<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
EchoStar Communications Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
-----------------------------------------------------------------------
(5) Total fee paid:
N/A
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
-----------------------------------------------------------------------
(3) Filing Party:
N/A
-----------------------------------------------------------------------
(4) Date Filed:
N/A
-----------------------------------------------------------------------
<PAGE> 2
April 7, 2000
DEAR SHAREHOLDER:
It is a pleasure for me to extend to you an invitation to attend the
2000 Annual Meeting of Shareholders of EchoStar Communications Corporation
("EchoStar" or the "Corporation"). The Annual Meeting will be held on Friday,
April 28, 2000, at 11:00 a.m. at EchoStar's headquarters located at 5701 South
Santa Fe Drive, Littleton, Colorado 80120.
The enclosed Notice of Meeting and Proxy Statement describe the
proposals to be considered and voted on at the Annual Meeting. During the Annual
Meeting, we also will review EchoStar's operations and other items of general
interest regarding the Corporation.
We hope that all shareholders will be able to attend the Annual
Meeting. Whether or not you plan to attend the Annual Meeting personally, it is
important that you be represented. To ensure that your vote will be received and
counted, please promptly complete, date and return your proxy card in the
enclosed return envelope.
On behalf of the Board of Directors and Management, I would like to
express our appreciation for your support and interest in EchoStar. I look
forward to seeing you at the Annual Meeting.
CHARLES W. ERGEN
Chairman and Chief Executive Officer
5701 South Santa Fe Drive o Littleton, Colorado 80120 o Tel: (303) 723-1000
o Fax: (303) 723-1999
<PAGE> 3
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF ECHOSTAR COMMUNICATIONS CORPORATION:
Please take notice that the Annual Meeting of Shareholders of EchoStar
Communications Corporation ("EchoStar" or the "Corporation") will be held on
Friday, April 28, 2000, at 11:00 a.m. at EchoStar's headquarters located at 5701
South Santa Fe Drive, Littleton, Colorado 80120, to consider and vote upon:
1. The election of five Directors of EchoStar;
2. A proposal to amend EchoStar's Amended and Restated Articles of
Incorporation to change the name of the Corporation to "Dish
Network, Inc."
3. A proposal to ratify the appointment of Arthur Andersen LLP as the
independent accountants of EchoStar for the fiscal year ending
December 31, 2000; and
4. Any other business that may properly come before the Annual
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 27, 2000
will be entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof.
By Order of the Board of Directors
DAVID K. MOSKOWITZ
Senior Vice President, General Counsel,
Corporate Secretary and Director
April 7, 2000
5701 South Santa Fe Drive o Littleton, Colorado 80120 o Tel: (303) 723-1000
o Fax: (303) 723-1999
<PAGE> 4
PRELIMINARY
PROXY STATEMENT
OF
ECHOSTAR COMMUNICATIONS CORPORATION
GENERAL
This Preliminary Proxy Statement is being furnished to the shareholders
of EchoStar Communications Corporation ("EchoStar" or the "Corporation") in
connection with the 2000 Annual Meeting of Shareholders of EchoStar (the "Annual
Meeting") to be held on Friday, April 28, 2000, at 11:00 a.m. at EchoStar's
headquarters located at 5701 South Santa Fe Drive, Littleton, Colorado 80120.
EchoStar's mailing address is 5701 South Santa Fe Drive, Littleton,
Colorado 80120. This Proxy Statement and the accompanying proxy are first being
sent or given on or about April 7, 2000, to shareholders of record as of the
close of business on March 27, 2000 of EchoStar's Class A Common Stock, $0.01
par value ("Class A Shares"), and EchoStar's Class B Common Stock, $0.01 par
value ("Class B Shares"), collectively (the "Shares").
The accompanying proxy is being solicited by EchoStar's Board of
Directors. It may be revoked by written notice given to the Corporate Secretary
at any time before being voted. The proxy card, which is attached to this form,
if properly executed, duly sent to EchoStar and not revoked will be voted for
the proposals described in this Proxy Statement, in accordance with the
instructions set forth in the proxy card. The Board of Directors is not aware of
any matters proposed to be presented at the Annual Meeting other than the
election of Directors of the Corporation, the approval of the amendment to
EchoStar's Amended and Restated Articles of Incorporation (the "Articles"), and
the ratification of the appointment of Arthur Andersen LLP as EchoStar's
independent accountants for the fiscal year ending December 31, 2000. If any
other proposal is properly presented, the persons named in the accompanying form
of proxy will have discretionary authority to vote thereon in accordance with
their best judgment. Presence at the Annual Meeting does not of itself revoke
the proxy.
SECURITIES ENTITLED TO VOTE
Shareholders of record on March 27, 2000 are entitled to notice of the
Annual Meeting and to vote their Shares at the Annual Meeting. On that date,
229,898,686 Class A Shares and 238,435,208 Class B Shares were issued and
outstanding. Each of the Class A Shares is entitled to one vote per share on
each proposal to be considered by shareholders. Each of the Class B Shares is
entitled to ten votes per share on each proposal to be considered by
shareholders.
VOTE REQUIRED
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the total voting power of all classes of EchoStar's
voting stock taken together shall constitute a quorum for the transaction of
business at the Annual Meeting.
The affirmative vote of a plurality of the total votes cast is
necessary to elect a Director. No cumulative voting is permitted. The
affirmative vote of a majority of the voting power of EchoStar entitled to vote
is required to approve the proposal to amend the Articles. The affirmative vote
of the majority of the total votes cast at the Annual Meeting is required to
approve the proposal to ratify the appointment of Arthur Andersen LLP as
EchoStar's independent accountants for the fiscal year ending December 31, 2000.
The total number of votes cast "for" will be counted for purposes of
determining whether sufficient affirmative votes have been cast to approve each
proposal. Abstentions from voting on a proposal by a shareholder at the Annual
Meeting, as well as broker non-votes, will be considered for purposes of
determining the number of total votes present at the Annual Meeting. Abstentions
will have the same effect as votes against the proposals, but will not affect
the election of Directors. Broker non-votes will not be considered as votes
"for" or "against" the proposals, and will therefore not be considered in
determining the election of Directors or whether the proposal to ratify the
appointment of Arthur Andersen LLP has passed, but will have the same effect as
votes against the proposal to amend the Articles.
Through his ownership of Class B Shares, Charles W. Ergen, the
Chairman, Chief Executive Officer and President of EchoStar, possesses more than
91.1% of the total voting power of the Corporation. Mr. Ergen has stated that he
will vote in favor of each proposal to be considered at the Annual Meeting and
for the election of each
1
<PAGE> 5
of the nominee Directors. Accordingly, approval of the proposals and the
election of each of the Directors is assured notwithstanding a negative vote by
any or all shareholders other than Mr. Ergen.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES
At the Annual Meeting, EchoStar's shareholders will elect five
Directors, in each case to hold office until the next annual meeting of
shareholders of EchoStar or until their respective successors shall be duly
elected and qualified. The affirmative vote of a plurality of the total votes
cast is necessary to elect a Director. Each nominee has consented to his
nomination and has advised EchoStar that he intends to serve the entire term, if
elected.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED HEREIN (ITEM NO. 1 ON THE ENCLOSED PROXY CARD).
The nominees for Director of EchoStar are as follows:
<TABLE>
<CAPTION>
NAME AGE FIRST BECAME DIRECTOR POSITION WITH THE CORPORATION
- ---------------------------- ------- -------------------------- ------------------------------------------
<S> <C> <C> <C>
Charles W. Ergen 47 1980 Chairman of the Board of Directors and
Chief Executive Officer
James DeFranco 47 1980 Director and Executive Vice President
David K. Moskowitz 41 1998 Director, Senior Vice President, General
Counsel and Secretary
Raymond L. Friedlob 55 1995 Director
O. Nolan Daines 40 1998 Director
</TABLE>
The following sets forth the business experience of each of the
nominees over the last five years:
Charles W. Ergen. Mr. Ergen has been Chairman of the Board of Directors
and Chief Executive Officer of EchoStar since its formation and, during the past
five years, has held various executive officer and director positions with
EchoStar's subsidiaries. Mr. Ergen, along with his spouse and James DeFranco,
was a co-founder of EchoStar in 1980.
James DeFranco. Mr. DeFranco, currently the Executive Vice President of
EchoStar, has been a Vice President and a Director of EchoStar since its
formation and, during the past five years, has held various executive officer
and director positions with EchoStar's subsidiaries. Mr. DeFranco, along with
Mr. Ergen and Mr. Ergen's spouse, was a co-founder of EchoStar in 1980.
David K. Moskowitz. Mr. Moskowitz is the Senior Vice President,
Secretary and General Counsel of EchoStar. Mr. Moskowitz joined EchoStar in
March 1990 and is responsible for all legal and regulatory affairs and certain
business functions for EchoStar and its subsidiaries. Mr. Moskowitz was
appointed to EchoStar's Board of Directors in March 1998. During the past five
years, Mr. Moskowitz also has held various executive officer and director
positions with EchoStar's subsidiaries.
Raymond L. Friedlob. Mr. Friedlob has been a Director of EchoStar and a
member of its Audit and Executive Compensation Committees since October 1995.
Mr. Friedlob has been a member of the law firm of Friedlob Sanderson Raskin
Paulson & Tourttillott, LLC since 1995. Prior to 1995, Mr. Friedlob was a
partner of Raskin & Friedlob, P.C., where he had practiced since 1970. Mr.
Friedlob specializes in federal securities law, corporate law, transportation
and taxation.
O. Nolan Daines. In 1993, Mr. Daines founded DiviCom, Inc. ("DiviCom").
DiviCom is a global provider of standards-based MPEG-2 encoding product systems
for digital video broadcasting. DiviCom's product lines include audio/video/data
encoding and networking systems, as well as integration consulting and
implementation services. Prior to founding DiviCom, Mr. Daines served as
Executive Director of Engineering and System Architecture at Compression Labs
Inc., where he led the development of digital video products and communications
systems. Mr. Daines was appointed to EchoStar's Board of Directors in March
1998.
2
<PAGE> 6
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors currently has an Executive Compensation
Committee and an Audit Committee, both of which were established in October
1995. Mr. Friedlob and Mr. Daines were the sole members of both the Audit and
Executive Compensation Committees during 1999. The principal functions of the
Audit Committee are to: (i) recommend to the Board of Directors the selection of
independent public accountants; (ii) review management's plan for engaging
EchoStar's independent public accountants during the year to perform non-audit
services and consider what effect these services will have on the independence
of the accountants; (iii) review the annual financial statements and other
financial reports which require approval by the Board of Directors; (iv) review
the adequacy of EchoStar's system of internal accounting controls; and (v)
review the scope of the independent public accountants' audit plans and the
results of the audit. The principal functions of the Executive Compensation
Committee are to approve compensation of Executive Officers of EchoStar and to
award grants to Executive Officers under EchoStar's 1995 Stock Incentive Plan
(the "1995 Incentive Plan") and 1999 Stock Incentive Plan (the "1999 Incentive
Plan" and together with the 1995 Incentive Plan, the "Incentive Plans").
The Board of Directors held 29 meetings during the fiscal year ended
December 31, 1999. The Compensation Committee held 15 meetings during 1999 and
the Audit Committee held three meetings during 1999. Each Director attended at
least 75% of the aggregate of: (i) the total number of meetings of the Board of
Directors held during the period in which he was a Director, and; (ii) the total
number of meetings held by all committees of the Board of Directors on which he
served.
Directors are elected annually and serve until their successors are
duly elected and qualified. Officers serve at the discretion of the Board of
Directors.
EQUITY SECURITY OWNERSHIP
On each of July 19, 1999, October 25, 1999 and March 22, 2000, EchoStar
completed two-for-one splits of its outstanding Class A and Class B common
stock. Accordingly, all share and per share amounts have been restated herein to
reflect these stock splits.
The following table sets forth, to the best knowledge of EchoStar, the
beneficial ownership of EchoStar's voting securities as of March 23, 2000 by:
(i) each person known by EchoStar to be the beneficial owner of more than five
percent of any class of EchoStar's voting Shares; (ii) each Director of
EchoStar; (iii) the five highest compensated persons acting as an Executive
Officer of EchoStar (collectively, the "Named Executive Officers"); and (iv) all
Directors and Executive Officers as a group. Unless otherwise indicated, each
person listed in the following table (alone or with family members) has sole
voting and dispositive power over the shares listed opposite such person's name.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
NAME (1) SHARES CLASS
- ---------------------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
CLASS A COMMON STOCK (2):
Charles W. Ergen (3), (4), (16), (17)............................................ 240,876,398 50.9%
The News Corporation Limited (5)................................................. 33,021,168 7.0%
FMR Corp. (6).................................................................... 22,554,360 4.8%
Morgan Stanley Dean Witter & Co. (7)............................................. 10,716,836 2.3%
MCI WorldCom, Inc (8)............................................................ 8,203,760 1.7%
James DeFranco (9), (16), (17)................................................... 7,640,412 1.6%
David K. Moskowitz (10), (16), (17).............................................. 665,874 *
Michael T. Dugan (11), (16), (17)................................................ 525,380 *
Steven B. Schaver (12), (16), (17)............................................... 218,821 *
O. Nolan Daines (13), (17)....................................................... 48,000 *
Raymond L. Friedlob (14), (17)................................................... 28,000 *
All Directors and Executive Officers as a Group (12 persons) (15), (16), (17) ... 250,618,505 53.0%
CLASS B COMMON STOCK:
Charles W. Ergen................................................................. 238,435,208 100.0%
All Directors and Executive Officers as a Group (12 persons)..................... 238,435,208 100.0%
</TABLE>
3
<PAGE> 7
- -------------------
* Less than 1%.
(1) Except as otherwise noted below, the address of each such person is
5701 Santa Fe Drive, Littleton, Colorado 80120.
(2) The following table sets forth, to the best knowledge of the
Corporation, the actual ownership of the Corporation's Class A Common
Stock (including options exercisable within 60 Days) as of March 23,
2000 by: (i) each person known by the Corporation to be the beneficial
owner of more than five percent of any class of the Corporation's
voting Shares; (ii) each Director or nominee of the Corporation; (iii)
each Named Executive Officers; and (iv) all Directors and Executive
Officers as a group:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
NAME SHARES CLASS
- --------------------------------------------------------------- --------------- ----------------
<S> <C> <C>
CLASS A COMMON STOCK:
The News Corporation Limited............................ 33,021,168 14.1%
FMR Corp................................................ 22,554,360 9.6%
Morgan Stanley Dean Witter & Co......................... 10,716,836 5.0%
James DeFranco.......................................... 7,640,412 3.3%
Charles W. Ergen........................................ 2,441,190 1.0%
David K. Moskowitz...................................... 665,874 *
Michael T. Dugan........................................ 525,380 *
Steven B. Schaver....................................... 218,821 *
O. Nolan Daines......................................... 48,000 *
Raymond L. Friedlob..................................... 28,000 *
All Directors and Executive Officers as a Group (12
persons)................................................ 12,183,297 5.2%
</TABLE>
(3) Includes: (i) 17,552 Class A Shares held in the 401(k) Employee Savings
Plan (the "401(k) Plan"); (ii) the right to acquire 343,856 Class A
Shares within 60 days upon the exercise of employee stock options;
(iii) 238,435,208 Class A Shares issuable upon conversion of Mr.
Ergen's Class B Shares, and (iv) 800 Class A Shares held as custodian
for his minor children.
(4) The percentage of total voting power held by Mr. Ergen is 91.1%, after
giving effect to the exercise of Mr. Ergen's options exercisable within
60 days.
(5) The address of The News Corporation Limited is 1211 Avenue of the
Americas, New York, New York 10036.
(6) The address of FMR Corp. is 82 Devonshire Street, Boston, Massachusetts
02109.
(7) The address of Morgan Stanley Dean Witter & Co. is 1585 Broadway, New
York, New York 10036.
(8) The address of MCI WorldCom, Inc. is 1800 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006.
(9) Includes: (i) 17,552 Class A Shares held in the 401(k) Plan; (ii) the
right to acquire 618,128 Class A Shares within 60 days upon the
exercise of employee stock options; (iv) 6,008 Class A Shares held as
custodian for his minor children; and (v) 2,200,000 Class A Shares
controlled by Mr. DeFranco as general partner of a partnership.
(10) Includes: (i) 16,736 Class A Shares held in the 401(k) Plan; (ii) the
right to acquire 164,536 Class A Shares within 60 days upon the
exercise of employee stock options; (iii) 1,328 Class A Shares held as
custodian for his minor children; and (iv) 8,184 Class A Shares held as
trustee for Mr. Ergen's children.
(11) Includes: (i) 16,744 Class A Shares held in the 401(k) Plan; and (ii)
the right to acquire 428,296 Class A Shares within 60 days upon the
exercise of employee stock options.
(12) Includes: (i) 15,696 Class A Shares held in the 401(k) Plan; and (ii)
the right to acquire 202,785 Class A Shares within 60 days upon the
exercise of employee stock options.
(13) Includes the right to acquire 48,000 Class A Shares within 60 days upon
the exercise of non-employee director stock options.
(14) Includes the right to acquire 28,000 Class A Shares within 60 days upon
the exercise of non-employee director stock options.
(15) Includes: (i) 97,736 Class A Shares held in the 401(k) Plan; (ii) the
right to acquire 2,423,595 Class A Shares within 60 days upon the
exercise of employee stock options; (iii) 2,200,000 Class A Shares held
in a partnership; (iv) 238,435,208 Class A Shares issuable upon
conversion of Class B Shares; and (v) 8,136 Class A Shares held in the
name of, or in trust for, minor children and other family members.
(16) Includes 1,559,870 Class A Shares over which Mr. Ergen has voting power
as Trustee for EchoStar's 401(k) Employee Savings Plan (the "401(k)
Plan"). These shares also are beneficially owned through investment
power by each individual 401(k) Plan participant. The Class A Shares
individually owned by each of the
4
<PAGE> 8
Named Executives through their participation in the 401(k) Plan are
included in each respective Named Executive's information above.
(17) Beneficial ownership percentage was calculated assuming exercise or
conversion of all Class B Shares, Warrants and employee stock options
exercisable within 60 days (collectively, the "Derivative Securities")
into Class A Shares by all holders of such Derivative Securities.
Assuming exercise or conversion of Derivative Securities by such
person, and only by such person, the beneficial ownership of Class A
Shares would be as follows: Mr. Ergen, 51.6%; Mr. DeFranco, 3.3%, less
than one percent for Mr. Moskowitz, Mr. Dugan, Mr. Schaver, Mr. Daines
and Mr. Friedlob, and all Officers and Directors as a group, 52.4%.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires EchoStar's Executive Officers, Directors, and any
person who directly or indirectly owns more than ten percent of a registered
class of EchoStar's equity securities (collectively, "Reporting Persons") to
file with the Securities and Exchange Commission ("SEC") initial reports of
ownership and reports of changes in ownership of Class A Shares and other equity
securities of the Corporation. Reporting Persons are required by SEC regulations
to furnish EchoStar with copies of all Section 16(a) forms that are filed with
the SEC. Based solely on a review of the copies of such forms and amendments, if
any, thereto, furnished to EchoStar for the 1999 fiscal year and written
representations that no other reports were required, with the exception of
amended filings by Mr. Dugan, Mr. Moskowitz and Mr. Schaver, all Reporting
Persons made all required filings in a timely manner. Mr. Dugan filed three
amended Form 4 reports with the SEC in January 2000 with respect to transactions
that occurred in April, June and December 1999. Mr. Moskowitz filed two amended
Form 4 reports with the SEC in January 2000 with respect to transactions that
occurred in June and August 1999. Mr. Schaver filed one amended Form 4 report
with the SEC in February 2000 with respect to a transaction that occurred during
December 1999.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION SUMMARY
Executive Officers are compensated by certain subsidiaries of EchoStar.
The following table sets forth the cash and non-cash compensation for the fiscal
years ended December 31, 1999, 1998 and 1997 for the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) (#) COMPENSATION(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Ergen 1999 $ 250,007 $ 500,000 $ -- 520,000 $ 26,798
Chairman, Chief Executive 1998 248,082 -- -- 240,000 21,510
Officer and President 1997 190,000 -- -- 240,000 13,044
James DeFranco 1999 $ 196,157 $ -- $ -- 680,000 $ 18,908
Executive Vice President and 1998 178,860 -- -- 240,000 15,995
Director 1997 160,000 -- -- 240,000 13,094
Michael T. Dugan 1999 $ 221,154 $ -- $ -- 520,000 $ 15,303
President, EchoStar 1998 209,231 -- -- 120,000 14,235
Technologies Corporation 1997 160,000 -- -- 1,110,560 13,094
David K. Moskowitz 1999 $ 194,789 $ 500,000 $ -- 520,000 $ 15,303
Senior Vice President 1998 187,311 500,000 -- 240,000 14,235
General Counsel and Director 1997 157,692 -- -- 240,000 12,918
Steven B. Schaver 1999 $ 196,932 $ -- $ 9,734 680,000 $ 15,303
Chief Operating Officer 1998 183,081 -- 15,074 312,720 13,765
and Chief Financial Officer 1997 158,462 -- 15,416 475,280 11,984
</TABLE>
5
<PAGE> 9
- -------------------
(1) With respect to Mr. Schaver, "Other Annual Compensation" includes housing
and car allowances related to his overseas assignments. While each Named
Executive Officer enjoys certain other perquisites, such perquisites do
not exceed the lesser of $50,000 or 10% of each Officer's salary and
bonus.
(2) "All Other Compensation" includes amounts contributed to EchoStar's
401(k) Plan on behalf of the Named Executive Officers. With respect to
Messrs. Ergen, DeFranco and Schaver for 1999, "All Other Compensation"
also includes payments made in connection with a tax indemnification
agreement between EchoStar and these individuals.
The following table provides information concerning grants of options
to purchase Class A Shares made in 1999 to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS EXERCISE
UNDERLYING GRANTED TO PRICE PER
OPTIONS EMPLOYEES IN SHARE GRANT DATE
NAME GRANTED (#) 1999 ($/SH) EXPIRATION DATE PRESENT VALUE (4)
- ---------------------------- ---------------- ----------------- ------------ --------------------- ------------------
<S> <C> <C> <C> <C> <C>
Charles W. Ergen 120,000(1) 1.26% $6.00 February 17, 2009 $505,536
Charles W. Ergen 400,000(2) 4.21% $6.00 February 17, 2009 --
James DeFranco 120,000(1) 1.26% $6.00 February 17, 2009 505,536
James DeFranco 400,000(2) 4.21% $6.00 February 17, 2009 --
James DeFranco 160,000(3) 1.68% $6.00 February 17, 2009 674,048
Michael T. Dugan 120,000(1) 1.26% $6.00 February 17, 2009 505,536
Michael T. Dugan 400,000(2) 4.21% $6.00 February 17, 2009 --
David K. Moskowitz 120,000(1) 1.26% $6.00 February 17, 2009 505,536
David K. Moskowitz 400,000(2) 4.21% $6.00 February 17, 2009 --
Steven B. Schaver 120,000(1) 1.26% $6.00 February 17, 2009 505,536
Steven B. Schaver 400,000(2) 4.21% $6.00 February 17, 2009 --
Steven B. Schaver 160,000(3) 1.68% $6.00 February 17, 2009 674,048
</TABLE>
- -------------------
(1) On February 17, 1999, each of the Named Executives was granted an
option to purchase 120,000 Class A Shares under the Corporation's 1999
Incentive Plan. The plan, which provided key employees with stock
options and cash incentives, the exercise and receipt of which was
contingent on the achievement of certain financial and other goals, was
adopted by the Corporation during February 1999. All of the goals upon
which the options were contingent were met. The options vest at the
rate of 20% per year, commencing March 31, 2000 and expire ten years
from the date of grant, subject to early termination in certain
circumstances.
(2) On February 17, 1999, each of the Named Executives was granted an
option to purchase 400,000 Class A Shares under the Corporation's Long
Term Incentive Plan. The plan, which provided key employees with stock
options, the exercise of which is contingent on the achievement of
certain long-term goals, was adopted by the Corporation during February
1999. As of the date of this Proxy Statement the achievement of those
goals and consequent exercisability of the options, can not reasonably
be predicted. Subject to the contingency, the options vest at the rate
of 20% per year, commencing March 31, 2000 and expire ten years from
the date of grant, subject to early termination in certain
circumstances.
(3) In February 1999, the Corporation granted options to Mr. DeFranco, Mr.
Schaver and other executive officers and key employees to purchase
Class A Shares. The options vest at the rate of 20% per year,
commencing March 31, 2000 and expire ten years from the date of grant,
subject to early termination in certain circumstances. See "- Stock
Incentive Plan."
6
<PAGE> 10
(1) Option values reflect the Black-Scholes model output for options. The
Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable. Currently, no valuation can be
provided for the options granted pursuant to the 1999 Long Term
Incentive Plan as the vesting of these options is contingent upon
meeting certain longer-term goals. In addition, option valuation models
require the input of highly subjective assumptions including the
expected stock price characteristics significantly different from those
of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its stock-based
compensation awards. The assumptions used in the model were expected
volatility of 76%, risk free rate of return of 5.38%, dividend yield of
0%, and time to exercise of six years.
The following table provides information as of December 31, 1999,
concerning unexercised options to purchase Class A Shares:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON EXERCISE VALUE REALIZED DECEMBER 31, 1999 (#) DECEMBER 31, 1999 ($) (1)
----------------------------- ---------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Ergen 428,544 $4,240,807 271,856 342,024 $12,659,806 $15,458,649
James DeFranco - - 514,128 442,824 24,299,778 19,561,669
Michael T. Dugan 614,328 9,959,051 342,184 655,816 15,954,329 30,112,421
David K. Moskowitz 257,000 5,272,920 483,026 332,862 22,877,156 15,054,690
Steven B. Schaver 415,392 8,619,602 23,703 660,529 1,105,152 29,684,455
</TABLE>
- -------------------------
(1) The dollar value of each exercisable and unexercisable option was
calculated by multiplying the number of Class A Shares underlying the
option by the difference between the exercise price of the option and
the closing price (as quoted in the Nasdaq National Market) of a Class
A Share on December 31, 1999.
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to October 1995, EchoStar did not have an Executive Compensation
Committee, and its Board of Directors determined all matters concerning
executive compensation. During 1999, the Executive Compensation Committee
consisted of Messrs. Friedlob and Daines. Mr. Friedlob is a partner in the law
firm of Friedlob, Sanderson, Raskin, Paulson & Tourtillot, LLC, which billed
EchoStar approximately $435,000 in fees related to legal services and securities
offerings in 1999. O. Nolan Daines is the founder of DiviCom. During 1999,
EchoStar purchased approximately $17 million of equipment for its Digital
Broadcast Operation Center and for certain of its other project integration
services for international direct-to-home satellite TV ventures from DiviCom.
DIRECTOR COMPENSATION
EchoStar's Directors who are not also employees receive $500 for each
meeting of the Board of Directors attended and are reimbursed for reasonable
travel expenses related to attendance at Board meetings. EchoStar's Directors
who are employees are not compensated for their services as Directors.
EchoStar's Directors are elected annually by the shareholders of the
Corporation. Directors who are not also employees of EchoStar are granted
options under the 1995 Non-employee Director Stock Option Plan (the "Director
Plan") to acquire Class A Shares upon election to the Board.
Mr. Friedlob was granted an option to acquire 8,000 Class A Shares on
December 22, 1995 pursuant to the Director Plan. These options were 100% vested
upon issuance and had an exercise price of $2.53125 per share and a term of five
years. These options were repriced to $2.1250 per share during July 1997, as
discussed below. In February 1997, Mr. Friedlob was granted an option to acquire
40,000 Class A Shares. These options were 100% vested upon issuance and have an
exercise price of $2.1250 and a term of five years. Additionally, in February
1999, Mr. Friedlob was granted an option to acquire 40,000 Class A Shares. These
options were 100% vested upon issuance and have an exercise price of $6.00 and a
term of five years.
7
<PAGE> 11
In March 1998, upon appointment to EchoStar's Board of Directors, Mr.
Daines was granted an option to acquire 8,000 Class A Shares. These options were
100% vested upon issuance, have an exercise price of $2.75, and a term of five
years. Additionally, in February 1999, Mr. Daines was granted an option to
acquire 40,000 Class A Shares. These options were 100% vested upon issuance,
have an exercise price of $6.00, and a term of five years.
STOCK INCENTIVE PLANS
EchoStar adopted Incentive Plans to provide incentives to attract and
retain Executive Officers and other key employees. EchoStar's Executive
Compensation Committee administers the Incentive Plans. Key employees are
eligible to receive awards under the Incentive Plans at the Committee's
discretion.
Awards available under the Incentive Plans include: (i) common stock
purchase options; (ii) stock appreciation rights; (iii) restricted stock and
restricted stock units; (iv) performance awards; (v) dividend equivalents; and
(vi) other stock-based awards. EchoStar has reserved up to 160 million Class A
Shares for granting awards under the Incentive Plans. Under the terms of the
Incentive Plans, the Executive Compensation Committee retains discretion,
subject to plan limits, to modify the terms of outstanding awards and to reprice
awards.
Pursuant to the Incentive Plans, EchoStar has granted options to its
Executive Officers and other key employees for the purchase of a total of
42,352,400 Class A Shares. Options to purchase 27,843,640 Class A Shares were
outstanding as of December 31, 1999. These options generally vest at the rate of
20% per year, commencing one year from the date of grant and 20% thereafter on
each anniversary of the date of grant. The exercise prices of these options,
which have generally been equal to or greater than the fair market value at the
date of grant, have ranged from $1.16625 to $48.75 per Class A Share. Certain of
these stock options were repriced as described below.
Effective July 1, 1997, the Executive Compensation Committee voted to
reprice all outstanding options with an exercise price greater than $2.125 per
Class A Share to $2.125 per Class A Share. The price to which the options were
repriced exceeded the fair market value of a Class A Share as of the date of
repricing. The market value of Class A Shares on the date of repricing was
$1.90625 per Class A Share. The Executive Compensation Committee and the Board
of Directors indicated that they would not typically consider reducing the
exercise price of previously granted options. However, the Executive
Compensation Committee and the Board of Directors recognized that certain events
beyond the reasonable control of the employees of EchoStar had significantly
reduced the incentive those options were intended to create. It was the
expectation of the Executive Compensation Committee and the Board of Directors
that by reducing the exercise price of these options to $2.125, the intended
incentive would be restored in part.
8
<PAGE> 12
The following table provides information concerning the repricing of
Incentive Plan stock options:
<TABLE>
<CAPTION>
TEN-YEAR OPTION REPRICING
- -----------------------------------------------------------------------------------------------------------------------------
MARKET
NUMBER OF PRICE OF EXERCISE
SECURITIES STOCK AT PRICE AT LENGTH OF ORIGINAL
UNDERLYING TIME OF TIME OF NEW OPTION TERM
OPTIONS REPRICING REPRICING EXERCISE REMAINING AT DATE
NAME AND POSITION DATE REPRICED (#) ($) ($) PRICE ($) OF REPRICING
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Ergen July 1, 1997 117,640 $1.90625 $2.3375 $2.125 3 years, 354 days
Chairman and Chief Executive July 1, 1997 136,240 1.90625 3.6700 2.125 5 years, 31 days
Officer
Michael T. Dugan July 1, 1997 79,016 1.90625 2.5313 2.125 4 years, 174 days
President, EchoStar Technologies July 1, 1997 149,880 1.90625 3.3359 2.125 5 years, 31 days
Corporation
Steven B. Schaver July 1, 1997 118,512 1.90625 2.5313 2.125 4 years, 174 days
Chief Operating Officer and Chief
Financial Officer
David K. Moskowitz July 1, 1997 118,512 1.90625 2.5313 2.125 4 years, 174 days
Senior Vice President, General July 1, 1997 59,960 1.90625 3.3359 2.125 5 years, 31 days
Counsel and Director
Mark W. Jackson July 1, 1997 79,016 1.90625 2.5313 2.125 4 years, 174 days
Senior Vice President - Satellite July 1, 1997 89,920 1.90625 3.3359 2.125 5 years, 31 days
Services
Michael S. Schwimmer July 1, 1997 59,960 1.90625 3.3359 2.125 5 years, 31 days
Vice President - Programming
</TABLE>
LAUNCH BONUS PLAN
During 1999, in connection with the launch of EchoStar's fifth
satellite, EchoStar granted a performance award of ten Class A Shares to all
eligible employees. Eligible employees included full-time employees of EchoStar
or one of its subsidiaries, with a hire date on or before June 1, 1999, and
part-time employees of EchoStar or one of its subsidiaries with a hire date on
or before June 1, 1999 who had worked at least 500 hours prior to June 1, 1999.
All eligible employees must have also been continuously employed with EchoStar
or one of its subsidiaries from June 1, 1999 through December 31, 1999.
Approximately 63,000 Class A Shares were distributed pursuant to the EchoStar V
launch bonus plan. EchoStar may elect to grant a similar performance award in
connection with the launch of future satellites, including the EchoStar VI
launch currently scheduled for this spring.
401(k) PLAN
In 1983, EchoStar adopted a defined-contribution tax-qualified 401(k)
Plan. EchoStar's employees become eligible for participation in the 401(k) Plan
upon completing six months of service with EchoStar and reaching age 19. 401(k)
Plan participants may contribute between 1% and 15% of their compensation in
each contribution period, subject to the maximum deductible limit provided by
the Internal Revenue Code. EchoStar may make a 50% matching contribution up to a
maximum of $1,000 per participant per calendar year. EchoStar may also make an
annual discretionary profit sharing or employer stock contribution to the 401(k)
Plan with the approval of the Board of Directors.
9
<PAGE> 13
401(k) Plan participants are immediately vested in their voluntary
contributions, plus actual earnings thereon. The balance of the vesting in
401(k) Plan participants' accounts is based on years of service. A participant
becomes 20% vested after one year of service, 40% vested after two years of
service, 60% vested after three years of service, 80% vested after four years of
service, and 100% vested after five years of service.
In March 2000, EchoStar contributed approximately 120,000 Class A
Shares, or approximately 8.33% of average employee salary (the percentage for
the highest salary employees was lower), to the 401(k) Plan as a discretionary
employer stock contribution. These shares, which were allocated to individual
participant 401(k) Plan accounts in proportion to their 1999 eligible
compensation, are subject to the five-year vesting schedule previously
described. EchoStar allocated approximately 273 Class A Shares to each of the
Named Executive Officers and 2,629 Class A Shares to all Officers and Directors
as a group, pursuant to the 1999 discretionary employer stock contribution.
PERFORMANCE GRAPH
The graph below sets forth the cumulative total shareholder return to
EchoStar's shareholders during the period from June 21, 1995 to December 31,
1999. The graph appearing below assumes the investment on June 21, 1995 (the
date of the Corporation's initial public offering) of $100 in Class A Shares of
the Corporation, the Nasdaq Stock Market Index, and an industry peer group. The
industry peer group consists of, Adelphia Communications Corporation,
Cablevision Systems Corporation, Century Communications Corporation, Comcast
Corporation, Cox Communications Inc., Hughes Electronics Corporation, Jones
Intercable, Inc., Media One Group Inc., Pegasus Communications Corporation,
Tele-Communications, Inc., TCI Satellite Entertainment Inc., and United States
Satellite Broadcasting Company, Inc. ("Industry Peer Group"). Although the
companies included in the industry peer group were selected because of similar
industry characteristics, they are not entirely representative of the
Corporation's business.
10
<PAGE> 14
[TOTAL RETURN TO STOCKHOLDERS GRAPH]
STOCK PRICE PERFORMANCE
<TABLE>
<CAPTION>
=================================================================================================================
TOTAL RETURN ANALYSIS 6/21/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EchoStar Communications Corporation $100 $143 $129 $ 98 $284 $2,287
- -----------------------------------------------------------------------------------------------------------------
Industry Peer Group $100 $ 98 $ 90 $174 $320 $ 573
- -----------------------------------------------------------------------------------------------------------------
Nasdaq Composite (US) $100 $113 $139 $169 $237 $ 441
=================================================================================================================
</TABLE>
The above graph is not to be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
REPORT ON EXECUTIVE COMPENSATION
GENERAL
The purpose of EchoStar's compensation policy is to offer compensation
packages to attract, retain and motivate Executive Officers over the long term.
Since 1996, executive compensation has been reviewed by the Executive
Compensation Committee (the "Committee"). The primary components of EchoStar's
executive compensation program are base salary and bonuses, conditional
incentive-based bonuses and long-term incentive compensation in the form of
stock options and other awards offered under EchoStar's Incentive Plans.
BASE SALARIES AND BONUSES
Annual base salaries paid to EchoStar's Executive Officers have
historically been at levels significantly below those paid to Executive Officers
with comparable experience and responsibilities in the telecommunications
industry or other similarly sized companies. Because of the levels of
compensation, EchoStar may experience difficulty in attracting Executives at the
highest performance levels. The Committee reviews all adjustments to annual base
salaries paid to EchoStar's Executive Officers. Compensation adjustments are
determined based on recommendations from the Chief Executive Officer and
President. Factors considered by Mr. Ergen in making his recommendation to the
Committee are typically based on his perception of the individual's performance,
success in achieving company and personal goals, and planned changes in
responsibilities. An individual's extraordinary efforts resulting in tangible
increases in corporate, division or department success are also considered by
Mr. Ergen in recommending increases in base salary and annual bonuses.
11
<PAGE> 15
INCENTIVE COMPENSATION
Stock option grants under EchoStar's Incentive Plans are designed to
provide an additional incentive to attract and retain Executive Officers. In
addition, stock options provide an incentive to Executive Officers to increase
shareholder value on a long-term and sustained basis. Management believes that
Executive Officers who are in a position to contribute to the long-term success
of EchoStar and to build incremental shareholder value, should have a stake in
EchoStar's future success. This focuses attention on managing EchoStar as an
owner with an equity position in EchoStar's business and seeks to align the
Executive Officer's interests with the long-term interests of shareholders.
Stock options represent an important part of EchoStar's compensation program for
Executive Officers, and, similar to other growing technology companies,
represents a significant component of overall compensation.
General Incentives
Awards under the 1995 Incentive Plan follow a review of the individual
employee's performance, years of service, position with EchoStar, and long-term
potential contribution to EchoStar. The number of options to be granted to an
employee are determined based upon the key employee's level of responsibility,
position in EchoStar and potential to contribute to the long-term success of
EchoStar and on the number of options previously granted to the employee.
Neither Management nor the Board of Directors assigns specific weights to these
factors, although the employee's position and a subjective evaluation of his
performance are considered most important.
Stock options were awarded under the 1995 Incentive Plan to Executive
Officers and certain key employees on February 17, March 31, June 30, September
30, and December 31, 1999. To encourage Executive Officers to remain employed by
EchoStar or its subsidiaries, options granted under the 1995 Incentive Plan
generally vest at the rate of 20% per year and generally are granted at exercise
prices not less than fair market value.
Conditional Incentives
On February 17, 1999, each of the Named Executives was granted an
option to purchase 120,000 Class A Shares under the Corporation's 1999 Incentive
Plan. The plan, which provided key employees with stock options and cash
incentives, the exercise and receipt of which was contingent on the achievement
of certain financial and other goals, was adopted by the Corporation during
February 1999. All of the goals upon which the options were contingent were met.
The options vest at the rate of 20% per year, commencing March 31, 2000 and
expire ten years from the date of grant, subject to early termination in certain
circumstances.
In addition, on February 17, 1999, each of the Named Executives was
granted an option to purchase 400,000 Class A Shares under the Corporation's
Long Term Incentive Plan. The plan, which provided key employees with stock
options, the exercise of which is contingent on the achievement of certain
long-term goals, was adopted by the Corporation during February 1999. As of the
date of this Proxy Statement the achievement of those goals and consequent
exercisability of the options, can not reasonably be predicted. Subject to the
contingency, the options vest at the rate of 20% per year, commencing March 31,
2000 and expire ten years from the date of grant, subject to early termination
in certain circumstances.
12
<PAGE> 16
COMPENSATION OF CHIEF EXECUTIVE OFFICER.
The Committee believes that the compensation paid to Charles W. Ergen,
EchoStar's Chief Executive Officer, has generally been at a level that is
substantially below amounts paid to Chief Executive Officers at other companies
of similar size and in comparable industries.
Mr. Ergen's base salary for each of fiscal 1999 and fiscal 1998 was
$250,000. Since 1996, changes in Mr. Ergen's base salary are reviewed annually
by the Committee based on recommendations from the Board of Directors. During
1999, Mr. Ergen was granted options to purchase 520,000 Class A Shares in
connection with the 1999 Incentive Plan and Long Term Incentive Plan.
The report of the Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that EchoStar specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Respectfully submitted,
The EchoStar Executive
Compensation Committee
Raymond L. Friedlob
O. Nolan Daines
13
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 8, 1999, EchoStar repurchased all of its outstanding Series
A Cumulative Preferred Stock from Messrs. Ergen and DeFranco for approximately
$90.9 million, including cumulative accrued dividends of $5.9 million. The
$52.611 purchase price per share was equal to or less than the closing price of
the Corporation's Class A Shares on the date of purchase.
During 1999, the law firm of Friedlob, Sanderson, Raskin, Paulson &
Tourtillott, LLC billed EchoStar approximately $435,000 in fees related to
certain of the Corporation's 1999 securities offerings and other corporate legal
advice. Mr. Friedlob, a member of EchoStar's Board of Directors, is a partner in
that law firm.
During 1999, EchoStar purchased approximately $17 million of equipment
for its Digital Broadcast Operations Center and for certain of its other project
integration services for international DTH ventures from DiviCom, Inc. O. Nolan
Daines, a member of EchoStar's Board of Directors is the founder of DiviCom.
PROPOSAL NO. 2 - TO AMEND OF THE ARTICLES TO CHANGE THE CORPORATION'S NAME
The Board of Directors proposes to amend the Corporation's Amended and
Restated Articles of Incorporation to change the name of the Corporation from
EchoStar Communications Corporation to DISH Network, Inc. The Board of Directors
believes that the name change, and improved name association with the
Corporation's core DISH Network programming service, will provide for more
consistent marketing and corporate identification, and will avoid confusion that
currently exists. The form of the proposed amendment is set forth as Exhibit __
to this Proxy Statement. The Board of Directors does not view the proposed
amendment as having a substantial effect on the interest of shareholders.
If a quorum is present, the affirmative vote of a majority of the total
voting power of EchoStar present or represented by proxy and entitled to vote at
the Annual Meeting is required to approve the Article amendment.
Charles W. Ergen, the Chairman, Chief Executive Officer and President
of EchoStar, possesses more than 91.1% of the total voting power of EchoStar.
Mr. Ergen has indicated his intention to vote in favor of Proposal No. 2.
Accordingly, approval of Proposal No. 2 is assured notwithstanding a negative
vote by shareholders other than Mr. Ergen.
Once the proposal is approved, the Corporation will file an amendment
to its Articles of Incorporation with the State of Nevada changing the name of
the Corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
PROPOSAL NO. 2 (ITEM NO. 2 ON THE ENCLOSED PROXY CARD).
PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT ACCOUNTANTS
Since 1988, the firm of Arthur Andersen LLP, independent accountants,
has examined and reported on EchoStar's financial statements. The Board of
Directors has appointed, subject to the approval of its shareholders, Arthur
Andersen LLP as EchoStar's independent accountants for the fiscal year ending
December 31, 2000. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting and will have the opportunity to make any
statements they may desire. They also will be available to respond to
appropriate questions from shareholders.
If a quorum is present, the affirmative vote of a majority of the total
voting power of EchoStar present or represented by proxy and entitled to vote at
the Annual Meeting is required to approve the appointment of Arthur Andersen LLP
as independents accountants.
Charles W. Ergen, the Chairman, Chief Executive Officer and President
of EchoStar, possesses more than 91.1% of the total voting power of EchoStar.
Mr. Ergen has indicated his intention to vote in favor of Proposal No. 3.
Accordingly, approval of Proposal No. 3 is assured notwithstanding a negative
vote by shareholders other than Mr. Ergen.
14
<PAGE> 18
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION
OF THIS APPOINTMENT (ITEM NO. 3 ON THE ENCLOSED PROXY CARD).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
EchoStar's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 filed with the SEC is incorporated herein by reference.
Shareholders should carefully review the Annual Report on Form 10-K prior to
deciding how to vote their shares in connection with the matters set forth in
this Proxy Statement.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded, for purposes
of this Proxy Statement, to the extent that a statement contained herein or in
any subsequently filed document that is deemed to be incorporated herein
modifies or supersedes any such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement.
WHERE TO GET ADDITIONAL INFORMATION
EchoStar files annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements, or other information EchoStar files at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
The SEC filings of EchoStar are also available to the public from commercial
document retrieval services and on the Internet through the website maintained
by the SEC at http://www.sec.gov. EchoStar Class A Shares are traded on the
NASDAQ National Market System and reports and other information concerning
EchoStar can also be inspected at the NASDAQ National Market, 1735 K Street, NW,
Washington, D.C. 20546.
COST OF PROXY STATEMENT
The cost of the solicitation of proxies will be borne by EchoStar. In
addition to the use of the mail, proxies may be solicited personally, by
telephone or by a few regular employees of EchoStar without additional
compensation. EchoStar does not expect to pay any compensation for the
solicitation of proxies but will reimburse brokerage firms, custodians,
nominees, fiduciaries and other persons holding stock in their names, or in the
names of nominees, at approved rates, for their expenses in forwarding proxy
materials to beneficial owners of securities held of record by such persons and
obtaining their proxies.
15
<PAGE> 19
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholders who intend to have a proposal considered for inclusion in
EchoStar's proxy materials for presentation at the 2001 Annual Meeting of
Shareholders must submit the proposal to EchoStar no later than December 23,
2000. EchoStar reserves the right to reject, rule out of order or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.
OTHER BUSINESS
Management knows of no other business that will be presented to the
Annual Meeting of Shareholders other than that which is set forth in this Proxy
Statement.
By Order of the Board of Directors
DAVID K. MOSKOWITZ
Senior Vice President, General
Counsel, Corporate Secretary
and Director
16
<PAGE> 20
PROXY PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David K. Moskowitz and Steven B.
Schaver, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote as designated below, all Class A Shares of
EchoStar Communications Corporation held of record by the undersigned on March
27, 2000, at the Annual Meeting of Shareholders to be held on April 28, 2000, or
any adjournment thereof.
<TABLE>
<S> <C>
1. ELECTION OF FIVE DIRECTORS.
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all the nominees listed below
Charles W. Ergen James DeFranco David K. Moskowitz Raymond L. Friedlob O. Nolan Daines
(INSTRUCTION: To withhold authority to vote for an individual nominee, cross out that nominee's name above.)
2. PROPOSAL TO AMEND ECHOSTAR'S AMENDED AND RESTATED ARTICLES OF INCORPORATION TO CHANGE THE NAME OF THE
CORPORATION TO "DISH NETWORK, INC."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
CORPORATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL
BE VOTED FOR THE ELECTION OF EACH OF THE FIVE (5) DIRECTORS SET FORTH ABOVE, FOR
THE NAME CHANGE AND FOR THE RATIFICATION OF ARTHUR ANDERSEN AS THE CORPORATION'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY WITH RESPECT TO PROPOSALS NOT KNOWN OR
DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement furnished herewith.
Dated: ,2000
--------------------------------------
---------------------------------------------------
Signature
---------------------------------------------------
Signature if held jointly
Signatures should agree with the name(s) stenciled
hereon. Executors, administrators, trustees,
guardians and attorneys should indicate when
signing. Attorneys should submit powers of
attorney.
PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE TENDER OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF
YOU ATTEND THE MEETING OR TO SUBMIT A LATER DATED REVOCATION OR AMENDMENT TO
THIS PROXY ON ANY OF THE ISSUES SET FORTH ABOVE.
