Dish Network 1999 Annual Report Download - page 69

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–21
6. Series B Preferred Stock
On January 4, 1999, EchoStar commenced an offer to exchange all, but not less than all, of the shares of
Series B Preferred Stock then outstanding for 12 1/8% Senior Exchange Notes due 2004. As previously described in
Note 4, EchoStar closed its tender offer for the Senior Exchange Notes during February 1999. The Senior Exchange
Notes not tendered (approximately $5,000) continue to bear interest at a rate of 12 1/8% per annum, payable semi-
annually in arrears on April 1 and October 1 of each year, commencing with the first such date to occur after the
date of the exchange. Interest on the Senior Exchange Notes may, at the option of EchoStar, be paid in cash or by
issuing additional Senior Exchange Notes in an aggregate principal amount equal to the amount of such interest.
The Senior Exchange Notes that remain outstanding following the tender offer mature on July 1, 2004.
7. Stockholders’ Equity (Deficit)
Common Stock
The Class A, Class B and Class C common stock are equivalent in all respects except 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 ten 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 ECC, each holder of
outstanding shares of Class C common stock is entitled to ten votes for each share of Class C common stock held.
ECC’s principal stockholder owns all outstanding Class B common stock and all other stockholders own Class A
common stock. There are no shares of Class C common stock outstanding.
Preferred Stock
Preferred Stock consists of the following (in thousands, except share data):
December 31,
1998 1999
Preferred Stock, 20,000,000 shares authorized (inclusive of 900,000 shares
designated as Series B Preferred Stock, see Note 6):
8% Series A Cumulative Preferred Stock, 1,616,681 and no shares issued
and outstanding, including cumulative accrued dividends of $5,755 and
none, respectively...................................................................................... $ 20,807 $ –
6 ¾% Series C Cumulative Convertible Preferred Stock, 2,300,000 and
908,665 shares issued and outstanding, respectively ............................... 108,666 45,434
Total Preferred Stock ........................................................................................... $ 129,473 $ 45,434
8% Series A Cumulative Preferred Stock
On February 8, 1999, EchoStar repurchased all outstanding shares of its Series A Preferred Stock at
$13.153 per share (the average of the preceding 20 trading day closing price of EchoStar’s Class A common stock).
The total repurchase price was approximately $91 million, including accrued dividends of approximately $6 million.
The carrying value of the Series A Preferred Stock, including accrued dividends, as of the date of repurchase was
approximately $21 million. All of the shares of Series A Preferred Stock were owned by Charles W. Ergen,
President and CEO, and James DeFranco, Executive Vice President.
Series C Cumulative Convertible Preferred Stock
In November 1997, EchoStar issued 2.3 million shares of 6 3/4% Series C Cumulative Convertible Preferred
Stock (the “Series C Preferred Stock”) which resulted in net proceeds to EchoStar of approximately $97 million.
Simultaneous with the issuance of the Series C Preferred Stock, the purchasers of the Series C Preferred Stock placed