Dish Network 2002 Annual Report Download - page 94

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-34
closing price of the class A common stock on the last business day of each calendar quarter in which such shares of
class A common stock are deemed sold to an employee under the ESPP. The ESPP shall terminate upon the first to
occur of (i) October 1, 2007 or (ii) the date on which the ESPP is terminated by the Board of Directors. During
2000, 2001 and 2002 employees purchased approximately 58,000; 80,000 and 108,000 shares of class A common
stock through the ESPP, respectively.
401(k) Employee Savings Plan
EchoStar sponsors a 401(k) Employee Savings Plan (the “401(k) Plan”) for eligible employees. Voluntary
employee contributions to the 401(k) Plan may be matched 50% by EchoStar, subject to a maximum annual
contribution by EchoStar of $1,000 per employee. Matching 401(k) contributions totaled approximately $1.6
million, $2.1 million and $2.4 million during the years ended December 31, 2000, 2001 and 2002, respectively.
EchoStar also may make an annual discretionary contribution to the plan with approval by EchoStar’s Board of
Directors, subject to the maximum deductible limit provided by the Internal Revenue Code of 1986, as amended.
These contributions may be made in cash or in EchoStar stock. Forfeitures of unvested participant balances which
are retained by the 401(k) Plan may be used to fund matching and discretionary contributions. Expense recognized
relating to discretionary contributions was approximately $7 million, $225 thousand and $17 million during the years
ended December 31, 2000, 2001 and 2002, respectively.
9. Commitments and Contingencies
Leases
Future minimum lease payments under noncancelable operating leases as of December 31, 2002, are as follows
(in thousands):
Year ending December 31,
2003 ................................................................................................... $ 17,274
2004 ................................................................................................... 14,424
2005 ................................................................................................... 11,285
2006 ................................................................................................... 7,698
2007 ................................................................................................... 3,668
Thereafter........................................................................................... 1,650
Total minimum lease payments................................................... 55,999
Total rent expense for operating leases approximated $9 million, $14 million and $16 million in 2000, 2001
and 2002, respectively.
Purchase Commitments
As of December 31, 2002, EchoStar’s purchase commitments totaled approximately $359 million. The
majority of these commitments relate to EchoStar receiver systems and related components. All of the purchases related
to these commitments are expected to be made during 2003. EchoStar expects to finance these purchases from existing
unrestricted cash balances and future cash flows generated from operations.
Patents and Intellectual Property
Many entities, including some of EchoStar’s competitors, now have and may in the future obtain patents and
other intellectual property rights that cover or affect products or services directly or indirectly related to those that
EchoStar offers. EchoStar may not be aware of all patents and other intellectual property rights that its products may
potentially infringe. Damages in patent infringement cases can include a tripling of actual damages in certain cases.
Further, EchoStar cannot estimate the extent to which it may be required in the future to obtain licenses with respect to