Dish Network 2008 Annual Report Download - page 37

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the terms of any such transactions will be as favorable to us or our subsidiaries or affiliates as may
otherwise be obtained in arm’s length negotiations.
x Business Opportunities. We have retained interests in various U.S. and international companies that have
subsidiaries or controlled affiliates that own or operate domestic or foreign services that may compete with
services offered by EchoStar. We may also compete with EchoStar when we participate in auctions for
spectrum or orbital slots for our satellites. In addition, EchoStar may in the future use its satellites, uplink
and transmission assets to compete directly against us in the subscription television business.
We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to
us than if we were dealing with an unaffiliated party.
We do not have any agreements with EchoStar that restrict us from selling our products to competitors of EchoStar.
We also do not have any agreements with EchoStar that would prevent either company from competing with the
other.
We rely on key personnel and the loss of their services or the inability to attract and retain them may negatively
affect our businesses.
We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen,
our Chairman, President and Chief Executive Officer and certain other executives. The loss of Mr. Ergen or of
certain other key executives could have a material adverse effect on our business, financial condition and results of
operations. Although all of our executives have executed agreements limiting their ability to work for or consult
with competitors if they leave us, we do not have employment agreements with any of them. Pursuant to a
management services agreement with EchoStar entered into at the time of the Spin-off, we have agreed to make
certain of our key officers available to provide services to EchoStar. In addition Mr. Ergen also serves as Chairman,
President and Chief Executive Officer of EchoStar. To the extent Mr. Ergen and such other officers are performing
services for EchoStar, this may divert their time and attention away from our business and may therefore adversely
affect our business.
We are controlled by one principal stockholder who is also our Chairman, President and Chief Executive Officer.
Charles W. Ergen, our Chairman, President and Chief Executive Officer, currently beneficially owns approximately
42.0% of our total equity securities and possesses approximately 58.0% of the total voting power. Mr. Ergen’s
beneficial ownership of shares of Class A Common Stock excludes 88,496,990 shares of Class A Common Stock
issuable upon conversion of shares of Class B Common Stock currently held by certain trusts established by Mr.
Ergen for the benefit of his family. These trusts beneficially own approximately 33.0% of our total equity securities
and possess approximately 34.0% of the total voting power. Through his voting power, Mr. Ergen has the ability to
elect a majority of our directors and to control all other matters requiring the approval of our stockholders. As a
result, DISH Network is a “controlled company” as defined in the Nasdaq listing rules and is, therefore, not subject
to Nasdaq requirements that would otherwise require us to have (i) a majority of independent directors; (ii) a
nominating committee composed solely of independent directors; (iii) compensation of our executive officers
determined by a majority of the independent directors or a compensation committee composed solely of independent
directors; and (iv) director nominees selected, or recommended for the Board’s selection, either by a majority of the
independent directors or a nominating committee composed solely of independent directors.
We are party to various lawsuits which, if adversely decided, could have a significant adverse impact on our
business, particularly lawsuits regarding intellectual property.
We are subject to various legal proceedings and claims which arise in the ordinary course of business, including
among other things, disputes with programmers regarding fees. Many entities, including some of our competitors,
have or may in the future obtain patents and other intellectual property rights that cover or affect products or
services related to those that we offer. In general, if a court determines that one or more of our products infringes on
intellectual property held by others, we may be required to cease developing or marketing those products, to obtain
licenses from the holders of the intellectual property at a material cost, or to redesign those products in such a way
as to avoid infringing the patent claims. If those intellectual property rights are held by a competitor, we may be