Exhibit 99.1
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement
(“Agreement”) is entered into effective as of
«Issue_Date», by and between EchoStar Communications
Corporation, a Nevada corporation (the “Company”), and
«First_Name» «Last_Name»
(“Employee”).
RECITAL
WHEREAS, the Company, pursuant to its
1999 Stock Incentive Plan (the “Plan”) desires to grant
this stock option to Employee, and Employee desires to accept such
stock option, each under the terms and conditions set forth in this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
The
Company hereby grants to Employee, as of the date set forth above,
the right and option (hereinafter called “the Option”)
to purchase all or any part of an aggregate of
«Stock_Requested» shares of the Class A Common Stock
of the Company, par value $0.01 per share (the “Common
Shares”), at the price of $«Price» per share (the
“Option Price”), on the terms and conditions set forth
herein, which price was equal to or greater than the fair market
value of a Common Share on the date of grant. The Option Price is
subject to adjustment as provided in this Agreement and the Plan.
This Option is intended to be an incentive stock option (an
“ISO”) within the meaning of the Internal Revenue Code
of 1986, as amended, and regulations thereunder (the
“Code”).
Employee
understands that to the extent that the aggregate fair market value
(determined at the time the Option was granted) of the Common
Shares with respect to which all options (that are ISOs within the
meaning of the Code) are exercisable for the first time by Employee
during any calendar year exceeds $100,000, in accordance with
Section 422(d) of the Code, such options shall be treated as
options that do not qualify as ISOs.
|
2.
|
|
Duration and
Exercisability
|
(a) Subject to the terms and
conditions set forth herein, this Option shall vest and may be
exercised by Employee in cumulative installments as
follows:
|
***
|
|
Certain
confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing
the redacted portions have been filed separately with the
Securities and Exchange Commission subject to a request for
confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act.
|
1
|
|
|
|
|
|
|
Cumulative
percentage
|
|
On or after each
of
|
|
of Common Shares
as to
|
|
the following
dates
|
|
which Option is
exercisable
|
|
|
|
20%
|
|
|
|
20%
|
|
|
|
20%
|
|
|
|
20%
|
|
|
|
20%
|
(b) During the lifetime of
Employee, the Option shall be exercisable only by Employee and
shall not be assignable or transferable by Employee, other than by
will or the laws of descent and distribution. Without limiting the
generality of the foregoing, this Option may not be sold, assigned,
transferred or otherwise disposed of, or pledged or hypothecated in
any manner (whether by operation of law or otherwise), and shall
not be subject to execution, attachment or other process. Any
assignment, transfer, pledge, hypothecation or other disposition of
this Option or any attempt to make any such levy of execution,
attachment or other process will cause this Option to terminate
immediately, unless the Board (or the Committee), in its sole
discretion, specifically waives applicability of this
provision.
(c) This Option shall terminate,
and shall cease to be exercisable, ten (10) years after the
date of this Agreement.
(d) It is intended that this
Option will qualify as an ISO pursuant to the Code. The Company
assumes no responsibility for individual income taxes, penalties or
interest related to grant, exercise or subsequent disposition of
stock pursuant to the Option. Additionally, the Company assumes no
responsibility in the event that this Option, or the tax treatment
related thereto, is ultimately other than the tax treatment
currently afforded for ISOs, whether such differing treatment is
the result of changes in the tax laws, a disqualifying disposition
by Employee, or for any other reason. Employee should consult
with employee’s personal tax advisor regarding the tax
ramifications, if any, which result from receipt or exercise of
this Option, and subsequent disposition of Common Shares. If in
the Company’s sole discretion it is necessary or appropriate
to collect federal, state or local taxes in connection with the
exercise of any portion of this Option, the Company shall be
entitled to require the payment of such amounts as a condition to
exercise.
(e) In considering the exercise
of this Option, Employee should use the same independent investment
judgment that Employee would use in making other investments in
corporate securities. Among other things, stock prices will
fluctuate over any reasonable period of time and the price of the
Common Shares may go down as well as up. No guarantees are made as
to the future prospects of the Company or the Common Shares, or
that any market for sale of the Common Shares will develop in the
future. No representations are made by the Company except as
contained in any active registration
|
***
|
|
Certain
confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing
the redacted portions have been filed separately with the
Securities and Exchange Commission subject to a request for
confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act.
|
2
statement at the time of exercise of the Option on file with the
United States Securities and Exchange Commission relating to the
Option Plan.
|
3.
|
|
Effect of Termination of Employment;
Death or Disability; Demotion; Termination after Change in
Control
|
(a) In the event that Employee
shall cease to be employed by the Company or its subsidiaries, if
any, for any reason other than Employee’s serious misconduct
or Employee’s death or disability (as such term is defined in
Section 3(c) hereof), Employee shall have the right to exercise the
Option at any time within one (1) month after such termination
of employment, to the extent of the full number of Common Shares
Employee was entitled to exercise under the Option on the date of
termination, subject to the condition that any portion of the
Option not exercised within that period shall terminate and cannot
be exercised following expiration of that period, and that no
portion of the Option shall be exercisable (whether vested or
unvested) after the expiration of the term of the Option.
Retirement, whether or not pursuant to any retirement or pension
plan of the Company, shall be deemed to be a termination of
employment for all purposes of this Agreement. The termination of
this Option by reason of the cessation of employment shall be
without prejudice to any right or remedy which the Company may have
against the holder.
(b) In the event that Employee
shall cease to be employed by the Company or its subsidiaries, if
any, by reason of Employee’s serious misconduct during the
course of employment, including but not limited to wrongful
appropriation of the Company’s funds, theft of Company
property or other reasons as determined by the Company, ***, the
Option shall be terminated and cannot be exercised, as of the date
of the misconduct or violation. The termination of this Option by
reason of the cessation of employment shall be without prejudice to
any right or remedy which the Company may have against the
holder.
(c) If Employee shall die while
in the employ of Company or a subsidiary, or within one (1) month
after termination of employment for any reason other than serious
misconduct, or if employment is terminated because Employee has
become disabled (within the meaning of Code Section 22(e)(3)) while
in the employ of the Company or a subsidiary, and Employee shall
not have fully exercised the Option, such Option may be exercised
at any time within twelve (12) months after Employee’s
death or date of termination of employment for disability by
Employee, personal representatives or administrators, executor or
guardians of Employee, as applicable, or by any person or persons
to whom the Option is transferred by will or the applicable laws of
descent and distribution, to the extent of the full number of
shares the Employee was entitled to purchase under the Option on
the date of death, termination of employment, if earlier, or date
of termination for such disability and subject to the condition
that any portion of the Option not exercised within that period
shall terminate and cannot be exercised following expiration of
that period, and that no portion of the Option shall be exercisable
after the expiration of the term of the Option.
|
***
|
|
Certain
confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing
the redacted portions have been filed separately with the
Securities and Exchange Commission subject to a request for
confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act.
|
3
(d) If Employee is demoted (but
remains employed) by the Company or its subsidiaries from
Employee’s current level (i.e., senior executive, vice
president, director, manager, or other level), this Option shall
continue in force, until otherwise terminated, with respect to the
full number of Common Shares Employee was entitled to exercise
under the Option on the date of demotion, and any portion of the
Option not vested or otherwise not exercisable prior to the date of
demotion shall forever terminate as of the date of
demotion.
(e) In
the event that (i) a Change in Control occurs, and
(ii) Employee is terminated by the Company (and not
simultaneously employed by the surviving entity — if not the
Company — in the Change in Control), for any reason other
than for Cause, during the twenty-four (24) month period
following such Change in Control, then all Option shares not
previously vested shall immediately vest and become exercisable,
and the Employee shall have the right to exercise all unexercised
Option shares within one (1) month after such termination of
employment, subject to the conditions that any portion of the
Option not exercised within such one (1) month period shall
terminate and cannot be exercised, and that no portion of the
Option shall be exercisable after the expiration of the term of the
Option.
For the purpose of this subsection 3(e), the capitalized terms
shall have the following meanings: “Capital Stock”
means any and all shares, interests, participations, rights or
other equivalents, however designated, of corporate stock or
partnership or membership interests, whether common or preferred.
“Cause” means: (i) the willful and continued
failure of Employee to substantially perform his duties consistent
with past practices prior to the Change in Control; (ii) any
illegal conduct or gross misconduct which is materially injurious
to the Company or its affiliates; (iii) Employee has been
convicted of or pleaded guilty or nolo contendere to a felony or
any crime involving moral turpitude or dishonesty; or (iv) Employee
has been convicted of or pleaded guilty or nolo contendere to a
felony, crime or engaged in conduct which results in a prohibition
on the Employee from serving, for any period of time, as an officer
or director of a publicly-traded company by any federal, state or
other regulatory governing body (including without limitation, an
exchange or association such as NYSE or Nasdaq). “Change in
Control” means: (i) a transaction or a series of
transactions the result of which is that any person (other than the
Principal or a Related Party) individually owns more than fifty
percent (50%) of the total Equity Interests of either (A) the
Company or (B) the surviving entity in any such transaction(s)
or a controlling affiliate of such surviving entity in such
transaction(s); and (ii) the first day on which a majority of
the members of the Board of Directors of the Company are not
Continuing Directors. “Continuing Director” means, as
of any date of determination, any member of the Board of Directors
of the Company who: (a) was a member of such Board of
Directors on the date of this Agreement; or (b) was nominated
for election or elected to such Board of Directors with the
affirmative vote of a majority of the
|
***
|
|
Certain
confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing
the redacted portions have been filed separately with the
Securities and Exchange Commission subject to a request for
confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act.
|
4
Continuing Directors who were members of such Board of Directors at
the time of such nomination or election or was nominated for
election or elected by the Principal and his Related Parties.
“Equity Interest” means any Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or
exchangeable for, Capital Stock). “Principal” means
Charles W. Ergen. “Related Party” means, with respect
to the Principal, (a) the spouse and each immediate family
member of the Principal; (b) each trust, corporation,
partnership or other entity of which the Principal beneficially
holds an eighty percent (80%) or more controlling interest; and
(c) the Principal’s personal representatives,
administrators, executor, guardians, or any person(s) or entit(ies)
to which the Principal’s shares of the Company are
transferred as a result of a transfer by will or the applicable
laws of descent and distribution.
(a) The Option can be exercised
only by Employee or other proper party, in whole Common Shares, by
delivering within the Option period written notice in person or by
certified mail to the Company at its principal office in the form
to be provided by the Company at the time Employee desires to
exercise. All notices to the Company shall be addressed to it at
its office at 9601 S. Meridian Blvd., Englewood, Colorado, 80112,
Attn: Corporate Secretary, or to such other address or person as
the Company may notify Employee from time to time. The notice shall
be signed by the person entitled to exercise the Option and shall
state, among other things, the number of Common Shares as to which
the Option is being exercised, shall contain a representation and
agreement as to the Employee’s investment intent with respect
to the Common Shares in form satisfactory to the Company’s
counsel (unless a Prospectus meeting applicable requirements of the
Securities Act of 1933, as amended, is in effect for the Common
Shares being purchased pursuant to exercise of this Option), and be
accompanied by payment in full of the Option price for all shares
designated in the notice. All notices to Employee or other person
or persons then entitled to exercise this Option shall be addressed
to the Employee or such other person(s) at the Employee’s
address specified below, or to such other address as Employee or
such person(s) may notify the Company from time to time.
(b) Employee shall pay the
Option Price for the Common Shares purchased in cash or by
certified or bank cashier’s check.
(c) Unless notified by the
Company to the contrary, the Common Shares issuable on exercise of
the Option shall be deemed issued on the date specified by the
Company, within five (5) business days following the date that
counsel for the Company determines that all requisite events to
issuance of the Common Shares have been properly completed. The
Company shall have no obligation to issue the Common
|
***
|
|
Certain
confidential portions of this exhibit were omitted by means of
redacting a portion of the text. Copies of the exhibit containing
the redacted portions have been filed separately
|
|