified,asthecasemaybe.

Section1.7.FurtherAssurances.EachofParentandtheCompanyshall,andshallcausetheirapplicablesubsidiaries(includingSiriusXMRadio,MergerSub,theNewHoldingCompanyandHoldcoMergerSub,asapplicable)to,cooperatewiththeotherpartyandexecutesuchdocuments,adoptsuchresolutionsandwrittenconsentsandtakesuchotheractionsasarereasonablynecessarytogiveeffecttothetransactionscontemplatedbythisArticleIinaccordancewiththetermsofthisAgreement,andeachshallprovidedraftsofanysuchdocuments,resolutionsandwrittenconsentsforreviewandcommentbytheotherparty.PriortotheClosing,theNewHoldingCompany,HoldcoMergerSubandSiriusXMRadioshalleachexecuteajoindertothisAgreementandeachshallbecomeapartyhereto.

ARTICLE II

CONSIDERATIONSection2.1.EffectonCapitalStock.

(a)AttheHoldingCompanyMergerEffectiveTime,byvirtueoftheHoldingCompanyMergerandwithoutanyactiononthepartoftheNewHoldingCompany,HoldcoMergerSub,theCompanyoranyholderofanysharesofCompanyCapitalStock:

(i)eachshareofCompanyCommonStockissuedandoutstandingimmediatelypriortotheHoldingCompanyMergerEffectiveTime(otherthantheCancelledShares)shallbeconvertedintoonevalidlyissued,fullypaidandnon-assessableshareofcommonstockoftheNewHoldingCompany(“NewHoldingCompanyCommonStock”);

(ii)eachshareofCompanyCommonStockownedbytheCompany(includingsharesheldastreasurystockorotherwise)immediatelypriortotheEffectiveTimeshallbeautomaticallycancelledandshallceasetoexistandnoconsiderationshallbedeliveredinexchangetherefor(the“CancelledShares”);

(iii)eachshareofCompanyPreferredStockshallbeconvertedintooneshareofpreferredstockoftheNewHoldingCompany,havingthesametermsandconditionsasimmediatelypriortotheHoldingCompanyMergerEffectiveTime(otherthansuchchangesasrequiredtoevidencethattheissuerofsuchpreferredsharesshallbetheNewHoldingCompany)(“NewHoldingCompanyPreferredStock”);and

(iv)eachshareofcapitalstockofHoldcoMergerSubissuedandoutstandingimmediatelypriortotheHoldcoMergerEffectiveTimeshallbeconvertedintoandbecomeonevalidlyissued,fullypaidandnon-assessableshareofcommonstockoftheCompany(whichsharesshallallbeownedbytheNewHoldingCompany),asthesurvivingcorporationintheHoldingCompanyMerger.

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(b)AttheEffectiveTime,byvirtueoftheMergerandwithoutanyactiononthepartofParent,MergerSub,theNewHoldingCompanyoranyholderofanysharesofNewHoldingCompanycapitalstock:

(i)eachshareofNewHoldingCompanyCommonStockissuedandoutstandingimmediatelypriortotheEffectiveTime(otherthananysharesofNewHoldingCompanyCommonStockheldbyanyParentSubsidiary(the“ExcludedShares”))shallbeconvertedintotherighttoreceive1.44(the“ExchangeRatio”)validlyissued,fullypaidandnon-assessablesharesofParentCommonStock(the“MergerConsideration”);and

(ii)eachExcludedShareshallremainissuedandoutstandingandshallbeunaffectedbytheMerger;(iii)eachshareofNewHoldingCompanyPreferredStockshallremainissuedandoutstandingandshallbeunaffectedbytheMerger;

and(iv)eachshareofcapitalstockofMergerSubissuedandoutstandingimmediatelypriortotheEffectiveTimeshallbeconvertedinto

andbecomeanumberofvalidlyissued,fullypaidandnon-assessablesharesofNewHoldingCompanyCommonStock(whichsharesshallallbeownedbyParent)equaltothequotientof(x)thenumberofoutstandingsharesofNewHoldingCompanyCommonStockimmediatelypriortotheEffectiveTime(otherthananyExcludedShares)and(y)thenumberofoutstandingsharesofMergerSubcapitalstockimmediatelypriortotheEffectiveTime.

(c)AttheSiriusXMRadioMergerEffectiveTime,byvirtueoftheSiriusXMRadioMergerandwithoutanyactiononthepartofSiriusXMRadio,theNewHoldingCompanyoranyholderofanysharesoftheNewHoldingCompanycapitalstock:

(i)eachshareofSiriusXMRadioissuedandoutstandingimmediatelypriortotheSiriusXMRadioMergerEffectiveTimeshallremainissuedandoutstandingandshallbeunaffectedbytheSiriusXMRadioMerger;and

(ii)eachshareofcapitalstockoftheNewHoldingCompanyissuedandoutstandingimmediatelypriortotheSiriusXMRadioMergerEffectiveTime(includingthesharesofNewHoldingCompanyPreferredStock)shallbecancelledfornoconsideration.

Section2.2.StockCertificatesandBook-EntryShares.FromandaftertheHoldingCompanyMergerEffectiveTime,allstockcertificatesthatpreviouslyrepresentedsharesofCompanyCommonStockandanysharesofCompanyCommonStockheldinbook-entryformshallrepresentthesharesofNewHoldingCompanyCommonStockintowhichthesharesrepresentedbysuchcertificatesorsuchbookentryshareswereconvertedintheHoldingCompanyMergeruntilpresentedfortransferorexchange.AttheEffectiveTime,allsharesofNewHoldingCompanyCommonStockconvertedintotherighttoreceivetheMergerConsiderationshallautomaticallybecancelledandshallceasetoexist,andeachholderofacertificatethatimmediatelypriortotheHoldingCompanyMergerEffectiveTimerepresentedanysharesofCompanyCommonStock(a“Certificate”)oranysuchsharesofCompanyCommonStockheldinbookentryform(“Book-EntryShares”)shall,ineachcase,ceasetohaveanyrightswithrespectthereto,excepttherighttoreceivetheMergerConsiderationwithrespecttothesharesofNewHoldingCompanyStockintowhichsuchCompanyCommonStockwasconvertedintopursuanttoSection2.1(a)(i),subjecttocompliancewiththeproceduressetforthinSection2.3.

Section2.3.ExchangeofCompanyCommonStock.(a)PriortotheEffectiveTime,Parentshallenterintoanexchangeagreement(whichshallbereasonablyacceptabletotheCompany)with

Parent’stransferagentoranothernationallyrecognizedfinancialinstitutiondesignatedbyParentandreasonablyacceptabletotheCompany(the“ExchangeAgent”).

(b)AtorimmediatelypriortotheEffectiveTime,ParentshalldepositorcausetobedepositedwiththeExchangeAgentforthebenefitoftheholdersofsharesofNewHoldingCompanyCommonStock(otherthanholdersofCancelledShares):(i)thenumberofsharesofParentCommonStock(inbook-entryform)issuablepursuanttoSection2.1and(ii)anamountof

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cashsufficienttopaytheaggregatecashinlieuoffractionalsharesofParentCommonStockpayableinaccordancewithSection2.4(togetherwiththesharesofParentCommonStockdepositedpursuanttoclause(i)above,the“ExchangeFund”).

(c)ThecashportionoftheExchangeFundmaybeinvestedbytheExchangeAgentasdirectedbyParent;providedthatnosuchinvestmentorlossthereonshallaffecttheamountspayabletoholdersofNewHoldingCompanyCommonStockpursuanttothisArticleII.Ifforanyreason(includinglosses)thecashintheExchangeFundshallbeinsufficienttofullysatisfyallofthepaymentobligationstobemadeincashbytheExchangeAgenthereunder,ParentshallpromptlydepositintotheExchangeFundtheamountofcashrequiredtofullysatisfysuchcashpaymentobligations.ExceptasprovidedforinthisAgreement,theExchangeFundshallnotbeusedforanyotherpurpose.

(d)ExchangeProceduresforCertificates.(i)ParentshallinstructtheExchangeAgenttomail,assoonasreasonablypracticableaftertheClosingDate,toeachholderofrecord

ofaCertificatewhosesharesofCompanyCommonStockwereconvertedintoNewHoldingCompanyCommonStockandthenconvertedintotherighttoreceivetheMergerConsideration:(i)aletteroftransmittal(whichshallspecifythatdeliveryshallbeeffected,andriskoflossandtitletotheCertificatesshallpass,onlyupondeliveryoftheCertificatestotheExchangeAgentandshallbeinaformandhavesuchcustomaryprovisionsasParentandtheCompanymayreasonablyagreepriortotheEffectiveTime)and(ii)instructionsforuseineffectingthesurrenderoftheCertificatesinexchangefortheMergerConsideration.

(ii)AnyholderofaCertificateshallbeentitledtoreceive,uponsurrenderofsuchCertificateforcancellationtotheExchangeAgenttogetherwiththeletteroftransmittal,dulyexecutedbysuchholder,andsuchotherdocumentsasmayreasonablyberequiredbytheExchangeAgent:(A)subjecttoSection2.4,theaggregateMergerConsiderationforthesharesofNewCompanyCommonStockthattheCompanyCommonStockpreviouslyrepresentedbysuchCertificatewasconvertedintopursuanttoSection2.1(a)(i),(B)cashinlieuoffractionalsharesofParentCommonStockpayableinaccordancewithSection2.4and(C)anydividendsorotherdistributionsinrespectofsuchwholenumberofsharesofParentCommonStockincludedinsuchaggregateMergerConsiderationthattheholderhasarighttoreceivepursuanttoSection2.3(f).NointerestshallbepaidoraccrueonanycashpayableuponsurrenderofanyCertificateandtheCertificatesosurrenderedshallforthwithbecancelled.

(e)ExchangeProceduresforBook-EntryShares.AnyholderofBook-EntrySharesshallnotberequiredtodeliveraCertificate,executedletteroftransmittalorotherdocumentsinordertoreceivetheMergerConsiderationthatsuchholderisentitledtoreceiveinrespectofsuchBook-EntryShares(unlesstheExchangeAgentreasonablyrequiresaletteroftransmittalorotherdocuments).TheExchangeAgentshallpayanddelivertoanysuchholderofBook-EntrySharesaspromptlyaspracticableaftertheEffectiveTime(andfollowingreceiptbytheExchangeAgentofanysuchdocumentssoreasonablyrequired,ifany):(A)subjecttoSection2.4,theaggregateMergerConsiderationforthesharesofNewCompanyCommonStockthattheCompanyCommonStockpreviouslyrepresentedbysuchBook-EntryShareswasconvertedintopursuanttoSection2.1(a)(i),(B)cashinlieuoffractionalsharesofParentCommonStockpayableinaccordancewithSection2.4and(C)anydividendsorotherdistributionsinrespectofsuchwholenumberofsharesofParentCommonStockincludedinsuchaggregateMergerConsiderationthattheholderhasarighttoreceivepursuanttoSection2.3(f).NointerestshallbepaidoraccrueonanycashpayableuponexchangeoftheBook-EntrySharesandsuchBook-EntrySharesshallforthwithbecancelled.

(f)DistributionswithRespecttoUnexchangedShares.UntilaholderofaCertificateorBook-EntrySharessurrenderssuchCertificateorexchangessuchBook-EntrySharesinaccordancewiththisArticleII,nodividendsorotherdistributionswithrespecttoParentCommonStockthattheholderofsuchCertificateorBook-EntrySharesisentitledtoreceiveshallbepaidtosuchholder.UponsuchholdersurrenderingsuchCertificateorexchangingsuchBook-EntrySharesinaccordancewiththisArticleII,suchholdershallbeentitledtoreceiveanydividendsorotherdistributionswithrespecttosuchsharesofParentCommonStockwitharecorddateafterthe

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EffectiveTimeandpaymentdatepriortothetimesuchCertificatewassurrenderedorsuchBook-EntrySharesexchanged.(g)UnclaimedFunds.AnyportionoftheExchangeFundthatremainsundistributedtotheformerholdersofNewHoldingCompany

CommonStocktwelve(12)monthsaftertheEffectiveTimeshallbedeliveredtotheSurvivingCompanyuponitsdemandtherefor,andanyformerholderofNewHoldingCompanyCommonStockwhohasnottheretoforecompliedwiththisArticleIIshallthereafterlookonlytotheSurvivingCompanyforpaymentofitsclaimfortheMergerConsiderationinaccordancewiththisArticleII.

(h)Escheatment.NoneofParent,MergerSub,theSurvivingCompanyortheExchangeAgentshallbeliabletoanyPersoninrespectofanysharesofParentCommonStock(ordividendsordistributionswithrespectthereto)orcashpayablepursuanttothisAgreementdeliveredtoapublicofficialpursuanttoanyapplicableabandonedproperty,escheatorsimilarLaw.AnyMergerConsiderationremainingunclaimedbyformerholdersofNewHoldingCompanyCommonStockimmediatelypriortosuchtimeassuchamountswouldotherwiseescheattoorbecomepropertyofanyGovernmentalEntityshall,tothefullestextentpermittedbyapplicableLaw,becomethepropertyoftheSurvivingCompanyfreeandclearofanyclaimsorinterestofanyPersonpreviouslyentitledthereto.

Section2.4.FractionalShares.Nofractionalshares(orscriprepresentingfractionalshares)ofParentCommonStockshallbeissuedinconnectionwiththeMerger.NotwithstandinganyotherprovisionofthisAgreement,eachholderofsharesofNewHoldingCompanyCommonStockwhowouldotherwisehavebeenentitledtoreceiveafractionofashareofParentCommonStock(afteraggregatingallsharesofParentCommonStockthattheholderofsuchCertificatesandBook-EntrySharesisentitledtoreceiveinrespectofsuchCertificatesandBook-EntrySharessurrenderedorexchangedbysuchholder)shallreceive,inlieuofsuchfractionofashareofParentCommonStock,cash(withoutinterest)inanamountdeterminedbymultiplying(i)suchfractionofashare(roundedtothenearestone-thousandthwhenexpressedindecimalform)by(ii)theParentMeasurementPrice.Nosuchholdershallbeentitledtodividends,distributions,votingrightsoranyotherrightsinrespectofanyfractionalshareofParentCommonStock.

Section2.5.CertificatesinAnotherPerson’sName.AnyPersonsurrenderingaCertificatethatisnotissuedinthenameofsuchPersonshallonlybeentitledtoreceivetheMergerConsiderationinaccordancewithSection2.3forthesharesofNewHoldingCompanyCommonStockthattheCompanyCommonStockpreviouslyrepresentedbysuchCertificatewasconvertedintopursuanttoSection2.1(a)(i)if(a)suchCertificateisproperlyendorsed(orParentandtheExchangeAgentareotherwisesatisfiedthatsuchPersonhasproperlytransferredsuchCertificate),(b)thePersonsurrenderingsuchCertificatepaysanyrequiredtransferorotherTaxes(orestablishestothesatisfactionofParentortheExchangeAgentthatsuchTaxhasbeenpaidorisnotapplicable)and(c)suchPersonhasotherwisecompliedwithSection2.3.

Section2.6.LostCertificates.AnyPersonclaimingthataCertificatehasbeenlost,stolenordestroyedshallonlybeentitledtoreceivetheMergerConsiderationinaccordancewithSection2.3forthesharesofNewHoldingCompanyCommonStockthattheCompanyCommonStockpreviouslyrepresentedbysuchCertificatewasconvertedintopursuanttoSection2.1(a)(i)ifsuchPerson(a)providesanaffidavit(reasonablyacceptabletoParentandtheExchangeAgent)thatsuchCertificatehasbeenlost,stolenordestroyed,(b)postsabond(insuchreasonableamountasParentortheExchangeAgentmaydirect)asindemnityagainstanyclaimthatmaybemadeagainstParent,theExchangeAgentortheSurvivingCorporationwithrespecttosuchCertificateand(c)hasotherwisecompliedwithSection2.3.

Section2.7.NoFurtherTransfers.AftertheHoldingCompanyMergerEffectiveTime,(i)thereshallbenofurtherregistrationoftransfersonthestocktransferbooksoftheCompanyofsharesofCompanyCommonStockthatwereoutstandingimmediatelypriortotheEffectiveTimeand(ii)thereshallbenofurtherregistrationoftransfersonthestocktransferbooksoftheNewHoldingCompanyofsharesofNewHoldingCompanyCommonStockthatareissuedinconnectionwiththeHoldingCompanyMerger.If,aftertheEffectiveTime,anyCertificatesformerly

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representingsharesofCompanyCommonStockarepresentedtotheSurvivingCorporationortheExchangeAgentforanyreason,theyshallbecancelledandexchangedasprovidedinthisArticleII.

Section2.8.CompanyStockOptionsandOtherStock-BasedAwards.AttheHoldingCompanyMergerEffectiveTime,theCompanyStockOptions,theCompanyRSUsandtheCompanyPerformanceAwardsoutstandingasofimmediatelypriortheretoshallbeadjustedtogiveeffecttotheconversionofsharesofCompanyCommonStockasdescribedinSection2.1.

(a)StockOptions.(i)AttheEffectiveTime,eachoptiontoacquiresharesofCompanyCommonStockgrantedunderaCompanyStockIncentivePlan

that,asadjustedintoanoptiontoacquireNewHoldingCompanyCommonStock,isoutstandingasofimmediatelypriortotheEffectiveTime(whethervestedorunvested)(each,a“CompanyStockOption”)shall,withoutanyfurtheractiononthepartofanyholderthereof,beassumedandconvertedintoanoptiontopurchasefromParent,anumberofsharesofParentCommonStock(roundeddowntothenearestwholeshare)determinedbymultiplying(x)thenumberofsharesofNewHoldingCompanyCommonStocksubjecttosuchCompanyStockOptionasofimmediatelypriortotheEffectiveTimeby(y)theExchangeRatio,atanexercisepricepershareofParentCommonStock(roundeduptothenearestwholecent)equaltothequotientobtainedbydividing(1)thepershareexercisepriceforthesharesofNewHoldingCompanyCommonStocksubjecttosuchCompanyStockOptionasofimmediatelypriortotheEffectiveTimeby(2)theExchangeRatio(each,assoadjusted,a“ConvertedParentOption”).

(ii)EachConvertedParentOptionshallhavethesamevestingschedule(includinganypotentialaccelerationofvestingasprovidedintheapplicableCompanyStockIncentivePlan,grantagreementunderwhichtheCompanyOptionwasoriginallygrantedoranyapplicableofferletter,employmentagreement,severanceagreementorseveranceplanorpolicyoftheCompanyoraCompanySubsidiaryasineffectonthedateofthisAgreementandlistedonSection3.11(a)oftheCompanyDisclosureLetterorgrantedincompliancewithSection5.1(k)(D))andpost-terminationexerciseperiodastheCompanyStockOptionasineffectasofimmediatelypriortotheEffectiveTimeandshallbesubjecttoallofthematerialtermsandconditionsoftheCompanyStockIncentivePlanunderwhichtheCompanyStockOptionwasoriginallygranted,totheextentadministrativelypracticable;provided,thatParentshallconvertCompanyStockOptionsintoConvertedParentOptionsinamannerintendedtonotcausetheConvertedParentOptionstobetreatedasthegrantofanewstockrightforpurposesofSection409AoftheCode.Notwithstandingtheforegoing,eachCompanyStockOptionthatis(x)outstandingasofimmediatelypriortotheEffectiveTimeand(y)hasanexercisepricepersharethatisequaltoorgreaterthantheMergerConsiderationClosingValue,shallbecancelledasoftheEffectiveTimewithoutpaymentthereforandshallhavenofurtherforceoreffect.

(b)RestrictedStockUnits.(i)AttheEffectiveTime,eachrighttoreceiveoneshareofCompanyCommonStockgrantedunderaCompanyStockIncentivePlan

intheformof“stockunits”that,asadjustedintoarighttoreceiveNewHoldingCompanyCommonStock,isoutstandingandunvestedasofimmediatelypriortotheEffectiveTime(each,a“CompanyRSU”)shall,withoutanyfurtheractiononthepartofanyholderthereof,beassumedandconvertedintotherighttoreceiveanumberofsharesofParentCommonStock(roundeddowntothenearestwholeshare)determinedbymultiplying(x)thenumberofsharesofNewHoldingCompanyCommonStocksubjecttosuchCompanyRSUasofimmediatelypriortotheEffectiveTimeby(y)theExchangeRatio(each,assoadjusted,a“ConvertedParentRSU”).

(ii)EachConvertedParentRSUshallhavethesamevestingschedule(includinganypotentialaccelerationofvestingasprovidedintheCompanyStockIncentivePlan,grantagreementunderwhichtheCompanyRSUwasoriginallygrantedoranyapplicableofferletter,employmentagreement,severanceagreementorseveranceplanorpolicyoftheCompanyoraCompanySubsidiaryasineffectonthedateofthisAgreementandlistedonSection3.11(a)oftheCompanyDisclosureLetterorgrantedincompliancewithSection5.1(k)(D))andsettlement

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dateastheCompanyRSUandshallbesubjecttoallofthematerialtermsandconditionsoftheCompanyStockIncentivePlanunderwhichtheCompanyRSUwasoriginallygranted,totheextentadministrativelypracticable.

(c)PerformanceAwards.(i)AttheEffectiveTime,iftheMergerConsiderationClosingValueequalsorexceeds$20.00then,eachrighttoreceiveoneshare

ofCompanyCommonStockgrantedunderaCompanyStockIncentivePlanintheformof“performanceawards”that,asadjustedintoarighttoreceiveNewHoldingCompanyCommonStock,isoutstandingandunvestedasofimmediatelypriortotheEffectiveTime(each,a“CompanyPerformanceAward”)shall,withoutanyfurtheractiononthepartofanyholderthereof,(x)beconvertedintoatime-vestingaward,inaccordancewiththetermsoftheapplicablegrantagreement,whichwillvestinaccordancewiththevestingschedulesetforthintheapplicablegrantagreementand(y)beassumedandconvertedintotherighttoreceiveanumberofsharesofParentCommonStock(roundeddowntothenearestwholeshare)determinedbymultiplying(A)thenumberofsharesofNewHoldingCompanyCommonStocksubjecttosuchCompanyPerformanceAwardasofimmediatelypriortotheEffectiveTimeby(B)theExchangeRatio(each,assoadjusted,a“ConvertedParentPerformanceAward”).EachConvertedParentPerformanceAwardshallhavethesametime-vestingschedule(includinganypotentialaccelerationofvestingasprovidedintheCompanyStockIncentivePlan,grantagreementunderwhichtheCompanyPerformanceAwardwasoriginallygrantedoranyapplicableofferletter,employmentagreement,severanceagreementorseveranceplanorpolicyoftheCompanyoraCompanySubsidiaryasineffectonthedateofthisAgreementandlistedonSection3.11(a)oftheCompanyDisclosureLetterorgrantedincompliancewithSection5.1(k)(D))andsettlementdateastheCompanyPerformanceAwardandshallbesubjecttoallofthematerialtermsandconditionsoftheCompanyStockIncentivePlanunderwhichtheCompanyRSUwasoriginallygranted,totheextentadministrativelypracticable.

(ii)AttheEffectiveTime,iftheMergerConsiderationClosingValueislessthan$20.00then,eachCompanyPerformanceAwardshall,withoutanyfurtheractiononthepartofanyholderthereof,inaccordancewiththetermsoftheapplicablegrantagreement,becancelledbytheCompanyandforfeited.

(d)ESPP.TheprovisionsofSection2.8(a)shallnotapplytoanyrightsundertheCompany’s2014EmployeeStockPurchasePlan(the“ESPP”).WithrespecttotheESPP,assoonaspracticablefollowingthedateofthisAgreement,theCompanyBoard(oracommitteethereof)willadoptresolutionsortakeotheractionsasmayberequiredtoprovidethatnofurtherOfferingPeriod(asdefinedintheESPP)orPurchasePeriod(asdefinedintheESPP)willcommencepursuanttotheESPPafterthedatehereof.PriortotheEffectiveTime,theCompanywilltakeallactionthatmaybenecessaryto,effectiveupontheconsummationoftheMerger:(A)causeanyPurchasePeriodthatwouldotherwisebeoutstandingattheEffectiveTime,ifany,tobeterminatednolaterthanoneBusinessDaypriortothedateonwhichtheEffectiveTimeoccurs;(B)makeanyprorataadjustmentsthatmaybenecessarytoreflecttheshortenedOfferingPeriod,butotherwisetreatsuchshortenedOfferingPeriodasafullyeffectiveandcompletedPurchasePeriodforallpurposespursuanttotheESPP;and(C)causetheexercise(asofnolaterthanone(1)BusinessDaypriortothedateonwhichtheEffectiveTimeoccurs)ofeachoutstandingpurchaserightpursuanttotheESPP.Onsuchexercisedate,ifany,referredtoinclause(C)oftheprecedingsentence,theCompanywillapplythefundscreditedasofsuchdatepursuanttotheESPPwithineachparticipant’spayrollwithholdingaccounttothepurchaseofwholesharesofCompanyCommonStockinaccordancewiththetermsoftheESPPandwillcausetheremainingaccumulatedbutunusedpayrolldeductionstobedistributedtotherelevantparticipantswithoutinterestaspromptlyaspracticablefollowingsuchexercisedate.ImmediatelypriortoandeffectiveasoftheHoldingCompanyMergerEffectiveTime(butsubjecttotheconsummationoftheHoldingCompanyMerger),theCompanywillterminatetheESPP.

(e)RegistrationofConvertedAwards.NotlaterthantheClosingDate,ParentshallhaveonfilewiththeSECaregistrationstatementonanappropriateform,orapost-effective

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amendmenttoaregistrationstatementpreviouslyfiledundertheSecuritiesAct,withrespecttothesharesofParentCommonStocksubjecttotheConvertedParentOptions,ConvertedParentRSUsand,totheextentapplicable,ConvertedParentPerformanceAwardsandshalldistributeaprospectusrelatingtosuchregistrationstatement,andParentshallusereasonablebesteffortstomaintaintheeffectivenessofsuchregistrationstatementorregistrationstatements(andmaintainthecurrentstatusoftheprospectusorprospectusescontainedtherein)forsolongasConvertedParentOptions,ConvertedParentRSUsand,totheextentapplicable,ConvertedParentPerformanceAwardsremainoutstanding.

(f)FurtherActions.PriortotheEffectiveTime,theCompany,theCompanyBoardandthecompensationcommitteeoftheCompanyBoard,asapplicable,willadoptanyresolutionsandtakeanyactionswithrespecttotheCompanyStockIncentivePlansandtheawardagreementsthereunderasarereasonablynecessarytogiveeffecttothetransactionscontemplatedbythisSection2.8,including(i)providingnoticetoeachholderofaCompanyOption,CompanyRSUand/orCompanyPerformanceAwardinaformreasonablyacceptabletoParentofthetreatmentoftheCompanyOptions,CompanyRSUsand/orCompanyPerformanceAwardssetforthinthisAgreement;and(ii)satisfyingallapplicablerequirementsofRule16b-3(e)promulgatedundertheExchangeAct.TheCompanywillprovideParentwithdraftsof,andareasonableopportunitytoreviewandcommentupon(andtheCompany’sacceptanceofParent’sreasonablecommentsshallnotbeunreasonablywithheld),allnotices,resolutionsandotherwrittenactionsorcommunicationsasmayberequiredtogiveeffecttotheprovisionsofthisSection2.8.

Section2.9.CertainAdjustments.NotwithstandinganythinginthisAgreementtothecontrary,iftheoutstandingsharesofParentCommonStockorCompanyCommonStockshallhavebeenchangedintoadifferentnumberorclassofsharesbyreasonofanyreclassification,stocksplit(includingareversestocksplit),recapitalizationorothersimilartransaction,orastockdividendthereonshallbedeclaredwitharecorddatefollowingthedatehereofandonorpriortotheClosingDate,thentheExchangeRatioandanyothersimilarlydependentitemsinthisAgreement,asthecasemaybe,shallbeappropriatelyadjustedtoprovideParentandtheholdersofCompanyCommonStockthesameeconomiceffectascontemplatedbythisAgreementpriortosuchevent.NothinginthisSection2.9shallbeconstruedtopermitanyPartytotakeanyactionthatisotherwiseprohibitedorrestrictedbyanyotherprovisionofthisAgreement.

Section2.10.Withholding.NotwithstandinganythinginthisAgreementtothecontrary,Parent,theSurvivingCompanyandtheExchangeAgent(andanyAffiliatethereoforanyotherwithholdingagent)shallbeentitledtodeductandwithholdfromtheamountspayablepursuanttothisAgreement(includingtoanyholderofNewHoldingCompanyCommonStock),suchamountsasarerequiredtobedeductedandwithheldwithrespecttothemakingofsuchpaymentundertheCode,orunderanyprovisionofstate,localorforeignLawrelatingtoTaxes.AnyamountsodeductedorwithheldanddulypaidovertotheapplicableTaxauthorityshallbetreatedashavingbeenpaidtothePersoninrespectofwhichsuchdeductionorwithholdingwasmade.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANYExceptasotherwisedisclosedin(a)theCompanySECDocumentsfiledwithorfurnishedtotheSECpriortothedateofthisAgreement,but

excludingdisclosuressetforthinanyriskfactors,“forwardlookingstatements”orotherstatementsincludedinsuchCompanySECDocumentstotheextenttheyarepredictiveorforwardlookinginnature,or(b)thecorrespondingsectionoftheletter(the“CompanyDisclosureLetter”)deliveredtoParentbytheCompanyatthetimeoftheexecutionofthisAgreement(itbeingagreedthatdisclosureofanyiteminanysectionorsubsectionoftheCompanyDisclosureLettershallbedeemeddisclosurewithrespecttoanyothersectionorsubsectiontowhichtherelevanceofsuchitemisreasonablyapparent),theCompanyrepresentsandwarrantstoParentandMergerSubasfollows:

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Section3.1.OrganizationandCorporatePower.(a)EachoftheCompanyandtheCompanySubsidiariesisacorporationorotherlegalentitydulyincorporatedorformed,validlyexisting

andingoodstandingundertheLawsofitsrespectivejurisdictionofincorporationorformationandhasallrequisitecorporateorotherorganizationalpowerandauthoritytoown,leaseandoperateitspropertiesandassetsandtocarryonitsbusinessasnowbeingconducted,exceptwherethefailuretohavesuchpowerorauthority,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.EachoftheCompanyandtheCompanySubsidiariesisdulyqualifiedorlicensedtodobusinessandisingoodstandingineachjurisdictioninwhichthenatureofitsbusinessortheownership,leasingoroperationofitspropertiesmakessuchqualificationorlicensingnecessary,exceptforthosejurisdictionsinwhichthefailuretobesoqualifiedorlicensedortobeingoodstandinghasnothadandwouldnotreasonablybeexpectedtohave,individuallyorintheaggregate,aCompanyMaterialAdverseEffect.

(b)TheCompanyhasmadeavailabletoParentcopiesoftheConstituentDocumentsoftheCompanyandeachoftheCompanySubsidiaries,eachasineffectonthedateofthisAgreement.NoneoftheCompanyortheCompanySubsidiariesisinviolationofanyprovisionofitsrespectiveConstituentDocuments,exceptashasnothadandwouldnotreasonablybeexpectedtohave,individuallyorintheaggregate,aCompanyMaterialAdverseEffect.

Section3.2.Capitalization.(a)TheauthorizedcapitalstockoftheCompanyconsistsof1,000,000,000sharesofCompanyCommonStockand10,000,000sharesof

CompanyPreferredStock.AsofthecloseofbusinessonSeptember21,2018(the“ReferenceDate”),(i)269,739,919sharesofCompanyCommonStockwereissuedandoutstanding;(ii)480,000sharesofCompanyPreferredStockwereissuedandoutstanding;(iii)nosharesofCompanyCommonStockwereownedbytheCompanyastreasurystock;(iv)39,257,001sharesofCompanyCommonStockwerereservedforissuancewithrespecttotheCompanyConvertibleNotesissuedundertheCompanyNotesIndenture;(v)48,812,165sharesofCompanyCommonStockwerereservedforissuancewithrespecttotheCompanyPreferredStock;and(vi)47,138,739sharesofCompanyCommonStockwerereservedforissuancepursuanttotheCompanyStockIncentivePlans,including(A)6,401,595sharesofCompanyCommonStockaresubjecttoissuancepursuanttotheexerciseofCompanyStockOptionsoutstandingundertheCompanyStockIncentivePlans(whetherornotpresentlyexercisable),(B)25,650,760sharesofCompanyCommonStockaresubjecttooutstandingCompanyRSUs,(C)875,000sharesofCompanyCommonStockaresubjecttooutstandingCompanyPerformanceAwards,and(D)aggregatecontributionsof$1,350,560.70receivedbytheCompanyforthecurrentofferingperiodpursuanttotheESPP.AlloftheissuedandoutstandingsharesofcapitalstockoftheCompanyaredulyauthorizedandvalidlyissuedandarefullypaid,non-assessableandfreeofpreemptiverights.NoSubsidiaryoftheCompanyownsanysharesofCompanyCommonStock.

(b)ExceptassetforthinSection3.2(a),asofthecloseofbusinessoftheReferenceDate:(i)theCompanydoesnothaveanyothersharesofCompanyCommonStock,CompanyPreferredStockorothercapitalstockorequityinterestsoutstanding,(ii)neithertheCompanynoranyCompanySubsidiaryhasissued,grantedorisboundbyanyoutstandingoptions,equity-basedawards,equity-linkedsecurities,warrants,puts,calls,subscriptionrights,preemptiverights,redemptionrightsorsecuritiesconvertibleorexchangeableintocapitalstockorequitysecuritiesoftheCompanyoranyCompanySubsidiaryand(iii)neithertheCompanynoranyCompanySubsidiaryispartytoanyContractobligatingtheCompanyoranyCompanySubsidiaryto(A)issue,transferorsellanysharesofcapitalstockorotherequityinterestsoftheCompanyoranyCompanySubsidiaryorsecuritiesconvertibleintoorexchangeableorexercisableforsuchcapitalstockorequityinterests,(B)issue,grantorbeboundbyanyoptions,equity-basedawards,equity-linkedsecurities,warrants,puts,calls,subscriptionrights,preemptiverights,redemptionrightsorsecuritiesconvertibleorexchangeableintocapitalstockorequitysecuritiesoftheCompanyoranyCompanySubsidiaryor(C)redeem,repurchaseorotherwiseacquireanycapitalstockorequitysecuritiesoftheCompanyoranyCompanySubsidiary.

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(c)Section3.2(c)oftheCompanyDisclosureLettercontainsacorrectandcompletelist,asofthecloseofbusinessontheReferenceDate,ofoutstandingCompanyOptions(otherthanpursuanttotheESPP),CompanyRSUsandCompanyPerformanceAwards,includingtheholder,thejurisdictionoftheholder,theCompanyStockIncentivePlanunderwhichtheawardwasgranted,thedateofgrant,term(whereapplicable),numberofsharesofCompanyCommonStockunderlyingsuchCompanyOptions(otherthanpursuanttotheESPP),CompanyRSUsandCompanyPerformanceAwardsand,whereapplicable,exercisepriceandvestingschedule.ExceptaswouldnotreasonablybeexpectedtobematerialtotheCompanyandtheCompanySubsidiaries,takenasawhole,eachCompanyOption(otherthanpursuanttotheESPP)wasgrantedwithanexercisepricepershareequaltoorgreaterthanthefairmarketvalueofashareofCompanyCommonStockontheeffectivedateofsuchgrant.

(d)OtherthanwithrespecttotheCompanyConvertibleNotes,therearenobonds,debentures,notesorotherIndebtednessoftheCompanyoranyoftheCompanySubsidiarieshavingtherighttovote(orconvertibleinto,orexchangeablefor,securitieshavingtherighttovote)onanymattersonwhichholdersoftheCompanyCommonStockmayvote.

(e)ExceptassetforthinSection3.2(e)oftheCompanyDisclosureLetter,therearenoContractstowhichtheCompanyoranyoftheCompanySubsidiariesisapartythatrestrictsthetransferof,thatrelatesto(orthatprovideaproxyfor)thevotingof,orthatprovidesregistrationrightsinrespectof,thecapitalstockorotherequityinterestoftheCompanyoranyCompanySubsidiary.

(f)Section3.2(f)oftheCompanyDisclosureLettersetsforthacompletelistofeachCompanySubsidiary,togetherwithitsjurisdictionofincorporationorformationandtheownershipinterestoftheCompany(oranotherCompanySubsidiary)insuchCompanySubsidiary.TheCompanyandtheCompanySubsidiariesown,directlyorindirectly,alloftheissuedandoutstandingsharesofcapitalstockorotherequityinterestsofeachoftheCompanySubsidiaries,freeandclearofanyLiens,otherthantransferandotherrestrictionsunderapplicablesecuritiesLaws,andallofsuchoutstandingsharesofstockorotherequitysecuritieshavebeendulyauthorizedandvalidlyissuedandarefullypaid,non-assessableandfreeofpreemptiverights.

(g)TheCompanyandtheCompanySubsidiariesdonotown,directlyorindirectly,anycapitalstockorequityinterestsofanyotherPerson(otherthantheCompanySubsidiaries).

Section3.3.Authority.(a)TheCompanyhasallrequisitecorporatepowerandauthoritytoexecuteanddeliverthisAgreement,toperformitsobligationsunder

thisAgreementand,subjecttoobtainingtheCompanyStockholderApproval,toconsummatetheMergerandtheothertransactionscontemplatedhereby.Theexecution,deliveryandperformancebytheCompanyofthisAgreementandtheconsummationbytheCompanyoftheMergerandtheothertransactionscontemplatedherebyhavebeendulyauthorizedbyallnecessarycorporateactiononthepartoftheCompany,subject,inthecaseoftheeffectuationoftheMerger,toreceiptoftheCompanyStockholderApproval.TheCompanyhasdulyexecutedanddeliveredthisAgreementand,assumingthedueauthorization,executionanddeliverybyParentandMergerSubofthisAgreement,thisAgreementconstitutestheCompany’slegal,validandbindingobligation,enforceableagainstitinaccordancewithitsterms,exceptaslimitedbybankruptcy,insolvency,reorganizationorsimilarLawsaffectingcreditors’rightsgenerallyandbygeneralprinciplesofequity.

(b)TheCompanyBoard,atameetingdulycalledandheld,adoptedresolutions(i)declaringthatthisAgreementandthetransactionscontemplatedhereby,includingtheMerger,theHoldingCompanyMerger,theConversionandtheSiriusXMRadioMerger,arefairtoandinthebestinterestsoftheCompanyandtheCompany’sstockholders,(ii)approvinganddeclaringthisAgreementandthetransactionscontemplatedhereby,includingtheMerger,theHoldingCompanyMerger,theConversionandtheSiriusXMRadioMerger,advisableand(iii)recommendingthattheCompany’sstockholdersadoptthisAgreement(the“CompanyRecommendation”).

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Section3.4.ConsentsandApprovals;NoConflicts.(a)Noconsent,approval,clearance,permitorauthorizationof,orregistrationorfilingwith,ornoticeto,anyGovernmentalEntityis

requiredtobemadeorobtainedbytheCompanyoranyCompanySubsidiaryinconnectionwiththeexecutionordeliveryofthisAgreementortheconsummationofthetransactionscontemplatedbythisAgreement,exceptfor(i)anynoticesorfilingsbytheCompanyrequiredundertheHSRActand,assumingtheaccuracyoftherepresentationsandwarrantiesofParentinSection4.4(a)(i),anyrequiredfilingsornotificationsundertheapplicableCompetitionLawsofthecountriesandjurisdictionslistedinSection3.4(a)oftheCompanyDisclosureLetterandtheexpirationorterminationofanyapplicablewaitingperiods(orapproval)thereunder,(ii)thefilingoftheCertificateofMergerwiththeSecretaryofStateoftheStateofDelawareinaccordancewiththeDGCL,(iii)thefilingwiththeSECoftheProxyStatementinaccordancewithRegulation14ApromulgatedundertheExchangeActandsuchreportsunderandsuchothercompliancewiththeExchangeActandtheSecuritiesActasmayberequiredinconnectionwiththisAgreementandthetransactionscontemplatedbythisAgreement,(iv)compliancewiththesecuritiesor“bluesky”lawsofvariousstatesinconnectionwiththeissuanceoftheMergerConsideration,(v)compliancewithNYSErulesandregulationstopermittheconsummationoftheMergerandthelistingoftheParentCommonStocktobeissuedintheMerger,and(vi)suchotherconsents,approvals,clearances,permits,authorizations,registrations,filingsornoticesthat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(b)Theexecution,deliveryandperformanceofthisAgreementbytheCompanydoesnot,andtheconsummationbytheCompanyofthetransactionscontemplatedherebywillnot,(i)conflictwithorviolateanyprovisionoftheConstituentDocumentsoftheCompanyoranyCompanySubsidiary(assumingtheCompanyStockholderApprovalisobtained),or(ii)assumingthefilings,consents,approvalsandwaitingperiodsreferredtoinSection3.4(a)aredulymade,obtainedorsatisfiedandtheCompanyStockholderApprovalisobtained(A)violateanyLaworOrder,ineithercase,applicabletotheCompanyoranyCompanySubsidiariesoranyoftheirrespectivepropertiesorassetsor(B)violate,conflictwith,resultinthelossofanybenefitunder,requireapaymentorincurapenaltyunder,constituteadefault(oraneventwhich,withnoticeorlapseoftime,orboth,wouldconstituteadefault)under,resultintheterminationoforarightofterminationorcancellationunder,acceleratetheperformancerequiredby,orresultinthecreationofanyLienuponanyoftherespectivepropertiesorassetsoftheCompanyoranyCompanySubsidiariesunder,anyCompanyMaterialContracttowhichtheCompanyoranyCompanySubsidiaryisaparty,orbywhichtheyoranyoftheirrespectivepropertiesorassetsmaybeboundoraffected,except,inthecaseoftheforegoingclause(ii),forsuchmattersas,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

Section3.5.SECDocumentsandInternalControls.(a)TheCompanyhasfiledwithorfurnishedtotheSECallreports,schedules,forms,statements,registrationstatements,prospectuses

andotherdocuments(includingexhibitsandotherinformationincorporatedtherein)requiredtobefiledorfurnishedbytheCompanyundertheSecuritiesActortheExchangeActwiththeSECsinceJanuary1,2016(suchdocuments,togetherwithanyotherdocumentsfiledorfurnishedduringsuchperiodbytheCompanytotheSEC,the“CompanySECDocuments”).NoCompanySubsidiaryissubjecttotheperiodicreportingrequirementsoftheExchangeActorisotherwiserequiredtomakefilingswiththeSEC.

(b)AsofitsrespectivedateoffilingwiththeSEC,or,ifamendedorsupplementedbyafilingpriortothedateofthisAgreement,asofthedateofthelastsuchfiling,eachoftheCompanySECDocumentscompliedinallmaterialrespectswiththerequirementsoftheSecuritiesAct,theExchangeActandtheSarbanes-OxleyAct,asapplicable,andtherulesandregulationsthereunder,andnoneoftheCompanySECDocumentswhenfiledorfurnished(orinthecaseofaregistrationstatementundertheSecuritiesAct,atthetimeitwasdeclaredeffective)containedanyuntruestatementofamaterialfactoromittedtostateamaterialfactrequiredtobestatedtherein

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ornecessaryinordertomakethestatementstherein,inlightofthecircumstancesunderwhichtheyweremade,notmisleading.(c)AsofthedateofthisAgreement,therearenooutstandingorunresolvedcommentsinlettersreceivedfromtheSECstaffwithrespect

toanyCompanySECDocuments,andnoneoftheCompanySECDocumentsfiledwiththeSECpriortothedateofthisAgreementis,totheKnowledgeoftheCompany,thesubjectofongoingSECreview.SinceJanuary1,2017,theCompanyhasbeenincomplianceinallmaterialrespectswiththeapplicablelistingandcorporategovernancerulesandregulationsoftheNewYorkStockExchangeandtheapplicableprovisionsoftheSarbanes-OxleyAct.

(d)TheCompanymaintains“internalcontrolsoverfinancialreporting”(asdefinedinRules13a-15(f)and15d-15(f)oftheExchangeAct)thatprovidereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithGAAP,andthatreceiptsandexpendituresoftheCompanyarebeingmadeonlyinaccordancewithauthorizationofmanagementanddirectorsoftheCompanyandthatprovidereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,useordispositionoftheCompany’sassetsthatcouldhaveamaterialeffectontheCompany’sfinancialstatements.TheCompanymaintains“disclosurecontrolsandprocedures”(asdefinedinRules13a-15(e)and15d-15(e)oftheExchangeAct)thatensurethatinformationrequiredtobedisclosedbytheCompanyinthereportsthatitfilesorsubmitsundertheExchangeActisrecorded,processed,summarizedandreported,withinthetimeperiodsspecifiedintheSEC’srulesandforms.

(e)SinceJanuary1,2017,theCompanyhasnotidentifiedandhasnotbeenadvisedbytheCompany’sauditorsof(i)significantdeficienciesormaterialweaknesses(asdefinedbythePublicCompanyAccountingOversightBoard)inthedesignoroperationofinternalcontrolsoverfinancialreporting,whichcouldreasonablybeexpectedtoadverselyaffecttheCompany’sabilitytorecord,process,summarizeandreportfinancialinformationor(ii)anyfraudorallegationoffraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohavearoleintheCompany’sinternalcontrolsoverfinancialreporting.

Section3.6.FinancialStatementsandUndisclosedLiabilities.(a)ThefinancialstatementsoftheCompany(includinganyrelatednotesandschedulesthereto)includedintheCompanySEC

Documents(i)havebeenderivedfromtheaccountingbooksandrecordsoftheCompanyandtheCompanySubsidiaries,(ii)asoftheirrespectivedatesoffilingwiththeSECcompliedinallmaterialrespectswithapplicableaccountingrequirementsandthepublishedrulesandregulationsoftheSECwithrespectthereto,(iii)havebeenpreparedinaccordancewithGAAPappliedonaconsistentbasisduringtheperiodsinvolved(exceptasmaybeindicatedinthenotesthereto)and(iv)fairlypresent,inallmaterialrespects,theconsolidatedfinancialpositionoftheCompanyandtheCompanySubsidiariesandtheconsolidatedresultsofoperations,stockholders’equityandcashflowsasofthedatesandfortherespectiveperiodsindicated(subject,inthecaseoftheunauditedstatements,tonormalyear-endauditadjustmentsandtheabsenceofnotes,noneofwhichindividuallyorintheaggregatearematerial).

(b)TheCompanyandtheCompanySubsidiariesdonothaveanyliabilitiesorobligationsofanynature(whetherabsolute,contingent,accruedorotherwise)requiredbyGAAPtobereflectedorreservedagainstinaconsolidatedbalancesheet(orthenotesthereto)oftheCompany,exceptforthoseliabilitiesandobligations(i)that,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,(ii)reflectedorreservedagainstinthemostrecentconsolidatedbalancesheetoftheCompany(includingthenotesthereto)includedintheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedJune30,2018,(iii)incurredsinceJune30,2018intheordinarycourseofbusinessconsistentwithpastpracticeandwhich,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffector(iv)incurredinaccordancewiththisAgreement.

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Section3.7.AbsenceofCertainChangesorEvents.(a)SinceDecember31,2017throughthedateofthisAgreement,therehasnotbeenanyevent,change,condition,occurrenceoreffect,

that,individuallyorintheaggregate,hashadorwouldreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.(b)SinceDecember31,2017,theCompanyandtheCompanySubsidiarieshaveconductedtheirbusinessesinallmaterialrespectsinthe

ordinarycourseofbusinessconsistentwithpastpractice.Section3.8.LegalProceedings.TherearenoProceedingspending,ortotheKnowledgeoftheCompany,threatenedagainsttheCompanyor

anyoftheCompanySubsidiariesoranyoftheirrespectiveassets,rightsorpropertiesoranyoftheexecutiveofficersordirectorsoftheCompanyineachsuchPerson’scapacityassuch,except,ineachcase,forthosethat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.NeithertheCompanynoranyoftheCompanySubsidiariesnoranyoftheirrespectiveproperties,rightsorassetsisoraresubjecttoanyOrder,exceptforthosethat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

Section3.9.CompliancewithLaws;Permits.(a)TheCompanyandtheCompanySubsidiariesare,andsinceJanuary1,2017havebeen,incompliancewithall(andhavenotviolated

any)applicableLaws,Orders,PrivacyPoliciesandthePaymentCardIndustryDataSecurityStandards,exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(b)SinceJanuary1,2017throughthedateofthisAgreement,neithertheCompanynoranyCompanySubsidiaryhasreceivedanywrittennotice,subpoena,writtendemand,writteninquiryorwritteninformationrequestsfromaGovernmentalEntityallegingorseekinginformationtodeterminewhethertheCompanyoranyCompanySubsidiaryisorwasinnon-compliancewithorviolationofanyLaw,Order,PrivacyPolicyorPermitexceptashasnothadandwouldnotreasonablybeexpectedtohave,individuallyorintheaggregate,aCompanyMaterialAdverseEffect.TotheKnowledgeoftheCompany,noinvestigation(whethercivil,criminal,administrative,investigative,formalorinformal)orreviewbyanyGovernmentalEntitywithrespecttoanynon-compliancewithorviolationofanyLaw,Order,PrivacyPolicyorPermitbytheCompanyoranyCompanySubsidiaryispendingorthreatened,ineachcase,wouldreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(c)TheCompanyandeachoftheCompanySubsidiariesholdandareincompliancewith,andsinceJanuary1,2017haveheldandhavebeenincompliancewith,allPermitsnecessaryforthelawfulconductoftheirbusinessandtheownershipanduseoftheirpropertiesandassetsandeachofsuchPermitsisvalidandinfullforceandeffect,exceptwherethefailuretosoholdorbeincompliancewithsuchPermit,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(d)PriortothedateofthisAgreement,theCompanyortheCompanySubsidiarieshavevalidlytransferred,inaccordancewithallapplicableLawandOrders,alllicenses,permitsandauthorizationsfromtheFederalCommunicationsCommissionpreviouslyheldorownedbytheCompanyortheCompanySubsidiaries.

Section3.10.CompanyMaterialContracts.(a)ExceptassetforthinSection3.10(a)oftheCompanyDisclosureLetterandotherthananyContracts,includingamendmentsthereto,

requiredtobefiledasanexhibittoanyreportoftheCompanyfiledpursuanttotheExchangeActofthetypedescribedinItem601(b)(10)ofRegulationS-KpromulgatedbytheSEC,neithertheCompanynoranyoftheCompanySubsidiariesis,asofthedateofthisAgreement,apartytoorboundbyanyContract:

(i)withanyPerson(includingartists,musiclabels,composers,publishers,collectionandperformancesocietiesandorganizationsandrightsadministrators)thatowns,controlsorlicensesanyrightstosoundrecordings,music,graphics,video,othercontentor

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rightsinanymedia(“ContentRights”)thataredownloaded,distributed,performed,reproduced,broadcastorotherwiseusedorexploitedintheoperationofthebusinessoftheCompanyortheCompanySubsidiaries,whichContractismaterialtotheCompanyandtheCompanySubsidiaries,takenasawhole,andrequirestheCompanyortheCompanySubsidiariestopayconsiderationofmorethan$15,000,000annually;

(ii)thatrelatestoanyjointventure,partnership,limitedliabilityorothersimilaragreementsorarrangementsrelatingtotheformation,creation,operation,managementorcontrolofanyjointventureorpartnership(otherthanwithoramongwholly-ownedCompanySubsidiaries);

(iii)that(A)isanindenture,creditagreement,loanagreement,securityagreement,guarantee,note,mortgageorotherContractprovidingfororsecuringIndebtedness(orguaranteeingtheIndebtednessofanotherPerson)inexcessof$10,000,000,(B)grantsaLien(otherthanaPermittedLien)orrestrictsthegrantingofLiensonanypropertyorassetthatismaterialtotheCompanyandtheCompanySubsidiaries,takenasawhole,(C)providesfororrelatestoanyinterest,currencyorhedging,derivativesorsimilarContractsor(D)restrictspaymentofdividendsoranydistributionsinrespectoftheequityinterestsoftheCompanyoranyoftheCompanySubsidiaries;

(iv)thatrelatesto,involvesorprovidesforthesettlementofanycurrentorformerClaim(A)whichContractiswithanyGovernmentalEntity(exceptsettlementsforanimmaterialmonetaryfine),(B)whichContractmateriallyrestrictsorimposesmaterialobligationsupontheCompanyandtheCompanySubsidiaries,takenasawhole,or(C)whichContractwouldrequiretheCompanyortheCompanySubsidiariestopayconsiderationofmorethan$10,000,000afterthedateofthisAgreement;

(v)thatisbetween(A)theCompanyoranyoftheCompanySubsidiaries,ontheonehand,and(B)anyofdirectorsorexecutiveofficersoftheCompany(includinganyemploymentagreementsandrelatedContractswithsuchofficers)orstockholderswhoownfivepercent(5%)ormoreoftheoutstandingCompanyCommonStock,ontheotherhand;

(vi)thatcontainscovenantsthat(A)purporttolimitorrestricttheabilityoftheCompanyoranyCompanySubsidiaries(orParentoritsAffiliatesaftertheEffectiveTime)tocompetewithanypersoninanybusinessorinanygeographicarea,includinganynon-competecovenantor(B)granttotheotherpartytosuchContract(orathirdparty)exclusivityor“mostfavorednation”status(whetherintermsofpricingorotherwise);

(vii)thatgrantsanyrightsoffirstrefusal,rightsoffirstofferorothersimilarrightstoanyPersonwithrespecttoanymaterialassetoftheCompanyandtheCompanySubsidiaries,takenasawhole,orthatcontainsaput,callorsimilarrightpursuanttowhichtheCompanyoranyCompanySubsidiarywouldberequiredtopurchaseorsell,asapplicable,anyequityinterestsofanyPersonorassetsofanyPerson,ineachcasethatwouldrequirepaymentsbyortotheCompanyortheCompanySubsidiariesofmorethan$10,000,000afterthedateofthisAgreement;

(viii)thatisfortheacquisitionordisposition,directlyorindirectly(bymergerorotherwise),ofallorsubstantiallyalloftheassetsoratleastamajorityofcapitalstockorotherequityinterestsofanyPerson,pursuanttowhichtheCompanyoranyCompanySubsidiaryhascontinuing“earnout”orothersimilarcontingentpaymentobligations,indemnificationorotherobligationsoutstanding;

(ix)thatobligatestheCompanyoranyoftheCompanySubsidiariestomakeanycapitalexpenditureorinvestmentnotcontemplatedbytheCapitalExpenditureBudgetinexcessof$10,000,000;

(x)thatrequirestheCompanyoranyoftheCompanySubsidiariestoprovideanyfundstoormakeanyinvestmentin(ineachcase,intheformofaloan,capitalcontributionorsimilartransaction)anyPerson(otherthananyCompanySubsidiary)inexcessof$10,000,000;

(xi)thatisa(A)materialContractthatrelatestoIntellectualProperty(excludingnon-exclusivecommerciallyavailablesoftwarelicenseswithannualfeesoflessthan$1,000,000,

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licensesforsoundrecordingsormusicpublishingandnon-exclusivelicensestocustomersintheordinarycourseofbusiness,butincludingany“opensource”licensesthatwouldrequirematerialproprietarysourcecodetobelicensedormadeavailableiftheapplicablesoftwareisdistributed,conveyedormadeavailabletoothers)or(B)PrivacyPolicythatisexternallypostedandobligatestheCompanyoranyCompanySubsidiariestotheircustomersandusers;or

(xii)excepttotheextentsuchContractisdescribedinclauses(i)-(xi)above,thatrequiresannualaggregatepaymentsby,orotherconsiderationfrom(orannualaggregatepayments,orotherconsideration,to)theCompanyortheCompanySubsidiariesofmorethan$10,000,000annually.

(b)TheContractsfiledorrequiredtobefiledasexhibitstotheCompanySECDocumentsofthetypedescribedinItem601(b)(10)ofRegulationS-KpromulgatedbytheSECorlistedorrequiredtobelistedinSection3.10(a)oftheCompanyDisclosureLetteraretogetherreferredtohereinasthe“CompanyMaterialContracts.”TheCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesofeachCompanyMaterialContract,includinganyschedules,exhibitsandamendmentsthereto.

(c)(i)EachCompanyMaterialContractisvalidandbindingontheCompanyoraCompanySubsidiaryandisinfullforceandeffect,and,totheKnowledgeoftheCompany,isvalidandbindingontheotherpartiesthereto,(ii)theCompanyandeachCompanySubsidiaryand,totheKnowledgeoftheCompany,eachoftheotherpartiesthereto,hasperformedallobligationsrequiredtobeperformedbyittodateundereachCompanyMaterialContract,and(iii)noeventorconditionexistswhichconstitutesor,afternoticeorlapseoftimeorboth,wouldconstituteabreachordefaultonthepartoftheCompanyoranyCompanySubsidiaryunderanyCompanyMaterialContractor,totheKnowledgeoftheCompany,anyotherpartythereto,except,ineachcaseofclauses(i)through(iii),as,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(d)SinceJanuary1,2017throughthedateofthisAgreement,neithertheCompanynoranyCompanySubsidiaryhasreceivedanywrittennoticeofamaterialbreachormaterialdefaultfromacounterpartytoanyCompanyMaterialContractandnocounterpartytoaCompanyMaterialContracthasnotifiedtheCompanyoranyCompanySubsidiaryinwriting(or,totheKnowledgeoftheCompany,otherwise)thatitintendstoterminateornotrenewaCompanyMaterialContract.

Section3.11.CompanyBenefitPlans.(a)Section3.11(a)oftheCompanyDisclosureLettersetsforthatrue,correctandcompletelistofallmaterialCompanyBenefitPlans.

WithrespecttoeachsuchCompanyBenefitPlan,totheextentapplicable,theCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesof(or,totheextentnosuchcopyexists,anaccuratedescriptionthereof,totheextentapplicable):(i)themostrecentannualreportonForm5500requiredtohavebeenfiledwiththeU.S.InternalRevenueServiceforeachCompanyBenefitPlan,includingallschedulestheretoandanyauditedfinancialstatementsandactuarialvaluationreports;(ii)themostrecentdeterminationletter,ifany,fromtheInternalRevenueServiceforanyCompanyBenefitPlanthatisintendedtoqualifypursuanttoSection401(a)oftheCodeor,ifsuchCompanyBenefitPlanisaprototypeorvolumesubmitterplan,theopinion,advisoryornotificationletterwhichcoverseachsuchCompanyBenefitPlan,ifapplicable;(iii)theplandocuments,includingallamendmentsthereto,andthemostrecentsummaryplandescriptionsandthemostrecentsummariesofmaterialmodifications;(iv)anyrelatedtrustagreements,insurancecontracts,insurancepoliciesorotherdocumentsofanyfundingarrangements;and(v)anynoticestoorfromtheU.S.InternalRevenueServiceoranyofficeorrepresentativeoftheUnitedStatesDepartmentofLabororanysimilarGovernmentalAuthorityrelatingtoanymaterialcomplianceissuesinrespectofanysuchCompanyBenefitPlan.

(b)NeithertheCompany,anyCompanySubsidiarynoranyoftheirrespectiveERISAAffiliateshaspreviouslymaintained,sponsored,contributedto(orhadanobligationtocontributeto)orcurrentlymaintains,sponsorsorparticipatesin,contributesto(orhasanobligationtocontributeto)orotherwisehasanyliabilitywithrespectto(i)anydefinedbenefitpensionplanorplansubjecttoSection302orTitleIVofERISAorSection412orSection4971oftheCodeor

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(ii)anymultiemployerplanwithinthemeaningofSection3(37)ofERISA,anymultipleemployerplanwithinthemeaningofSection413oftheCode,oranymultipleemployerwelfarearrangementwithinthemeaningofSection3(40)ofERISA.

(c)Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,eachCompanyBenefitPlanwhichisintendedtobequalifiedwithinthemeaningofSection401(a)oftheCodeissoqualifiedandhasreceivedafavorabledeterminationletterastoitsqualification,orifsuchCompanyBenefitPlanisaprototypeorvolumesubmitterplan,theopinion,advisoryornotificationletterforeachsuchCompanyBenefitPlan,and,totheKnowledgeoftheCompany,therearenocircumstances,whetherbyactionorfailuretoact,thatcouldreasonablybeexpectedtocausethelossofsuchqualification.Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,(i)eachCompanyBenefitPlanhasbeenmaintainedincompliancewithitstermsandwiththerequirementsprescribedbyanyandallstatutes,orders,rulesandregulations,includingERISAandtheCode,whichareapplicabletosuchCompanyBenefitPlan,(ii)therearenopendingor,totheKnowledgeoftheCompany,threatenedProceedingsagainstanyCompanyBenefitPlan,anyfiduciarythereof,ortheCompanyoranyCompanySubsidiarywithrespecttoanyCompanyBenefitPlanandnofactsorcircumstancesexistthatcouldreasonablybeexpectedtogiverisetoanysuchProceedings,and(iii)allcontributionsrequiredtobemadebytheCompany,anyCompanySubsidiaryoranyofitsERISAAffiliatestoanyCompanyBenefitPlanhavebeenmadeonorbeforetheirapplicableduedates.Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,noeventhasoccurredandnoconditionexiststhatwouldsubjecttheCompanyoranyCompanySubsidiary,eitherdirectlyorbyreasonoftheiraffiliationwithanyERISAAffiliate,toanyTax,fine,Lien,penaltyorotherliabilityimposedbyERISA,theCodeoranyotherapplicableLawwithrespecttoanyCompanyBenefitPlan.Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,noCompanyBenefitPlanthatisa“welfarebenefitplan”(withinthemeaningofSection3(1)ofERISA)providespost-terminationorretireelifeinsurance,healthorotherwelfarebenefitsorcoveragetoanyperson,exceptasmayberequiredbySection4980BoftheCodeoranysimilarLaw.

(d)ExceptasotherwisecontemplatedunderthisAgreement,neithertheexecutionnordeliveryofthisAgreement,shareholderapprovalofthisAgreement,northeconsummationofthetransactionscontemplatedherebywouldreasonablybeexpectedto,whetheraloneorincombinationwithanyotherevent(s):(i)resultintheacceleratedvestingorpaymentof,oranyincreasein,orthefunding(throughagrantortrustorotherwise)of,anycompensationorbenefitstoanyCompanyEmployee;(ii)resultintheentitlementofanyCompanyEmployeetoseveranceorterminationpayorbenefits;(iii)limitorrestricttherightoftheCompanytomerge,amendorterminateanyoftheCompanyBenefitPlans;or(iv)resultinanypaymentunderanyoftheCompanyBenefitPlansoranyotherarrangementthatwouldnotbedeductibleunderSection280GoftheCode.NoCompanyBenefitPlanprovidesfora“gross-up”orsimilarpayment,includinginrespectofanyamountof“excisetax”or“additionaltax”thatmaybecomepayableunderSection409AoftheCodeorSection4999oftheCode.

(e)Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,neithertheCompanynoranyCompanySubsidiaryhasmadeanycommitment(i)tocreate,incurliabilitywithrespecttoorcausetoexistanyothercompensation,benefit,fringebenefitorotherplan,program,arrangementoragreementortoenterintoanycontractoragreementtoprovidecompensationorbenefitstoanyindividual,ineachcaseotherthanrequiredbythetermsoftheCompanyBenefitPlansasineffectasofthedatehereofor(ii)tomodify,changeorterminateanyCompanyBenefitPlan,otherthanamodification,changeorterminationrequiredbyapplicableLaw.

(f)Inadditiontotheforegoing,withrespecttoeachNon-U.S.CompanyBenefitPlan:(i)allemployerandemployeecontributionstoeachNon-U.S.CompanyBenefitPlanrequiredbyLaworbythetermsofsuchNon-

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anycontractualobligation(includingcontributionstoallmandatoryprovidentfundschemes)havebeenmadeor,ifapplicable,accruedinaccordancewithgenerallyacceptedaccountingpracticesintheapplicablejurisdictionappliedtosuchmatter,exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect;and

(ii)eachNon-U.S.CompanyBenefitPlanrequiredtoberegisteredhasbeenregisteredandhasbeenmaintainedingoodstandingwithapplicableregulatoryauthorities,exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

Section3.12.LaborMatters.(a)Thereisnoeffortcurrentlybeingmadeor,totheKnowledgeoftheCompany,threatenedbyoronbehalfofanylaborunion,works

council,employeecommitteeorrepresentativeorotherlabororganizationtoauthorizerepresentationofanyemployeesoftheCompanyoranyCompanySubsidiarybyanylabororganization.Nopetitionhasbeenfiled,norhasanyProceedingbeeninstitutedbyanyemployeeoftheCompanyoranyCompanySubsidiary,groupofemployeesoftheCompanyoranyCompanySubsidiary,orlabororganizationwithanylaborrelationsboardorcommissionseekingrecognitionofacollectivebargainingorsimilarrepresentativeinthepastthreeyears.NeithertheCompanynoranyCompanySubsidiaryisapartytoorotherwiseboundbyanycollectivebargainingagreementorothercontractoragreementwithanylabororganizationorotherrepresentativeofanyemployeesoftheCompanyoranyCompanySubsidiary,norisanysuchcontractoragreementpresentlybeingnegotiated.

(b)ExceptassetforthinSection3.12(b)oftheCompanyDisclosureLetter,neithertheCompanynoranyCompanySubsidiaryhasclosedanyplantorfacility,effectuatedanylayoffsofemployeesorimplementedanyearlyretirement,separationorwindowprogramsinceJanuary1,2017,norhastheCompanyoranyCompanySubsidiaryplannedorannouncedanysuchactionorprogramforthefuture.

Section3.13.Taxes.Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect(providedthattheforegoingexceptionshallnotapplytoclause(j)below):

(a)TheCompanyandtheCompanySubsidiarieshavetimelyfiled(orcausedtobetimelyfiled)allTaxReturnsrequiredtobefiledbythem,andallsuchTaxReturnsaretrue,correctandcompleteinallmaterialrespects.TheCompanyandtheCompanySubsidiarieshavepaid(orcausedtobepaid)allTaxesdueandpayablebythemandhavewithheldandpaidallTaxesthattheCompanyoranyoftheCompanySubsidiariesareobligatedtowithholdfromamountsowingtoanyemployee,formeremployee,independentcontractor,shareholder,creditororthirdparty,except,ineachcase,forTaxesthatarebeingcontestedingoodfaithandforwhichadequatereservesareprovidedonthefinancialstatementsoftheCompanyinaccordancewithGAAP.

(b)NodeficiencyforanyTaxhasbeenassertedorassessedagainsttheCompanyoranyoftheCompanySubsidiariesbyaTaxauthorityinwriting,otherthananydeficiencythathasbeenfullypaid,settledorwithdrawn.NeithertheCompanynoranyCompanySubsidiaryhaswaivedanystatuteoflimitationsoragreedinwritingtoanyextensionoftimewithrespecttoamaterialTaxassessmentordeficiencywhichwaiverorextensioniscurrentlyinforce.TherearenoLiensforTaxesontheassetsoftheCompanyoranyCompanySubsidiaryotherthanPermittedLiens.

(c)Noaudit,examination,investigationorotherproceedinginrespectofanyTaxesoranyTaxReturnoftheCompanyoranyoftheCompanySubsidiariesiscurrentlypendingor,totheKnowledgeoftheCompany,threatenedinwriting,otherthanforwhichadequatereservesareprovidedonthefinancialstatementsoftheCompanyinaccordancewithGAAP.

(d)NeithertheCompanynoranyoftheCompanySubsidiaries(i)isorhasbeenamemberofagroup(otherthanagroupthecommonparentofwhichistheCompanyoranyoftheCompanySubsidiariesandwhichincludesorincludedonlytheCompanyand/orCompanySubsidiaries)filingaconsolidated,combined,affiliated,unitaryorsimilarincomeTaxReturnor

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(ii)hasanyliabilityforTaxesofanyPerson(otherthantheCompanyoranyCompanySubsidiary)arisingfromtheapplicationofTreasuryRegulationSection1.1502-6(oranysimilarprovisionofstate,localornon-U.S.Law),asatransfereeorsuccessor,orotherwisebyoperationofLaw.

(e)NeithertheCompanynoranyoftheCompanySubsidiariesisapartytoorboundbyorhasanyobligationunderanyTaxallocation,sharing,indemnity,reimbursementorsimilaragreementorarrangement(otherthan(i)anyagreementorarrangementsolelyamongtheCompany/oranyoftheCompanySubsidiariesor(ii)ordinarycoursecommercialagreementsorarrangementstheprimarysubjectmatterofwhichisnotTaxmatters).

(f)NowrittenclaimhasbeenmadebyanyTaxauthorityinajurisdictionwheretheCompanyoranyoftheCompanySubsidiarieshasnotfiledaTaxReturnthatitisormaybesubjecttoTaxby,orrequiredtofileTaxReturnsin,suchjurisdiction,otherthananysuchclaimsthathavebeenfullyresolvedorforwhichadequatereservesareprovidedonthefinancialstatementsoftheCompanyinaccordancewithGAAP.

(g)NeithertheCompanynoranyoftheCompanySubsidiarieshasparticipatedina“listedtransaction”withinthemeaningofTreasuryRegulationSection1.6011-4(b)(2)(oranysimilarprovisionofstate,localornon-U.S.Law).

(h)NeithertheCompanynoranyoftheCompanySubsidiarieswillberequiredtoincludeamaterialitemofincome(orexcludeamaterialitemofdeduction)inanytaxableperiod(orportionthereof)beginningaftertheClosingDateasaresultof(i)achangeinorincorrectmethodofaccountingoccurringpriortotheClosingDate,(ii)aprepaidamountreceived,orpaid,priortotheClosingDate,(iii)a“closingagreement”asdescribedinSection7121oftheCode(oranysimilarprovisionofstate,localornon-U.S.Law)executedonorpriortotheClosingDate,or(iv)anelectionunderSection108(i)oftheCode(oranysimilarprovisionofstate,localornon-U.S.Law).

(i)Withinthepasttwoyears,neithertheCompanynoranyoftheCompanySubsidiarieshasconstituteda“distributingcorporation”ora“controlledcorporation”inatransactionthatwaspurportedorintendedtobegovernedinwholeorinpartbySection355oftheCode(oranysimilarprovisionofstate,local,ornon-U.S.Law).

(j)NeithertheCompanynoranyCompanySubsidiaryhastakenanyactionorknowsofanyfactorcircumstancethatwouldreasonablybeexpectedtopreventorimpede(i)theMergerandtheSiriusXMRadioMerger,takentogether,or(ii)theHoldingCompanyMergerandtheConversion,takentogether,fromineachcasequalifyingasareorganizationwithinthemeaningofSection368(a)oftheCode.

(k)NeithertheCompanynoranyCompanySubsidiaryhasmadeanelectionpursuanttoSection965(h)oftheCode.Notwithstandinganythinghereintothecontrary,therepresentationsandwarrantiescontainedinthisSection3.13and,totheextentexpressly

referringtoCodesections,Section3.11,arethesoleandexclusiverepresentationsoftheCompanywithrespecttoTaxesandTaxmatters.Section3.14.IntellectualPropertyandPrivacy.

(a)Section3.14(a)oftheCompanyDisclosureLetterlistsallIntellectualPropertyregisteredwithanyGovernmentalEntity(andallapplicationsforanyoftheforegoing)thatisownedbytheCompanyortheCompanySubsidiaries(collectively,the“RegisteredIP”).

(b)Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,(i)theCompanyandtheCompanySubsidiariesexclusivelyowntheOwnedIntellectualProperty,freeandclearofallLiens(includingclaimsofcurrentandformeremployeesandcontractors),andallsuchregistrationsandapplicationsforRegisteredIParesubsistingandunexpiredand,totheKnowledgeoftheCompany,validandenforceable;(ii)theoperationoftheCompany’sandtheCompanySubsidiaries’businessesdoesnotinfringe,misappropriateorotherwiseviolate(“Infringe”)(andhasnotdonesosinceJanuary1,2017)theIntellectualPropertyorotherproprietaryrightsofanyotherPersonand,sinceJanuary1,2017,noPersonhasallegedthesameinwriting(includingin“ceaseanddesist”letters,invitations

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totakeapatentlicenseorstatutory“takedown”notices),otherthanclaimsthathavesincebeenresolvedwithoutmaterialliability;(iii)sinceJanuary1,2017,noPersonhasmadeacompliantinwritingtotheCompanyortheCompanySubsidiariesastotheadvertising,marketingorprivacypracticesoftheCompanyortheCompanySubsidiaries,otherthanclaimsthathavesincebeenresolvedwithoutmaterialliabilityorthatwouldnotresultinmaterialliabilityevenifunresolved;(iv)totheKnowledgeoftheCompany,noPersonisInfringinganyOwnedIntellectualPropertyorIntellectualPropertyexclusivelylicensedtotheCompanyortheCompanySubsidiaries;(v)sinceJanuary1,2017,noPersonhasdemandedinwritingthattheCompanyortheCompanySubsidiariesremovefromtheirsystemsorservicesand/orpayroyaltiesfor(otherthanroyaltiesdueunderexistingwrittenagreements)anycontentinwhichsuchPersonhasorclaimsrights;(vi)nothirdPersonhasthecurrentorcontingentrighttoaccessorpossessanymaterialproprietarysourcecodeoftheCompanyortheCompanySubsidiaries;and(vii)theCompanyandtheCompanySubsidiaries’materialproprietarysoftwaredoesnotcontainandisnotdistributed,conveyedorotherwiseusedtogetherwithany“opensource”orsimilarsoftwareinanymannerthatwouldrequireanysuchmaterialproprietarysourcecodetobelicensedormadeavailabletoothersiftheapplicablesoftwareisconveyed,distributedormadeavailabletoothers.

(c)Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,theCompanyandtheCompanySubsidiariestake,andsinceJanuary1,2017havetaken,actionstomaintainandprotect(i)theintegrity,securityandcontinuousoperationofITAssetsownedor,toKnowledgeoftheCompany,controlledbytheCompanyortheCompanySubsidiariesandusedintheoperationoftheirbusiness,and,totheKnowledgeoftheCompany,therehavebeennomaterialbreaches,violations,unplannedoutagesorunauthorizedusesofsame;(ii)allnonpublicsensitivedatarelatingtotheCompanyandtheCompanySubsidiaries’currentandformersubscribersandcustomers(includingtrialsubscribersandcustomers),includinganyPrivateData;(iii)theirtradesecretsandconfidentialinformationincludedintheOwnedIntellectualProperty;and(iv)theirqualificationforthe“safeharbors”oftheU.S.DigitalMillenniumCopyrightAct,17U.S.C.§512,andtheU.S.CommunicationsDecencyAct,47U.S.C.§230(the“IPSafeHarbors”).

(d)Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,allITAssetsownedor,toKnowledgeoftheCompany,controlledbytheCompanyandusedintheoperationoftheCompanyandtheCompanySubsidiaries’business(i)arefreefromanymaterialdefect,bug,virus,malware,errororothercorruptantand(ii)operateinmaterialcompliancewiththeirdocumentation.

Section3.15.EnvironmentalMatters.Exceptaswouldnothaveorreasonablybeexpectedtohave,individuallyorintheaggregate,aCompanyMaterialAdverseEffect,(a)therearenoMaterialsofEnvironmentalConcernpresentatoraffectinganyrealpropertycurrentlyorformerlyowned,leasedoroperatedbytheCompanyortheCompanySubsidiaries,(b)neithertheCompanynortheCompanySubsidiariesnoranyoftheirpredecessorsorotherentitiesfortheactsoromissionsofwhichtheyareliablehascausedanyconditionatanylocationthathasresultedinorwouldreasonablybeexpectedtoresultinliabilityorotherobligation(i)underanyapplicableLawsprotectingtheenvironment,qualityoftheambientair,soil,surfacewaterorgroundwater,ornaturalresourcesorprotectinghumanhealthandsafety(“EnvironmentalLaws”)or(ii)regardinganyMaterialsofEnvironmentalConcernand(c)neithertheCompanynoranyoftheCompanySubsidiarieshasassumedorretained,bycontractoroperationoflaw,anyliabilitiesunderanyEnvironmentalLawsorconcerninganyMaterialsofEnvironmentalConcern.

Section3.16.RealProperty.(a)Section3.16(a)oftheCompanyDisclosureLetteridentifiesallleases,subleases,licensesandotheroccupancyagreementsineffectas

ofthedatehereof,pursuanttowhichtheCompanyoraCompanySubsidiaryoccupiesrealpropertyfortheannualrentpaymentofmorethan$5,000,000(the“Leases”).Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect:(i)eachLeaseisvalid,infullforceandeffectandenforceableagainsttheCompanyorCompanySubsidiarythatispartytheretoand(ii)theCompanyandtheCompanySubsidiariesarenotindefault(andthereisno

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eventorconditionthatafternoticeorlapseoftimeorbothwouldconstituteadefaultbytheCompanyoranyCompanySubsidiary)underanyLeaseand,totheKnowledgeoftheCompany,thereisnodefault(oreventorconditionthatafternoticeorlapseoftimeorbothwouldconstituteadefault)byanyotherpartytheretounderanyLease.

(b)NeithertheCompanynoranyoftheCompanySubsidiariesownsanyrealpropertyorinterestsinrealpropertyoranyoptionstoacquiresuchrealpropertyorintereststherein,exceptpursuanttotheleases,subleases,licensesandotheroccupancyagreementstowhichtheCompanyoranyCompanySubsidiaryisaparty.

Section3.17.Insurance.Section3.17oftheCompanyDisclosureLettersetsforthalist(includingnameofinsurer,agent,coverageandexpirationdate)ofallinsurancepoliciesinforceonthedatehereofwithrespecttothebusinessandassetsoftheCompanyandtheCompanySubsidiaries.Exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect,(a)theCompanyandtheCompanySubsidiariesareincompliancewiththeirinsurancepoliciesandarenotinbreachordefaultunderanyofthetermsthereof,and(b)eachsuchpolicyisoutstandingandinfullforceandeffectandnoinsurerhasrefused,deniedordisputedcoverageofanyclaimmadethereunder.Allpremiumsandotherpaymentsdueunderanysuchpolicyhavebeenpaid,andallclaimsthereunderhavebeenfiledindueandtimelyfashion.

Section3.18.InformationSupplied.NoneoftheinformationsuppliedortobesuppliedbyoronbehalfoftheCompanyforinclusionorincorporationbyreferencein(i)theFormS-4will,atthetimetheFormS-4isfiledwiththeSEC,andatanytimeitisamendedorsupplementedoratthetimeitbecomeseffectiveundertheSecuritiesAct,containanyuntruestatementofamaterialfactoromittostateanymaterialfactrequiredtobestatedthereinornecessarytomakethestatementsthereinnotmisleadingand(ii)theProxyStatementwill,atthedateitoranyamendmentorsupplementismailedtoholdersofthesharesofCompanyCommonStockandatthetimeoftheCompanyStockholdersMeeting,containanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementstherein,inlightofthecircumstancesinwhichtheyaremade,notmisleading(exceptthatnorepresentationorwarrantyismadebytheCompanyregardingsuchportionsthereofthatrelateexpresslytoParent,MergerSuboranyoftheirSubsidiariesortostatementsmadethereintotheextentbasedoninformationsuppliedbyoronbehalfofParentorMergerSubforinclusionorincorporationbyreferencetherein).

Section3.19.TransactionswithAffiliates.NeithertheCompany,noranyoftheCompanySubsidiaries,ispartytoanyContractwithany(i)officerordirectoroftheCompanyoranyoftheCompanySubsidiariesor,otherthanasdirectlyrelatedtosuchperson’semploymentorservicewiththeCompanyoranyCompanySubsidiary,(ii)Personthatisthebeneficialowneroffivepercent(5%)ormoreoftheoutstandingCompanyCommonStockor(iii)Affiliateorfamilymemberofanysuchofficer,directororstockholder,otherthaninthecaseofclause(ii)or(iii),anyContractwithParentoritsAffiliates.

Section3.20.TakeoverLaws.AssumingtheaccuracyoftherepresentationsandwarrantiesofParentinSection4.12,neitherSection203oftheDGCLnoranyotherTakeoverLawisapplicablewithrespecttothisAgreement,theMergerortheothertransactionscontemplatedhereby.

Section3.21.StockholderVoteRequired.TheCompanyStockholderApprovalistheonlyvoteofholdersofanyclassorseriesofsecuritiesoftheCompanynecessarytoadoptthisAgreementortoapprovetheMergerandtheothertransactionscontemplatedhereby.

Section3.22.Brokers.OtherthanassetforthonSection3.22oftheCompanyDisclosureLetter,neithertheCompanynoranyoftheCompanySubsidiarieshasengagedanyfinancialadvisor,brokerorfinderorincurredanyliabilityforanyfinancialadvisoryfee,broker’sfee,commissionorfinder’sfeeinconnectionwithanyofthetransactionscontemplatedhereby.True,correctandcompletecopiesofallagreementswiththosepersonssetforthonSection3.22oftheCompanyDisclosureLetterrelatingtoanysuchfeesorcommissions(orotherwiserelatingtothetransactionscontemplatedbythisAgreement)havebeenfurnishedtoParentpriortothedatehereof.

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Section3.23.OpinionsofFinancialAdvisors.TheCompanyBoardhasreceivedthewrittenopinionsofCenterviewPartnersLLCandLionTreeAdvisorsLLC,financialadvisorstotheCompanyBoard,datedasofthedatehereof,that,asofthedateofsuchopinionsandbaseduponandsubjecttothevariousassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationsonthereviewundertakeninpreparingsuchopinionsassetforthintheirrespectiveopinions,theExchangeRatioprovidedforpursuanttothisAgreementisfair,fromafinancialpointofview,totheholdersofCompanyCommonStock(otherthanExcludedSharesandsharesofCompanyCommonStockheldbyanyAffiliateoftheCompanyorParent).TheCompanywillmakeexecutedcopiesofsuchopinionsavailabletoParentsolelyforinformationalpurposespromptlyfollowingtheexecutionofthisAgreement,anditisagreedandunderstoodthatsuchopinionsmaynotbereliedonbyParentorMergerSub.

Section3.24.NoOtherRepresentationsorWarranties.ExceptfortherepresentationsandwarrantiesofParentandMergerSubcontainedinArticleIV,theCompanyacknowledgesthatneitherParent,MergerSub,noranyPersonactingontheirbehalfmakesanyotherexpressoranyimpliedrepresentationsorwarrantieswhatsoeverandspecifically(butwithoutlimitingthegeneralityoftheforegoing)thatneitherParent,MergerSub,noranyPersonactingontheirbehalfmakesanyrepresentationorwarrantywithrespectto(i)ParentoranyParentSubsidiaries,anyoftheirbusinesses,operations,assets,liabilities,condition(financialorotherwise)orprospectsoranyothermatterrelatingtoParentortheParentSubsidiariesor(ii)anydocumentation,forecasts,budgets,projections,estimatesorotherinformationprovidedbyParentoranyPersonactingonitsbehalftotheCompany,anyAffiliateoftheCompanyoranyPersonactingonanyoftheirbehalf,includinginany“datarooms”ormanagementpresentations.TheCompanyhasnotreliedonanysuchinformationoranyrepresentationorwarrantynotsetforthinArticleIV.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Exceptasotherwisedisclosedin(a)theParentSECDocumentsfiledwithorfurnishedtotheSECpriortothedateofthisAgreement,butexcludingdisclosuressetforthinanyriskfactors,“forwardlookingstatements”orotherstatementsincludedinsuchCompanySECDocumentstotheextenttheyarepredictiveorforwardlookinginnature,or(b)thecorrespondingsectionoftheletter(the“ParentDisclosureLetter”)deliveredtotheCompanybyParentatthetimeoftheexecutionofthisAgreement(itbeingagreedthatdisclosureofanyiteminanysectionorsubsectionoftheParentDisclosureLettershallbedeemeddisclosurewithrespecttoanyothersectionorsubsectiontowhichtherelevanceofsuchitemisreasonablyapparent),ParentandMergerSubrepresentandwarranttotheCompanyasfollows:

Section4.1.OrganizationandCorporatePower.(a)EachofParentandMergerSubisacorporationdulyincorporated,validlyexistingandingoodstandingundertheLawsoftheStateof

Delawareandhasallrequisitecorporatepowerandauthoritytoown,leaseandoperateitspropertiesandassetsandtocarryonitsbusinessasnowbeingconducted,exceptwherethefailuretohavesuchpowerorauthority,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.EachofParentandMergerSubisdulyqualifiedorlicensedtodobusinessandisingoodstandingineachjurisdictioninwhichthenatureofitsbusinessortheownership,leasingoroperationofitspropertiesmakessuchqualificationorlicensingnecessary,exceptforthosejurisdictionsinwhichthefailuretobesoqualifiedorlicensedortobeingoodstanding,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohave,individuallyorintheaggregate,aParentMaterialAdverseEffect.

(b)ParenthasmadeavailabletotheCompanycopiesoftheConstituentDocumentsofParentandMergerSubineffectonthedateofthisAgreement.EachofParentandMergerSubisnotinviolationofanyprovisionofitsConstituentDocuments,exceptashasnothadandwouldnotreasonablybeexpectedtohave,individuallyorintheaggregate,aParentMaterialAdverseEffect.

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(c)MergerSubwasformedsolelyforthepurposesofengaginginthetransactionscontemplatedbythisAgreementandMergerSubhasnotcarriedonanybusinessorconductedanyoperationsotherthantheexecutionofthisAgreement,theperformanceofitsobligationshereunderandmattersancillarythereto.AlloftheissuedandoutstandingsharesofcommonstockofMergerSubhavebeenvalidlyissued,arefullypaidandnon-assessableandareowneddirectlyorindirectlybyParent,freeandclearofanyLien.

Section4.2.ParentCapitalization.(a)AsofthedateofthisAgreement,theauthorizedcapitalstockofParentconsistsof9,000,000,000sharesofParentCommonStockand

50,000,000sharesofParentPreferredStock.AsofthecloseofbusinessonSeptember20,2018,(i)4,452,964,967sharesofParentCommonStockwereissuedandoutstanding;(ii)nosharesofParentPreferredStockwereissuedandoutstanding;(iii)2,324,114sharesofParentCommonStockwereownedbyParentastreasurystock;(iv)278,902,853sharesofParentCommonStockwerereservedforissuancepursuanttotheParentStockIncentivePlans.AlloftheissuedandoutstandingsharesofcapitalstockofParentaredulyauthorizedandvalidlyissuedandarefullypaid,non-assessableandfreeofpreemptiverights.

(b)ExceptassetforthinSection4.2(a),asofthecloseofbusinessonSeptember20,2018:(i)ParentdoesnothaveanyothersharesofParentCommonStock,ParentPreferredStockorothercapitalstockorequityinterestsoutstanding,(ii)Parenthasnotissued,grantedorisboundbyanyoutstandingoptions,equity-basedawards,equity-linkedsecurities,warrants,puts,calls,subscriptionrights,preemptiverights,redemptionrightsorsecuritiesconvertibleorexchangeableintocapitalstockorequitysecuritiesofParentand(iii)ParentisnotpartytoanyContractobligatingParentto(A)issue,transferorsellanysharesofcapitalstockorotherequityinterestsofParentorsecuritiesconvertibleintoorexchangeableorexercisableforsuchcapitalstockorequityinterests,(B)issue,grantorbeboundbyanyoptions,equity-basedawards,equity-linkedsecurities,warrants,puts,calls,subscriptionrights,preemptiverights,redemptionrightsorsecuritiesconvertibleorexchangeableintocapitalstockorequitysecuritiesofParentor(C)redeem,repurchaseorotherwiseacquireanycapitalstockorequitysecuritiesofParent.

Section4.3.Authority.EachofParentandMergerSubhasallrequisitepowerandauthoritytoexecuteanddeliverthisAgreement,toperformitsobligationsunderthisAgreementand,subjectto,inthecaseofMergerSub,theadoptionofthisAgreementbythesolestockholderofMergerSub,toconsummatetheMerger,theParentStockIssuanceandtheothertransactionscontemplatedhereby.Theexecution,deliveryandperformancebyeachofParentandMergerSubofthisAgreementandtheconsummationbyParentandMergerSubofthetransactionscontemplatedherebyhavebeendulyauthorizedbyallnecessarycorporateactiononthepartofParentandMergerSub,subject,inthecaseoftheMergerwithregardtoMergerSub,theadoptionofthisAgreementbythesolestockholderofMergerSub.EachofParentandMergerSubhasdulyexecutedanddeliveredthisAgreementand,assumingthedueauthorization,executionanddeliverybytheCompanyofthisAgreement,thisAgreementconstitutesParent’sandMergerSub’slegal,validandbindingobligation,enforceableagainstitinaccordancewithitsterms,exceptaslimitedbybankruptcy,insolvency,reorganizationorsimilarLawsaffectingcreditors’rightsgenerallyandbygeneralprinciplesofequity.

Section4.4.ConsentsandApprovals;NoConflicts.(a)Noconsent,approval,clearance,permitorauthorizationof,orregistrationorfilingwith,ornoticeto,anyGovernmentalEntityis

requiredtobemadeorobtainedbyParentoranyParentSubsidiaryinconnectionwiththeexecutionordeliveryofthisAgreementortheconsummationofthetransactionscontemplatedbythisAgreement,exceptfor(i)anynoticesorfilingsbyParentrequiredundertheHSRAct,and,assumingtheaccuracyoftherepresentationsandwarrantiesoftheCompanyinSection3.4(a)(i),anyrequiredfilingsornotificationsundertheapplicableCompetitionLawsofthecountriesandjurisdictionslistedinSection4.4(a)oftheParentDisclosureLetterandtheexpirationorterminationofanyapplicablewaitingperiods(orapproval)thereunder,(ii)thefilingwiththeSECoftheFormS-4andsuchreportsunderandsuchothercompliancewiththeExchangeActandtheSecuritiesActasmayberequiredinconnectionwiththisAgreementandthetransactionscontemplatedbythisAgreement,(iii)compliancewiththe

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securitiesor“bluesky”lawsofvariousstatesinconnectionwiththeissuanceoftheMergerConsideration,(iv)compliancewithNasdaqrulesandregulationstopermittheconsummationoftheMergerandthelistingoftheParentCommonStocktobeissuedintheMerger,and(v)suchotherconsents,approvals,clearances,permits,authorizations,registrations,filingsornoticesthat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

(b)Theexecution,deliveryandperformanceofthisAgreementbyeachofParentandMergerSubdoesnotandtheconsummationbyeachofParentandMergerSubofthetransactionscontemplatedherebywillnot(i)conflictwithorviolateanyprovisionoftheConstituentDocumentsofParentorMergerSub,or(ii)assumingthefilings,consents,approvalsandwaitingperiodsreferredtoinSection4.4(a)aredulymade,obtainedorsatisfiedandtheadoptionofthisAgreementbythesolestockholderofMergerSubisobtained(A)violateanyLaworOrder,ineithercase,applicabletoParentoranyParentSubsidiaryoranyoftheirrespectivepropertiesorassetsor(B)violate,conflictwith,resultinthelossofanybenefitunder,requireapaymentorincurapenaltyunder,constituteadefault(oraneventwhich,withnoticeorlapseoftime,orboth,wouldconstituteadefault)under,resultintheterminationoforarightofterminationorcancellationunder,acceleratetheperformancerequiredby,orresultinthecreationofanyLienuponanyoftherespectivepropertiesorassetsofParentoranyParentSubsidiaryunder,anyContracttowhichParentoranyParentSubsidiaryisaparty,orbywhichtheyoranyoftheirrespectivepropertiesorassetsmaybeboundoraffected,except,inthecaseoftheforegoingclause(ii),forsuchmattersas,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

Section4.5.SECDocuments.(a)ParenthasfiledwithorfurnishedtotheSECallreports,schedules,forms,statements,registrationstatements,prospectusesandother

documents(includingexhibitsandotherinformationincorporatedtherein)requiredtobefiledorfurnishedbyParentwiththeSECsinceJanuary1,2016(suchdocuments,togetherwithanyotherdocumentsfiledorfurnishedduringsuchperiodbyParenttotheSEC,the“ParentSECDocuments”).NoParentSubsidiaryissubjecttotheperiodicreportingrequirementsoftheExchangeActorisotherwiserequiredtomakefilingswiththeSEC.

(b)AsofitsrespectivedateoffilingwiththeSEC,or,ifamendedorsupplementedbyafilingpriortothedateofthisAgreement,asofthedateofthelastsuchfiling,eachoftheParentSECDocumentscompliedinallmaterialrespectswiththerequirementsoftheSecuritiesAct,theExchangeActandtheSarbanes-OxleyAct,asapplicable,andtherulesandregulationsthereunder,andnoneoftheParentSECDocumentswhenfiledorfurnished(orinthecaseofaregistrationstatementundertheSecuritiesAct,atthetimeitwasdeclaredeffective)containedanyuntruestatementofamaterialfactoromittedtostateamaterialfactrequiredtobestatedthereinornecessaryinordertomakethestatementstherein,inlightofthecircumstancesunderwhichtheyweremade,notmisleading.

(c)Parentmaintains“internalcontroloverfinancialreporting”(asdefinedinRules13a-15(f)and15d-15(f)oftheExchangeAct)thatprovidereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithGAAP,andthatreceiptsandexpendituresofParentarebeingmadeonlyinaccordancewithauthorizationofmanagementanddirectorsofParentandthatprovidereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,useordispositionofParent’sassetsthatcouldhaveamaterialeffectontheCompany’sfinancialstatements.Parentmaintains“disclosurecontrolsandprocedures”(asdefinedinRules13a-15(e)and15d-15(e)oftheExchangeAct)thatensurethatinformationrequiredtobedisclosedbytheCompanyinthereportsthatitfilesorsubmitsundertheExchangeActisrecorded,processed,summarizedandreported,withinthetimeperiodsspecifiedintheSEC’srulesandforms.

(d)SinceJanuary1,2017,ParenthasnotidentifiedandhasnotbeenadvisedbyParent’sauditorsof(i)significantdeficienciesormaterialweaknesses(asdefinedbythePublicCompanyAccountingOversightBoard)inthedesignoroperationofinternalcontroloverfinancial

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reporting,whichreasonablycouldadverselyaffectParent’sabilitytorecord,process,summarizeandreportfinancialinformationor(ii)anyfraudorallegationoffraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohavearoleinParent’sinternalcontroloverfinancialreporting.

Section4.6.FinancialStatementsandUndisclosedLiabilities.(a)ThefinancialstatementsofParent(includinganyrelatednotesandschedulesthereto)includedintheParentSECDocuments(a)have

beenderivedfromtheaccountingbooksandrecordsofParentandParentSubsidiaries,(b)asoftheirrespectivedatesoffilingwiththeSECcompliedinallmaterialrespectswithapplicableaccountingrequirementsandthepublishedrulesandregulationsoftheSECwithrespectthereto,(c)havebeenpreparedinaccordancewithGAAPappliedonaconsistentbasisduringtheperiodsinvolved(exceptasmaybeindicatedinthenotesthereto)and(d)fairlypresent,inallmaterialrespects,theconsolidatedfinancialpositionofParentandtheParentSubsidiariesandtheconsolidatedresultsofoperations,stockholders’equityandcashflowsasofthedatesandfortherespectiveperiodsindicated(subject,inthecaseoftheunauditedstatements,tonormalyear-endauditadjustmentsandtheabsenceofnotes).

(b)ParentandParentSubsidiariesdonothaveanyliabilitiesorobligationsofanynature(whetherabsolute,contingent,accruedorotherwise)requiredbyGAAPtobereflectedorreservedagainstinaconsolidatedbalancesheet(orthenotesthereto)ofParent,exceptforthoseliabilitiesandobligations(i)that,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect,(ii)reflectedorreservedagainstinthemostrecentconsolidatedbalancesheetofParent(includingthenotesthereto)includedinParent’sQuarterlyReportonForm10-QforthefiscalquarterendedJune30,2018,(iii)incurredsinceJune30,2018intheordinarycourseofbusinessconsistentwithpastpracticeandwhich,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffector(iv)incurredinaccordancewiththisAgreement.

Section4.7.AbsenceofCertainChangesorEvents.(a)SinceDecember31,2017throughthedateofthisAgreement,therehasnotbeenanyevent,change,condition,occurrenceoreffect,

that,individuallyorintheaggregate,hashadorwouldreasonablybeexpectedtohaveaParentMaterialAdverseEffect.(b)SinceDecember31,2017,ParentandtheParentSubsidiarieshaveconductedtheirbusinessesinallmaterialrespectsintheordinary

courseofbusinessconsistentwithpastpractice.Section4.8.LegalProceedings.TherearenoProceedingspending,ortotheKnowledgeofParent,threatenedagainstParentoranyofthe

ParentSubsidiariesoranyoftheirrespectiveassets,rightsorpropertiesoranyoftheofficersordirectorsofParent,except,ineachcase,forthosethat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.NeitherParentnoranyofParentSubsidiariesnoranyoftheirrespectiveproperties,rightsorassetsisoraresubjecttoanyOrder,exceptforthosethat,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

Section4.9.Taxes.NeitherParentnoranyParentSubsidiaryhastakenanyactionorknowsofanyfactorcircumstancethatcouldreasonablybeexpectedtopreventorimpede(a)theMergerandtheSiriusXMRadioMerger,takentogether,or(b)theHoldingCompanyMergerandtheConversion,takentogether,fromineachcasequalifyingasareorganizationwithinthemeaningofSection368(a)oftheCode.

Section4.10.CompliancewithLaws.ParentandtheParentSubsidiariesare,andsinceJanuary1,2017havebeen,incompliancewithall(andhavenotviolatedany)applicableLawsandOrders,exceptas,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

Section4.11.InformationSupplied.NoneoftheinformationsuppliedortobesuppliedbyoronbehalfofParentorMergerSubforinclusionorincorporationbyreferencein(i)theFormS-4will,atthetimetheFormS-4isfiledwiththeSEC,andatanytimeitisamendedorsupplementedoratthetimeitbecomeseffectiveundertheSecuritiesAct,containanyuntruestatementofa

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materialfactoromittostateanymaterialfactrequiredtobestatedthereinornecessarytomakethestatementsthereinnotmisleading,and(ii)theProxyStatementwill,atthedateitoranyamendmentorsupplementismailedtoholdersofthesharesofCompanyCommonStockandatthetimeoftheCompanyStockholdersMeeting,containanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementstherein,inlightofthecircumstancesinwhichtheyaremade,notmisleading(exceptthatnorepresentationorwarrantyismadebyParentorMergerSubregardingsuchportionsthereofthatrelateexpresslytotheCompanyoranyCompanySubsidiariesortostatementsmadethereintotheextentbasedoninformationsuppliedbyoronbehalfoftheCompanyforinclusionorincorporationbyreferencetherein).

Section4.12.OwnershipofCompanyCommonStock.ExceptfortheCompanyPreferredStock(includingallaccruedbutunpaiddividendsthereon),neitherParentnoranyParentSubsidiaryownsanysharesofCompanyCommonStock.

Section4.13.NoVoteofParentStockholders.NovoteofholdersofParentCommonStockisnecessarytoapprovethisAgreement,theMerger,theParentStockIssuanceandtheothertransactionscontemplatedhereby.TheadoptionofthisAgreementbythesolestockholderofMergerSubistheonlyvoteofholdersofanycapitalstockofMergerSubnecessarytoadoptthisAgreementandapprovetheMergerandtheothertransactionscontemplatedhereby.

Section4.14.Brokers.OtherthanAllen&CompanyLLCandBankofAmericaMerrillLynch,nobroker,finderorinvestmentbankerwillbeentitledtoanybrokerage,finder’sorotherfeeorcommissioninconnectionwiththetransactionscontemplatedbythisAgreementbaseduponarrangementsmadebyoronbehalfofParentorMergerSub.

Section4.15.NoOtherRepresentationsorWarranties.ExceptfortherepresentationsandwarrantiesoftheCompanycontainedinArticleIII,eachofParentandMergerSubacknowledgesthatneithertheCompanynoranyPersonactingonitsbehalfmakesanyotherexpressoranyimpliedrepresentationsorwarrantieswhatsoeverandspecifically(butwithoutlimitingthegeneralityoftheforegoing)thatneithertheCompanynoranyPersonactingonitsbehalfmakesanyrepresentationorwarrantywithrespectto(i)theCompanyoranyCompanySubsidiaries,anyoftheirbusinesses,operations,assets,liabilities,condition(financialorotherwise)orprospectsoranyothermatterrelatingtotheCompanyortheCompanySubsidiariesor(ii)anydocumentation,forecasts,budgets,projections,estimatesorotherinformationprovidedbytheCompanyoranyPersonactingonitsbehalftoParentorMergerSub,anyAffiliateofParentoranyPersonactingonanyoftheirbehalf,includinginany“datarooms”ormanagementpresentations.NeitherParentnorMergerSubhasreliedonanysuchinformationoranyrepresentationorwarrantynotsetforthinArticleIII.

ARTICLE V

COVENANTSSection5.1.CompanyConductofBusinessPriortotheEffectiveTime.Except(i)assetforthinSection5.1oftheCompanyDisclosure

Letter,(ii)asexpresslycontemplatedbythisAgreement,(iii)asrequiredbyapplicableLawor(iv)withthepriorwrittenconsentofParent(suchconsentnottobeunreasonablywithheld,conditionedordelayed),duringtheperiodfromthedateofthisAgreementtotheearlieroftheEffectiveTimeandtheterminationofthisAgreement,(A)theCompanyshall,andshallcausetheCompanySubsidiariesto:(1)conductitsbusinessintheordinarycourseconsistentwithpastpracticeand(2)usecommerciallyreasonableeffortstomaintainandpreserveitspresentbusinessorganization,maintainineffectallContractsandPermitsasnecessarytooperatetheirbusinesses,keepavailabletheservicesofofficersandkeyemployeesandmaintainrelationshipswithcustomers,suppliersandothershavingmaterialbusinessrelationshipswithitand(B)infurtheranceof,andwithoutlimitingthegeneralityoftheforegoing,theCompanyshallnot,andshallcausetheCompanySubsidiariestonot:

(a)(A)amendorotherwisechangetheCompany’sConstituentDocumentsand(B)withrespecttoanyCompanySubsidiaries,amendorotherwisechangetheirConstituentDocumentsinanymaterialrespect;

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(b)adjust,split,combineorreclassifyanycapitalstockorotherequityinterestorenterintoanyagreementorplantoeffectamerger,consolidation,shareexchange,reorganization,dissolutionorliquidation(providedthatfortheavoidanceofdoubt,nothinginthisclause(b)(orclause(s)asitrelatestothisclause(b))shallprohibittheexercisebytheCompanyofitsrightsunderSection5.5(g));

(c)exceptaspermittedinSection5.1(k)(D),issue,grant,sell,disposeof,redeemorrepurchaseanyequitysecuritiesorequity-basedawardintheCompanyoranyCompanySubsidiaries,orsecuritiesconvertibleinto,orexchangeableorexercisablefor,anysuchequitysecuritiesorawards,oranyrightsofanykindtoacquireanysuchequitysecuritiesorsuchconvertibleorexchangeablesecurities,otherthantheissuanceofsharesofCompanyCommonStock(x)upontheexerciseofCompanyStockOptionsandoptionsundertheESPP,ineachcaseoutstandingasofthedatehereofinaccordancewiththeirterms,(y)tosatisfythevestingandsettlementofanyCompanyRSUsorCompanyPerformanceAwardsoutstandingasofthedatehereofinaccordancewiththeirtermsor(z)tosatisfytheconversionofanyCompanyConvertibleNotesinaccordanceCompanyNotesIndenture;

(d)declare,setaside,makeorpayanydividendorotherdistribution,payableincash,stock,propertyorotherwise,withrespecttoanyofCompanyCommonStockorothersharesofcapitalstockorequityinterests(exceptforanydividendordistributionontheCompanyPreferredStockorbyawholly-ownedCompanySubsidiarytotheCompanyoranotherwholly-ownedCompanySubsidiary);

(e)sell,license,transfer,subjecttoaLien,abandonorallowtolapseorexpireorotherwisedisposeof(whetherbymerger,consolidationorsaleofstockorassetsorotherwise),anyassets,rights(includingIntellectualProperty)orbusinessesoftheCompanyortheCompanySubsidiaries(includinganycapitalstockofanyCompanySubsidiaries),ineachcaseotherthandispositionsof(x)equipmentandotherassetsintheordinarycourseofbusinessconsistentwithpastpractice,(y)anyassets,rightsorbusinessesnotexceeding$10,000,000individuallyor$20,000,000intheaggregateor(z)non-exclusivelicensestoIntellectualPropertygrantedintheordinarycourseofbusinessconsistentwithpastpractice;

(f)acquire(whetherbymerger,consolidationoracquisitionofstockorassetsorotherwise)anycorporation,partnershiporotherbusinessorganizationordivisionthereoforanyassets,ineachcaseotherthan(A)purchasesofequipmentandotherassetsintheordinarycourseofbusinessconsistentwithpastpracticeor(B)acquisitionsnotexceeding$10,000,000individuallyor$20,000,000intheaggregate;

(g)(A)incur,assume,refinanceorguaranteeanyIndebtedness(otherthanIndebtednessbetweenwhollyownedCompanySubsidiariesorbetweentheCompanyandwhollyownedCompanySubsidiaries)orissueanydebtsecurities,orassumeorguaranteeanyIndebtednessofanyperson,exceptforborrowingsintheordinarycourseofbusinessconsistentwithpastpracticeundertheCompany’srevolvingcreditfacility(assetforthintheCreditAgreement)or(B)enterinto(orterminate)anyswaporhedgingtransactionorotherderivativeagreement;

(h)makeanyloans,advancesorcapitalcontributionsto,orinvestmentsin,anyotherperson(otherthantoanywholly-ownedCompanySubsidiary)inexcessof$5,000,000individuallyor$10,000,000intheaggregate;

(i)enterinto,amendinanymaterialrespect,waivecompliancewithanymaterialrightswithrespectto,orcancel,failtoreneworterminateanyCompanyMaterialContractorContractwhichifenteredintopriortothedatehereofwouldbeaCompanyMaterialContract,otherthananyContractrelatingtolicensesoftheContentRights;

(j)exceptforexpenditurescontemplatedbyandconsistentwiththecapitalexpenditurebudgetssetforthonSection5.1(j)oftheCompanyDisclosureLetter(the“CapitalExpenditureBudget”),make,orcommittomake,orotherwiseauthorizeanycapitalexpendituresinexcessof$10,000,000intheaggregate;

(k)exceptasmayberequiredbythetermsofanyCompanyBenefitPlandisclosedonSection3.11(a)oftheCompanyDisclosureLetterasineffectasofthedatehereof:(A)increasethecompensationorbenefitsofanyCompanyEmployee,exceptforincreasesincompensationorbenefitsfortheCompanyEmployeesbelowtheleveloftheCompany’sSeniorLeadershipTeamtotheextentthatsuchincreasesareintheordinarycourseofbusinessandconsistentwithpast

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practice;(B)grantanyrightstochange-in-control,retention,severanceorterminationpayorotherterminationbenefitstoanyCompanyEmployee,exceptformakingseverance,terminationpayorotherterminationbenefitsintheordinarycourseofbusinessandconsistentwithpastpracticetoCompanyEmployeesbelowtheleveloftheCompany’sSeniorLeadershipTeaminconnectionwithpromotionsorthehiringofanewCompanyEmployeebelowtheleveloftheCompany’sSeniorLeadershipTeamorthefillingofavacancyforapositionbelowtheleveloftheCompany’sSeniorLeadershipTeam;(C)establish,adopt,enterinto,amend,terminateorgrantanywaiverorconsentunderanyCompanyBenefitPlanoranyplan,agreement,program,policy,trust,fundorotherarrangementthatwouldbeaCompanyBenefitPlanifitwereinexistenceasofthedateofthisAgreementexceptforamendmentstoCompanyBenefitPlansmadeintheordinarycourseofbusinessconsistentwithpastpracticethatdonotincreasethecosttotheCompanyoranyoftheCompanySubsidiariesofsucharrangements;providedthatnosuchactionshallbetakenwhichextendsaCompanyBenefitPlanbeyondDecember31,2019;(D)grantanyequityorequity-basedawardsotherthaninconnectionwiththehiringofanynewCompanyEmployeeorpromotionawardsmadetoanyCompanyEmployeeintheordinarycourseofbusinessandconsistentwithpastpractice(itbeingunderstoodthatnosuchawardsshallcontainanyaccelerationofvestingsolelyasaresultofthetransactionscontemplatedhereby);(E)terminatetheemploymentofanyexecutiveofficers(otherthanforcause)orhireanynewemployeesunlesssuchhiringisintheordinarycourseofbusinessandconsistentwithpastpracticeandiswithrespecttoemployeeshavinganannualbasesalaryandannualtargetcashincentiveopportunitynottoexceed$400,000intheaggregateforsuchemployee;(F)takeanyactiontoacceleratethevestingortimeofpaymentofanycompensationorbenefitunderanyCompanyBenefitPlanorpayanycashbonus;or(G)loanoradvanceanymoneyorotherpropertytoanyCompanyEmployee(otherthanroutineadvancementofbusinessexpensesintheordinarycourseofbusinessandconsistentwithpastpractice);

(l)enterintoanyContractinvolvingorprovidingforthesettlementofanyClaimorthreatenedClaim(orseriesofrelatedClaims):(A)whichContractiswithaGovernmentalEntity(exceptsettlementsforanimmaterialmonetaryfine);(B)whichContractmateriallyrestrictsorimposesmaterialobligationsontheCompanyoranyCompanySubsidiary;or(C)whichContractinvolvespaymentsbytheCompanyoranyCompanySubsidiariesafterthedatehereofinexcessof$1,000,000individuallyor$5,000,000intheaggregate(excludinganyamountsthatmaybepaidunderexistinginsurancepolicies),providedthatthisclause(l)shallnotapplytoanysettlementofanyProceedingdescribedinSection5.6orSection5.13,whichshallbegovernedbytherespectiveprovisionsthereof;

(m)(i)announce,implementoreffectanyreductioninforce,layofforotherprogramresultingintheterminationofCompanyEmployees,ineachcase,thatwouldtriggertheWARNActor(ii)recognizeanyunionorotherlabororganizationastherepresentativeofanyCompanyEmployees,orenterintoanyneworamendedcollectivebargainingagreementwithanyunionorotherlabororganization;

(n)makeanychangesinitsmethods,practicesorpoliciesoffinancialaccounting,exceptasmayberequiredunderapplicableLaw,rule,regulationorU.S.GAAP,ineachcasefollowingconsultationwiththeCompany’sindependentpublicaccountants;

(o)(i)make,changeorrevokeanyTaxelection,exceptwheresuchelectionwouldnothaveamaterialeffectontheTaxpositionoftheCompanyoranyCompanySubsidiary(ii)fileanyamendedmaterialTaxReturns,(iii)settleorcompromiseanyTaxliabilityoftheCompanyoranyCompanySubsidiary(otherthanwithrespecttosettlementsorcompromisesofanyTaxliabilityforanamountthatdoesnotmateriallyexceedtheamountspecificallydisclosed,reflectedorreservedwithrespecttosuchTaxliabilityinaccordancewithGAAPintheconsolidatedfinancialstatementsincludedintheCompanySECDocumentswithrespecttotherelevantTaxmatteratissue,(iv)agreetoanextensionorwaiverofthestatuteoflimitationswithrespecttotheassessmentordeterminationofamaterialamountofTaxesoftheCompanyoranyCompanySubsidiaries,(v)enterintoanyclosingagreementwithrespecttoanymaterialTaxorsurrenderanyrighttoclaimamaterialTaxrefund,or(vi)failtofilewhendue(takingintoaccountanyavailableextensions)anymaterialTaxReturn;

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(p)(i)takeanyactionorcauseanyactiontobetakenthatwouldreasonablybeexpectedtoprevent(x)theMergerandtheSiriusXMRadioMerger,takentogether,or(y)theHoldingCompanyMergerandtheConversion,takentogether,fromineithercaseconstitutingareorganizationunderSection368(a)andrelatedprovisionsoftheCodeor(ii)failtotakeanycommerciallyreasonableactionorfailtocauseanycommerciallyreasonableactiontobetakenthatisreasonablyexpectedtobenecessarytocause(x)theMergerandtheSiriusXMRadioMerger,takentogether,and(y)theHoldingCompanyMergerandtheConversion,takentogether,toineachcaseconstituteareorganizationunderSection368(a)andrelatedprovisionsoftheCode;

(q)failtouseitsreasonablebesteffortstomaintaininfullforceandeffecttheexistinginsurancepoliciesoftheCompanyandtheCompanySubsidiariesortoreplacesuchinsurancepolicieswithcomparableinsurancepoliciescoveringtheCompany,theCompanySubsidiariesandtheirrespectiveproperties,assetsandbusinesses;

(r)makeanymaterialchangestoanyPrivacyPolicy(exceptasisreasonablydeterminedbytheCompanytobenecessaryoradvisabletocomplywithapplicableLaw)oritsactionstoqualifyfortheIPSafeHarbors;or

(s)agree,resolveorcommittotakeanyoftheactionsprohibitedbythisSection5.1.NothingcontainedinthisAgreementisintendedtogiveParent,directlyorindirectly,therighttocontrolordirecttheCompany’sortheCompany

Subsidiaries’operationspriortotheEffectiveTime.PriortotheEffectiveTime,theCompanyshallexercise,consistentwiththetermsandconditionsofthisAgreement,completecontrolandsupervisionoveritsandtheCompanySubsidiaries’respectiveoperations.

Section5.2.ParentConductofBusinessPriortotheEffectiveTime.Exceptas(i)setforthinSection5.2oftheParentDisclosureLetter,(ii)asexpresslycontemplatedbythisAgreement,(iii)asrequiredbyapplicableLawor(iv)withthepriorwrittenconsentoftheCompany(suchconsentnottobeunreasonablywithheld,conditionedordelayed),duringtheperiodfromthedateofthisAgreementtotheearlieroftheEffectiveTimeandtheterminationofthisAgreement:(A)Parentshall,andshallcausetheParentSubsidiariesto:(1)conductitsbusinessintheordinarycourseconsistentwithpastpracticeand(2)usecommerciallyreasonableeffortstomaintainandpreserveitspresentbusinessorganization,maintainineffectallContractsandPermitsasnecessarytooperatetheirbusinesses,keepavailabletheservicesofofficersandkeyemployeesandmaintainrelationshipswithcustomers,suppliersandothershavingmaterialbusinessrelationshipswithitand(B)infurtheranceof,andwithoutlimitingthegeneralityoftheforegoing,Parentshallnot:

(a)amendorotherwisechangetheConstituentDocumentsofParentinanymannerthatwouldadverselyaffecttheholdersofCompanyCommonStockwhowouldreceiveParentCommonStockattheEffectiveTimeinamannerdifferentfromholdersofParentCommonStockpriortotheEffectiveTime;

(b)adjust,split,combineorreclassifytheParentCommonStock,anycapitalstockorotherequityinterestofParentorenterintoanyagreementorplantoeffectareorganization,dissolutionorliquidation;

(c)declare,setaside,makeorpayanydividendorotherdistribution,payableincash,stock,propertyorotherwise,withrespecttoanyofParentCommonStockorothersharesofcapitalstockorequityinterests(exceptfor(i)regularquarterlycashdividendsbyParentor(ii)anydividendordistributionbyawholly-ownedParentSubsidiarytoParentoranotherwholly-ownedParentSubsidiary);

(d)(i)takeanyactionorcauseanyactiontobetakenthatwouldreasonablybeexpectedtoprevent(x)theMergerandtheSiriusXMRadioMerger,takentogether,or(y)theHoldingCompanyMergerandtheConversion,takentogether,ineithercasefromconstitutingareorganizationunderSection368(a)andrelatedprovisionsoftheCodeor(ii)failtotakeanycommerciallyreasonableactionorfailtocauseanycommerciallyreasonableactiontobetakenthatisreasonablyexpectedtobenecessarytocausethe(x)MergerandtheSiriusXMRadioMerger,takentogether,and(y)theHoldingCompanyMergerandtheConversion,takentogether,toineachcaseconstituteareorganizationunderSection368(a)andrelatedprovisionsoftheCode;or

(e)agree,resolveorcommittotakeanyoftheactionsprohibitedbythisSection5.2.A-30

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NothingcontainedinthisAgreementisintendedtogivetheCompany,directlyorindirectly,therighttocontrolordirectParent’sortheParentSubsidiaries’operationspriortotheEffectiveTime.PriortotheEffectiveTime,Parentshallexercise,consistentwiththetermsandconditionsofthisAgreement,completecontrolandsupervisionoveritsandtheParentSubsidiaries’respectiveoperations.

Section5.3.AccesstoInformation.(a)FromthedateofthisAgreementthroughtheearlieroftheEffectiveTimeandtheterminationofthisAgreement,eachPartyshall

affordtotheotherPartyanditsAffiliates(anditsandtheirRepresentatives),uponreasonablenoticebysuchotherParty,reasonableaccessduringnormalbusinesshourstoallitsanditsSubsidiaries’properties,books,contracts,commitmentsandrecords,andtoitsanditsSubsidiaries’officers,employees,accountants,counselandotherRepresentativesandeachPartyshallpromptlymakeavailabletotheotherPartyallinformationconcerningitsbusiness,propertiesandpersonnelastheotherPartymayreasonablyrequest;providedthataPartyshallnotberequiredtoprovidesuchaccessorfurnishsuchinformationifsuchPartyingoodfaithreasonablybelievesthatdoingsowouldreasonablybeexpectedto(i)breachorviolateanyapplicableLawrelatingtotheexchangeofinformation,(ii)resultinthelossofattorney-clientprivilegeorattorneyworkproductprivilegeor(iii)violateanyconfidentialityobligation(existingonthedatehereof)withrespecttosuchinformation;provided,further,thatthePartiesagreetocollaborateingoodfaithtomakealternativearrangementstoallowforsuchaccessordisclosureinamannerthatdoesnotresultintheeventssetoutinclauses(i),(ii)or(iii)above.NoinvestigationbyanyofthePartiesortheirrespectiveRepresentativesshallconstituteawaiveroforotherwiseaffecttherepresentations,warranties,covenantsoragreementsofanyotherPartysetforthhereinorotherwiseaffectanyconditiontotheobligationsofthePartiesunderthisAgreement.

(b)AllinformationfurnishedbyaPartyoranyofitsRepresentativestoanotherPartyoritsRepresentativespursuanttothisAgreement(includingSection5.3(a))shallbesubjecttotheconfidentialityprovisionsoftheInvestmentAgreement(withrespecttoinformationprovidedtoParent,itsAffiliatesandtheirrespectiveRepresentatives)orthenondisclosureagreement,datedJanuary25,2016,asamended,byandamongSiriusXMRadio,LibertyMediaCorporationandtheCompany(the“ConfidentialityAgreement”)(withrespecttoinformationprovidedtotheCompany,CompanySubsidiariesandtheirrespectiveRepresentatives),asiftheConfidentialityAgreementhasatermlastinguntilthesecondanniversaryofthedateofthisAgreement.Section5.07(otherthanclause(a)thereinandthelastsentencetherein)oftheInvestmentAgreementshallbeofnoforceandeffectforsolongasthisAgreementremainsineffect(or,intheeventtheCompanyhasterminatedthisAgreementtoenterintoanagreementwithrespecttoaSuperiorProposal,forsolongassuchagreementfortheacquisitionoftheCompanyisotherwiseineffect).

Section5.4.PreparationoftheFormS-4andtheProxyStatement.(a)AspromptlyaspracticableafterthedateofthisAgreement,(i)theCompanyshallprepareandfilewiththeSECtheProxyStatement

tobesenttothestockholdersoftheCompanyinconnectionwiththeCompanyStockholdersMeetingand(ii)ParentshallprepareandfilewiththeSECtheFormS-4,inwhichtheProxyStatementwillbeincluded,inconnectionwiththeregistrationundertheSecuritiesActoftheParentCommonStocktobeissuedintheMerger.TherespectivePartieswillcausetheProxyStatementandtheFormS-4tocomplyastoforminallmaterialrespectswiththeapplicableprovisionsoftheSecuritiesActandtheExchangeAct.PriortofilingtheFormS-4andProxyStatement(oranyamendmentorsupplementthereto)orrespondingtoanycommentsoftheSEC(orthestaffoftheSEC)withrespecttheretofollowingsuchfiling,eachPartyshallprovidetheotherPartiesareasonableopportunitytoreviewandtocommentonsuchdocumentorresponseandshalltakeintoaccountingoodfaithanysuchcommentsasreasonablyproposed.ParentshalluseitsreasonablebesteffortstohavetheFormS-4declaredeffectiveundertheSecuritiesActaspromptlyaspracticableaftersuchfiling(includingbyresponding,afterconsultationwiththeCompany,tocommentsoftheSEC),tokeeptheFormS-4effectiveaslongasisnecessarytoconsummatetheMergerandtheothertransactionscontemplated

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herebyandParentshalltakeallactionsreasonablyrequiredtobetakenunderanyapplicablestatesecuritiesLawsinconnectionwiththeParentStockIssuance.

(b)TheCompanyshall,assoonaspracticablefollowingeffectivenessoftheFormS-4,mailtheProxyStatementtotheholdersofrecordofCompanyCommonStockanddulycall,givenoticeof,conveneandholdtheCompanyStockholdersMeeting;provided,however,thatnobreachofthisSection5.4(b)shallbedeemedtohaveoccurrediftheCompanyadjournsorpostponestheCompanyStockholdersMeetingforareasonableperiodoftime,eachsuchperiodoftimenottoexceedten(10)BusinessDays;providedthat(x)atthetimeofsuchadjournmentorpostponementtheCompanyBoardshallbeprohibitedbythetermsofthisAgreementfrommakingaChangeofRecommendation,andtheCompanyStockholdersMeetingisthenscheduledtooccurwithinthree(3)BusinessDaysofthetimeofsuchadjournmentorpostponementor(y)atthetimetheCompanyBoardannouncesaChangeofRecommendation,theCompanyStockholdersMeetingisthenscheduledtooccurnolaterthanten(10)BusinessDaysfromthedateofsuchChangeofRecommendation;providedfurtherthattheCompanymaynotadjournorpostponetheCompanyStockholdersMeetingpursuanttothisSection5.4(b)morethantwo(2)timesorformorethantwenty(20)BusinessDaysintheaggregate.Withoutlimitingthegeneralityoftheforegoing,theCompanyagreesthatitsobligationspursuanttothisSection5.4(b)shallnotbeaffectedbythecommencement,publicproposal,publicdisclosureorcommunicationtotheCompanyoranyotherPersonofanyCompanyAcquisitionProposalortheoccurrenceofanyChangeofRecommendation(whetherornotmadeinaccordancewiththisAgreement).

(c)EachofParentandtheCompanyshallfurnishallinformationasmaybereasonablyrequestedbytheotherinconnectionwithanysuchactionandthepreparation,filinganddistributionoftheFormS-4andtheProxyStatement.EachPartyshallnotifytheotherpromptlyof(i)thereceiptofanycommentsfromtheSECorthestaffoftheSEContheFormS-4ortheProxyStatement,(ii)anyrequestbytheSECorthestaffoftheSECforamendmentsorsupplementstotheProxyStatementortheFormS-4orforadditionalinformationand(iii)theissuanceofanystoporderorsuspensionofthequalificationoftheParentCommonStockissuableinconnectionwiththeMergerforofferingorsaleinanyjurisdiction.EachPartyshallsupplytheotherwithcopiesofallwrittencorrespondencebetweenitoranyofitsRepresentatives,ontheonehand,andtheSECoritsstaff,ontheotherhand,withrespecttotheProxyStatement,theFormS-4ortheMerger.EachPartyshalluseitsreasonablebesteffortstorespondaspromptlyaspracticabletoanycommentsfromtheSECoritsstaffwithrespecttotheProxyStatementortheFormS-4(witheachPartytoprovidetheotherPartiesareasonableopportunitytoreviewandtocommentonsuchresponseandshalltakeintoaccountingoodfaithanysuchcommentsasreasonablyproposed)andtohaveanysuchstoporderorsuspensionlifted,reversedorotherwiseterminated.

(d)Nofilingof,oramendmentorsupplementto,theFormS-4willbemadebyParent,andnofilingof,oramendmentorsupplementto,theProxyStatementwillbemadebytheCompany,ineachcasewithoutprovidingtheotherPartywithareasonableopportunitytoreviewandcommentthereon.IfatanytimepriortotheEffectiveTimeanyinformationrelatingtoParentortheCompanyoranyoftheirrespectiveAffiliates,directorsorofficers,shouldbediscoveredbyParentortheCompanywhichshouldbesetforthinanamendmentorsupplementtoeithertheFormS-4ortheProxyStatement,sothateithersuchdocumentwouldnotincludeanymisstatementofamaterialfactoromittostateanymaterialfactnecessarytomakethestatementstherein,inlightofthecircumstancesunderwhichtheyaremade,notmisleading,thePartythatdiscoverssuchinformationshallpromptlynotifytheotherPartiesandanappropriateamendmentorsupplementdescribingsuchinformationshallbepromptlyfiledwiththeSECand,totheextentrequiredbyLaw,disseminatedtothestockholdersofParentandtheCompany.

(e)UnlesstheCompanyBoardhasmadeaChangeofRecommendationinaccordancewithandsubjecttoSection5.5,theCompanyshallincludetheCompanyRecommendationintheProxyStatementandtheCompanyshalluseitsreasonablebesteffortstosolicitfromitsstockholdersproxiesinfavorofapprovaloftheMergerandsecureanyotherapprovalofstockholdersoftheCompanythatisrequiredbyapplicableLawinconnectionwiththeMerger.TheCompanyshallkeepParentreasonablyupdatedwithrespecttoproxysolicitationresults.TheobligationoftheCompanytomailtheProxyStatementtotheholdersofCompanyCommonStock

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andtocall,givenoticeof,conveneandholdtheCompanyStockholdersMeeting,shallnotbeaffectedbyaChangeofRecommendation(whetherornotmadeinaccordancewiththisAgreement).

Section5.5.Go-ShopandNoSolicitationbytheCompany.(a)NotwithstandinganythingtothecontrarycontainedinthisAgreement,duringtheperiodbeginningonthedateofthisAgreementand

continuinguntil12:01a.m.(NewYorkCitytime)onOctober24,2018(the“No-ShopPeriodStartDate”),theCompany,theCompanySubsidiariesandtheirrespectiveRepresentativesshallhavetherightto(i)initiate,solicit,facilitateandencourageanyinquiryorthemakingofanyproposalorofferthatconstitutesaCompanyAcquisitionProposal,(ii)furnishtoanyPersonanyinformationwhichisreasonablyrequestedbysuchPersoninconnectionwiththeirpotentiallymakingaCompanyAcquisitionProposaland(iii)participateorengageindiscussionsornegotiationswithsuchPersonregardingaCompanyAcquisitionProposal;providedthat(A)priortoparticipatingorengaginginsuchdiscussionsornegotiationsorfurnishingsuchinformation,theCompanyshallhaveenteredintoanAcceptableConfidentialityAgreementwithsuchPersonand(B)theCompanywillprovidetoParentanyinformationrelatingtotheCompanyoranyoftheCompanySubsidiariesthatwasnotpreviouslyprovidedormadeavailabletoParentpriortoorconcurrentlywiththetimeitisfurnishedtosuchPerson.PriortotheNo-ShopPeriodStartDate,theCompanywillprovideawrittenreporttoParenteveryten(10)BusinessDayssettingforth(1)thetotalnumberofpartiescontactedtodatepursuanttothisSection5.5(a),(2)thenumberofpartiesthathaveaffirmativelydeclinedtoreceiveinformationorenterintodiscussionsregardingaCompanyAcquisitionProposal,(3)thenumberofpartiesthathaveaffirmativelyexpressedinterestinreceivinginformationorenteringintodiscussionsregardingaCompanyAcquisitionProposaland(4)thenumberofpartiesthathaveexecutedanAcceptableConfidentialityAgreement.OntheNo-ShopPeriodStartDate,theCompanyshallnotifyParentinwritingoftheidentityofeachExcludedPartyfromwhomtheCompanyreceivedawrittenCompanyAcquisitionProposalaftertheexecutionofthisAgreementandpriortotheNo-ShopPeriodStartDate,whichnoticeshallincludecopiesofdraftsofproposedagreements,termsheetsorlettersofintentrelatedtheretoprovidedtotheCompanyoranyofitsRepresentativesandasummaryofallmaterialtermsofsuchCompanyAcquisitionProposalsthatwerenotmadeinwriting.

(b)OntheNo-ShopPeriodStartDate,theCompanyshall,andshallcausetheCompanySubsidiariesanditsandtheirRepresentativesto,immediatelyceaseandcausetobeterminatedanydiscussionsornegotiationsconductedwithanyPersonsotherthanParent(anditsRepresentatives)andanyExcludedParty(anditsRepresentatives)withrespecttoanyCompanyAcquisitionProposal,includingimmediatelyrevokingorwithdrawingaccessofanyPersonotherthanParent(anditsRepresentatives)andanyExcludedParty(anditsRepresentatives)toanydataroom(virtualoractual)containinganynon-publicinformationwithrespecttotheCompanyortheCompanySubsidiariesandrequestthepromptreturnordestructionofallconfidentialinformationpreviouslyfurnishedtoanysuchPersonanditsRepresentativesotherthanParent(anditsRepresentatives)andanyExcludedParty(anditsRepresentatives).TheCompanyshallnotterminate,waive,amendormodifyanyprovisionofanystandstillorconfidentialityagreementtowhichtheCompanyoranyCompanySubsidiaryisapartywithrespecttoaCompanyAcquisitionProposal,excepttopermittheapplicablepartytomakeaconfidentialCompanyAcquisitionProposaltotheCompanyortheCompanyBoard.

(c)ExceptasexpresslypermittedbySection5.5,theCompanyshallnot,andtheCompanyshallcausetheCompanySubsidiariestonot,andshallusereasonablebesteffortstocauseitsandtheirrespectiveRepresentativesnotto,directlyorindirectly(i)initiate,solicit,knowinglyfacilitateorencourageortakeanyotheractiondesignedtoresultinorfacilitate(includingbywayofprovidinginformation)anyinquiry,proposaloroffer(orthemakingorannouncementofanyinquiry,proposaloroffer)withrespecttoanyCompanyAcquisitionProposal,(ii)participateorengageinanydiscussionsornegotiationsregardingaCompanyAcquisitionProposal,furnishtoanyPersonanyinformationordatawithrespecttoaCompanyAcquisitionProposal,orotherwisecooperatewithorknowinglytakeanyotheractiontofacilitateanyinquiry,proposaloroffermayreasonablybeexpectedtoleadtoaCompanyAcquisitionProposalor(iii)enterintoanyletterof

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intent,agreementinprincipleorContractrelatingtoorprovidingforaCompanyAcquisitionProposal(otherthananAcceptableConfidentialityAgreement)orenterintoanyletterofintent,agreementinprincipleorContractrequiringtheCompanytoabandon,terminateorfailtoconsummatethetransactionscontemplatedherebyorbreachitsobligationshereunder(anysuchletterofintentorotherdocumentorContract,an“AlternativeAcquisitionAgreement”).

(d)NotwithstandinganythingtothecontraryinthisSection5.5,beginningontheNo-ShopPeriodStartDateandpriortoobtainingtheCompanyStockholderApproval,iftheCompanyoranyofitsRepresentativesreceivesanunsolicitedbonafidewrittenCompanyAcquisitionProposalthatdidnotresultfromabreachofthisSection5.5andtheCompanyBoardconcludesingoodfaith(afterconsultationwiththeCompany’soutsidelegalandfinancialadvisors)thatsuchCompanyAcquisitionProposalconstitutesaCompanySuperiorProposalorisreasonablylikelytoresultinaCompanySuperiorProposal,theCompanyanditsRepresentativesmay(i)participateorengageindiscussionsornegotiationswithsuchPersonoritsRepresentativesregardingsuchCompanyAcquisitionProposaland(ii)furnishinformationtothePersonmakingsuchCompanyAcquisitionProposalwhichisreasonablyrequestedbysuchPersoninconnectionwithsuchCompanyAcquisitionProposal;providedthat(A)priortoparticipatingorengaginginsuchdiscussionsornegotiationsorfurnishingsuchinformation,theCompanyshallhaveenteredintoanAcceptableConfidentialityAgreementwithsuchPersonand(B)theCompanywillprovidetoParentanyinformationrelatingtotheCompanyoranyoftheCompanySubsidiariesthatwasnotpreviouslyprovidedormadeavailabletoParentpriortoorconcurrentlywiththetimeitisfurnishedtosuchPersonmakingsuchCompanyAcquisitionProposal.Fortheavoidanceofdoubt,notwithstandingthecommencementoftheNo-ShopPeriodStartDate,priortoobtainingtheCompanyStockholderApproval,theCompanyispermittedtoengageintheactivitiesdescribedinthisSection5.5(d)withrespecttoanyExcludedParty,subjecttotheprovisointheprevioussentence,unlesssuchExcludedPartyceasestobeanExcludedPartyinaccordancewiththedefinitionthereof.

(e)FromandaftertheNo-ShopPeriodStartDate,theCompanywillnotifyParentorallyandinwritingpromptly(andinanyeventwithinoneBusinessDay)(i)afterreceiptofanyCompanyAcquisitionProposaloranyrequestfornon-publicinformationortoengageindiscussionsornegotiationsthatcouldreasonablybeexpectedtoleadtoaCompanyAcquisitionProposal),whichnoticeshallincludethematerialtermsandconditionsofsuchCompanyAcquisitionProposal,theidentityofthePersonmakinganysuchCompanyAcquisitionProposalandcopiesofdraftsofproposedagreements,commitmentletters,termsheetsorlettersofintentrelatedthereto(includinganycoverletterwithrespectthereto)thatareexchangedbetweensuchPersonandtheCompany(suchmaterials,the“ProposalDocuments”)and(ii)ofanychangetothefinancialorothermaterialtermsandconditionsofanyCompanyAcquisitionProposal(includinganyCompanyAcquisitionProposalfromanExcludedParty).TheCompanyshallkeepParentreasonablyinformedonareasonablycurrentbasisofmaterialchangesinthestatusofanysuchCompanyAcquisitionProposal(includingfromanExcludedParty),includingbyprovidingParentwithcopiesofallProposalDocumentspromptly(andinanyeventwithinoneBusinessDay)uponreceiptbytheCompanyofsuchwrittendocumentsorupondeliverybytheCompany,theCompanyBoardortheircounselofsuchwrittendocumentstosuchPersonmakingsuchCompanyAcquisitionProposal.Withoutlimitingtheforegoing,fromandaftertheNo-ShopPeriodStartDate,theCompanywillnotifyParentorallyandinwritingpromptly(andinanyeventwithinoneBusinessDay)afterreceiptofanyrequestfornon-publicinformationrelatingtotheCompanyoranyCompanySubsidiaryorforaccesstoanyproperties,booksorrecordsbyanyPerson(includingfromanExcludedParty)inconnectionwithaCompanyAcquisitionProposalandshallinnoeventbeginprovidingsuchinformationoraccesspriortoprovidingsuchnotice.

(f)ExceptasprovidedinSection5.5(g),neithertheCompanynortheCompanyBoard(oranycommitteethereof)shall,directlyorindirectly,(i)failtomakeorwithdraw(ormodifyorqualifyinanymanneradversetoParentorpubliclyproposetowithdraw,modifyorqualifyinanymanneradversetoParent)theCompanyRecommendationor(ii)adopt,approve,orpubliclyrecommend,endorseorotherwisedeclareadvisabletheadoptionofanyCompanyAcquisitionProposal(eachsuchactionbeingreferredtohereinasan“ChangeofRecommendation”).

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(g)AtanytimepriortoobtainingtheCompanyStockholderApproval(whetherbeforeoraftertheNo-ShopPeriodStartDate),andonlyfollowingcompliancewiththeotherprovisionsinthisSection5.5,theCompanyBoardmayterminatethisAgreementinaccordancewithSection7.1(f)(andeffectaChangeofRecommendationwithrespectthereto),if:

(i)theCompanyreceivedabonafidewrittenCompanyAcquisitionProposal(includingaCompanyAcquisitionProposalfromanExcludedParty)afterthedateofthisAgreementthatdidnotresultfromabreachofthisSection5.5thattheCompanyBoardhasdeterminedingoodfaith(afterconsultationwiththeCompany’soutsidelegalandfinancialadvisors)constitutesaCompanySuperiorProposal;

(ii)theCompanyshallhaveprovidedParentwithwrittennotice(“SuperiorProposalNotice”)advisingParentitintendstoterminatethisAgreementpursuanttoSection7.1(f),whichnoticeshallincludethematerialtermsandconditionsofsuchCompanyAcquisitionProposal,theidentityofthePersonmakinganysuchCompanyAcquisitionProposalandcopiesofallwrittenagreements,or,ifnotfinal,themostrecentdraftthereof,reflectingsuchCompanyAcquisitionProposal(includingdrafts(orfinalversions)ofanyagreements,commitmentletters,termsheetsorlettersofintentrelatedthereto(includinganycoverletterwithrespectthereto));

(iii)foratleastathree(3)BusinessDayperiodcommencingontheBusinessDayfollowingthedateParentreceivestheSuperiorProposalNotice(the“CompanyNegotiationPeriod”),theCompanyhasnegotiated,andhascauseditsfinancialandlegaladvisors(andotherRepresentatives)tonegotiate,withParentingoodfaith(totheextentParentdesirestonegotiate)changestothetermsofthisAgreementsuchthattheCompanyAcquisitionProposalwouldnolongerconstituteaCompanySuperiorProposal(itbeingunderstoodthatanyrevisionstothefinancialterms(includingtotheamountorformofconsideration)orothermaterialtermsoftheCompanyAcquisitionProposalshallrequiretheCompanytocomplyagainwiththeproceduressetforthinthisSection5.5(g),includingprovidinganewSuperiorProposalNoticeandanewCompanyNegotiationPeriod,whichperiodshallbeshortenedtotwo(2)BusinessDays,withrespectthereto);and

(iv)following11:59p.m.,NewYorkCitytime,onthelastBusinessDayoftheapplicableCompanyNegotiationPeriod(s)referredtoinclause(iii)above,theCompanyBoarddeterminesingoodfaith(afterconsultationwiththeCompany’soutsidelegalandfinancialadvisors)thatsuchCompanyAcquisitionProposalstillconstitutesaCompanySuperiorProposalaftergivingeffecttoallofthechangestothisAgreementwhichhavebeenproposedbyParent.

(h)AtanytimepriortoobtainingtheCompanyStockholderApproval(whetherbeforeoraftertheNo-ShopPeriodStartDate),theCompanyBoardmayeffectaChangeofRecommendationif:

(i)thereshalloccurorariseafterthedateofthisAgreementamaterialdevelopmentormaterialchangeincircumstances(orifsuchmaterialdevelopmentormaterialchangeincircumstancesoccurredoraroseonorpriortothedateofthisAgreement,thematerialconsequencesofwhicharenotknowntotheCompanyBoardasofthedateofthisAgreementandonlybecomeknowntotheCompanyBoardpriortoobtainingtheCompanyStockholderApproval),ineachcase,thatwasnotreasonablyforeseeableandthatrelatestotheCompanyortheCompanySubsidiariesbutdoesnotrelatetoanyCompanyAcquisitionProposal(astowhichSection5.5(g)shallapply)(anysuchmaterialdevelopmentormaterialchangeincircumstancesunrelatedtoanCompanyAcquisitionProposalbeingreferredtoasan“InterveningEvent”);provided,however,thatinnoeventshall(A)anyactiontakenbytheCompanyinordertocomplywiththecovenantssetforthinthisAgreement,andtheconsequencesofanysuchaction,constituteanInterveningEventand(B)anychangesinthemarketpriceortradingvolumeofsharesofCompanyCommonStockorParentCommonStockconstituteanInterveningEvent;

(ii)theCompanyBoarddeterminesingoodfaith(afterconsultationwiththeCompany’soutsidelegalandfinancialadvisors)that,inlightofsuchInterveningEvent,thefailuretowithdrawormodifytheCompanyRecommendationinamanneradversetoParent

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wouldbeinconsistentwiththeCompanyBoard’sfiduciaryobligationstotheCompany’sstockholdersunderapplicableLaw;(iii)theCompanyshallhaveprovidedParentwithwrittennotice(an“InterveningEventNotice”)advisingParentthattheCompany

BoardintendstomakeaChangeofRecommendation,whichnoticeshalldescribeinreasonabledetailtheInterveningEvent(itbeingagreedthatthedeliveryofsuchnoticebytheCompanyshallnotconstituteaChangeofRecommendation);

(iv)foratleastathree(3)BusinessDayperiodcommencingontheBusinessDayfollowingthedateParentreceivestheInterveningEventNotice,theCompanyhasnegotiated,andhascauseditsfinancialandlegaladvisors(andotherRepresentatives)tonegotiate,withParentingoodfaith(totheextentParentdesirestonegotiate)tomakesuchadjustmentsinthetermsandconditionsofthisAgreementsothattheneedformakingsuchChangeofRecommendationwouldbeobviated;and

(v)attheendoftheperiodreferredtoinclause(iv)above,aftertakingintoaccountanychangestothetermsofthisAgreementofferedbyParentinwritingtotheCompany,theCompanyBoardhasdeterminedingoodfaith(afterconsultationwiththeCompany’soutsidelegalandfinancialadvisors)thatthefailuretowithdrawormodifytheCompanyRecommendationwouldbeinconsistentwiththeCompanyBoard’sfiduciaryobligationstotheCompany’sstockholdersunderapplicableLawinlightofsuchInterveningEvent.

(i)NothingcontainedinthisSection5.5willprohibittheCompanyortheCompanyBoardfrom(i)complyingwithitsdisclosureobligationsunderapplicableLawwithrespecttoaCompanyAcquisitionProposal,includingtakinganddisclosingtothestockholdersoftheCompanyapositioncontemplatedbyRule14e-2(a)orRule14d-9undertheExchangeActormakingastatementcontemplatedbyItem1012(a)ofRegulationM-A(oranysimilarcommunicationtostockholders)or(ii)makinga“stop,lookandlisten”orsimilarcommunicationtostockholdersofthetypecontemplatedbyRule14d-9(f)undertheExchangeAct;providedthat(x)thisparagraphshallinnowayeliminateormodifytheeffectthatanysuchactiontakenordisclosuremadewouldotherwisehaveunderthisAgreement,(y)anysuchactiontakenordisclosuremadethatrelatestoaCompanyAcquisitionProposalshallbedeemedtobeaChangeinRecommendationunlesstheCompanyBoardreaffirmstheCompanyRecommendationinconnectionwithsuchactionordisclosureand(z)innoeventshalltheCompanyortheCompanyBoardmakeaChangeofRecommendationexceptincompliancewithSection5.5(f).

Section5.6.ReasonableBestEfforts.(a)SubjecttothetermsandconditionsofthisAgreement,eachofParent,MergerSubandtheCompanyshallusetheirreasonablebest

effortstotake,orcausetobetaken,allactionsnecessary,properoradvisableto(i)consummatethetransactionscontemplatedherebyandtocausetheconditionssetforthinArticleVItobesatisfiedaspromptlyaspracticable(andinanyeventpriortotheOutsideDate);(ii)prepareaspromptlyaspracticableallnecessaryapplications,notices,filings,requestsandotherdocumentstobemadeorfiledbysuchParty(andcooperatewiththeotherPartieswithrespecttoanyapplications,notices,filings,requestsandotherdocumentstobemadeorfiledbytheotherParties)inconnectionwiththetransactionscontemplatedbythisAgreement;(iii)obtainaspromptlyaspracticableallconsents,approvals,clearances,permits,authorizations,registrations,filingsornoticesfromanyGovernmentalEntity(orotherPerson)whichisrequiredtobeobtainedinconnectionwiththetransactionscontemplatedbythisAgreement;(iv)complypromptlywithallrequirementsunderapplicableLawwhichmaybeimposedonsuchPartywithrespecttothetransactionscontemplatedbythisAgreement;(v)defendalllawsuitsorotherProceedingstowhichit(orwithrespecttotheCompany,theCompanySubsidiariesis)apartychallengingoraffectingthisAgreementortheconsummationofthetransactionscontemplatedbythisAgreement,ineachcaseuntiltheissuanceofafinal,non-appealableorderwithrespecttoeachsuchlawsuitorotherProceeding;(vi)haveliftedorrescindedanyinjunctionorrestrainingOrderwhichmayadverselyaffecttheabilityofthePartiestoconsummatethetransactionscontemplatedbythisAgreement,ineachcaseuntiltheissuanceofa

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final,non-appealableOrderwithrespecttheretoand(vii)resolveanyobjectionorassertionbyanyGovernmentalEntitychallengingthisAgreementorthetransactionscontemplatedhereby.

(b)Infurtheranceoftheforegoing,theCompany,ParentandMergerSubagreeto,aspromptlyaspracticableafterthedatehereof:(i)make(orcausetobemade)anappropriatefilingofaNotificationandReportFormpursuanttotheHSRAct,whichfilingshallinanyeventbemadewithintwenty(20)BusinessDaysfollowingthedatehereof,and(ii)makesuchfilingsandsubmissionscontemplatedbyapplicableforeignCompetitionLawsassetforthonSection5.6(b)oftheCompanyDisclosureLetter.

(c)SubjecttotheotherprovisionsofthisAgreement,includingthosesetforthelsewhereinthisSection5.6,eachoftheCompany,ontheonehand,andParentandMergerSub,ontheotherhand,shall(i)totheextentpermittedbyapplicableLaw,promptlyinformtheotherPartyofanysubstantivecommunication(oralandwritten)receivedbysuchpartyfrom,orgivenbysuchPartyto,anyGovernmentalEntitywithrespecttoanyapplications,notices,filingsorrequestsmade(oranyconsents,approvalsorclearancessoughttobeobtained)inconnectionwiththetransactioncontemplatedbythisAgreement(includingkeepingtheotherPartiesapprised,onacurrentbasisofthestatusthereof);(ii)totheextentpermittedbyapplicableLaw,promptlyinformtheotherPartyofanysubstantivecommunication(oralandwritten)receivedbysuchPartyfrom,orgivenbysuchPartyto,anyPersonthatisnotaGovernmentalEntityinconnectionwithanyProceeding(orthreatenedProceeding)bysuchPersonregardingorarisingoutofthisAgreementorthetransactionscontemplatedbythisAgreement;(iii)consultwiththeotherParties(subjecttoapplicableLawrelatingtotheexchangeofinformation)inconnectionwithanyanalyses,appearances,presentations,memoranda,briefs,arguments,opinionsandproposalsmadeorsubmittedbyoronbehalfofanyPartyrelatingtoanyapplications,notices,filingsorrequestsmade(oranyconsents,approvalsorclearancessoughttobeobtained)inconnectionwiththetransactioncontemplatedbythisAgreement;(iv)usereasonablebesteffortstofurnishtotheotherPartyand,uponrequest,toanyGovernmentalEntitiessuchinformationandassistanceasmaybereasonablyrequestedinconnectionwiththeforegoing,includingbyrespondingpromptlytoandusingreasonablebesteffortstocomplyfullywithanyrequestforadditionalinformationordocumentsunderanyapplicableLaw;and(v)notindependentlyparticipateinanymeeting(includingtelephonicmeetings)withanyGovernmentalEntityinconnectionwiththeforegoingwithoutgivingtheotherPartysufficientpriornoticeofthemeeting(includingtelephonicmeetings)and,totheextentpermittedbysuchGovernmentalEntity,theopportunitytoattendand/orparticipateinsuchmeeting(includingtelephonicmeetings).NotwithstandinganythinginthisSection5.6tothecontrary,materialsprovidedbyoronbehalfofParenttotheCompanyoritscounselortheCompanytoParentoritscounselmayberedactedtotheextentnecessary(a)toremovereferencesconcerningParent’sortheCompany’svaluationanalyseswithrespecttotheCompanyandtheCompanySubsidiaries,(b)asnecessarytocomplywithContractsineffectonthedatehereof,(c)toaddressreasonableconcernsregardingattorney-clientprivilegeor(d)toremovepersonal,proprietaryandotherconfidentialbusinessinformation.NeitherParentnortheCompanyshallacquire,oragreetoacquire,anybusiness,entityorundertaking,wherethatacquisition,ifcompleted,willorisreasonablylikelytohaveamateriallyadverseeffectontheprospectsofobtaininganyregulatoryapprovaltobesoughtinrelationtotheAgreement.

(d)NotwithstandinganythingtothecontraryinthisAgreement(i)innocaseshalltheCompany,ParentorMergerSubbeobligatedto(andtheCompanyshallnot,withoutthewrittenconsentofParent,andinnoeventshallParentorMergerSubbedeemedtohavebreachedanyrepresentation,warranty,covenantoragreementforrefusingto)becomesubjectto,consenttooragreeto,orotherwisetakeanyactionwithrespectto,anyrequirement,condition,understanding,agreementorordertosell,toholdseparateorotherwisedisposeof,ortoconduct,restrict,operate,investorotherwisechangeitsrespectiveassetsorbusiness(includingthoseofitsrespectiveAffiliates(butfortheavoidanceofdoubtexcludinganySpecifiedPersons,astowhomnosuchrequirements,conditions,understandings,agreementsorordershallapplyinanyevent))inanymannerthat,eitherindividuallyorintheaggregate,(A)materiallyadverselyaffectsthefinancialcondition,business,ortheoperationsof(x)theCompanyandtheCompanySubsidiaries,onaconsolidatedbasis,or(y)ParentanditsAffiliatesor(B)prohibitsormateriallylimitstheownership,

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controloroperationby(x)theCompanyandtheCompanySubsidiariesor(y)ParentanditsAffiliatesofanymaterialportionofitsortheirrespectivebusinessesorassets,orcompelstheCompanyorParentoranyofitsAffiliatestodisposeoforholdseparateanyofitsmaterialbusinessesorassetsoranyportionthereof.

(e)Fortheavoidanceofdoubt,ParentandtheParentSubsidiariesandtheCompanyandtheCompanySubsidiariesshallnotberequired(andwithoutthepriorconsentofParent,theCompanyandtheCompanySubsidiariesshallnot)totakeanyactionwithrespecttoanyorderoranyapplicableLaworinordertoobtainanyapproval,consentorclearancewhichisnotconditionedupontheconsummationoftheMerger.

(f)WithoutlimitingthegeneralityofanythingcontainedinthisSection5.6butsubjectinallrespectstoSection5.6(d),eachPartyshallusetheirrespectivereasonablebesteffortstoobtainanyconsentsorapprovalsfromanyPersons(otherthanGovernmentalEntities)thatarenecessaryoradvisableinconnectionwiththetransactionscontemplatedbythisAgreement.IntheeventthatthePartiesheretoshallfailtoobtainanysuchthirdpartyconsent,theCompanyshalluseitsreasonablebestefforts,andshalltakesuchactionsasarereasonablyrequestedbyParent,tominimizeanyadverseeffectupontheCompanyandtheCompanySubsidiariesresulting,orwhichwouldreasonablybeexpectedtoresult,aftertheEffectiveTime,fromthefailuretoobtainsuchconsent.NotwithstandinganythingtothecontraryinthisAgreement,inconnectionwithobtaininganysuchapprovalorconsentwithrespecttoanytransactioncontemplatedbythisAgreement,(i)noneoftheCompanyoranyCompanySubsidiaryshallberequiredto,or,withoutthepriorwrittenconsentofParent,shall,payorcommittopaytosuchPersonwhoseapprovalorconsentisbeingsolicitedanycashorotherconsideration,makeanycommitmentorincuranyliabilityorotherobligationduetosuchpersonand(ii)noneofParent,MergerSuboranyoftheirAffiliatesshallberequiredtopayorcommittopaytosuchpersonwhoseapprovalorconsentisbeingsolicitedanycashorotherconsideration,makeanycommitmentorincuranyliabilityorotherobligation.

Section5.7.NotificationofCertainMatters.EachPartyshallgivereasonablypromptwrittennoticetotheotherParty,iftosuchParty’sKnowledge,(a)anyrepresentationorwarrantymadebyitcontainedinthisAgreementbecomesuntrueorinaccuratesuchthatitwouldbereasonabletoexpectthattheapplicableclosingconditionswouldbeincapableofbeingsatisfiedbytheOutsideDateor(b)itfailstocomplywithorsatisfyinanymaterialrespectanycovenant,conditionoragreementtobecompliedwithorsatisfiedbyitunderthisAgreement;providedthat(i)nothinginthisSection5.7shallbedeemedtoaffect,modifyorconditiontheobligationsofeachpartytoeffecttheClosingand(ii)eachParty’sobligations,actionsorinactionspursuanttothisSection5.7shallbedeemedexcludedforpurposesofdeterminingwhethertheconditionssetforthineitherSection6.2orSection6.3havebeensatisfied.

Section5.8.Publicity.ExceptwithrespecttoanyChangeofRecommendationmadebytheCompanyinaccordancewithSection5.5,solongasthisAgreementisineffect,eachofParentandtheCompanyshallconsultwitheachotherbeforeissuinganypressreleaseorpublicstatementwithrespecttothisAgreement,theMergerortheothertransactionscontemplatedherebyandshallnotissueanysuchpressreleaseormakeanysuchpublicstatementwithoutthepriorconsent(nottobeunreasonablywithheld,delayedorconditioned)oftheotherParty;providedthataPartymay,withoutobtainingthepriorconsentoftheotherparty(butafterpriorconsultation,totheextentpracticableinthecircumstances),issuesuchpressreleaseormakesuchpublicstatementasmayupontheadviceofoutsidecounselberequiredbyapplicableLawortherulesandregulationsofNasdaqorNYSE,asapplicable.Withoutlimitingtheforegoing,ParentandtheCompanyshallusereasonableeffortstocooperatetodevelopallpublicannouncementmaterialsandmakeappropriatemanagementavailableatpresentationsrelatedtothetransactionscontemplatedbythisAgreementasreasonablyrequestedbytheotherParty,andtheCompanyshallconsultwithParentregardingcommunicationswithcustomers,stockholdersandemployeesrelatedtothetransactionscontemplatedhereby.

Section5.9.Indemnification.(a)FromandaftertheEffectiveTime,ParentwillcausetheSurvivingCompanytoindemnify,defendandholdharmless,tothefullest

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incorporationandbylawsoftheCompanyasineffectonthedateofthisAgreementandaspermittedunderapplicableLaw,allpastandpresentdirectorsandofficersoftheCompanyandanyCompanySubsidiary(each,togetherwithsuchperson’sheirs,executorsoradministrators,a“CompanyIndemnifiedParty”)againstanyliabilities,damages,costsorexpenses(includingreasonableattorneys’feesandexpenses)incurredinconnectionwithanyProceeding(whetherassertedbeforeoraftertheEffectiveTime)arisingoutofactsoromissionsoccurringatorpriortotheEffectiveTimeinconnectionwithsuchCompanyIndemnifiedPartyhavingservedasadirectororofficeroftheCompanyoraCompanySubsidiaryorhavingservedattherequestoftheCompanyoraCompanySubsidiaryasadirector,officeroremployeeofanyothercorporation,limitedliabilitycompany,partnership,jointventure,employeebenefitplan,trustorotherbusiness(andincludinganyactsoromissionswithrespecttothisAgreementortheconsummationofthetransactionscontemplatedhereby),and,tothesameextentthatsuchCompanyIndemnifiedPartieshavetherighttoadvancementofexpensesfromtheCompanyoraCompanySubsidiaryasofthedateofthisAgreement,toprovideadvancementofexpensestoanysuchCompanyIndemnifiedParty,subjecttoreceiptofanundertakingfromsuchCompanyIndemnifiedPartytorepaysuchadvancedamountsifitisdeterminedbyacourtofcompetentjurisdictioninafinaljudgmentthatsuchCompanyIndemnifiedPersonwasnotentitledtoindemnification.SuchrightssetforthinthisSection5.9(a)shallcontinueinfullforceandeffectuntiltheexpirationoftheapplicablestatuteoflimitationswithrespecttoanysuchProceedingsagainstanyCompanyIndemnifiedParty,exceptasotherwiserequiredbyapplicableLaw,andParentshallcausetheSurvivingCompany(oranysuccessor)toincludeandmaintainineffect,foraperiodofsix(6)yearsaftertheEffectiveTime,theprovisionsregardingeliminationofliabilityofdirectorsthatareintheCompany’scertificateofincorporationasineffectasofthedateofthisAgreement.

(b)Foraperiodofsix(6)yearsaftertheEffectiveTime,ParentshallmaintainorcausetheSurvivingCompanytomaintainforthebenefitofeachCompanyIndemnifiedPartyadirectors’andofficers’liabilityinsurancepolicythatprovidescoverageforactsoromissionsoccurringpriortotheEffectiveTime(the“D&OInsurance”)withtermsandconditionswhichare,intheaggregate,notlessadvantageoustosuchCompanyIndemnifiedPartythanthetermsandconditionsoftheexistingdirectors’andofficers’liabilityinsurancepolicyoftheCompany;providedthat,atParent’soption,inlieuoftheforegoinginsurancecoverage,Parentor,withParent’sconsent,theCompanymayatorpriortotheEffectiveTimesubstitutethereforasinglepremiumtailcoveragewithrespecttotheD&OInsurancethatprovidescoverageforperiodofsix(6)yearsaftertheEffectiveTime,withtermsandconditionswhichare,intheaggregate,notlessadvantageoustosuchCompanyIndemnifiedPartythan(andotherwisecomparableto)thetermsandconditionsoftheexistingdirectors’andofficers’liabilityinsurancepolicyoftheCompany.Notwithstandingtheforegoing,innoeventwillParentberequiredtoexpend(andinnoeventshalltheCompanyexpend),intheaggregate,anamountinexcessof300%ofthemostrecentannualpremiumpaidbytheCompanyfortheexistingdirectors’andofficers’liabilityinsurancepolicyoftheCompany(the“InsuranceAmount”),andifParentisunabletomaintainorobtaintheinsurancecalledforbythisSection5.9(b)foranamountequaltoorlessthantheInsuranceAmount,ParentshallobtainasmuchcomparableinsuranceasmaybeavailablefortheInsuranceAmount.

(c)IntheeventthattheSurvivingCompanyoranyofitssuccessorsorassigns(i)consolidateswithormergesintoanyotherPersonandisnotthecontinuingorsurvivingcompanyorentityofsuchconsolidationormergeror(ii)transfersorconveysallorsubstantiallyallofitsproperties,rightsandotherassetstoanyPerson,then,ineachsuchcasetotheextentsorequired,ParentshallcauseproperprovisiontobemadesothatsuchsuccessororassignoftheSurvivingCompanyassumestheobligationssetforthinthisSection5.9.

(d)TheprovisionsofthisSection5.9areintendedtobeforthebenefitof,andwillbeenforceableby,theCompanyIndemnifiedPartiesfollowingtheClosingandareinadditionto,andnotinsubstitutionfor,anyotherrightstoindemnification,advancementorcontributionthatanysuchPersonmayhavebyLaw,Contractorotherwise.

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Section5.10.EmployeeMatters.(a)ForaperiodcommencingontheEffectiveTime,andendingonDecember31,2019,theSurvivingCompanywillprovideindividuals

whoareemployeesoftheCompanyoranyCompanySubsidiaryimmediatelypriortotheEffectiveTimeandcontinuetobeemployeesofParentoroneoftheParentSubsidiaries(includingtheSurvivingCompany)immediatelyfollowingtheEffectiveTime,butonlyforsolongassuchindividualsaresoemployed(each,a“ContinuingEmployee”),(i)abasesalary,regularhourlywage,orcommissionopportunities,asapplicable,thatarenotlessthanthebasesalary,regularhourlywage,orcommissionopportunities,asapplicable,providedtosuchContinuingEmployeesbytheCompanyandtheCompanySubsidiariesonthedateofthisAgreement,(ii)targetcashincentivecompensationopportunities(excludingequity-basedincentivecompensationopportunities)thatarenotlessthanthetargetcashincentivecompensationopportunities(excludingequity-basedincentives)providedtosuchContinuingEmployeesbytheCompanyandtheCompanySubsidiariesonthedateofthisAgreement,and(iii)employeebenefits(otherthanequity-basedawards)thatareeither(A)substantiallycomparabletotheemployeebenefits(otherthanequity-basedawards,includingundertheESPP)providedbytheCompanyoranyCompanySubsidiaryonthedateofthisAgreementor(B)substantiallycomparabletotheemployeebenefits(otherthanequity-basedawards)providedtosimilarly-situatedemployeesofParentandtheParentSubsidiaries.

(b)AsoftheEffectiveTime,Parentshall,andshallcausetheSurvivingCompanyandanyapplicableCompanySubsidiaryto,(i)giveContinuingEmployeescreditforpurposesofeligibility,benefitaccrual,vestingandentitlementtobenefitswherelengthofserviceisrelevant(butnotforanypurposesunderanyemployeebenefitplanthatisadefinedbenefitpensionplan)underanyemployeebenefitandcompensationplansorarrangementsmaintainedbyParentoranapplicableParentSubsidiarythatsuchemployeesmaybeeligibletoparticipateinaftertheEffectiveTime(“NewPlans”)forsuchContinuingEmployees’servicewiththeCompanyoranyCompanySubsidiariestothesameextentthatsuchservicewascreditedforpurposesofanycomparableemployeebenefitplanoftheCompanyoraCompanySubsidiaryimmediatelypriortotheEffectiveTimeandinnoeventshallservicepriortotheEffectiveTimeberequiredtobetakenintoaccountifsuchservicecreditwouldresultintheduplicationofbenefitswithrespecttothesameperiod.Inaddition,andwithoutlimitingthegeneralityoftheforegoing,Parentshallprovidethat(i)eachCompanyEmployeeshallbeimmediatelyeligibletoparticipate,withoutanywaitingtime,inanyandallNewPlanstotheextentcoverageundersuchNewPlanreplacescoverageunderacomparableCompanyBenefitPlaninwhichsuchCompanyEmployeeparticipatedimmediatelybeforethereplacement,and(ii)forpurposesofeachNewPlanprovidingmedical,dental,pharmaceuticaland/orvisionbenefitstoanyCompanyEmployee,allpre-existingconditionlimitations,exclusions,actively-at-workrequirementsorwaitingperiodsofsuchNewPlanbewaivedforsuchemployeeandhisorhercovereddependentstotheextentwaivedornotapplicableunderacomparableCompanyBenefitPlaninwhichsuchCompanyEmployeeParticipatedimmediatelybeforethereplacement,andanyeligibleexpensesincurredbysuchemployeeandhisorhercovereddependentsunderaCompanyBenefitPlanduringtheportionoftheplanyearpriortotheEffectiveTimetotakenintoaccountundersuchNewPlanforpurposesofsatisfyingalldeductible,co-insurance,co-paymentandmaximumout-of-pocketrequirementsapplicabletosuchemployeeandhisorhercovereddependentsfortheremainderoftheapplicableplanyearduringwhichtheEffectiveTimeoccursasifsuchamountshadbeenpaidinaccordancewithsuchNewPlan.

(c)FromandaftertheEffectiveTime,theCompanyortheSurvivingCompany,asapplicable,will,andParentwillcausetheCompanyortheSurvivingCompany,asapplicable,to,honor,inaccordancewiththeirterms,(i)the2018CorporateIncentivePlanandtheExecutiveLeadershipTeam2018SupplementalBonusProgramand(ii)allemployment,severance,incomecontinuityandchangeofcontrolprograms,plansoragreementsbetweentheCompanyoranyCompanySubsidiaryandtheContinuingEmployeesincludingbonuses,incentives,severancepaymentsordeferredcompensationinexistenceonthedatehereof,ineachcase,inaccordancewiththeirtermsasineffectimmediatelypriortothedateofthisAgreementortotheextentamendedinaccordancewiththetermsofthisAgreementorinaccordancewiththetermsofsuchprograms,plansoragreementsasineffectpriortotheEffectiveTime,includingwithrespecttoanypayments,

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benefitsorrightsarisingasaresultofthetransactionscontemplatedbythisAgreement(eitheraloneorincombinationwithanyotherevent).(d)NoprovisionofthisSection5.10shallbeconstruedasalimitationontherightofParent,ortocauseanyParentSubsidiaryto,amend

orterminateanyspecificemployeebenefitplanthatParentoraParentSubsidiarywouldotherwisehaveunderthetermsofsuchemployeebenefitplan,norshallanyprovisionofthisSection5.10beconstruedtorequirethecontinuationoftheemploymentofanyparticularContinuingEmployee.TheprovisionsofthisSection5.10aresolelyforthebenefitoftheParties,andnoCompanyEmployeeoranyotherPersonshallbeathird-partybeneficiaryofthisSection5.10,andnothinghereinshallbeconstruedasanamendmenttoanyemployeebenefitplanofParentoranyParentSubsidiaryorothercompensationorbenefitplanorarrangementforanypurpose.

Section5.11.StockExchangeListing.ParentshalluseitsreasonablebesteffortstocausethesharesofParentCommonStocktobeissuedinconnectionwiththeMergertobelistedonNasdaq,subjecttoofficialnoticeofissuance,priortotheClosingDate.

Section5.12.Section16Matters.PriortotheEffectiveTime,ParentandtheCompanyshalltakeallsuchstepsasmayberequiredtocauseanyacquisitionsordispositionsofCompanyCommonStock(includingderivativesecuritieswithrespecttoCompanyCommonStock)oracquisitionsofParentCommonStock(includingderivativesecuritieswithrespecttoParentCommonStock)resultingfromthetransactionscontemplatedbythisAgreementbyeachindividualwhoissubjecttothereportingrequirementsofSection16(a)oftheExchangeActwithrespecttotheCompanyorwillbecomesubjecttosuchreportingrequirementswithrespecttoParent,tobeexemptunderRule16b-3promulgatedundertheExchangeAct,totheextentpermittedbyapplicableLaw.

Section5.13.StockholderLitigation.PriortotheEffectiveTime,intheeventthatanylitigationorotherProceedingofanystockholderrelatedtothisAgreement,theMergerortheothertransactionscontemplatedbythisAgreementisbrought,ortotheKnowledgeoftheCompany,threatenedagainstanyoftheCompanyand/orthemembersoftheCompanyBoardpriortotheEffectiveTime,theCompanyshallpromptlynotifyParentofanysuchlitigationorotherProceedingandshallkeepParentreasonablyinformedonareasonablycurrentbasiswithrespecttothestatusthereof.TheCompanyshallconsultwithParentonaregularbasiswithrespectto,andshallgiveParenttheopportunitytoparticipate,atParent’sexpense,inthedefenseorsettlementof,anysuchlitigationorClaims,andnosuchsettlementorcompromiseshallbeagreedtowithoutParent’spriorwrittenconsent(whichconsentshallnotbeunreasonablywithheld,delayedorconditioned).

Section5.14.TakeoverLaws.IfanyTakeoverLawbecomesapplicabletoanyofthetransactionscontemplatedbythisAgreement,theCompanyshalltakeallactionreasonablynecessarytoenablethetransactionscontemplatedbythisAgreementtobeconsummatedaspromptlyaspracticableonthetermscontemplatedbythisAgreementandotherwiseminimizetheeffectofsuchTakeoverLawonthetransactionscontemplatedbythisAgreement.

Section5.15.CompanyCooperationonCertainMatters.AfterthedatehereofandpriortotheearlieroftheEffectiveTimeandtheterminationofthisAgreement,ParentandtheCompanyshallestablishprocedures,subjecttoapplicableLaw,reasonablyacceptabletobothPartiesbywhichthePartieswillconferonaregularandcontinuedbasisregardingthegeneralstatusoftheongoingoperationsoftheCompanyandtheCompanySubsidiariesandintegrationplanningmattersandcommunicateandconsultwithspecificPersonstobeidentifiedbyeachPartytotheotherwithrespecttotheforegoing.

Section5.16.CertainTaxMatters.(a)DuringtheperiodfromthedateofthisAgreementtotheClosing,ParentandtheCompanyshall(andParentshallcausetheParent

Subsidiaries(includingMergerSub)toandtheCompanyshallcausetheCompanySubsidiariesandtheNewHoldingCompanyto)each(i)usereasonablebesteffortstocause(x)theMergerandtheSiriusXMRadioMerger,takentogether,and(y)theHoldingCompanyMergerandtheConversion,takentogether,toineachcaseconstituteareorganizationunderSection368(a)oftheCode,(ii)neithertakeanyactionnorfailtotakeany

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actionifsuchactionorsuchfailurecouldreasonablybeexpectedtopreventorimpede(x)theMergerandtheSiriusXMRadioMerger,takentogether,or(y)theHoldingCompanyMergerandtheConversion,takentogether,ineithercasefromqualifyingasareorganizationwithinthemeaningofSection368(a)oftheCode,and(iii)usereasonablebesteffortstoobtaintheopiniondescribedinSection6.2(f)(inthecaseofParentandMergerSub)andtheopiniondescribedinSection6.3(e)(inthecaseoftheCompany).TheobligationsofParentandtheCompanypursuanttothisSection5.16(a)shallincludenegotiatingingoodfaithsuchamendmentstothisAgreementasmaybereasonablyrequiredinordertorestructurethetransactionssetforthhereinifsuchrestructuringwouldbenecessarytoallowParenttoobtaintheopiniondescribedinSection6.2(f)ortheCompanytoobtaintheopiniondescribedinSection6.3(e),includinganyotheradditionaloralternativestepsthatcouldbetakentopreservetheintendedtreatmentofthetransactionssetforthhereinasareorganizationwithinthemeaningofSection368(a)oftheCodeandthatdonotadverselyaffectParent,theCompanyoranyoftheirrespectiveAffiliates.

(b)ParentandtheCompanyshall(andParentshallcausetheParentSubsidiaries(includingMergerSub)toandtheCompanyshallcausetheCompanySubsidiariesandtheNewHoldingCompanyto)executeanddeliverofficer’scertificatescontainingappropriaterepresentationsatsuchtimeortimesasmaybereasonablyrequestedbycounsel,includinginconnectionwithanyfilingoftheFormS-4andthedeliveryoftheopinionsdescribedinSection6.2(f)andSection6.3(e),forpurposesofrenderingopinionswithrespecttothetaxtreatmentoftheMerger,theSiriusXMRadioMerger,theHoldingCompanyMergerandtheConversion.

(c)IftheopiniondescribedinSection6.2(f)ortheopiniondescribedinSection6.3(e)cannotbeobtaineddespitethereasonablebesteffortsdescribedinSection5.16(a),theclosingconditionsinSection6.2(f)andSection6.3(e)shallnotapplyandthepartieshereto(i)shallexecuteareversesubsidiarymergerofMergerSubwithandintotheCompany,withtheCompanysurvivingsuchmerger(the“AlternativeReverseSubsidiaryMerger”)(itbeingunderstoodthatundersuchcircumstances,theAlternativeReverseSubsidiaryMergershallbestructuredsothatitshallbetreatedasataxablestocksalebytheCompanyshareholders(otherthanParentoranyParentSubsidiaries)forU.S.federalincometaxpurposes),and(ii)shallnoteffecttheSiriusXMRadioMerger,theHoldingCompanyMergerortheConversionand,totheextentnecessary,shallnegotiateingoodfaithsuchamendmentstothisAgreementasmaybereasonablyrequiredinordertoexecutesuchAlternativeReverseSubsidiaryMergerandtonoteffecttheSiriusXMRadioMerger,theHoldingCompanyMergerortheConversion.

Section5.17.CompanyConvertibleNotesandCreditAgreement.(a)PriortotheClosing,theCompanyshalltakeallactionsrequiredinordertocomplywith,anddischargeitsobligationsunder,theterms

oftheConvertibleNotesIndenture,including(i)givinganynoticesandthefilingsthatmayberequiredinconnectionwithanyconversionsofConvertibleNotesoccurringasaresultofthetransactionscontemplatedbythisAgreement;(ii)executinganddeliveringtoCitibank,N.A.,astrusteeundertheConvertibleNotesIndenture,asupplementalindentureeffectiveasoftheEffectiveTimecomplyingwiththerequirementsofArticle10andArticle11andSection14.07oftheConvertibleNotesIndenture,togetherwithanyrelatedcertificates,legalopinionsandotherdocumentsrequiredbytheConvertibleNotesIndenturetobedeliveredinconnectionwithsuchsupplementalindenture;(iii)deliveringanyothersupplementalindentures,legalopinions,officerscertificatesorotherdocumentsorinstrumentsrequiredinconnectionwiththeconsummationoftheMergerorotherwisereasonablyrequestedbyParentand(iv)takingsuchactionsasnecessarytoensurethat,attheEffectiveTime,eachoutstandingConvertibleNoteshallnolongerbeconvertibleintosharesofCompanyCommonStockandshallinsteadbedeterminedbyreferencetotheMergerConsideration,ineachcaseofclauses(i),(ii),(iii)or(iv)inaccordancewith,andsubjectto,theprovisionsoftheConvertibleNotesIndenture(includingthetimeperiodsspecifiedtherein).TheCompanyshallprovideParentareasonableopportunitytoreviewandtocommentonsuchdocumentsorinstrumentsandshalltakeintoaccountingoodfaithanysuchcommentsasreasonablyproposedbyParentoritscounsel.

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fundsasarrangedbyParent),fromtherequisitecreditorsoragentsundertheCreditAgreementsettingforththeamountrequiredtopayoffinfullontheClosingDatetheCreditAgreementandthecommitmentoftherelevantcreditorsoragenttoreleaseanyliensandterminateallguaranteesinconnectiontherewithfollowingsatisfactionofthetermssetforthinsuchpayoffletter.

Section5.18.ParentVote.Parentshallorshallcausetobevoted,allofthesharesofCompanyCommonStockandCompanyPreferredStockownedbeneficiallyorofrecordbyParentoranyofitsAffiliates,atanymeetingoftheholdersofcapitalstockoftheCompanyor,ifapplicable,pursuanttoanyconsentofthestockholdersoftheCompanyinlieuofameetingorotherwise,infavorofthisAgreementandtheMerger.

ARTICLE VI

CONDITIONS TO THE MERGERSection6.1.ConditionstoObligationsofEachParty.TherespectiveobligationsofeachPartytoconsummatetheClosingaresubjecttothe

satisfactionofthefollowingconditions(whichmaybewaived,inwholeorinpart,totheextentpermittedbyLaw,bytheapplicableParty):(a)StockholderApproval.TheCompanyStockholderApprovalshallhavebeenobtained.(b)NasdaqListing.ThesharesofParentCommonStocktobeissuedintheMergerandanysuchothersharesofParentCommonStock

tobereservedforissuanceinconnectionwiththeMergershallhavebeenapprovedforlistingonNasdaq,subjecttoofficialnoticeofissuance.(c)NoLegalRestraints.NoLaworOrder(whethertemporary,preliminaryorpermanent)shallhavebeenpromulgated,enactedorissued

byanyGovernmentalEntityofcompetentjurisdictionthatprohibitsormakesillegaltheconsummationoftheMerger;providedthatpriortoaPartyassertingthisconditionwithrespecttoanyOrdersuchPartyshallhaveuseditsreasonablebesteffortstoopposeanysuchOrderandtohavesuchOrdervacatedormadeinapplicabletosuchMerger,asthecasemaybe.

(d)FormS-4.TheFormS-4shallhavebecomeeffectivebytheSECundertheSecuritiesAct,shallnotbethesubjectofanystoporderineffectandnoProceedingsseekingastopordershallbependingbeforetheSEC.

(e)RegulatoryMatters.(i)Thewaitingperiod(andanyextensionsthereof)undertheHSRActapplicabletotheMergershallhaveexpiredorbeenterminatedand(ii)thedecisions,orders,consentsorexpirationofanywaitingperiodsrequiredtoconsummatethetransactioncontemplatedbythisAgreementundertheCompetitionLawsofthecountriesorjurisdictionslistedonSection6.1(e)oftheCompanyDisclosureLettershallhaveoccurredorbeengranted.

Section6.2.ConditionstoObligationsofParentandMergerSubtoEffecttheMerger.TheobligationsofParentandMergerSubtoconsummatetheClosingaresubjecttothesatisfaction(orwaiverbyParent)ofthefollowingconditions:

(a)RepresentationsandWarranties.(i)TherepresentationsandwarrantiesoftheCompanycontainedinSection3.3,Section3.7(a),Section3.20,Section3.21andSection3.23shallbetrueandcorrectinallrespectsasofthedateofthisAgreementandatandasoftheClosingDateasifmadeonandasoftheClosingDate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate),(ii)therepresentationsandwarrantiesoftheCompanycontainedinSections3.2(a),Section3.2(b)andSection3.22shallbetrueandcorrectinallbutdeminimisrespectsasofthedateofthisAgreementandatandasoftheClosingDateasifmadeonandasoftheClosingDate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate)and(iii)theotherrepresentationsandwarrantiesoftheCompanysetforthinthisAgreementshallbetrueandcorrect(ineachcasewithoutgivingeffecttoanymaterialityorCompanyMaterialAdverseEffectqualifiertherein),asofthedateofthisAgreementandatandasoftheClosingDateasthoughmadeonorasofsuchdate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate),exceptinthecaseofthisclause(iii)wherethefailureofsuch

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representationsandwarrantiestobesotrueandcorrect,individuallyorintheaggregate,hasnothadandwouldnotreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(b)Covenants.TheCompanyshallhaveperformedorcompliedinallmaterialrespectswithallcovenantsandagreementsrequiredbythisAgreementtobeperformedorcompliedwithbyitpriortotheClosing.

(c)NoCompanyMaterialAdverseEffect.SincethedateofthisAgreement,therehasnotbeenanyevent,change,condition,occurrenceoreffect,that,individuallyorintheaggregate,hashadorwouldreasonablybeexpectedtohaveaCompanyMaterialAdverseEffect.

(d)Officer’sCertificate.ParentshallhavereceivedacertificatesignedonbehalfoftheCompanybyanexecutiveofficercertifyingthattheconditionssetforthinSection6.2(a),(b)and(c)havebeensatisfied.

(e)FIRPTACertificate.ParentshallhavereceivedfromtheCompanyacertificate,datedasoftheClosingDateanddulyexecutedbyanexecutiveofficeroftheCompany,inaccordancewithTreasuryRegulationSections1.897-2(h)and1.1445-2(c)(3).

(f)TaxOpinion.SubjecttoSection5.16(c),ParentshallhavereceivedfromSimpsonThacher&BartlettLLP,counseltoParent,oranothernationallyrecognizedlawfirm,awrittenopiniondatedtheClosingDatetotheeffectthatforU.S.federalincometaxpurposes(x)theMergerandtheSiriusXMRadioMerger,takentogether,and(y)theHoldingCompanyMergerandtheConversion,takentogether,willineachcaseconstitutea“reorganization”withinthemeaningofSection368(a)oftheCode.Inrenderingsuchopinion,counselshallbeentitledtorelyuponcustomaryassumptionsandrepresentationsreasonablysatisfactorytosuchcounsel,includingrepresentationssetforthincertificatesofofficersofParent,MergerSub,theNewHoldingCompanyandtheCompany.

Section6.3.ConditionstoObligationsoftheCompanytoEffecttheMerger.TheobligationoftheCompanytoconsummatetheMergerissubjecttothesatisfactionatorpriortotheClosingofthefollowingconditions(whichmaybewaivedinwholeorinpartbytheCompany):

(a)RepresentationsandWarranties.(i)TherepresentationsandwarrantiesofParentandMergerSubcontainedinSection4.3,Section4.7(a)andSection4.13shallbetrueandcorrectinallrespectsasofthedateofthisAgreementandatandasoftheClosingDateasifmadeonandasoftheClosingDate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate),(ii)therepresentationsandwarrantiesofParentandMergerSubcontainedinSection4.2,Section4.12andSection4.14shallbetrueandcorrectinallbutdeminimisrespectsasofthedateofthisAgreementandatandasoftheClosingDateasifmadeonandasoftheClosingDate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate)and(iii)theotherrepresentationsandwarrantiesofParentandMergerSubsetforthinthisAgreementshallbetrueandcorrect(ineachcasewithoutgivingeffecttoanymaterialityorParentMaterialAdverseEffectqualifiertherein),asofthedateofthisAgreementandatandasoftheClosingDateasthoughmadeonorasofsuchdate(or,inthecaseofrepresentationsandwarrantiesthataddressmattersonlyasofaparticulardate,asofsuchdate),exceptinthecaseofthisclause(iii)wherethefailureofsuchrepresentationsandwarrantiestobetrueandcorrect,individuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

(b)Covenants.ParentandMergerSubshallhaveperformedorcompliedinallmaterialrespectswithallcovenantsandagreementsrequiredbythisAgreementtobeperformedorcompliedwithbyeachofthempriortotheClosing.

(c)NoParentMaterialAdverseEffect.SincethedateofthisAgreement,therehasnotbeenanyevent,change,condition,occurrenceoreffect,that,individuallyorintheaggregate,hashadorwouldreasonablybeexpectedtohaveaParentMaterialAdverseEffect.

(d)Officer’sCertificate.TheCompanyshallhavereceivedacertificatesignedonbehalfofParentbyanexecutiveofficercertifyingthattheconditionssetforthinSection6.3(a),(b)and(c)havebeensatisfied.

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(e)TaxOpinion.SubjecttoSection5.16(c),theCompanyshallhavereceivedfromSidleyAustinLLP,counseltotheCompany,oranothernationallyrecognizedlawfirm,awrittenopiniondatedtheClosingDatetotheeffectthatforU.S.federalincometaxpurposes(x)theMergerandtheSiriusXMRadioMerger,takentogether,and(y)theHoldingCompanyMergerandtheConversion,takentogether,willineachcaseconstitutea“reorganization”withinthemeaningofSection368(a)oftheCode.Inrenderingsuchopinion,counselshallbeentitledtorelyuponcustomaryassumptionsandrepresentationsreasonablysatisfactorytosuchcounsel,includingrepresentationssetforthincertificatesofofficersofParent,MergerSub,theNewHoldingCompanyandtheCompany.

ARTICLE VII

TERMINATIONSection7.1.Termination.ThisAgreementmaybeterminatedandtheMergermaybeabandonedatanytimepriortotheClosing,whether

beforeor,exceptasprovidedbelow,aftertheCompanyStockholderApprovalhasbeenobtained(withanyterminationbyParentalsobeinganeffectiveterminationbyMergerSub):

(a)bythemutualwrittenconsentofParentandtheCompany;(b)byeitherofParentortheCompany,bywrittennoticetotheother:

(i)ifanyGovernmentalEntityofcompetentjurisdictionshallhaveissuedanOrderpermanentlyrestraining,enjoiningorotherwiseprohibitingtheMergerandsuchOrdershallhavebecomefinalandnon-appealable;providedthattherighttoterminatethisAgreementpursuanttothisSection7.1(b)(i)shallnotbeavailabletoanyPartyunlesssuchPartyshallhaveuseditsreasonablebesteffortstoopposeanysuchOrderandtohavesuchOrdervacatedormadeinapplicabletosuchMerger;

(ii)iftheMergershallnothavebeenconsummatedonorbeforethenine(9)monthanniversaryofthedateofthisAgreement(the“OutsideDate”);provided,however,thattherighttoterminatethisAgreementpursuanttothisSection7.1(b)(ii)shallnotbeavailabletoanyPartywhosefailuretoperforminallmaterialrespectsitsobligationsunderthisAgreementwastheprimarycauseofthefailureoftheMergertohavebeenconsummatedbytheOutsideDate;or

(iii)iftheCompanyStockholderApprovalshallnothavebeenobtaineduponavotetakenthereonattheCompanyStockholdersMeetingdulyconvenedtherefor(includingatanyadjournmentorpostponementthereof);

(c)bytheCompany,bywrittennoticetoParent,ifParentorMergerSubshallhavebreachedanyofitsrepresentations,warranties,covenantsoragreementssetforthinthisAgreement,suchthattheconditionssetforthinSection6.3(a)orSection6.3(b)wouldbeincapableofbeingsatisfiedbytheOutsideDateand,ifsuchbreachiscurable,followingnoticeofsuchbreachbytheCompanytoParentsuchbreachisnotcuredwithinthirty(30)days(ortheBusinessDaybeforetheOutsideDate,ifearlier);providedthattheCompanyshallnothavetherighttoterminatethisAgreementpursuanttothisSection7.1(c)iftheCompanyisinmaterialbreachofanyofitscovenantsoragreementscontainedinthisAgreement,whichbreachhasnotbeencured;

(d)byParent,bywrittennoticetotheCompany,iftheCompanyshallhavebreachedanyofitsrepresentations,warranties,covenantsoragreementssetforthinthisAgreementsuchthattheconditionssetforthinSection6.2(a)orSection6.2(b)wouldbeincapableofbeingsatisfiedbytheOutsideDateand,ifsuchbreachiscurable,followingnoticeofsuchbreachbytheCompanytoParentsuchbreachisnotcuredwithinthirty(30)days(ortheBusinessDaybeforetheOutsideDate,ifearlier);providedthatParentshallnothavetherighttoterminatethisAgreementpursuanttothisSection7.1(d)ifParentorMergerSubisinmaterialbreachofanyofitscovenantsoragreementscontainedinthisAgreement,whichbreachhasnotbeencured;

(e)byParent,bywrittennoticetotheCompany,if(A)aChangeofRecommendationshallhaveoccurred,whetherornotmadeinaccordancewiththisAgreement;(B)theCompany

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shallhavebreachedSection5.4byfailingtocallandholdtheCompanyStockholdersMeetingasprovidedtherein;(C)theCompanyshallhavemateriallybreachedSection5.5;(D)theCompanyhasapproved,adopted,publiclyendorsedorrecommendedorenteredintoanAlternativeAcquisitionAgreement;(E)theCompanyBoardshallhavefailedtopubliclyrecommendagainstanytenderofferorexchangeofferthatconstitutesaCompanyAcquisitionProposal(including,forthesepurposes,bytakingnopositionwithrespecttotheacceptanceofsuchtenderofferorexchangeofferbytheCompany’sstockholders)withinten(10)BusinessDaysafterthecommencement(assuchtermisdefinedinRule14d-2oftheExchangeAct)ofsuchtenderofferorexchangeoffer;or(F)afterthedatehereof,anyPersonshallhavepubliclyannouncedaCompanyAcquisitionProposaloranyplanorintention(whetherornotconditional)tomakeaCompanyAcquisitionProposal,orifanysuchCompanyAcquisitionProposalorintentionshallhaveotherwisebecomepubliclydisclosed,andtheCompanyBoardshallfailtopubliclyreaffirmtheCompanyRecommendationwithinten(10)BusinessDaysfollowingParent’swrittenrequesttodoso;or

(f)bytheCompany,bywrittennoticetoParent,if(i)theCompanyStockholderApprovalhasnotbeenobtained,(ii)theCompanyBoardauthorizestheCompany,subjecttocomplyingwiththetermsofSection5.5withrespecttosuchCompanySuperiorProposal,toenterintoabindingdefinitiveagreementtoeffectatransactionconstitutingaCompanySuperiorProposal,(iii)theCompanypriortoorconcurrentlywithsuchterminationpaystoParentinimmediatelyavailablefundstheCompanyTerminationFeeortheGo-ShopTerminationFee,asapplicable,and(iv)theCompanyentersintosuchbindingdefinitiveagreementsubstantiallyconcurrentlywithsuchtermination.

Section7.2.EffectofTermination.IntheeventoftheterminationofthisAgreementinaccordancewithSection7.1,thisAgreementshallforthwithbecomevoidandhavenoeffect,andthereshallnotbeanyliabilityorobligationonthepartofanyPartyhereto(oranyofitsRepresentativesorAffiliates)toanotherParty,exceptthat(i)theprovisionsofthisSection7.2,Section7.3andArticleVIIIshallsurvivesuchterminationand(ii)nosuchterminationshallrelieveanyPartyfromliabilitytoanyotherPartyforfraudorwillfulandmaterialbreachofthisAgreement.ForpurposesofthisAgreement,“willfulandmaterialbreach”shallmeanamaterialbreachthatisaconsequenceofanactionbythebreachingParty(orfailuretoactbythebreachingParty)withtheKnowledgethatthetakingofsuchaction(orfailuretotakesuchaction)would,orwouldreasonablybeexpectedto,causeabreachofthisAgreement.

Section7.3.TerminationFee.(a)TheCompanyshallpayParentoritsdesignee,bywiretransferofimmediatelyavailablefunds,$52.5million(the“Go-Shop

TerminationFee”)ifthisAgreementisterminatedbytheCompanypursuanttoSection7.1(f)inordertoenterintoadefinitiveagreementtoeffectaCompanySuperiorProposalwithanExcludedParty;providedthatsuchdefinitiveagreementisenteredintoby11:59p.m.(NewYorkCitytime)onNovember22,2018.

(b)TheCompanywillpaytoParentoritsdesignee,bywiretransferofimmediatelyavailablefunds,$105million(the“CompanyTerminationFee”)ifthisAgreementisterminatedasfollows:

(i)TheCompanyterminatesthisAgreementpursuanttoSection7.1(f)inacircumstanceinwhichtheGo-ShopTerminationFeeisnotpayable;

(ii)(A)ParentterminatesthisAgreementpursuanttoclauses(A),(B),(D),(E)or(F)ofSection7.1(e)inacircumstanceinwhichtheCompanyisnotentitledtoterminatethisAgreementpursuanttoSection7.1(f)andpaytheGo-ShopTerminationFeeor(B)ParentortheCompanyterminatethisAgreementpursuanttoSection7.1(b)(iii)atatimewhenthisAgreementwasterminablepursuanttoclauses(A),(B),(D),(E)or(F)ofSection7.1(e)inacircumstanceinwhichtheCompanyisnotentitledtoterminatethisAgreementpursuanttoSection7.1(f)andpaytheGo-ShopTerminationFee;or

(iii)(A)thisAgreementisterminatedbytheCompanyorParentpursuanttoSection7.1(b)(ii)orSection7.1(b)(iii),(B)afterthedateofthisAgreement,anyPersonshallhavemadeaCompanyAcquisitionProposal(whetherornotconditional)orshallhavepublicly

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proposed,announcedorcommunicatedanyplanorintention(whetherornotconditional)tomakeaCompanyAcquisitionProposalandsuchCompanyAcquisitionProposalisnotunconditionallywithdrawnpriortotheOutsideDate(inthecaseofaterminationpursuanttoSection7.1(b)(ii))orthetimeofthevotetakenontheCompanyStockholderApprovalattheCompanyStockholdersMeeting(inthecaseofaterminationpursuanttoSection7.1(b)(iii)),and(C)withintwelve(12)monthsofthedateoftheterminationofthisAgreement,theCompanyentersintoanagreementwithrespecttoaCompanyAcquisitionProposaloratransactioninrespectofaCompanyAcquisitionProposalisconsummated(ineachcase,whetherornotwithaPersonthatmadeaCompanyAcquisitionProposalreferencedinclause(B));providedthatsolelyforthepurposesofclause(C),allreferencesinthedefinitionof“CompanyAcquisitionProposal”to“15%”shallbedeemedtobereferencesto“50%”.

(c)IftheCompanyTerminationFeebecomespayable(exceptpursuanttoSection7.3(b)(iii))ortheGo-ShopTerminationFeebecomespayable,suchfeeshallbepaidonthedatetheAgreementisterminated.IftheCompanyTerminationFeebecomespayablepursuanttoSection7.3(a)(iii),theCompanyTerminationFeeshallbepaidonthedatetheCompanyentersintoanagreementwithrespecttoaCompanyAcquisitionProposal(or,ifearlier,thedateatransactioninrespectofaCompanyAcquisitionProposalisconsummated).TheCompanyTerminationFeeandtheGo-ShopTerminationFeeshall,ifpayable,bepaidbywiretransferofimmediatelyavailablefundstoanaccountdesignatedbyParent.

(d)TheCompanyacknowledgesthattheagreementscontainedinthisSection7.3areanintegralpartofthetransactionscontemplatedbythisAgreement,andthat,withouttheseagreements,ParentwouldnotenterintothisAgreement.IftheCompanyfailspromptlytopaytheCompanyTerminationFeeortheGo-ShopTerminationFee,and,inordertoobtainsuchpayment,ParentcommencesasuitthatresultsinajudgmentagainsttheCompanyforthepaymentthereoforasettlementinwhichtheCompanypaysalloranyportionoftheCompanyTerminationFeeortheGo-ShopTerminationFee,theCompanyshallpaytoParentitsreasonablecostsandexpenses(includingreasonableattorneys’feesandexpenses)inconnectionwithsuchsuit,togetherwithinterestontheCompanyTerminationFeeortheGo-ShopTerminationFee,asapplicable,fromthedateoftheCompanyTerminationFeeortheGo-ShopTerminationFeewaspayablepursuanttothisAgreementatarateperannumequaltotheprimerateaspublishedinTheWallStreetJournalonthedatesuchpaymentwasrequiredtobemade.

ARTICLE VIII

MISCELLANEOUSSection8.1.AmendmentandModification.SubjecttoapplicableLaw,thisAgreementmaybeamended,modifiedandsupplementedinany

andallrespects,whetherbeforeorafteranyvoteofthestockholdersoftheCompanycontemplatedhereby,bywrittenagreementofthePartiesheretoatanytimepriortotheClosingDatewithrespecttoanyofthetermscontainedherein;provided,thatfollowingreceiptofsuchstockholderapproval,noamendment,modificationorsupplementofthisAgreementshallbemadethatbyapplicableLawortherulesorregulationsoftheNYSErequiresanyfurtherapprovalorauthorizationofsuchstockholders,withoutsuchapprovalorauthorizationbysuchstockholders.

Section8.2.Extension;Waiver.AtanytimepriortotheClosing,eachPartymay(a)extendthetimefortheperformanceofanyoftheobligationsorotheractsoftheotherParties,(b)waiveanyinaccuraciesintherepresentationsandwarrantiesoftheotherPartiescontainedinthisAgreementorinanydocumentdeliveredpursuanttothisAgreementor(c)waivecompliancewithanyoftheagreementsorconditionsoftheotherPartiescontainedinthisAgreement.ExceptasrequiredbyapplicableLaw,nosuchextensionorwaivershallrequiretheapprovalofthestockholdersofanyofParent,theCompanyorMergerSub.AnyagreementonthepartofaPartytoanysuchextensionorwaivershallbevalidonlyifsetforthinaninstrumentinwritingsignedonbehalfofsuchParty.

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Section8.3.NoSurvival.Noneoftherepresentations,warranties,covenantsoragreementsinthisAgreementorinanyinstrumentpursuantheretowillsurvivetheClosing,exceptArticleVIIIandthecovenantsandagreementsthatbytheirtermsapplyoraretobeperformedinwholeorinpartafterClosing(includingthosecontainedinArticleII,Section5.09andSection5.10)shallsurvivetheClosing.

Section8.4.Expenses.ExceptasotherwiseprovidedinSection7.3(orotherwiseasexpresslyprovidedinthisAgreement),allfeesandexpensesincurredbythePartiesheretoshallbebornesolelybythePartythathasincurredsuchfeesandexpenseswhetherornottheMergerisconsummated.

Section8.5.Notices.AllnoticesandothercommunicationsinconnectionwiththisAgreementwillbeinwritingandwillbedeemeddulygiven(a)onthedateofdeliveryifdeliveredpersonally,byfacsimileorbyelectronicmailor(b)onthefirstBusinessDayfollowingthedateofdispatchifdeliveredbyarecognizednext-daycourierservice.AllnoticesinconnectionwiththisAgreementwillbedeliveredassetforthbeloworpursuanttosuchotherinstructionsasmaybedesignatedinwritingbythePartytoreceivesuchnotice:

         

(a)   iftoParentorMergerSub,to: 

  SiriusXMHoldingsInc. 

  1290AvenueoftheAmericas 

  11thFloor 

  NewYork,NewYork10104 

  Attn:GeneralCounsel 

  Email:patrick.donnelly@siriusxm.com 

  withacopyto: 

  SimpsonThacher&BartlettLLP 

  425LexingtonAvenue 

  NewYork,NewYork10017 

  Attention:   EricM.Swedenburg     

  RaviPurushotham 

  FacsimileNo.:   (212)455-2502 

  Email:   eswedenburg@stblaw.com     

  rpurushotham@stblaw.com(b)   iftotheCompany,to: 

  PandoraMedia,Inc. 

  2100FranklinStreet 

  Suite700 

  Oakland,CA94612 

  Attention:GeneralCounsel 

  Email:legal@pandora.com 

  withacopyto: 

  SidleyAustinLLP 

  1001PageMillRoad,Building1 

  PaloAlto,California94304 

  Attention:   MartinA.Wellington     

  JenniferF.Fitchen 

  FacsimileNo.:   (650)5657100 

  Email:   mwellington@sidley.com     

  jfitchen@sidley.comSection8.6.EntireAgreement.ThisAgreement(includingtheExhibitshereto),theCompanyDisclosureLetter,theParentDisclosureLetter,

theConfidentialityAgreementandtheInvestmentAgreementconstitutetheentireagreementandsupersedeallprioragreementsandA-48

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understandings,bothwrittenandoral,amongthePartieswithrespecttothesubjectmatterhereofandthereof.Section8.7.ThirdPartyBeneficiaries.

(a)ThisAgreementisnotintendedtoconferanyrights(includingtherighttorelyupontherepresentations,warrantiesandcovenantssetforthherein),benefits,remedies,obligationsorliabilitiesuponanyPersonotherthanthePartiesheretoandtheirrespectivesuccessorsandassigns,exceptthat(i)followingtheEffectiveTime,theprovisionsofSection5.9shallbeenforceablebyeachCompanyIndemnifiedPartyandhisorherheirs,executorsoradministratorsandrepresentatives,and(ii)followingtheEffectiveTime,theprovisionsofArticleIIwithrespecttotherightsofholdersofsharesofCompanyCommonStocktoreceivetheMergerConsideration,asapplicable,shallbeenforceablebysuchholders.

(b)TherepresentationsandwarrantiesinthisAgreementaretheproductofnegotiationsamongthePartiesandareforthesolebenefitoftheParties.AnyinaccuraciesinsuchrepresentationsandwarrantiesmaybesubjecttowaiverbythePartiesinaccordancewithSection8.2withoutnoticeorliabilitytoanyotherPerson.Insomeinstances,therepresentationsandwarrantiesinthisAgreementmayrepresentanallocationamongthePartiesofrisksassociatedwithparticularmattersregardlessoftheknowledgeofanyoftheParties.Consequently,personsotherthanthePartiesheretomaynotrelyupontherepresentationsandwarrantiesinthisAgreementascharacterizationsofactualfactsorcircumstancesasofthedateofthisAgreementorasofanyotherdate.

Section8.8.Severability.Ifanyterm,provision,covenantorrestriction(orpartthereof)ofthisAgreementisheldbyacourtofcompetentjurisdictionorotherGovernmentalEntitytobeinvalid,void,unenforceableoragainstitsregulatorypolicy,theremainderoftheterms,provisions,covenantsandrestrictionsofthisAgreementshallremaininfullforceandeffectandshallinnowaybeaffected,impairedorinvalidated,solongastheeconomicandlegalsubstanceofthetransactionscontemplatedhereby,takenasawhole,arenotaffectedinamannermateriallyadversetoanyPartyhereto.

Section8.9.Assignment.NeitherthisAgreementnoranyoftherights,interestsorobligationshereundershallbeassignedbyanyofthePartiesinwholeorinpart(whetherbyoperationofLaworotherwise)withoutthepriorwrittenconsentoftheotherParties,andanysuchassignmentwithoutsuchconsentshallbenullandvoid;providedthat,withouttheconsentofanyotherParty,priortothemailingoftheProxyStatement,Parentmaydesignate,bywrittennoticetotheCompany,anotherwholly-owneddirectorindirectParentSubsidiarytobeapartytotheMergerinlieuofMergerSub,inwhicheventallreferenceshereintoMergerSubshallbedeemedreferencestosuchotherParentSubsidiary,exceptthatallrepresentationsandwarrantiesmadehereinwithrespecttoMergerSubasofthedateofthisAgreementshallbedeemedrepresentationsandwarrantiesmadewithrespecttosuchotherParentSubsidiaryasofthedateofsuchdesignation;provided,further,thatanysuchdesignationnotimpedeordelaytheMergerortheothertransactionscontemplatedbythisAgreement.Fortheavoidanceofdoubt,withouttheconsentofanyParty,ParentmaytransferthesharesofcommonstockofMergerSubtoanyoneormoredirectorindirectwholly-ownedSubsidiariesofParent.

Section8.10.GoverningLaw.ThisAgreementandanyclaimsandcausesofactionarisinghereunder,whetherintort,contractorotherwise,shallbegovernedandconstruedinaccordancewiththeLawsoftheStateofDelaware.

Section8.11.ExclusiveJurisdiction.EachoftheParties(a)consentstosubmititself,andherebysubmitsitself,tothepersonaljurisdictionoftheCourtofChanceryoftheStateofDelawareandanyfederalcourtlocatedintheStateofDelaware,or,ifneitherofsuchcourtshassubjectmatterjurisdiction,anystatecourtoftheStateofDelawarehavingsubjectmatterjurisdiction,intheeventanydisputearisesoutofthisAgreementoranyofthetransactionscontemplatedbythisAgreement,(b)agreesthatitwillnotattempttodenyordefeatsuchpersonaljurisdictionbymotionorotherrequestforleavefromanysuchcourt,andagreesnottopleadorclaimanyobjectiontothelayingofvenueinanysuchcourtorthatanyjudicialproceedinginanysuchcourthasbeenbroughtinaninconvenientforum,(c)agreesthatitwillnotbringanyactionrelatingtothis

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AgreementoranyofthetransactionscontemplatedbythisAgreementinanycourtotherthantheCourtofChanceryoftheStateofDelawareandanyfederalcourtlocatedintheStateofDelaware,or,ifneitherofsuchcourtshassubjectmatterjurisdiction,anystatecourtoftheStateofDelawarehavingsubjectmatterjurisdiction,and(d)consentstoserviceofprocessbeingmadethroughthenoticeproceduressetforthinSection8.5.

Section8.12.SpecificPerformance.ThePartiesagreethatirreparabledamagewouldoccurandthatthePartieswouldnothaveanyadequateremedyatlawintheeventthatanyoftheprovisionsofthisAgreementwerenotperformedinaccordancewiththeirspecifictermsorwereotherwisebreached.ItisaccordinglyagreedthatthePartiesshallbeentitledtoaninjunctionorinjunctionstopreventbreachesorthreatenedbreachesofthisAgreementandtoenforcespecificallythetermsandprovisionsofthisAgreementintheCourtofChanceryoftheStateofDelawareor,ifunderapplicableLawexclusivejurisdictionoversuchmatterisvestedinthefederalcourts,anyfederalcourtlocatedintheStateofDelawarewithoutproofofactualdamagesorotherwise(and,tothefullestextentpermittedbyLaw,eachPartyherebywaivesanyrequirementforthesecuringorpostingofanybondinconnectionwithsuchremedy),thisbeinginadditiontoanyotherremedytowhichtheyareentitledatlaworinequity.

Section8.13.WAIVEROFJURYTRIAL.EACHOFTHEPARTIESHERETOHEREBYKNOWINGLY,INTENTIONALLYANDVOLUNTARILYIRREVOCABLYWAIVESANYANDALLRIGHTSTOTRIALBYJURYINANYLEGALPROCEEDINGARISINGOUTOFORRELATEDTOTHISAGREEMENTORTHETRANSACTIONSCONTEMPLATEDHEREBY.

Section8.14.Counterparts.ThisAgreementmaybeexecutedintwoormorecounterparts,allofwhichshallbeconsideredoneandthesameagreementandshallbecomeeffectivewhentwoormorecounterpartshavebeensignedbyeachofthePartiesanddeliveredtotheotherParties(includingbyfacsimileorviaportabledocumentformat(.pdf)),itbeingunderstoodthatallPartiesneednotsignthesamecounterpart.

Section8.15.Interpretation.Thewords“include,”“includes,”and“including”shallbedeemedtobefollowedby“withoutlimitation”whetherornottheyareinfactfollowedbysuchwordsorwordsoflikeimport.Thewords“hereof,”“herein”and“hereunder”andwordsofsimilarimportwhenusedinthisAgreementshallrefertothisAgreementasawholeandnottoanyparticularprovisionofthisAgreement.Referencesto“thisAgreement”shallincludetheParentDisclosureLetterandtheCompanyDisclosureLetter.Theword“will”shallbeconstruedtohavethesamemeaningandeffectastheword“shall.”AlltermsdefinedinthisAgreementshallhavethedefinedmeaningswhenusedinanycertificateorotherdocumentmadeordeliveredpursuantheretounlessotherwisedefinedtherein.TheCompanyDisclosureLetterandtheParentDisclosureLetterareherebyincorporatedinandmadeapartofthisAgreementasifsetforthinfullherein.ThedefinitionscontainedinthisAgreementareapplicabletothesingularaswellasthepluralformsofsuchtermsandtothemasculineaswellastothefeminineandneutergendersofsuchterm.AnyContract,instrumentorLawdefinedorreferredtohereinmeanssuchContract,instrumentorLawasfromtimetotimeamended,modifiedorsupplementedinamannerconsistentwiththisAgreement,including(inthecaseofContractsorinstruments)bywaiverorconsentand(inthecaseofLaws)bysuccessionofcomparablesuccessorLawsandreferencestoallattachmentstheretoandinstrumentsincorporatedtherein.ReferencestoaPersonarealsotoitspermittedsuccessorsandassigns.ThisAgreementistheproductofnegotiationsbythePartieshavingtheassistanceofcounselandotheradvisers.ItistheintentionofthePartiesthatthisAgreementnotbeconstruedmorestrictlywithregardtoonePartythanwithregardtotheothers.ThedescriptiveheadingsusedhereinareinsertedforconvenienceofreferenceonlyandarenotintendedtobepartofortoaffectthemeaningorinterpretationofthisAgreement.

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Section8.16.Definitions.(a)ThefollowingtermsandthosesetforthintheIndexofDefinedTermsshallhavethemeaningsspecifiedinthisSection8.16oronthe

correspondingpagenumberoftheIndexofDefinedTerms:“2015CompanyNotesIndenture”meansthatcertainIndenture,datedasofDecember9,2015,amongPandoraMedia,Inc.andCitibank,N.A.,as

Trustee.“2018CompanyNotesIndenture”meansthatcertainIndenture,datedasofJune1,2018,amongPandoraMedia,Inc.andCitibank,N.A.,as

Trustee.“AcceptableConfidentialityAgreement”meansaconfidentialityagreementthatcontainstermsthatarenolessfavorableintheaggregatetothe

CompanythanthosecontainedintheConfidentialityAgreement,butshallnotcontainanystandstillprovision.“Affiliate”ofanyPersonmeansanotherPersonthatdirectlyorindirectly,throughoneormoreintermediaries,Controls,iscontrolledby,oris

undercommoncontrolwith,suchfirstPerson;providedhoweverthat(i)theCompanyandtheCompanySubsidiariesshallnotbedeemedtobeAffiliatesofParentoranyofitsAffiliatesand(ii)noneoftheSpecifiedPersonswillbetreatedasanAffiliateofParentoranyParentSubsidiariesoranyoftheirrespectiveAffiliatesforanypurposehereunder.

“BusinessDay”meansanydayexceptaSaturday,aSundayorotherdayonwhichbankinginstitutionsintheNewYork,NewYork,orOakland,California,areauthorizedorrequiredbyLawtobeclosed.

“Code”meanstheInternalRevenueCodeof1986,asamended.“CompanyAcquisitionProposal”meansanyinquiry,proposal,indicationofinterestorofferfromanyPerson(otherthanParentoranyofthe

ParentSubsidiaries),whetherwrittenororal,relatingto,orthatcouldreasonablybeexpectedtoleadto,inonetransactionoraseriesoftransactions,anydirectorindirect(i)acquisition,purchaseorsaleofabusinessorassetsthatconstitute15%ormoreoftheconsolidatedbusiness,revenues,netincomeorassets(includingstockoftheCompany’sSubsidiaries)oftheCompanyandtheCompanySubsidiaries,(ii)merger,reorganization,shareexchange,consolidation,businesscombination,recapitalization,liquidation,dissolutionorsimilartransactioninvolvingtheCompany,or(iii)purchaseorsaleof,ortenderorexchangeoffer(includingaself-tenderoffer)for,securitiesoftheCompanythat,ifconsummated,wouldresultinanyPerson(orthestockholdersofsuchPerson)beneficiallyowningsecuritiesrepresenting15%ormoreoftheequityortotalvotingpoweroftheCompany.

“CompanyBenefitPlan”meanseach“employeebenefitplan,”withinthemeaningofSection3(3)ofERISA,includingmultiemployerplans(withinthemeaningofSection3(37)ofERISA),andeachotherstockgrant,stockpurchase,stockoption,restrictedstock,otherequityorequity-related,severance,employment,consulting,change-in-control,retention,fringebenefit,loan,collectivebargaining,bonus,incentive,sabbatical,medical,dental,vision,disability,cafeteriabenefit,dependentcare,welfarebenefit,lifeinsuranceoraccidentinsurance,retirement,supplementalretirement,deferredcompensationorothercompensationorbenefitplan,agreement,program,policyorarrangement,sponsored,maintained,enteredintoorcontributedto(orrequiredtobecontributedto)bytheCompanyoranyofitsERISAAffiliates,ortowhichtheCompanyoranyofitsERISAAffiliatesisaparty,whetherwrittenororal,forthebenefitofanyCompanyEmployee(includingtheirdependentsorbeneficiaries)orwithrespecttowhichtheCompanyoranyofitsERISAAffiliateshasanyliability(contingentorotherwise).

“CompanyBoard”meanstheBoardofDirectorsoftheCompany.“CompanyCapitalStock”means,collectively,CompanyCommonStockandCompanyPreferredStock.“CompanyCommonStock”meanstheCompany’scommonstock,parvalue$0.0001pershare.“CompanyEmployee”meansanycurrentorformeremployee,consultantordirectoroftheCompanyoranyoftheCompanySubsidiaries.

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“CompanyMaterialAdverseEffect”meansanyevent,change,condition,occurrenceoreffectthat,individuallyorintheaggregatewithallotherevents,changes,conditions,occurrencesoreffects,(x)hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectontheassets,business,financialconditionorresultsofoperationsoftheCompanyandtheCompanySubsidiaries,takenasawhole,or(y)thatpreventsormateriallydelaysormateriallyimpairs,orthatwouldreasonablybeexpectedtoprevent,materiallydelayormateriallyimpair,theCompany’sabilitytoperformitsobligationsunderthisAgreementorconsummatethetransactionscontemplatedherebyonatimelybasisbytheOutsideDate,provided,thatindeterminingwhetheraCompanyMaterialAdverseEffecthasoccurredpursuanttoclause(x)above,thereshallbeexcludedanyeffectresultingfrom:(i)changesingeneraleconomicorpoliticalconditionsorfinancial,creditorsecuritiesmarketsingeneral(includingchangesininterestorexchangerates);(ii)changesinapplicableLawsorchangesinGAAP;(iii)acts,declarationsorescalationsofwar,armedhostilities,sabotage,terrorism,earthquakes,floods,hurricanes,tropicalstorms,firesorothernaturaldisastersoranynational,internationalorregionalcalamity;(iv)thenegotiation,execution,announcement,consummationorpendencyofthisAgreementorthetransactionscontemplatedhereby(includingtheimpactthereonontheCompany’sandtheCompanySubsidiaries’relationshipswithcustomers,vendors,lendersoremployees);(v)anychangesinthecreditratingoftheCompany,themarketpriceortradingvolumeofsharesofCompanyCommonStockoranyfailurebytheCompanytomeetinternalorpublishedprojections,forecastsorrevenueorearningspredictions,itbeingunderstoodthatanyunderlyingeventcausingsuchchangesorfailuresinwholeorinpartmaybetakenintoaccountindeterminingwhetheraCompanyMaterialAdverseEffecthasoccurred;(vi)anylitigationbyholdersofCompanyCommonStockarisingfromallegationsofabreachoffiduciarydutyrelatingtothisAgreementorthetransactionscontemplatedhereby;(vii)anysuspensionoftradinggenerallyontheNYSE;or(viii)anyactionorinactionbytheCompanyorCompanySubsidiariesexpresslyrequiredbythisAgreement(otherthanpursuanttoSection5.1(a)),oractiontakenornottakenbytheCompanyortheCompanySubsidiariesuponthewrittenrequestofParent;providedthatineachcaseofclauses(i),(ii),(iii)or(vii),suchevents,changes,conditions,occurrencesoreffectsshallbetakenintoaccounttotheextenttheyhaveamateriallyanddisproportionatelyadverseimpactontheCompanyandtheCompanySubsidiariesrelativetoothercompaniesintheindustryinwhichtheCompanyandtheCompanySubsidiariesoperate.WithrespecttoreferencestoCompanyMaterialAdverseEffectintherepresentationsandwarrantiessetforthinSection3.4,theexceptionsinclause(iv)aboveshallnotapply.

“CompanyConvertibleNotes”meansthe1.75%ConvertibleSeniorNotesdue2020issuedbyPandoraMedia,Inc.pursuanttothe2015CompanyNotesIndentureandthe1.75%ConvertibleSeniorNotesdue2023issuedbyPandoraMedia,Inc.pursuanttothe2018CompanyNotesIndenture.

“CompanyNotesIndenture”means,collectively,the2015CompanyNotesIndentureandthe2018CompanyNotesIndenture.“CompanyPreferredStock”meansthepreferredstock,parvalue$0.0001pershare,oftheCompany.“CompanyStockIncentivePlans”means,collectively,(i)thePandoraMedia,Inc.2011EquityIncentivePlan,asitmaybeamendedfromtimeto

time,(ii)thePandoraMedia,Inc.2004StockPlan,asitmaybeamendedfromtimetotime,(iii)theTheSavageBeast.com,Inc.2000StockIncentivePlan;(iv)theESPP;and(v)anyothercompensatoryequity-basedplansorContractsoftheCompany,includinganyoptionplansorContractsassumedbytheCompanypursuanttoamerger,acquisitionorsimilartransaction.

“CompanyStockholderApproval”meanstheadoptionofthisAgreementbytheholdersofamajorityofthecombinedvotingpoweroftheoutstandingsharesofCompanyCommonStockandtheoutstandingsharesofCompanyPreferredStock,votingtogetherasasingleclass.

“CompanyStockholdersMeeting”meansameetingoftheholdersofCompanyCapitalStockforthepurposeofseekingtheCompanyStockholderApproval(includinganyadjournmentsorpostponementsthereof).

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“CompanySuperiorProposal”meansanybonafidewrittenCompanyAcquisitionProposal(exceptthatreferencesthereinto“15%”shallbereplacedby“50%”)madebyanyPerson(otherthanParentoranyParentSubsidiary)afterthedatehereof,whichinthegoodfaithjudgmentoftheCompanyBoard(afterconsultationwithitsoutsidelegalcounselandfinancialadvisors)is,ifaccepted,likelytobeconsummatedandwouldresult,ifconsummatedonthetermsproposedonatimelybasis,inatransactionthatismorefavorablefromafinancialpointofviewtothestockholdersoftheCompanythanthetransactionscontemplatedbythisAgreement,aftertakingintoaccount(a)thelikelihoodandtimingofconsummation(ascomparedtothetransactionscontemplatedhereby),(b)suchothermattersthattheCompanyBoardconsidersrelevant,includinglegal,financial(includingthefinancingtermsofanysuchCompanyAcquisitionProposal),regulatoryandotheraspectsandrisksofsuchCompanyAcquisitionProposal(includingtheconditionstoclosing,anyrequirementofastockholdervoteofthePersonmakingtheproposal,andanyfinancingrequirementsofsuchPerson)andtheidentityofthePersonmakingsuchCompanyAcquisitionProposaland(c)anychangestothetermsofthisAgreementproposedbyParent.

“CompetitionLaws”meansalllawsthataredesignedorintendedtoprohibit,restrictorregulateactionshavingthepurposeoreffectofmonopolizationorlesseningofcompetitionthroughmergeroracquisitionorrestraintoftrade.

“ConfidentialityAgreement”meanstheconfidentialityagreement,datedJanuary25,2016betweenParent,LibertyMediaCorporationandtheCompany,asthesamemaybefurtheramended,supplementedorotherwisemodifiedbytheParties.

“ConstituentDocuments”means,withrespecttoanyPerson,thecharter,thecertificateorarticlesofincorporationorformation,bylaws,limitedliabilitycompanyoroperatingagreementorcomparableorganizationaldocumentsofsuchPerson,asthesamemaybeamended,supplementedorotherwisemodifiedfromtimetotime.

“Contract”meansanynote,bond,debenture,mortgage,indenture,deedoftrust,license,lease,agreementorothercontract,agreement,commitment,instrumentorobligation,ineachcase,includingallamendments,supplementsorothermodificationsthereto.

“Control”(includingtheterms“controlledby”and“undercommoncontrolwith”),withrespecttotherelationshipbetweenoramongtwoormorePersons,meansthepossession,directlyorindirectly,ofthepowertodirectorcausethedirectionoftheaffairsormanagementofaPerson,whetherthroughtheownershipofvotingsecurities,astrusteeorexecutor,bycontractoranyothermeans.

“CreditAgreement”meanstheCreditAgreement,datedasofDecember29,2017(asmaybeamendedfromtimetotime,including,withoutlimitation,pursuanttoAmendmentNumberOnetoCreditAgreement,datedasofFebruary6,2018,asfurtheramendedbyAmendmentNumberTwotoCreditAgreement,datedasofSeptember21,2018),byandamongtheCompany,PandoraMediaCalifornia,LLC,thelenderspartythereto,WellsFargoBank,NationalAssociation,asadministrativeagent,andJPMorganChaseBank,N.A.,MorganStanleySeniorFunding,Inc.andWellsFargoBank,NationalAssociationasjointleadarrangersandjointbookrunners.

“ERISA”meanstheEmployeeRetirementIncomeSecurityActof1974,asamended.“ERISAAffiliate”means,withrespecttoanyPerson,eachtradeorbusiness,whetherornotincorporated,that,togetherwithsuchPerson,would

bedeemeda“singleemployer”withinthemeaningofSection4001(b)ofERISAorSection414oftheCode.“ExchangeAct”meanstheSecuritiesExchangeActof1934,asamended,andtherelatedrulesandregulationspromulgatedthereunder.“ExcludedParty”meansanyPersonfromwhomtheCompanyoranyofitsRepresentativeshasreceivedawrittenCompanyAcquisitionProposal

aftertheexecutionofthisAgreementandpriortotheNo-ShopPeriodStartDate,whichwrittenCompanyAcquisitionProposaltheCompanyBoardhasdeterminedingoodfaithpriortothestartoftheNo-ShopPeriodStartDate(afterconsultationwithitsoutsidecounselanditsfinancialadvisor)isorwouldreasonablybeexpectedtoleadtoaCompanySuperiorProposal;provided,however,thataPersonshallimmediatelyceasetobeanExcludedParty(andtheprovisionsofthisAgreementapplicabletoExcludedPartiesshallceaseto

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applywithrespecttosuchPerson)if(A)suchCompanyAcquisitionProposalmadebysuchPersonpriortothestartoftheNo-ShopPeriodStartDateiswithdrawn(itbeingunderstoodthatanyamendment,modificationorreplacementofsuchCompanyAcquisitionProposalshallnot,inandofitself,bedeemedawithdrawalofsuchCompanyAcquisitionProposal)or(B)suchCompanyAcquisitionProposal,inthegoodfaithdeterminationoftheCompanyBoard(afterconsultationwithitsoutsidecounselanditsfinancialadvisor),nolongerisorwouldreasonablybeexpectedtoleadtoaSuperiorProposal.

“FormS-4”meanstheregistrationstatementonFormS-4tobefiledwiththeSECbyParentinconnectionwiththeregistrationundertheSecuritiesActofthesharesofParentCommonStocktobeissuedintheMerger(asamendedorsupplementedfromtimetotime).

“GAAP”meansgenerallyacceptedaccountingprinciplesintheUnitedStates.“GovernmentalEntity”means,anywhereintheworld,anysupranational,national,federal,state,provincial,municipal,localorforeign

government,governmentalorquasi-governmentalauthority,regulatoryoradministrativeagency,governmentalcommission,department,board,bureau,agencyorinstrumentality,court,arbitralbodyorothertribunal.

“HSRAct”meanstheHart-Scott-RodinoAntitrustImprovementsActof1976,asamended,andtheregulationspromulgatedthereunder.“Indebtedness”means(i)anyindebtednessorotherobligationforborrowedmoney,whethercurrent,short-termorlong-term,orsecuredor

unsecured,andwhetherevidencedbyanote,bond,debentureorothersecurityorsimilarinstrumentorotherwise,(ii)anyliabilitiesorobligationswithrespecttointerestrateswaps,collars,capsandsimilarhedgingobligationsorotherfinancialagreementsorarrangementsenteredintoforthepurposeoflimitingormanaginginterestraterisks,(iii)anycapitalizedleaseobligations,(iv)anyobligationsforthedeferredpurchasepriceofpropertyorservices,and(v)guaranties,endorsementsandassumptionsinrespectofanyoftheforegoingclauses(i)through(iv).

“IntellectualProperty”meansallworldwideintellectualandindustrialpropertyrights,includingall(i)patentsandinventions,(ii)trademarks,servicemarks,corporatenames,tradenames,domainnames,socialandmobilemediaidentifiers,logos,tradedress,designrights,andotherdesignationsofsourceororigin,togetherwiththegoodwillsymbolizedbyanyoftheforegoing,(iii)copyrights,(iv)tradesecrets,know-how,technology,methods,processes,algorithmsandconfidentialinformation,(v)artists’andperformers’rights,includingrightsofperformance,publicity,attributionandintegrityand(vi)allapplications,registrations,renewals,continuations,continuations-in-part,divisionals,reissues,re-examinations,extensionsandforeigncounterpartsofanyoftheforegoing.

“InvestmentAgreement”meanstheInvestmentAgreement,datedJune9,2017,byandbetweentheCompanyandSiriusXMRadio.“ITAssets”meansallsoftware,systems,code,applications,websites,applications,networksandotherinformationtechnologyequipment,assets

andinfrastructure.“Knowledge”meanstheactualknowledgeof(a)withrespecttotheCompany,thepersonssetforthinSection8.16(a)oftheCompanyDisclosure

Letterafterreasonableinquiryand(b)withrespecttoParent,thepersonssetforthonSection8.16(b)oftheParentDisclosureLetterafterreasonableinquiry.

“Laws”meansanyUnitedStates,federal,stateorlocaloranyforeignlaw(ineachcase,statutory,commonorotherwise),constitution,treaty,convention,ordinance,code,rule,statute,regulationorothersimilarrequirementenacted,issued,adopted,promulgated,enteredintoorappliedbyaGovernmentalEntity.

“Lien”meansanylien(statutoryorotherwise),pledge,hypothecation,mortgage,lease,restriction,covenant,titledefect,assignment,charge,encumbrance,adverseright,claim,option,rightoffirstrefusal,preemptiverightorsecurityinterestofanykindornaturewhatsoever.

“MaterialsofEnvironmentalConcern”meansanypollutant,contaminant,hazardousortoxicsubstanceorwaste,ortermsofsimilarmeaningdefinedorregulatedassuchunder,andanyothersubstancethatcouldreasonablybeexpecttoresultinliabilitypursuantto,anyEnvironmentalLaw,

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includinganypetroleumorpetroleum-containingproducts,asbestos,asbestoscontainingmaterials,urea-formaldehydeinsulation,radioactivity,polychlorinatedbiphenyls,andtoxicmolds.

“MergerConsiderationClosingValue”meanstheproductof(x)theExchangeRatioand(y)theParentMeasurementPrice.“Nasdaq”meansTheNasdaqGlobalSelectMarket.“Non-U.S.CompanyBenefitPlan”meansaCompanyBenefitPlanthatisnotsubjectexclusivelytoUnitedStatesLaw.“NYSE”meansTheNewYorkStockExchange.“Order”meansanyorder,writ,injunction,decree,judgment,award,injunction,settlementorstipulationissued,promulgated,made,renderedor

enteredintobyorwithanyGovernmentalEntity(ineachcase,whethertemporary,preliminaryorpermanent).“OwnedIntellectualProperty”meansallIntellectualPropertythatisownedorpurportedtobeownedbytheCompanyortheCompany

Subsidiaries,includingtheRegisteredIP.“ParentBoard”meanstheBoardofDirectorsofParent.“ParentCommonStock”meansParent’ssharesofcommonstock,parvalue$0.001pershare.“ParentMaterialAdverseEffect”meansanyevent,change,condition,occurrenceoreffectthat,individuallyorintheaggregatewithallother

events,changes,conditions,occurrencesoreffects,(x)hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectontheassets,business,financialconditionorresultsofoperationsofParentandtheParentSubsidiaries,takenasawholeor(y)thatpreventsormateriallydelaysormateriallyimpairs,orthatwouldreasonablybeexpectedtoprevent,materiallydelayormateriallyimpair,Parent’sandMergerSub’sabilitytoperformtheirobligationsunderthisAgreementorconsummatethetransactionscontemplatedherebyonatimelybasisbytheOutsideDate,providedthatindeterminingwhetheraParentMaterialAdverseEffecthasoccurredpursuanttoclause(x)above,thereshallbeexcludedanyeffectresultingfrom:(i)changesingeneraleconomicorpoliticalconditionsorfinancial,creditorsecuritiesmarketsingeneral(includingchangesininterestorexchangerates);(ii)changesinapplicableLawsorchangesinGAAP;(iii)actsofwar,armedhostilities,sabotage,terrorismornaturaldisasters;(iv)thenegotiationorannouncementofthisAgreement(includingtheimpactthereononParent’srelationshipswithcustomers,vendors,lendersoremployees);(v)anychangesinthecreditratingofParent,themarketpriceortradingvolumeofsharesofParentCommonStockoranyfailurebyParenttomeetinternalorpublishedprojections,forecastsorrevenueorearningspredictionsforanyperiod,itbeingunderstoodthatanyunderlyingeventcausingsuchchangesorfailuresinwholeorinpartmaybetakenintoaccountindeterminingwhetheraParentMaterialAdverseEffecthasoccurred;(vi)anylitigationbyholdersofParentCommonStockarisingfromallegationsofabreachoffiduciarydutyrelatingtothisAgreementorthetransactionscontemplatedhereby,(vii)anysuspensionoftradinggenerallyonNasdaq;or(viii)anyactionorinactionbyParentorParentSubsidiariesexpresslyrequiredbythisAgreement(otherthanpursuanttoSection5.2(a)),oractiontakenornottakenbyParentorParentSubsidiariesuponthewrittenrequestoftheCompany;providedthatineachcaseofclauses(i),(ii)or(iii)or(vii),suchevents,changes,conditions,occurrencesoreffectsshallbetakenintoaccounttotheextenttheyhaveamateriallyanddisproportionatelyadverseimpactonParentandtheParentSubsidiariesrelativetoothercompaniesintheindustryinwhichParentandtheParentSubsidiariesoperate.WithrespecttoreferencestoParentMaterialAdverseEffectintherepresentationsandwarrantiessetforthinSection4.4,theexceptionsinclause(iv)aboveshallnotapply.

“ParentMeasurementPrice”meansanamountequaltotheaverageofthevolumeweightedaveragepricepershare,roundedtofourdecimalplaces(withamounts0.00005andaboveroundedup),ofParentCommonStockonNasdaq(asreportedbyBloombergL.P.or,ifnotreportedtherein,inanotherauthoritativesourcemutuallyselectedbyParentandtheCompany)forthefiveconsecutivetradingdayperiodthatendsonthesecondcompletetradingdayendingimmediatelypriortotheClosingDate(fortheavoidanceofdoubt,suchsecondcompletetradingdayshallbeincludedinthefiveconsecutivetradingdayperiod).

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“ParentPreferredStock”meanspreferredstock,parvalue$0.001pershare,ofParent.“ParentSECFinancialStatements”meanstheconsolidatedfinancialstatementsofParentincludedintheParentSECDocuments(including,in

eachcase,anynotesorschedulesthereto).“ParentStockIncentivePlans”meanstheSiriusXMHoldingsInc.2015Long-TermStockIncentivePlan,theSiriusXMRadioInc.2009Long-

TermStockIncentivePlan,theSiriusSatelliteRadio2007StockIncentivePlan,theAmendedandRestatedSiriusSatelliteRadio2003Long-TermStockIncentivePlanandtheXMSatelliteRadioHoldingsInc.1998SharesAwardPlan,ineachcaseasitmaybeamendedfromtimetotime.

“ParentStockIssuance”meanstheissuanceofsharesofParentCommonStockaspartoftheMergerConsideration.“ParentSubsidiary”meansaSubsidiaryofParent.“Permit”meansanygovernmentallicense,permit,certificate,approvalorauthorization.“PermittedLien”means(i)anyLienforTaxesnotyetdueandpayableorwhicharebeingcontestedingoodfaithbyappropriateproceedingsand

forwhichadequatereservesinaccordancewithGAAPhavebeenestablished,(ii)carriers’,warehousemen’s,mechanics’,materialmen’s,repairmen’sorothersimilarLiens,includingstatutoryliens,ineachcaseincurredintheordinarycourseofbusinesstosecureclaimswhicharenotyetdueandpayableorwhicharebeingcontestedingoodfaithbyappropriateproceedingsandforwhichadequatereserveshavebeenestablished,(iii)pledgesordepositsinconnectionwithworkers’compensation,unemploymentinsuranceandothersocialsecuritylegislation,(iv)statutorylandlords’LiensandLiensgrantedtolandlordsunderanylease,(v)anypurchasemoneysecurityinterests,equipmentleasesorsimilarfinancingarrangements,and(vi)LienscreatedunderorinconnectionwiththeCreditAgreement.

“Person”meansanyindividual,corporation,partnership,limitedliabilitycompany,association,trustorotherentityororganization,includingagovernmentorpoliticalsubdivisionoranagencyorinstrumentalitythereof,andfortheavoidanceofdoubtshallincludeany“group”(assetforthinSection13(d)(3)oftheExchangeAct)ofPersons.

“PrivacyPolicy”meansanyCompanypolicyoragreementrelatingto(i)privacy,(ii)PrivateDataor(ii)thesecurityorintegrityofanyITAssets.“PrivateData”meansanypersonal,personallyidentifiable,financial,sensitiveorregulatedinformation(includingcreditordebtcardinformation,

bankaccountinformationorusernamesandpasswords).“Proceeding”meansanysuit,action,proceeding,arbitration,mediation,audit,hearing,orinquirycommenced,brought,conductedorheardbyor

beforeanyGovernmentalEntity.“ProxyStatement”meanstheCompany’sproxystatementtobesenttothestockholdersoftheCompanyrelatingtotheCompanyStockholders

Meeting(togetherwithanyamendmentsorsupplementsthereto).“Representatives”means,withrespecttoanyPerson,suchPerson’sofficers,agents,employees,consultants,professionaladvisers(including

attorneys,accountantsandfinancialadvisors)anddebtfinancingsources.“SEC”meanstheUnitedStatesSecuritiesandExchangeCommission.“SecuritiesAct”meanstheSecuritiesActof1933,asamended,andtherelatedrulesandregulationspromulgatedthereunder.“SpecifiedPersons”meansthePersonssetforthonSection8.16(c)oftheParentDisclosureLetter.“Subsidiary”means,withrespecttoanyPerson,anyothercorporation,partnership,jointventure,limitedliabilitycompanyoranyotherentity(i)

ofwhichsuchfirstPersonoraSubsidiaryofsuchfirstPersonisageneralpartnerormanagingmemberor(ii)atleastamajorityofthesecuritiesorotherinterestsofwhichhavingbytheirtermsordinaryvotingpowertoelectamajorityoftheboardofdirectorsorPersonsperformingsimilarfunctionswithrespecttosuchentityis

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directlyorindirectlyownedorcontrolledbysuchfirstPersonand/oroneormoreSubsidiariesthereof.“TakeoverLaw”meansanystate“businesscombination,”“affiliatedtransaction,”“controlshareacquisition,”“fairprice,”“moratorium”orother

anti-takeoverLaw.“Taxes”meansanyandallfederal,state,local,foreignorothertaxes,charges,fees,levies,orothersimilarassessments(togetherwithanyandall

interest,penalties,additionstotaxandadditionalamountsimposedwithrespectthereto)imposedbyanyGovernmentalEntity,includinganyincome,franchises,windfallorotherprofits,grossreceipts,property,capital,sales,use,transfer,registration,property,inventory,license,capitalstock,payroll,employment,unemployment,socialsecurity,workers’compensation,severance,stamp,customs,duties,occupation,premiumornetworth,excise,withholding,advalorem,valueadded,estimatedorothertaxofanykind.

“TaxReturn”meansanyreport,return,document,declarationorotherinformationorfilingthatisfiledorrequiredtobefiledwithaGovernmentalEntitywithrespecttoTaxes(whetherornotapaymentisrequiredtobemadewithrespecttosuchfiling),including,withoutlimitation,informationreturns,declarationsofestimatedTaxes,amendedreturnsorclaimsforrefunds(andanyattachmentsthereto).

“TreasuryRegulations”meanstheUnitedStatesTreasuryRegulationspromulgatedundertheCode.“WARNAct”meanstheWorkerAdjustmentandRetrainingNotificationActof1988andanysimilar“masslayoff”or“plantclosing”Laws,or

otherLawsrequiringadvancenoticeofterminationofemploymentand/orpaymentstoaffectedemployees.

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INWITNESSWHEREOF,Parent,MergerSubandtheCompanyhavecausedthisAgreementtobedulyexecuted,allasofthedatefirstwrittenabove.

     

SIRIUSXMHOLDINGSINC.By:   /s/PatrickL.Donnelly   

 

Name:   PatrickL.DonnellyTitle:   ExecutiveVicePresident,GeneralCounselandSecretary     

WHITEOAKSACQUISITIONCORP.By:   /s/PatrickL.Donnelly   

 

Name:   PatrickL.DonnellyTitle:   VicePresidentandSecretary

      

PANDORAMEDIA,INC.By:   /s/RogerLynch   

 

Name:   RogerLynchTitle:   President&ChiefExecutiveOfficer

 

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ANNEX A

Form of Certificate of Incorporation of the Surviving Corporation

SECONDAMENDEDANDRESTATEDCERTIFICATEOFINCORPORATIONOF

PANDORAMEDIA,INC.FIRST:Thenameofthecorporation(whichishereinafterreferredtoasthe“Corporation”)isPandoraMedia,Inc.SECOND:TheaddressoftheregisteredofficeoftheCorporationintheStateofDelawareisTheCorporationTrustCompany,CorporationTrust

Center,1209OrangeStreet,Wilmington,CountyofNewCastle,Delaware19801.ThenameoftheCorporation’sregisteredagentatsuchaddressisTheCorporationTrustCompany.

THIRD:ThepurposeoftheCorporationistoengageinanylawfulactoractivityforwhichcorporationsmaybeorganizedundertheGeneralCorporationLawoftheStateofDelaware(the“DGCL”),asfromtimetotimeamended.

FOURTH:ThetotalnumberofsharesofcapitalstockwhichtheCorporationshallhaveauthoritytoissueis1,000,allofwhichsharesshallbeCommonStockhavingaparvaluepershareof$0.01.

FIFTH:Infurtheranceandnotinlimitationofthepowersconferredbylaw,subjecttoanylimitationscontainedelsewhereinthiscertificateofincorporation,bylawsoftheCorporationmaybeadopted,amendedorrepealedbyamajorityoftheboardofdirectorsoftheCorporation.Electionofdirectorsneednotbebywrittenballot.

SIXTH:(A)LimitedLiability.AdirectoroftheCorporationshallnotbeliabletotheCorporationoritsstockholdersformonetarydamagesforbreachof

fiduciarydutyasadirectortothefullestextentpermittedbyDelawareLaw.(B)RighttoIndemnification.1.Eachperson(andtheheirs,executorsoradministratorsofsuchperson)whowasorisapartyoristhreatenedtobemadeapartyto,oris

involvedinanythreatened,pendingorcompletedaction,suitorproceeding,whethercivil,criminal,administrativeorinvestigative,byreasonofthefactthatsuchpersonisorwasadirectororofficeroftheCorporationorisorwasservingattherequestoftheCorporationasadirectororofficerofanothercorporation,partnership,jointventure,trustorotherenterprise,shallbeindemnifiedandheldharmlessbytheCorporationtothefullestextentpermittedbyDelawareLaw.TherighttoindemnificationconferredinthisArticleVIshallalsoincludetherighttobepaidbytheCorporationtheexpensesincurredinconnectionwithanysuchproceedinginadvanceofitsfinaldispositiontothefullestextentauthorizedbyDelawareLaw.TherighttoindemnificationconferredinthisArticleVIshallbeacontractright.

2.TheCorporationmay,byactionofitsBoardofDirectors,provideindemnificationtosuchoftheemployeesandagentsoftheCorporationtosuchextentandtosucheffectastheBoardofDirectorsshalldeterminetobeappropriateandauthorizedbyDelawareLaw.

(C)Insurance.TheCorporationshallhavepowertopurchaseandmaintaininsuranceonbehalfofanypersonwhoisorwasadirector,officer,employeeoragentoftheCorporation,orisorwasservingattherequestoftheCorporationasadirector,officer,employeeoragentofanothercorporation,partnership,jointventure,trustorotherenterpriseagainstanyexpense,liabilityorlossincurredbysuchpersoninanysuchcapacityorarisingoutofsuchperson’sstatusassuch,whetherornottheCorporationwouldhavethepowertoindemnifysuchpersonagainstsuchliabilityunderDelawareLaw.

(D)NonexclusivityofRights.TherightsandauthorityconferredinthisArticleVIshallnotbeexclusiveofanyotherrightthatanypersonmayotherwisehaveorhereafteracquire.

(E)PreservationofRights.NeithertheamendmentnorrepealofthisArticleVI,northeadoptionofanyprovisionofthisAmendedandRestatedCertificateofIncorporationorthebylaws

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oftheCorporation,nor,tothefullestextentpermittedbyDelawareLaw,anymodificationoflaw,shalladverselyaffectanyrightorprotectionofanypersongrantedpursuantheretoexistingat,orarisingoutoforrelatedtoanyevent,actoromissionthatoccurredpriorto,thetimeofsuchamendment,repeal,adoptionormodification(regardlessofwhenanyproceeding(orpartthereof)relatingtosuchevent,actoromissionarisesorisfirstthreatened,commencedorcompleted).

SEVENTH:TheCourtofChanceryoftheStateofDelawareshallbethesoleandexclusiveforumfor(i)anyderivativeactionorproceedingbroughtonbehalfoftheCorporation,(ii)anyactionassertingaclaimofbreachoffiduciarydutyowedbyanydirector,officerorotheremployeeoftheCorporationtotheCorporationortheCorporation’sstockholders,(iii)anyactionassertingaclaimarisingpursuanttoanyprovisionoftheDelawareLaw,or(iv)anyactionassertingaclaimgovernedbytheinternalaffairsdoctrine.AnypersonorentitypurchasingorotherwiseacquiringanyinterestinsharesofcapitalstockofthecorporationshallbedeemedtohavenoticeofandconsentedtotheprovisionsofthisArticleVII.

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ANNEX B

Form of Bylaws of Surviving Corporation

PANDORA MEDIA, INC.

BYLAWS

ADOPTED [ • ], 2018

ARTICLE I

MEETINGS OF STOCKHOLDERSSection1.PlaceofMeetingandNotice.MeetingsofthestockholdersoftheCorporationshallbeheldatsuchplaceeitherwithinorwithoutthe

StateofDelawareastheBoardofDirectorsmaydetermine.Section2.AnnualandSpecialMeetings.Annualmeetingsofstockholdersshallbeheld,atadate,timeandplacefixedbytheBoardofDirectors

andstatedinthenoticeofmeeting,toelectaBoardofDirectorsandtotransactsuchotherbusinessasmayproperlycomebeforethemeeting.SpecialmeetingsofthestockholdersmaybecalledbythePresidentforanypurposeandshallbecalledbythePresidentorSecretaryifdirectedbytheBoardofDirectors.

Section3.Notice.Exceptasotherwiseprovidedbylaw,atleast10andnotmorethan60daysbeforeeachmeetingofstockholders,writtennoticeofthetime,dateandplaceofthemeeting,and,inthecaseofaspecialmeeting,thepurposeorpurposesforwhichthemeetingiscalled,shallbegiventoeachstockholder.

Section4.Quorum.Atanymeetingofstockholders,theholdersofrecord,presentinpersonorbyproxy,ofamajorityoftheCorporation’sissuedandoutstandingcapitalstockshallconstituteaquorumforthetransactionofbusiness,exceptasotherwiseprovidedbylaw.Intheabsenceofaquorum,anyofficerentitledtopresideatortoactassecretaryofthemeetingshallhavepowertoadjournthemeetingfromtimetotimeuntilaquorumispresent.

Section5.Voting.Exceptasotherwiseprovidedbylaw,allmatterssubmittedtoameetingofstockholdersshallbedecidedbyaffirmativevoteofamajorityoftheCorporation’sissuedandoutstandingcapitalstockpresentinpersonorbyproxy.

ARTICLEII

DIRECTORSSection1.Number,ElectionandRemovalofDirectors.ThenumberofDirectorsthatshallconstitutetheBoardofDirectorsshallnotbelessthan

oneormorethanfifteen.ThenumberofDirectorsshallbedeterminedbytheBoardofDirectorsorthestockholders.TheDirectorsshallbeelectedbythestockholdersattheirannualmeeting.VacanciesandnewlycreateddirectorshipsresultingfromanyincreaseinthenumberofDirectorsmaybefilledbyamajorityoftheDirectorstheninoffice,althoughlessthanaquorum,orbythesoleremainingDirectororbythestockholders.ADirectormayberemovedwithorwithoutcausebythestockholders.

Section2.Meetings.RegularmeetingsoftheBoardofDirectorsshallbeheldatsuchtimesandplacesasmayfromtimetotimebefixedbytheBoardofDirectorsorasmaybespecifiedinanoticeofmeeting.

Section3.Quorum.One-thirdofthetotalnumberofauthorizedDirectorseatsshallconstituteaquorumforthetransactionofbusiness.IfaquorumisnotpresentatanymeetingoftheBoardofDirectors,theDirectorspresentmayadjournthemeetingfromtimetotime,withoutnoticeotherthanannouncementatthemeeting,untilsuchaquorumispresent.Exceptasotherwiseprovidedbylaw,theCertificateofIncorporationoftheCorporationortheseBylaws,theactofamajorityoftheDirectorspresentatanymeetingatwhichthereisaquorumshallbetheactoftheBoardofDirectors.

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Section4.Committees.TheBoardofDirectorsmay,byresolutionadoptedbyamajorityofthewholeBoard,designateoneormorecommittees,including,withoutlimitation,anExecutiveCommittee,tohaveandexercisesuchpowerandauthorityastheBoardofDirectorsshallspecify.Intheabsenceordisqualificationofamemberofacommittee,thememberormembersthereofpresentatanymeetingandnotdisqualifiedfromvoting,whetherornotheortheyconstituteaquorum,mayunanimouslyappointanotherDirectortoactastheabsentordisqualifiedmember.

ARTICLEIII

OFFICERSTheofficersoftheCorporationshallconsistofaPresidentandaSecretary,andsuchotheradditionalofficerswithsuchtitlesastheBoardof

Directorsshalldetermine,allofwhichshallbechosenbyandshallserveatthepleasureoftheBoardofDirectors.Suchofficersshallhavetheusualpowersandshallperformalltheusualdutiesincidenttotheirrespectiveoffices.AllofficersshallbesubjecttothesupervisionanddirectionoftheBoardofDirectors.Theauthority,dutiesorresponsibilitiesofanyofficeroftheCorporationmaybesuspendedbythePresidentwithorwithoutcause.AnyofficerelectedorappointedbytheBoardofDirectorsmayberemovedbytheBoardofDirectorswithorwithoutcause.

ARTICLE IV

GENERAL PROVISIONSSection1.Notices.Wheneveranystatute,theCertificateofIncorporationortheseBylawsrequirenoticetobegiventoanyDirectoror

stockholder,suchnoticemaybegiveninwritingbymail,addressedtosuchDirectororstockholderathisaddressasitappearsintherecordsoftheCorporation,withpostagethereonprepaid.SuchnoticeshallbedeemedtohavebeengivenwhenitisdepositedintheUnitedStatesmail.NoticetoDirectorsmayalsobegivenbyemail.

Section2.Certificates.ThesharesoftheCorporationshallbeuncertificated,providedthattheBoardofDirectorsmayprovidebyresolutionorresolutionsthatsomeorallofanyorallclassesorseriesofstockshallbecertificatedshares.EveryholderofstockrepresentedbycertificatesshallbeentitledtohaveacertificatesignedbyorinthenameoftheCorporationbydulyauthorizedofficersoftheCorporationcertifyingthenumberofsharesownedbysuchholderintheCorporation.Anyoforallthesignaturesonthecertificatemaybeafacsimile.Incaseanyofficerwhohassignedorwhosefacsimilesignaturehasbeenplaceduponacertificateshallhaveceasedtobesuchofficerbeforesuchcertificateisissued,itmaybeissuedbytheCorporationwiththesameeffectasifsuchpersonweresuchofficer,transferagent,orregistraratthedateofissue.TheCorporationmayissueanewcertificateofstockintheplaceofanycertificatetheretoforeissuedbyit,allegedtohavebeenlost,stolenordestroyed,andtheCorporationmayrequiretheownerofthelost,stolenordestroyedcertificate,orsuchowner’slegalrepresentative,togivetheCorporationabondsufficienttoindemnifyitagainstanyclaimthatmaybemadeagainstitonaccountoftheallegedloss,theftordestructionofanysuchcertificateortheissuanceofsuchnewcertificate.

Section3.FiscalYear.ThefiscalyearoftheCorporationshallbefixedbytheBoardofDirectors.***************************

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Annex A1ExecutionVersion

JOINDER TO MERGER AGREEMENT

October25,2018ReferenceisherebymadetothatcertainAgreementandPlanofMergerandReorganizationdatedasofSeptember23,2018(the“Merger

Agreement ”),byandamongPandoraMedia,Inc.,aDelawarecorporation(the“Company ”),SiriusXMHoldingsInc.,aDelawarecorporation(“Parent ”),andWhiteOaksAcquisitionCorp.,aDelawarecorporation(“Merger Sub ”).CapitalizedtermsusedhereinbutnototherwisedefinedshallhavethemeaningssetforthintheMergerAgreement.

InordertoinducetheCompany,ParentandMergerSubtoconsummatethetransactionscontemplatedbytheMergerAgreement,andforgoodandvaluableconsideration,thereceiptandsufficiencyofwhichareherebyacknowledged,eachoftheundersigned(each,a“Joining Party ”),hereby:

(a)representsandwarrantsasfollows:(i)Theundersignedisacorporationdulyincorporated,validlyexistingandingoodstandingundertheLawsoftheStateofDelaware.(ii)TheundersignedhasallrequisitepowerandauthoritytoexecuteanddeliverthisJoindertoMergerAgreement(this“Joinder ”),to

performitsobligationsunderthisJoinderandtheMergerAgreementandtoconsummatethetransactionscontemplatedherebyandthereby.Theexecution,deliveryandperformancebytheundersignedofthisJoinderandtheconsummationbytheundersignedofthetransactionscontemplatedbythisJoinderandtheMergerAgreementhavebeendulyauthorizedbyallnecessarycorporateactiononthepartoftheundersigned.TheundersignedhasdulyexecutedanddeliveredthisJoinderandthisJoinderconstitutestheundersigned’slegal,validandbindingobligation,enforceableagainstitinaccordancewithitsterms,exceptaslimitedbybankruptcy,insolvency,reorganizationorsimilarLawsaffectingcreditors’rightsgenerallyandbygeneralprinciplesofequity.

(iii)Noconsent,approval,clearance,permitorauthorizationof,orregistrationorfilingwith,ornoticeto,anyGovernmentalEntityisrequiredtobemadeorobtainedbytheundersignedinconnectionwiththeexecutionordeliveryofthisJoinderortheconsummationofthetransactionscontemplatedbythisJoinderortheMergerAgreement,exceptfor:(x)thefilingoftheCertificateofHoldingCompanyMergerwiththeSecretaryofStateoftheStateofDelaware,(y)thefilingoftheCertificateofSiriusXMMergerwiththeSecretaryofStateoftheStateofDelawareand(z)thefilings,consents,approvalsandwaitingperiodsreferredtoinSections3.4(a)and4.4(a)oftheMergerAgreement.

(iv)Theexecution,deliveryandperformanceofthisJoinderbytheundersigneddoesnot,andtheconsummationbytheundersignedofthetransactionscontemplatedherebyandbytheMergerAgreementwillnot,(i)conflictwithorviolateanyprovisionoftheConstituentDocumentsoftheundersigned,or(ii)assumingthefilings,consents,approvalsandwaitingperiodsreferredtoinsection(a)(iii)abovearedulymade,obtainedorsatisfiedandtheCompanyStockholderApprovalisobtained(A)violateanyLaworOrder,ineithercase,applicabletotheundersignedoranyofitspropertiesorassetsor(B)violate,conflictwith,resultinthelossofanybenefitunder,requireapaymentorincurapenaltyunder,constituteadefault(oraneventwhich,withnoticeorlapseoftime,orboth,wouldconstituteadefault)under,resultintheterminationoforarightofterminationorcancellationunder,acceleratetheperformancerequiredby,orresultinthecreationofanyLienuponanyofthepropertiesorassetsoftheundersignedunder,anyContracttowhichtheundersignedisaparty,orbywhichtheundersignedoranyofitspropertiesorassetsmaybeboundoraffected,except,inthecaseoftheforegoingclause(ii),forsuchmattersas,individuallyorintheaggregate,havenothadandwouldnotreasonablybeexpectedtohaveamaterialadverseeffecttotheundersigned.

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(b)acknowledgesthereceiptofacopyoftheMergerAgreementandagrees,effectiveasofthedatefirstwrittenabove,(i)tojoinandbecomeapartytotheMergerAgreement,(ii)tobeboundby,observeandcomplywiththetermsandconditionsoftheMergerAgreement,asthesamemaybeamendedfromtimetotime,asapartythereto,and(x)withrespecttoBillboardHoldingCompany,Inc.,“NewHoldingCompany”thereunder,(y)withrespecttoBillboardAcquisitionSub,Inc.,“HoldcoMergerSub”thereunderand(w)withrespecttoSiriusXMRadioInc.,“SiriusXMRadio”thereunderand(iii)thatforallpurposesundertheMergerAgreement,eachreferencetothe“NewHoldingCompany”shallbedeemedtomeanBillboardHoldingCompany,Inc.andeachreferencetothe“HoldcoMergerSub”shallbedeemedtomeanBillboardAcquisitionSub,Inc.

ThisJoindershallbegovernedby,andconstruedinaccordancewith,theLawoftheStateofDelawarewithoutregardtoanyconflictsoflawprinciplesthatwouldrequiretheapplicationofanyotherLaw.BytheexecutionanddeliveryofthisJoinder,eachJoiningPartyherebysubmitstothepersonaljurisdictionofanystateorfederalcourtwithintheStateofDelawareinanysuit,actionorproceedingarisingoutoforrelatingtothisJoinder.TheprovisionsofArticleVIIIoftheMergerAgreementshallapplymutatismutandistothisJoinder.

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IN WITNESS WHEREOF, theJoiningPartyhasexecutedthisJoinderasofthedatefirstwrittenabove.     

JOINING PARTY:BILLBOARDHOLDINGCOMPANY,INC.By:   /s/KarenWalker   

 

Name:   KarenWalkerTitle:   President     

BILLBOARDACQUISITIONSUB,INC.By:   /s/KarenWalker   

 

Name:   KarenWalkerTitle:   President

      

SIRIUSXMRADIOINC.By:   /s/PatrickL.Donnelly   

 

Name:   PatrickL.DonnellyTitle:   ExecutiveVicePresident,GeneralCounselandSecretary

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Acceptedandagreed:     

PANDORAMEDIA,INC.By:   /s/KarenWalker   

 

Name:   KarenWalkerTitle:   ChiefAccountingOfficer     

SIRIUSXMHOLDINGSINC.By:   /s/PatrickL.Donnelly   

 

Name:   PatrickL.DonnellyTitle:   ExecutiveVicePresident,GeneralCounselandSecretary     

WHITEOAKSACQUISITIONCORP.By:   /s/PatrickL.Donnelly   

 

Name:   PatrickL.DonnellyTitle:   VicePresidentandSecretary

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Annex B

CenterviewPartnersLLC31West52ndStreetNewYork,NY10019September23,2018

TheBoardofDirectorsPandoraMedia,Inc.2100FranklinSt.Suite700Oakland,CA94612

LadiesandGentlemen:Youhaverequestedouropinionastothefairness,fromafinancialpointofview,totheholdersoftheoutstandingsharesofcommonstock,par

value$0.0001pershare(the“Shares”)(otherthanExcludedShares,asdefinedbelow),ofPandoraMedia,Inc.,aDelawarecorporation(the“Company”),oftheExchangeRatio(asdefinedbelow)providedforpursuanttotheAgreementandPlanofMergerandReorganizationproposedtobeenteredinto(the“Agreement”)byandamongSiriusXMHoldingsInc.,aDelawarecorporation(“Parent”),WhiteOaksAcquisitionCorp.,aDelawarecorporationandawhollyownedsubsidiaryofParent(“MergerSub”),andtheCompany.TheAgreementprovidesthat(a)theCompanywillformaDelawarecorporationasawhollyownedsubsidiaryoftheCompany(“NewHoldingCompany”),(b)NewHoldingCompanywillformaDelawarecorporationasawhollyownedsubsidiaryofNewHoldingCompany(“HoldcoMergerSub”),(c)HoldcoMergerSubwillbemergedwithandintotheCompany(the“HoldingCompanyMerger”),asaresultofwhichtheCompanywillbecomeawhollyownedsubsidiaryofNewHoldingCompany,(d)immediatelyaftertheeffectivetimeoftheHoldingCompanyMerger,theCompanywillconvertintoaDelawarelimitedliabilitycompany(the“Conversion”),(e)immediatelyaftertheeffectivetimeoftheConversion,MergerSubwillmergewithandintoNewHoldingCompany(the“Merger”),asaresultofwhichNewHoldingCompanywillbecomeawhollyownedsubsidiaryofParent,and(f)immediatelyaftertheeffectivetimeoftheMerger,NewHoldingCompanywillmergewithandintoSiriusXMRadio,Inc.,awhollyownedsubsidiaryofParent,asaresultofwhichtheseparateexistenceofNewHoldingCompanywillceaseandSiriusXMRadio,Inc.willcontinueasthesurvivingcorporation(collectivelywiththeMerger,theHoldingCompanyMergerandtheothertransactionscontemplatedbytheAgreement,the“Transaction”).AsaresultoftheTransaction,eachissuedandoutstandingShare(otherthananySharesownedbytheCompany(includingSharesheldastreasurystockorotherwise)(suchshares,togetherwithanySharesheldbyParentoranyaffiliateoftheCompanyorParent,“ExcludedShares”))willbeconvertedintotherighttoreceive1.44(the“ExchangeRatio”)sharesofcommonstock,parvalue$0.001pershare(the“ParentShares”),ofParent.ThetermsandconditionsoftheTransactionaremorefullysetforthintheAgreement.

WehaveactedasfinancialadvisortotheBoardofDirectorsoftheCompanyinconnectionwiththeTransaction.WewillreceiveafeeforourservicesinconnectionwiththeTransaction,aportionofwhichispayableupontheearlierof(i)theconsummationoftheTransactionand(ii)the13-monthanniversaryoftheexecutionoftheAgreement,andasubstantialportionofwhichispayablecontingentupontheconsummationoftheTransaction.Inaddition,theCompanyhasagreedtoreimbursecertainofourexpensesarising,andindemnifyusagainstcertainliabilitiesthatmayarise,outofourengagement.

31WEST52NDSTREET,22NDFLOOR,NEWYORK,NY10019PHONE:(212)380-2650FAX:(212)380-2651WWW.CENTERVIEWPARTNERS.COM

NEWYORK• LONDON• SANFRANCISCO• PALOALTO• LOSANGELES

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018

Weareasecuritiesfirmengageddirectlyandthroughaffiliatesandrelatedpersonsinanumberofinvestmentbanking,financialadvisoryandmerchantbankingactivities.Inthepasttwoyears,wehavebeenengagedtoprovidefinancialadvisoryservicestotheCompanyfromtimetotime,includinginconnectionwithParent’spreferredequityinvestmentintheCompany,theCompany’ssaleofitsTicketflybusinesstoEventbriteandtheCompany’songoingreviewofstrategicalternatives,andwehavereceivedcompensationfromtheCompanyforsuchservices.Inthepasttwoyears,wehavenotbeenengagedtoprovidefinancialadvisoryorotherservicestoParentorMergerSub,andwehavenotreceivedcompensationfromParent.WemayprovideinvestmentbankingandotherservicestoorwithrespecttotheCompanyorParentortheirrespectiveaffiliatesinthefuture,forwhichwemayreceivecompensation.Certain(i)ofourandouraffiliates’directors,officers,membersandemployees,orfamilymembersofsuchpersons,(ii)ofouraffiliatesorrelatedinvestmentfundsand(iii)investmentfundsorotherpersonsinwhichanyoftheforegoingmayhavefinancialinterestsorwithwhichtheymayco-invest,mayatanytimeacquire,hold,sellortrade,indebt,equityandothersecuritiesorfinancialinstruments(includingderivatives,bankloansorotherobligations)of,orinvestmentsin,theCompany,Parent,oranyoftheirrespectiveaffiliates,oranyotherpartythatmaybeinvolvedintheTransaction.

Inconnectionwiththisopinion,wehavereviewed,amongotherthings:(i)adraftoftheAgreementdatedSeptember23,2018(the“DraftAgreement”);(ii)AnnualReportsonForm10-K,asamended,oftheCompanyfortheyearsendedDecember31,2017,December31,2016andDecember31,2015andAnnualReportsonForm10-KofParentfortheyearsendedDecember31,2017,December31,2016andDecember31,2015;(iii)certaininterimreportstostockholdersandQuarterlyReportsonForm10-QoftheCompanyandParent;(iv)certainpubliclyavailableresearchanalystreportsfortheCompanyandParent;(v)certainothercommunicationsfromtheCompanyandParenttotheirrespectivestockholders;(vi)certaininternalinformationrelatingtothebusiness,operations,earnings,cashflow,assets,liabilitiesandprospectsoftheCompany,includingcertainfinancialforecasts,analysesandprojectionsrelatingtotheCompanypreparedbymanagementoftheCompanyandfurnishedtousbytheCompanyforpurposesofouranalysis(the“CompanyForecasts”)(collectively,the“CompanyInternalData”);(vii)certaininternalinformationrelatingtothebusiness,operations,earnings,cashflow,assets,liabilitiesandprospectsofParent(collectively,the“ParentInternalData”);(viii)certainpubliclyavailableresearchanalysts’estimatesrelatingtoParentfurnishedtousbyParentforpurposesofouranalysis(the“ParentPublicForecasts”);and(ix)certaincostsavingsandoperatingsynergiesprojectedbythemanagementoftheCompanytoresultfromtheTransactionfurnishedtousbytheCompanyforpurposesofouranalysis(the“Synergies”).WehaveparticipatedindiscussionswithmembersoftheseniormanagementandrepresentativesoftheCompanyandParentregardingtheirassessmentoftheCompanyInternalData(including,withoutlimitation,theCompanyForecasts),theParentInternalData,theParentPublicForecastsandtheSynergies,asappropriate,andthestrategicrationalefortheTransaction.Inaddition,wereviewedpubliclyavailablefinancialandstockmarketdata,includingvaluationmultiples,fortheCompanyandcomparedthatdatawithsimilardataforcertainothercompanies,thesecuritiesofwhicharepubliclytraded,inlinesofbusinessthatwedeemedrelevant.WealsocomparedcertainoftheproposedfinancialtermsoftheTransactionwiththefinancialterms,totheextentpubliclyavailable,ofcertainothertransactionsthatwedeemedrelevantandconductedsuchotherfinancialstudiesandanalysesandtookintoaccountsuchotherinformationaswedeemedappropriate.

Wehaveassumed,withoutindependentverificationoranyresponsibilitytherefor,theaccuracyandcompletenessofthefinancial,legal,regulatory,tax,accountingandotherinformationsuppliedto,discussedwith,orreviewedbyusforpurposesofthisopinionandhave,withyourconsent,relieduponsuchinformationasbeingcompleteandaccurate.Inthatregard,wehaveassumed,atyourdirection,thattheCompanyInternalData(including,withoutlimitation,theCompanyForecasts)andtheSynergieshavebeenreasonablypreparedonbasesreflectingthebestcurrentlyavailable

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018estimatesandjudgmentsofthemanagementoftheCompanyastothematterscoveredtherebyandthattheParentPublicForecastsareareasonablebasisuponwhichtoevaluatethefuturefinancialperformanceofParent,andwehaverelied,atyourdirection,ontheCompanyInternalData(including,withoutlimitation,theCompanyForecasts),theParentInternalData,theParentPublicForecastsandtheSynergiesforpurposesofouranalysisandthisopinion.WeexpressnovieworopinionastotheCompanyInternalData(including,withoutlimitation,theCompanyForecasts),theParentInternalData,theParentPublicForecastsortheSynergiesortheassumptionsonwhichtheyarebased.Inaddition,atyourdirection,wehavenotmadeanyindependentevaluationorappraisalofanyoftheassetsorliabilities(contingent,derivative,off-balance-sheetorotherwise)oftheCompanyorParent,norhavewebeenfurnishedwithanysuchevaluationorappraisal,andwehavenotbeenaskedtoconduct,anddidnotconduct,aphysicalinspectionofthepropertiesorassetsoftheCompanyorParent.Wehaveassumed,atyourdirection,thatthefinalexecutedAgreementwillnotdifferinanyrespectmaterialtoouranalysisorthisopinionfromtheDraftAgreementreviewedbyus.Wehavealsoassumed,atyourdirection,thattheTransactionwillbeconsummatedonthetermssetforthintheAgreementandinaccordancewithallapplicablelawsandotherrelevantdocumentsorrequirements,withoutdelayorthewaiver,modificationoramendmentofanyterm,conditionoragreement,theeffectofwhichwouldbematerialtoouranalysisorthisopinionandthat,inthecourseofobtainingthenecessarygovernmental,regulatoryandotherapprovals,consents,releasesandwaiversfortheTransaction,nodelay,limitation,restriction,conditionorotherchange,includinganydivestiturerequirementsoramendmentsormodifications,willbeimposed,theeffectofwhichwouldbematerialtoouranalysisorthisopinion.WehavenotevaluatedanddonotexpressanyopinionastothesolvencyorfairvalueoftheCompanyorParent,ortheabilityoftheCompanyorParenttopaytheirrespectiveobligationswhentheycomedue,orastotheimpactoftheTransactiononsuchmatters,underanystate,federalorotherlawsrelatingtobankruptcy,insolvencyorsimilarmatters.Wearenotlegal,regulatory,taxoraccountingadvisors,andweexpressnoopinionastoanylegal,regulatory,taxoraccountingmatters.

Weexpressnoviewasto,andouropiniondoesnotaddress,theCompany’sunderlyingbusinessdecisiontoproceedwithoreffecttheTransaction,ortherelativemeritsoftheTransactionascomparedtoanyalternativebusinessstrategiesortransactionsthatmightbeavailabletotheCompanyorinwhichtheCompanymightengage.Thisopinionislimitedtoandaddressesonlythefairness,fromafinancialpointofview,asofthedatehereof,totheholdersoftheShares(otherthanExcludedShares)oftheExchangeRatioprovidedforpursuanttotheAgreement.Wehavenotbeenaskedto,nordoweexpressanyviewon,andouropiniondoesnotaddress,anyothertermoraspectoftheAgreementortheTransaction,including,withoutlimitation,thestructureorformoftheTransaction,oranyotheragreementsorarrangementscontemplatedbytheAgreementorenteredintoinconnectionwithorotherwisecontemplatedbytheTransaction,including,withoutlimitation,thefairnessoftheTransactionoranyothertermoraspectoftheTransactionto,oranyconsiderationtobereceivedinconnectiontherewithby,ortheimpactoftheTransactionon,theholdersofanyotherclassofsecurities,creditorsorotherconstituenciesoftheCompanyoranyotherparty.Inaddition,weexpressnovieworopinionastothefairness(financialorotherwise)oftheamount,natureoranyotheraspectofanycompensationtobepaidorpayabletoanyoftheofficers,directorsoremployeesoftheCompanyoranyparty,orclassofsuchpersonsinconnectionwiththeTransaction,whetherrelativetotheExchangeRatioprovidedforpursuanttotheAgreementorotherwise.Ouropinionisnecessarilybasedonfinancial,economic,monetary,currency,marketandotherconditionsandcircumstancesasineffecton,andtheinformationmadeavailabletousasof,thedatehereof,andwedonothaveanyobligationorresponsibilitytoupdate,reviseorreaffirmthisopinionbasedoncircumstances,developmentsoreventsoccurringafterthedatehereof.WeexpressnovieworopinionastowhatthevalueofParentSharesactuallywillbewhenissuedpursuanttotheTransactionorthepricesatwhichtheSharesorParentShareswilltradeorotherwisebetransferableatanytime,includingfollowingtheannouncementorconsummationoftheTransaction.Ouropiniondoesnotconstitutearecommendationtoany

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018stockholderoftheCompanyoranyotherpersonastohowsuchstockholderorotherpersonshouldvotewithrespecttotheMergerorotherwiseactwithrespecttotheTransactionoranyothermatter.

OurfinancialadvisoryservicesandtheopinionexpressedhereinareprovidedfortheinformationandassistanceoftheBoardofDirectorsoftheCompany(intheircapacityasdirectorsoftheCompanyandnotinanyothercapacity)inconnectionwithandforpurposesofitsconsiderationoftheTransaction.TheissuanceofthisopinionwasapprovedbytheCenterviewPartnersLLCFairnessOpinionCommittee.

Baseduponandsubjecttotheforegoing,includingthevariousassumptionsmade,proceduresfollowed,mattersconsidered,andqualificationsandlimitationssetforthherein,weareoftheopinion,asofthedatehereof,thattheExchangeRatioprovidedforpursuanttotheAgreementisfair,fromafinancialpointofview,totheholdersofSharesotherthanExcludedShares.

   

  Verytrulyyours, 

  CENTERVIEWPARTNERSLLC

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Annex C   

 LionTreeAdvisorsLLC660MadisonAvenue,15thFloorNewYork,NY10065

CONFIDENTIAL

September23,2018TheBoardofDirectorsPandoraMedia,Inc.2101WebsterStreet,Suite1650Oakland,California94612

DearMembersoftheBoard:WeunderstandthatPandoraMedia,Inc.(the“Company” )proposestoenterintoanAgreementandPlanofMergerandReorganization,tobe

datedasofSeptember23,2018(the“Agreement” ),byandamongtheCompany,SiriusXMHoldingsInc.(the“Acquiror” )andWhiteOaksAcquisitionCorp.,awhollyownedsubsidiaryoftheAcquiror(“Merger Sub” ),pursuanttowhich(i)anewlyformedcorporationandwhollyownedsubsidiaryoftheCompanywillmergewithandintotheCompany,asaresultofwhichtheCompanywillbecomeawhollyownedsubsidiaryofanewlyformedcorporation(“New Holdco” ),andeachissuedandoutstandingshareofcommonstock,parvalue$0.0001pershare,oftheCompany(the“Company Stock” )willbeconverted,subjecttocertainexceptions,intoonevalidlyissued,fullypaidandnon-assessableshareofcommonstockofNewHoldco(“New Holdco Stock” ),and(ii)immediatelythereafter,MergerSubwillmergewithandintoNewHoldco,asaresultofwhichNewHoldcowillbecomeawhollyownedsubsidiaryoftheAcquiror,andeachissuedandoutstandingshareofNewHoldcoStockwillbeconverted,subjecttocertainexceptions,intotherighttoreceive1.44(the“Exchange Ratio” )validlyissued,fullypaidandnon-assessablesharesofcommonstock,parvalue$0.001pershare,oftheAcquiror(the“Acquiror Stock” and,suchnumberofsharesofCompanyStocktobeissued,the“Consideration” ).

ThetransactionscontemplatedbytheAgreement(collectively,the“Transaction” )andthetermsandconditionsthereofaremorefullysetforthintheAgreement.

Youhaverequestedouropinionastothefairness,fromafinancialpointofview,oftheExchangeRatiopursuanttotheAgreementtothepublicholdersofCompanyStock(otherthantheAcquiroranditsrespectiveaffiliates(collectively,the“Excluded Parties” ))(withoutgivingeffecttoanyimpactoftheTransactiononanyparticularstockholderoftheCompanyotherthaninitscapacityasaholderofCompanyStock).

Inarrivingatouropinion,wehave,amongotherthings:(i)

 

reviewedadraft,datedSeptember23,2018,oftheAgreement;(ii)

 

reviewedcertainpubliclyavailablebusinessandfinancialinformationrelatingtotheCompanyandtheAcquiror;(iii)

 

reviewedcertainhistoricalfinancialinformationandotherdatarelatingtotheCompanythatwereprovidedtousbythemanagementoftheCompany,approvedforourusebytheCompany,andnotpubliclyavailable;

(iv) 

reviewedcertaininternalfinancialforecasts,estimates,andotherdatarelatingtothebusinessandfinancialprospectsoftheCompanythatwereprovidedtousbythemanagementoftheCompany,approvedforourusebytheCompany,andnotpubliclyavailable,includingfinancialforecastsandestimatesforthefiscalyearsendingDecember31,2018,throughDecember31,2025,preparedbythemanagementoftheCompany;

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018

(v) 

conducteddiscussionswithmembersoftheseniormanagementoftheCompanyconcerningthebusiness,operations,historicalfinancialresults,andfinancialprospectsoftheCompanyandtheTransaction;

(vi) 

conductedlimiteddiscussionswithmembersoftheseniormanagementoftheAcquirorconcerningneartermfinancialprospectsoftheAcquiror;

(vii) 

reviewedcurrentandhistoricalmarketpricesoftheCompanyStockandtheAcquirorStock;(viii)

 

reviewedcertainpubliclyavailablefinancialandstockmarketdatawithrespecttocertainothercompanies;(ix)

 

reviewedandcompareddataregardingthepremiumspaidincertainothertransactions;(x)

 

reviewedcertainfinancialperformancedataoftheCompanyandcomparedthatdatawithsimilardataforcertainothercompanies;and(xi)

 

conductedsuchotherfinancialstudies,analysesandinvestigations,andconsideredsuchotherinformation,aswedeemednecessaryorappropriate.

Inconnectionwithourreview,withyourconsent,wehaveassumedandreliedupon,withoutindependentverification,theaccuracyandcompletenessoftheinformationprovidedto,discussedwith,orreviewedbyusforthepurposeofthisopinion.Inaddition,withyourconsent,wehavenotmadeanyindependentevaluationorappraisalofanyoftheassetsorliabilities(contingentorotherwise)oftheCompanyortheAcquiror,oranyoftheirrespectivesubsidiaries,norhavewebeenfurnishedwithanysuchevaluationorappraisal.Withrespecttothefinancialforecastsandestimatesreferredtoabove,wehaveassumed,withyourconsent(andbasedonadviceofmanagementoftheCompany),thattheyhavebeenreasonablypreparedingoodfaithonabasisreflectingthebestcurrentlyavailableestimatesandjudgmentsofthemanagementoftheCompanyastothefuturefinancialperformanceoftheCompanyanditssubsidiariesandwillbeachievedatthetimesandintheamountsprojected.Weexpressnoopinionwithrespecttosuchforecastsorestimates.Wealsohaveassumed,withyourconsent,thattheTransactionwillhavethetaxconsequencescontemplatedbytheAgreement.Thisopiniondoesnotaddressanylegal,regulatory,taxation,oraccountingmatters,astowhichweunderstandthatyouhaveobtainedsuchadviceasyoudeemednecessaryfromqualifiedprofessionals,andwehaveassumedtheaccuracyandveracityofallassessmentsmadebysuchadvisorstotheCompanywithrespecttosuchmatters.Ouropinionisnecessarilybasedoneconomic,monetary,market,andotherconditionsasineffecton,andtheinformationavailabletousasof,thedatehereofandouropinionspeaksonlyasofthedatehereof.

OuropiniondoesnotaddresstheCompany’sunderlyingbusinessdecisiontoengageintheTransactionoranyrelatedtransaction,therelativemeritsoftheTransactionoranyrelatedtransactionascomparedtootherbusinessstrategiesortransactionsthatmightbeavailabletotheCompany,orwhethertheconsiderationtobereceivedbythestockholdersoftheCompanypursuanttotheAgreementrepresentsthebestpriceobtainable.Inconnectionwithourengagement,wedidnotnegotiatetheExchangeRatiooranyothermatterwiththeAcquirororitsrepresentativesonyourbehalfandwewerenotrequestedto,anddidnot,solicitinterestfromotherpartiespriortothedatehereofwithrespecttoanacquisitionof,orotherbusinesscombinationwith,theCompanyoranyotheralternativetransaction.Wealsoexpressnoviewasto,andouropiniondoesnotaddress,thesolvencyoftheCompanyoranyotherentityunderanystate,federal,orotherlawsrelatingtobankruptcy,insolvency,orsimilarmatters.Thisopinionaddressesonlythefairness,fromafinancialpointofview,oftheExchangeRatiopursuanttotheAgreement,asofthedatehereof,totheholdersofCompanyStock(otherthantheExcludedParties).Wehavenotbeenaskedto,nordowe,offeranyopinionastotheterms,otherthantheExchangeRatiototheextentexpresslyspecifiedherein,oftheAgreementoranyrelateddocumentsortheformoftheTransactionoranyrelatedtransaction(includinganyagreementortransactionbetweenanyExcludedPartyandthe

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018CompanyorbetweenanyExcludedPartyandtheAcquiror),includingthefairnessoftheTransactionto,oranyconsiderationreceivedinconnectiontherewithby,theholdersofanyotherclassofsecurities,creditors,orotherconstituenciesoftheCompany,theAcquiror,oranyoftheirrespectiveaffiliates.Wehavenotbeenaskedto,nordowe,offeranyopinionwithrespecttoanyallocationoftheConsideration(oranyportionthereof),orthefairmarketvalueoftheCompany,theAcquiror,theCompanyStock,ortheAcquirorStock.Inaddition,weexpressnoopinionastothefairnessoftheamountornatureofanycompensationtobereceivedbyanyofficers,directors,oremployeesofanypartiestotheTransaction,anyExcludedParties,oranyclassofsuchpersons,whetherrelativetotheExchangeRatioorotherwise.ThislettershouldnotbeconstruedascreatinganyfiduciarydutyonthepartofLionTreeAdvisorsLLC(oranyofitsaffiliates)toanyparty.WeexpressnoopinionastowhatthevalueoftheAcquirorStockwillbewhenissuedpursuanttotheTransactionorthepricesatwhichtheAcquirorStockorCompanyStockwilltradeatanytime.Inrenderingthisopinion,wehaveassumed,withyourconsent,thatexceptaswouldnotbeinanywaymeaningfultoouranalysis:(i)thefinalexecutedformoftheAgreementwillnotdifferfromthedraftthatwehavereviewed,(ii)therepresentationsandwarrantiesofthepartiestotheAgreement,andtherelatedTransactiondocuments,aretrueandcorrect,(iii)thepartiestotheAgreement,andtherelatedTransactiondocuments,willcomplywithandperformallcovenantsandagreementsrequiredtobecompliedwithorperformedbysuchpartiesundertheAgreementandtherelatedTransactiondocuments,and(iv)theTransactionwillbeconsummatedinaccordancewiththetermsoftheAgreementandrelatedTransactiondocuments,withoutanywaiveroramendmentofanytermorconditionthereof.Wehavealsoassumed,withyourconsent,thatallgovernmental,regulatory,orotherthird-partyconsentsandapprovalsnecessaryfortheconsummationoftheTransactionorotherwisecontemplatedbytheAgreementwillbeobtainedwithoutanyadverseeffectontheCompany,theAcquiror,orontheexpectedbenefitsoftheTransactioninanywaymeaningfultoouranalysis.

ThisopinionisprovidedsolelyforthebenefitoftheBoardofDirectorsoftheCompany(initscapacityassuch)inconnectionwith,andforthesolepurposeof,itsevaluationoftheTransaction,anddoesnotconstitutearecommendationtoanystockholderastohowsuchstockholdershouldvoteoractwithrespecttotheTransactionoranyothermatter.

WehaveactedasfinancialadvisortotheBoardofDirectorsoftheCompanyinconnectionwiththeTransaction.Wewillreceiveafeeforourservices,aportionofwhichispayableinconnectionwiththisopinion,andtheCompanyhasagreedtoreimbursecertainofourexpensesarising,andindemnifyusagainstcertainliabilitiesthatmayarise,outofourengagement.Inthepast,weandouraffiliateshaveprovidedinvestmentbankingservicesandcapitalmarketsservicestoaffiliatesoftheAcquirorandtheirrelatedentitiesorentitiesinwhichsuchaffiliateshaveasignificantdirectorindirectinterest,unrelatedtotheproposedTransaction,forwhichweandouraffiliatesreceived,andmayreceive,compensation,includinghavingactedas(i)financialadvisortoCharterCommunications,Inc.,LibertyGlobalplc,LionsGateEntertainmentCorp.,LiveNationEntertainment,Inc.andStarzinconnectionwithanumberofmergerandacquisitiontransactionsorsimilarmattersand(ii)co-managerinconnectionwithcertaindebtofferingsofsuchentities(includingCharterCommunications,Inc.andLiveNationEntertainment,Inc.).WeandouraffiliatesmayalsoseektoprovidesuchservicestotheCompany,theAcquiror,theirrespectiveaffiliatesandtheirrelatedentitiesorentitiesinwhichtheyhaveasignificantdirectorindirectinterest,andexpecttoreceivefeesfortherenderingoftheseservices.Inaddition,fromtimetotime,JohnC.Malone,whohasasignificantindirectownershipinterestintheAcquirorthroughaffiliatedentities,andGregMaffei,whoisChairmanoftheCompanyandChairmanoftheAcquiror,haveinvestedin,oralongsidewith,investmentvehiclesestablishedbyoneormoreofouraffiliates.OneormoreofouraffiliatesmayestablishinvestmentvehiclesinthefutureinwhichaffiliatesoftheAcquirormayinvest.InconnectionwiththebankruptcyproceedingsofiHeartMedia,Inc.(“iHeart” ),inwhichaffiliatesoftheAcquirorhaveaninterest,weandouraffiliateshavebeenengagedtoactasa

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TheBoardofDirectorsPandoraMedia,Inc.September23,2018specialfinancialadvisortoiHeartforwhichweandouraffiliatesmayreceivecompensation.Intheordinarycourseofbusiness,certainofouremployeesandaffiliatesmayholdortrade,fortheirownaccountsandtheaccountsoftheirinvestors,securitiesoftheCompanyandtheAcquirorand,accordingly,mayatanytimeholdalongorshortpositioninsuchsecurities.TheissuanceofthisopinionwasapprovedbyanauthorizedcommitteeofLionTreeAdvisorsLLC.

Thisopinionmaynotbedisclosed,referredto,orcommunicated(inwholeorinpart)toanythirdparty,norshallanypublicreferencetousbemade,foranypurposewhatsoeverexceptwithourpriorwrittenconsentineachinstance.

Baseduponandsubjecttotheforegoing,itisouropinionthat,asofthedatehereof,theExchangeRatiopursuanttotheAgreementisfair,fromafinancialpointofview,totheholdersofCompanyStock(otherthantheExcludedParties).

   

  Verytrulyyours,   LIONTREEADVISORSLLC

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PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and OfficersUnderSection145oftheDGCL,acorporationmayindemnifyadirector,officer,employeeoragentofthecorporation(orapersonwhoisorwas

servingattherequestofthecorporationasadirector,officer,employeeoragentofanothercorporation,partnership,jointventure,trustorotherenterprise)againstexpenses(includingattorneys’fees),judgments,finesandamountspaidinsettlementactuallyandreasonablyincurredbythepersonifheactedingoodfaithandinamannerhereasonablybelievedtobeinornotopposedtothebestinterestsofthecorporationand,withrespecttoanycriminalactionorproceeding,ifhehadnoreasonablecausetobelievesuchperson’sconductwasunlawful.Inthecaseofanactionbroughtbyorintherightofacorporation,thecorporationmayindemnifyadirector,officer,employeeoragentofthecorporation(orapersonwhoisorwasservingattherequestofthecorporationasadirector,officer,employeeoragentofanothercorporation,partnership,jointventure,trustorotherenterprise)againstexpenses(includingattorneys’fees)actuallyandreasonablyincurredbysuchpersonifsuchpersonactedingoodfaithandinamannersuchpersonreasonablybelievedtobeinornotopposedtothebestinterestsofthecorporation,exceptthatnoindemnificationmaybemadeinrespectofanyclaim,issueormatterastowhichsuchpersonshallhavebeenadjudgedtobeliabletothecorporationunlessandonlytotheextentacourtfindsthat,inviewofallthecircumstancesofthecase,suchpersonisfairlyandreasonablyentitledtoindemnificationforsuchexpensesasthecourtshalldeemproper.TheindemnificationprovisionsoftheDGCLrequireindemnificationofadirectororofficerwhohasbeensuccessfulonthemeritsindefenseofanyaction,suitorproceedingthathewasapartytobyvirtueofthefactthatheisorwasadirectororofficerofthecorporation.

Section145furtherauthorizesacorporationtopurchaseandmaintaininsuranceonbehalfofanypersonwhoisorwasadirector,officer,employeeoragentofthecorporation,orisorwasservingattherequestofthecorporationasadirector,officer,employeeoragentofanothercorporation,partnership,jointventure,trustorotherenterprise,againstanyliabilityassertedagainsttheperson,andincurredbythepersoninanysuchcapacity,orarisingoutofhisorherstatusassuch,whetherornotthecorporationwouldhavethepowertoindemnifysuchpersonunderSection145.

Section102(b)(7)oftheDGCLenablesaDelawarecorporationtoprovideinitscertificateofincorporationfortheeliminationorlimitationofthepersonalliabilityofadirectortothecorporationoritsstockholdersformonetarydamagesforbreachoffiduciarydutyasadirector.However,noprovisioncaneliminateorlimitadirector’sliability:

• 

foranybreachofthedirector’sdutyofloyaltytothecorporationoritsstockholders;•

 

foractsoromissionsnotingoodfaithorwhichinvolveintentionalmisconductoraknowingviolationoflaw;•

 

underSection174oftheDGCL,which,amongotherthings,imposesliabilityondirectorsforunlawfulpaymentofdividendsorunlawfulstockpurchaseorredemption;or

• 

foranytransactionfromwhichthedirectorderivedanimproperpersonalbenefit.ArticleeleventhoftheSiriusXMCharterprovidesthatnoSiriusXMdirectorshallbepersonallyliabletoSiriusXMoritsstockholdersfor

monetarydamagesforbreachoffiduciarydutybythatdirectorasadirector.However,thislimitationdoesnoteliminateorlimittheliabilityofadirectortotheextentprovidedbyapplicablelaw(i)foranybreachofthedirector’sdutyofloyaltytoSiriusXMoritsstockholders,(ii)foractsoromissionsnotingoodfaithorwhichinvolveintentionalmisconductoraknowingviolationoflaw,(iii)underSection174oftheDGCL,or(iv)foranytransactionfromwhichthedirectorderivedanimproperpersonalbenefit.IftheDGCLisamendedafterNovember14,2013,theeffectivedateofthisarticleeleventh,toauthorizecorporateactionfurthereliminatingorlimitingthepersonalliabilityofdirectors,thentheliabilityofadirectorofSiriusXMshallbeeliminatedorlimitedtothefullestextentpermittedbytheDGCL,assoamended.

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ArticleeleventhoftheSiriusXMcharteralsoprovidesthatSiriusXMindemnifies,tothefullestextentpermittedbylaw,anyperson(ortheestateofanyperson)whowasorisapartyto,oristhreatenedtobemadeapartyto,anythreatened,pendingorcompleteaction,suitorproceeding,whetherornotbyorintherightofSiriusXM,andwhethercivil,criminal,administrative,investigativeorotherwise,byreasonofthefactthatsuchpersonisorwasadirector,officeroremployeeofSiriusXM,orisorwasservingattherequestofSiriusXMasadirector,officeroremployeeofanothercorporationororganization.SiriusXMmay,tothefullextentpermittedbylaw,purchaseandmaintaininsuranceonbehalfofanysuchpersonagainstanyliabilitywhichmaybeassertedagainsthimorher.Tothefullextentpermittedbylaw,theindemnificationincludesexpenses(includingattorneys’fees),judgments,finesandamountspaidinsettlement,andanysuchexpensesmaybepaidbySiriusXMinadvanceofthefinaldispositionofsuchaction,suitorproceeding.TheindemnificationdoesnotlimittherightofSiriusXMtoindemnifyanyotherpersonforanysuchexpensestothefullextentpermittedbylaw,norisitexclusiveofanyotherrightstowhichanypersonseekingindemnificationfromSiriusXMmaybeentitledunderanyagreement,voteofstockholdersordisinteresteddirectorsorotherwise,bothastoactioninhisorherofficialcapacityandastoactioninanothercapacitywhileholdingsuchoffice.

AnyrepealormodificationoftheforegoingparagraphsbythestockholdersofSiriusXMshallnotadverselyaffectanyrightorprotectionofadirector,officeroremployeeoftheSiriusXMexistingatthetimeofsuchrepealormodification.

Theforegoingsummariesarenecessarilysubjecttothecompletetextofthestatute,theregistrant’scertificateofincorporationandbylaws,asamendedtodate,andthearrangementsreferredtoaboveandarequalifiedintheirentiretybyreferencethereto.

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Item 21. Exhibits and Financial Statement Schedules   

Exhibit Number

 

Description  2.1     AgreementandPlanofMergerandReorganization,datedasofSeptember23,2018,byandamongSiriusXMHoldingsInc.,WhiteOaks

AcquisitionCorp.,SiriusXMRadioInc.,PandoraMedia,Inc.,BillboardHoldingCompany,Inc.,andBillboardAcquisitionSub,Inc.(includedasAnnexAtotheproxystatement/prospectusformingapartofthisregistrationstatementandincorporatedhereinbyreference).†

  3.1     AmendedandRestatedCertificateofIncorporationofSiriusXMHoldingsInc.(incorporatedbyreferencetoExhibit3.1toSiriusXMHoldingsInc.’sCurrentReportonForm8-KfiledonNovember15,2013(FileNo.001-34295)).

  3.2     AmendedandRestatedBy-LawsofSiriusXMHoldingsInc.(incorporatedbyreferencetoExhibit3.2toSiriusXMHoldingsInc.’sCurrentReportonForm8-KfiledonNovember15,2013(FileNo.001-34295)).

  4.1     FormofcertificateforsharesofSiriusXMHoldingsInc.’scommonstock(incorporatedbyreferencetoExhibit4.1toSiriusXMHoldingsInc.’sAnnualReportonForm10-KfortheyearendedDecember31,2013(FileNo.001-34295)).

  5.1     OpinionandConsentofSimpsonThacher&BartlettLLPastothelegalityofthesecuritiesbeingregistered.*  8.1     OpinionofSimpsonThacher&BartlettLLPregardingcertainU.S.federalincometaxaspectsofthetransactions.***  8.2     OpinionofSidleyAustinLLPregardingcertainU.S.federalincometaxaspectsofthetransactions.***  23.1     ConsentofKPMGLLP(withrespecttofinancialstatementsofSiriusXMHoldingsInc.).**  23.2     ConsentofErnst&YoungLLP,independentregisteredpublicaccountingfirm(withrespecttofinancialstatementsofPandoraMedia,

Inc.).**  23.3     ConsentofSimpsonThacher&BartlettLLP(includedinExhibit5.1hereto).*  23.4     ConsentofSimpsonThacher&BartlettLLP(includedinExhibit8.1hereto).***  23.5     ConsentofSidleyAustinLLP(includedinExhibit8.2hereto).***  24.1     PowerofAttorney(includedonsignaturepage).*  99.1     ConsentofCenterviewPartnersLLC.**  99.2     ConsentofLionTreeAdvisorsLLC.**  99.3     FormofProxyCardofPandoraMedia,Inc.****

† 

PursuanttoItem601(b)(2)ofRegulationS-K,SiriusXMagreestofurnishsupplementallyacopyofanyomittedscheduleorexhibittotheAgreementandPlanofMergerandReorganizationtotheSecuritiesandExchangeCommissiononaconfidentialbasisuponrequest.

* 

Previouslyfiledwiththeregistrant’sRegistrationStatementonFormS-4(No.333-228088),whichwasfiledwiththeSEConOctober31,2018(the“PriorFiling”).

** 

Filedherewith.***

 

FormofpreviouslyfiledinthePriorFiling.Executedopiniontobefiledbyamendment.****

 

Tobefiledbyamendment.

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Item 22. Undertakings(a)Theundersignedregistrantherebyundertakes:

(1)tofile,duringanyperiodinwhichoffersorsalesarebeingmade,apost-effectiveamendmenttothisregistrationstatement:(i)toincludeanyprospectusrequiredbysection10(a)(3)oftheSecuritiesActof1933,asamended;(ii)toreflectintheprospectusanyfactsoreventsarisingaftertheeffectivedateoftheregistrationstatement(orthemostrecentpost-

effectiveamendmentthereof)which,individuallyorintheaggregate,representafundamentalchangeintheinformationsetforthintheregistrationstatement.Notwithstandingtheforegoing,anyincreaseordecreaseinthevolumeofsecuritiesoffered(ifthetotaldollarvalueofsecuritiesofferedwouldnotexceedthatwhichwasregistered)andanydeviationfromtheloworhighendoftheestimatedmaximumofferingrangemaybereflectedintheformofprospectusfiledwiththeSECpursuanttoRule424(b)if,intheaggregate,thechangesinvolumeandpricerepresentnomorethana20%changeinthemaximumaggregateofferingpricesetforthinthe“CalculationofRegistrationFee”tableintheeffectiveregistrationstatement;and

(iii)toincludeanymaterialinformationwithrespecttotheplanofdistributionnotpreviouslydisclosedintheregistrationstatementoranymaterialchangetosuchinformationintheregistrationstatement;(2)that,forthepurposeofdetermininganyliabilityundertheSecuritiesActof1933,asamended,eachsuchpost-effectiveamendmentshall

bedeemedtobeanewregistrationstatementrelatingtothesecuritiesofferedtherein,andtheofferingofsuchsecuritiesatthattimeshallbedeemedtobetheinitialbonafideofferingthereof;

(3)toremovefromregistrationbymeansofapost-effectiveamendmentanyofthesecuritiesbeingregisteredwhichremainunsoldattheterminationoftheoffering;

(4)That,forthepurposeofdeterminingliabilityundertheSecuritiesActof1933,asamended,toanypurchaser:(ii)iftheregistrantissubjecttoRule430C,eachprospectusfiledpursuanttoRule424(b)aspartofaregistrationstatementrelatingtoan

offering,otherthanregistrationstatementsrelyingonRule430BorotherthanprospectusesfiledinrelianceonRule430A,shallbedeemedtobepartofandincludedintheregistrationstatementasofthedateitisfirstusedaftereffectiveness;provided,however,thatnostatementmadeinaregistrationstatementorprospectusthatispartoftheregistrationstatementormadeinadocumentincorporatedordeemedincorporatedbyreferenceintotheregistrationstatementorprospectusthatispartoftheregistrationstatementwill,astoapurchaserwithatimeofcontractofsalepriortosuchfirstuse,supersedeormodifyanystatementthatwasmadeintheregistrationstatementorprospectusthatwaspartoftheregistrationstatementormadeinanysuchdocumentimmediatelypriortosuchdateoffirstuse;(5)ThatforthepurposeofdeterminingliabilityoftheregistrantundertheSecuritiesActof1933,asamended,toanypurchaserintheinitial

distributionofthesecurities,theundersignedregistrantundertakesthatinaprimaryofferingofsecuritiesoftheundersignedregistrantpursuanttothisregistrationstatement,regardlessoftheunderwritingmethodusedtosellthesecuritiestothepurchaser,ifthesecuritiesareofferedorsoldtosuchpurchaserbymeansofanyofthefollowingcommunications,theundersignedregistrantwillbeasellertothepurchaserandwillbeconsideredtoofferorsellsuchsecuritiestosuchpurchaser:

(i)anypreliminaryprospectusorprospectusoftheundersignedregistrantrelatingtotheofferingrequiredtobefiledpursuanttoRule424;(ii)anyfreewritingprospectusrelatingtotheofferingpreparedbyoronbehalfoftheundersignedregistrantorusedorreferredtobythe

undersignedregistrant;(iii)theportionofanyotherfreewritingprospectusrelatingtotheofferingcontainingmaterialinformationabouttheundersigned

registrantoritssecuritiesprovidedbyoronII-4

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behalfoftheundersignedregistrant;and(iv)anyothercommunicationthatisanofferintheofferingmadebytheundersignedregistranttothepurchaser;

(b)Theundersignedregistrantherebyundertakesthat,forpurposesofdetermininganyliabilityundertheSecuritiesActof1933,asamended,eachfilingoftheregistrant’sannualreportpursuanttoSection13(a)orSection15(d)oftheSecuritiesExchangeActof1934,asamended(and,whereapplicable,eachfilingofanemployeebenefitplan’sannualreportpursuanttoSection15(d)oftheSecuritiesExchangeActof1934,asamended)thatisincorporatedbyreferenceintheregistrationstatementshallbedeemedtobeanewregistrationstatementrelatingtothesecuritiesofferedtherein,andtheofferingofsuchsecuritiesatthattimeshallbedeemedtobetheinitialbonafideofferingthereof;

(c)Theundersignedregistrantherebyundertakesasfollows:thatpriortoanypublicreofferingofthesecuritiesregisteredhereunderthroughuseofaprospectuswhichisapartofthisregistrationstatement,byanypersonorpartywhoisdeemedtobeanunderwriterwithinthemeaningofRule145(c),theregistrantundertakesthatsuchreofferingprospectuswillcontaintheinformationcalledforbytheapplicableregistrationformwithrespecttoreofferingsbypersonswhomaybedeemedunderwriters,inadditiontotheinformationcalledforbytheotherItemsoftheapplicableform;

(d)Theregistrantundertakesthateveryprospectus(i)thatisfiledpursuanttotheimmediatelyprecedingparagraph,or(ii)thatpurportstomeettherequirementsofSection10(a)(3)oftheSecuritiesActof1933,asamended,andisusedinconnectionwithanofferingofsecuritiessubjecttoRule415,willbefiledasapartofanamendmenttotheregistrationstatementandwillnotbeuseduntilsuchamendmentiseffective,andthat,forpurposesofdetermininganyliabilityundertheSecuritiesActof1933,asamended,eachsuchpost-effectiveamendmentshallbedeemedtobeanewregistrationstatementrelatingtothesecuritiesofferedtherein,andtheofferingofsuchsecuritiesatthattimeshallbedeemedtobetheinitialbonafideofferingthereof;

(e)insofarasindemnificationforliabilitiesarisingundertheSecuritiesActof1933,asamended,maybepermittedtodirectors,officersandcontrollingpersonsoftheregistrantpursuanttotheforegoingprovisions,orotherwise,theregistranthasbeenadvisedthatintheopinionoftheSecuritiesandExchangeCommissionsuchindemnificationisagainstpublicpolicyasexpressedintheSecuritiesActof1933,asamended,andis,therefore,unenforceable.Intheeventthataclaimforindemnificationagainstsuchliabilities(otherthanthepaymentbytheregistrantofexpensesincurredorpaidbyadirector,officerorcontrollingpersonoftheregistrantinthesuccessfuldefenseofanyaction,suitorproceeding)isassertedbysuchdirector,officerorcontrollingpersoninconnectionwiththesecuritiesbeingregistered,theregistrantwill,unlessintheopinionofitscounselthematterhasbeensettledbycontrollingprecedent,submittoacourtofappropriatejurisdictionthequestionwhethersuchindemnificationbyitisagainstpublicpolicyasexpressedintheSecuritiesActof1933,asamended,andwillbegovernedbythefinaladjudicationofsuchissue;

(f)TheundersignedregistrantherebyundertakestorespondtorequestsforinformationthatisincorporatedbyreferenceintotheprospectuspursuanttoItems4,10(b),11or13ofthisForm,withinonebusinessdayofreceiptofsuchrequest,andtosendtheincorporateddocumentsbyfirstclassmailorotherequallypromptmeans.Thisincludesinformationcontainedindocumentsfiledsubsequenttotheeffectivedateoftheregistrationstatementthroughthedateofrespondingtotherequest;and

(g)Theundersignedregistrantherebyundertakestosupplybymeansofapost-effectiveamendmentallinformationconcerningthetransactions,andthecompanybeingacquiredinvolvedtherein,thatwasnotthesubjectofandincludedinthisregistrationstatementwhenitbecameeffective.

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SIGNATURESPursuanttotherequirementsoftheSecuritiesActof1933,asamended,theregistranthasdulycausedthisAmendmentNo.2totheRegistration

Statementtobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized,intheCityofNewYork,StateofNewYork,onDecember14,2018.     

SIRIUSXMHOLDINGSINC.

   

By:   /s/PATRICKL.DONNELLY   

 

Name:   PatrickL.DonnellyTitle:   ExecutiveVicePresident,GeneralCounselandSecretary

PursuanttotherequirementsoftheSecuritiesActof1933,asamended,thisAmendmentNo.2totheRegistrationStatementhasbeensignedbythefollowingpersonsinthecapacitiesindicatedbelowonDecember14,2018.

Signature 

Title

*

Gregory B. Maffei

  ChairmanoftheBoardofDirectorsandDirector

/s/JAMESE.MEYER

James E. Meyer

  ChiefExecutiveOfficerandDirector(PrincipalExecutiveOfficer)

/s/DAVIDJ.FREAR

David J. Frear

  SeniorExecutiveVicePresidentandChiefFinancialOfficer(PrincipalFinancialOfficer)

/s/THOMASD.BARRY

Thomas D. Barry

  SeniorVicePresidentandController(PrincipalAccountingOfficer)

*

Joan L. Amble

  Director

*

George W. Bodenheimer

  Director

*

Mark D. Carleton

  Director

*

Eddy W. Hartenstein

  Director

*

James P. Holden

  Director

*

Evan D. Malone

  Director

*

James F. Mooney

  Director

*

Michael Rapino

  Director

*   Director

Kristina M. Salen

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Signature 

Title

*

Carl E. Vogel

 

Director

*

David M. Zaslav

 

Director

*By: 

/S/PATRICKL.DONNELLY

Patrick L. Donnelly (Attorney-in-Fact)

Pursuant to Powers of Attorney

Exhibit 23.1 

Consent of Independent Registered Public Accounting Firm 

The Board of Directors Sirius XM Holdings Inc. and subsidiaries: We consent to the use of our reports dated January 31, 2018, with respect to the consolidated balance sheets of Sirius XM Holdings Inc. andsubsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, stockholders’ (deficit) equity,and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule(collectively, the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of December 31, 2017,incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus. Our report refers to a change in themethod of accounting for share-based payments in 2016 due to the adoption of ASU 2016-09, Compensation-Stock Compensation (Topic 718):Improvements to Employee Share-Based Payment Accounting. /s/ KPMG LLP New York, New York December 14, 2018

 

Exhibit 23.2

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption "Experts" in Amendment No. 2 to the Registration Statement (Form S-4 No. 333-228088) and relatedprospectus of Sirius XM Holdings, Inc. relating to the Agreement and Plan of Merger and Reorganization, dated as of September 23, 2018 and providing for thecombination of Pandora Media, Inc. with Sirius XM Holdings, Inc., and to the incorporation by reference therein of our reports dated February 26, 2018, withrespect to the consolidated financial statements of Pandora Media, Inc. and the effectiveness of internal control over financial reporting of Pandora Media, Inc.,included in its Annual Report (Form 10-K) for the year ended December 31, 2017, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP San Francisco, CaliforniaDecember 13, 2018

 

 Exhibit 99.1

 

The Board of DirectorsPandora Media, Inc.2100 Franklin Street, Suite 700Oakland, CA 94612

The Board of Directors:

We hereby consent to the inclusion of our opinion letter, dated September 23, 2018, to the Board of Directors of Pandora Media, Inc. (“Pandora”) as Annex B to,and reference to such opinion letter under the headings “Summary—Opinions of Pandora’s Financial Advisors—Opinion of Centerview Partners LLC”, “TheTransactions—Background of the Transactions”, “The Transactions—Pandora’s Purpose and Reasons for the Transactions; Recommendations of the PandoraBoard of Directors” and “The Transactions—Opinions of Pandora’s Financial Advisors—Opinion of Centerview Partners LLC” in, the proxy statement/prospectusrelating to the proposed transactions involving Pandora and Sirius XM Holdings Inc. (“Sirius XM”), which proxy statement/prospectus forms a part of AmendmentNo. 2 to the registration statement on Form S-4 of Sirius XM (the “Registration Statement”). In giving such consent, we do not admit that we come within thecategory of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities andExchange Commission promulgated thereunder nor do we hereby admit that we are experts with respect to any part of the Registration Statement within themeaning of the term “experts” as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commissionpromulgated thereunder.          Very truly yours,     CENTERVIEW PARTNERS LLC       By:  /s/ Centerview Partners LLC

December 14, 2018 

     

Exhibit 99.2 

Consent of LionTree Advisors LLC 

We hereby consent to (i) the inclusion of our opinion letter dated September 23, 2018, to the Board of Directors of Pandora Media,Inc. (“Pandora”) as Annex C to the proxy statement/prospectus which forms a part of amendment no. 2 to the registration statementon Form S-4 of Sirius XM Holdings Inc. (“Sirius XM”), filed with the Securities and Exchange Commission as of the date hereof(the “Registration Statement”) relating to the proposed transactions involving Pandora and Sirius XM and (ii) all references to suchopinion in the sections captioned “Summary—Opinions of Pandora’s Financial Advisors—Opinion of LionTree Advisors LLC,”“The Transactions—Background of the Transactions,” “The Transactions—Pandora’s Purpose and Reasons for the Transactions;Recommendations of the Pandora Board of Directors,” and “The Transactions—Opinions of Pandora’s Financial Advisors—Opinionof LionTree Advisors LLC” of such proxy statement/prospectus. The foregoing consent applies only to the Registration Statementbeing filed with the Securities and Exchange Commission as of the date hereof and not to any amendments or supplements thereto,and our opinion is not to be used, circulated, quoted or otherwise referred to for any other purpose, nor is it to be filed with, includedin or referred to in whole or in part in any other registration statement (including any subsequent amendments to the above-mentioned Registration Statement), proxy statement or any other document, except in accordance with our prior written consent. In giving such consent, we do not admit that we come within the category of persons whose consent is required under Section 7 ofthe Securities Act of 1933, as amended (the “Securities Act”), or the rules and regulations of the Securities and ExchangeCommission thereunder, nor do we thereby admit that we are experts with respect to any part of such Registration Statement withinthe meaning of the term “expert” as used in the Securities Act, or the rules and regulations of the Securities and ExchangeCommission thereunder. 

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  /s/ LionTree Advisors LLC  LionTree Advisors LLC New York, New YorkDecember 14, 2018