Dish Network 2008 Annual Report Download - page 121

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-39
12. Stockholders’ Equity (Deficit)
Common Stock
The Class A, Class B and Class C common stock are equivalent except for voting rights. Holders of Class A
and Class C common stock are entitled to one vote per share and holders of Class B common stock are
entitled to 10 votes per share. Each share of Class B and Class C common stock is convertible, at the option
of the holder, into one share of Class A common stock. Upon a change in control of DISH Network, each
holder of outstanding shares of Class C common stock is entitled to 10 votes for each share of Class C
common stock held. Our principal stockholder owns the majority of all outstanding Class B common stock
and, together with all other stockholders, owns outstanding Class A common stock. There are no shares of
Class C common stock outstanding.
Common Stock Repurchase Program
Our board of directors previously authorized stock repurchases of up to $1.0 billion of our Class A
common stock. During the year ended December 31, 2008, we repurchased 3.1 million shares of our
common stock for $83 million. In November 2008, our board of directors extended the plan and
authorized an increase in the maximum dollar value of shares that may be repurchased under the plan, such
that we are authorized to repurchase up to $1.0 billion of our outstanding shares through and including
December 31, 2009. As of December 31, 2008, we may repurchase up to $999 million under this plan.
13. Employee Benefit Plans
Employee Stock Purchase Plan
During 1997, the Board of Directors and stockholders approved an employee stock purchase plan (the
“ESPP”). During 2006, this plan was amended for the purpose of registering an additional 1,000,000
shares of Class A common stock, such that we were authorized to issue a total of 1,800,000 shares of Class
A Common stock. At December 31, 2008, we had 816,000 remaining Class A common stock available for
issuance under this plan. Substantially all full-time employees who have been employed by us for at least
one calendar quarter are eligible to participate in the ESPP. Employee stock purchases are made through
payroll deductions. Under the terms of the ESPP, employees may not deduct an amount which would
permit such employee to purchase our capital stock under all of our stock purchase plans at a rate which
would exceed $25,000 in fair value of capital stock in any one year. The purchase price of the stock is
85% of the 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. During
2008, 2007 and 2006 employees purchased approximately 117,000, 80,000, and 89,000 shares of Class A
common stock through the ESPP, respectively.
401(k) Employee Savings Plan
We sponsor 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 us, subject to a maximum annual
contribution of $1,500 per employee. Forfeitures of unvested participant balances which are retained by
the 401(k) Plan may be used to fund matching and discretionary contributions. Expense recognized related
to matching 401(k) contributions, net of forfeitures, totaled $5 million, $2 million and $2 million during
the years ended December 31, 2008, 2007 and 2006, respectively.
We also may make an annual discretionary contribution to the plan with approval by our 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 our stock. Discretionary stock contributions, net
of forfeitures, to the 401(k) Plan were $12 million, $20 million and $18 million for years ended December
31, 2008, 2007 and 2006, respectively.