Dish Network 1997 Annual Report Download - page 27

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25
John R. Hager. Mr. Hager has been Treasurer and Controller of EchoStar since February 1997. From
August 1993 to February 1997, Mr. Hager was Controller of American Telecasting, Inc., a national operator of multiple
wireless cable systems. Previously, Mr. Hager was with the Denver office of Ernst & Young from May 1984 until
August 1993, most recently as Audit Senior Manager.
There are no family relationships among the executive officers and directors of EchoStar or arrangements or
understandings between any executive officer and any other person pursuant to which any executive officer was
selected as such. Pursuant to the Bylaws of EchoStar, executive officers serve at the discretion of the Board of
Directors. Executive officers of EchoStar are elected annually to serve until their respective successors are elected
and qualified.
Item 2. Properties
The following table sets forth certain information concerning EchoStar’s properties:
Description/Use Location
Approximate
Square Footage
Owned or
Leased
Corporate headquarters
................................ Littleton, Colorado 156,000 Owned
EchoStar Technologies Corporation office
and distribution center............................. Englewood, Colorado 155,000 Owned
Office and distribution center ....................... Sacramento, California 78,500 Owned
Digital Broadcast Operations Center............. Cheyenne, Wyoming 55,000 Owned
Customer Service Center.............................. Thornton, Colorado 55,000 Owned
European headquarters and warehouse.......... Almelo, The Netherlands 53,800 Owned
Warehouse facility....................................... Denver, Colorado 40,000 Owned
Item 3. Legal Proceedings
On July 29, 1996, EchoStar Acceptance Corporation (“ EAC”), Dish Network Credit Corporation (“ DNCC” ),
ESC and Echosphere Corporation (collectively, “ EchoStar Credit”), filed a civil action against Associates Investment
Corporation (“ Associates”) which is currently pending in the U.S. District Court in the District of Colorado. EchoStar
Credit alleges that Associates, among other things, breached its contract with EchoStar Credit pursuant to which
Associates agreed to finance the purchase of EchoStar Receiver Systems by consumers. EchoStar Credit alleges that
Associates’ refusal to finance certain prospective consumers has resulted in the loss of prospective customers to
EchoStar’s competitors. In addition, EchoStar Credit alleges that the loss of sales due to Associate’s action forced
EchoStar to lower the price on its products. Associates filed counterclaims against EAC for fraud and breach of
contract. Associates seeks approximately $10.0 million by way of its counterclaims. EAC intends to vigorously
defend against such counterclaims. A trial date has not yet been set. It is too early in the litigation to make an
assessment of the probable outcome.
Certain purchasers of C-band and DISH Network systems have filed actions in various state courts in
Alabama naming EchoStar, EAC or Echosphere Corporation as a defendant and seeking actual and punitive damages.
Eleven lawsuits were filed against EAC in the state of Alabama. Eight of the suits involve EAC and Household
Retail Services, Inc. (“ HRSI” ) and three suits involve EAC and Bank One Dayton, N.A. (“ Bank One”). All three of
the EAC/Bank One cases recently have been dismissed or are in the process of being dismissed against all
defendants including EAC. Therefore, only the cases involving EAC and HRSI remain pending. In those cases, the
plaintiffs in those suits allege that the terms of the financing plan were misrepresented to them by the independent
retail dealers. The plaintiffs allege that the dealers were the agents of EAC and that EAC did not properly train the
dealers. Additional suits may be filed or the plaintiffs' attorneys may attempt to certify a class and/or add additional
plaintiffs to the existing suits and seek exponentially greater damages. EAC denies liability and intends to
vigorously defend against all remaining claims, which include allegations of fraud and lending law violations.
While the actual damages claimed in each of these cases are not material, EchoStar is aware that juries in Alabama
have recently issued a number of verdicts awarding substantial punitive damages on actual damage claims of less than
$10,000.