# SEC Filing Details DBS Merger Agreement



## Guest (Mar 20, 2002)

EchoStar may not be required to pay all of the $600 million that is part of a break-up fee if the company can't complete its merger with Hughes Electronics and DirecTV, according to a filing on the $26 billion deal recently sent to the Securities and Exchange Commission.

Under the merger agreement between the companies, EchoStar will pay Hughes a $600 million termination fee if the satellite TV company can't get regulators to approve the transaction. Hughes would be required to pay to EchoStar $600 million if its parent General Motors fails to obtain stockholder approval for the transaction, among other items.

However, if the merger is terminated because of Hughes' "failure to comply with its obligations to use its best efforts to satisfy specified conditions in the Hughes/EchoStar merger agreement relating to antitrust requirements and governmental approvals," then EchoStar is obligated to pay Hughes only $300 million of the termination fee, the SEC filing said.

In addition, EchoStar will not be obligated to pay the full $600 million if it's willing to do a settlement with antitrust authorities or the Federal Communications Commission on the merger, but Hughes doesn't accept the settlement and exits the deal, the filing said.

EchoStar's purchase of PanAmSat for about $2.7 billion is still a requirement for the satellite TV company if the merger collapses. However, the PanAmSat deal also is subject to any antitrust review and FCC approval.

In other parts of the filing, the companies said the merged company will have a board of directors with 11 officers, three of whom would be directors or officers of Hughes.

Also, EchoStar's common stockholders are not being asked to vote on the proposed transaction.

The deal requires approval from a majority of the voting power of all outstanding shares of EchoStar common stock. A trust controlled by EchoStar CEO Charlie Ergen represents about 90 percent of that voting power, and the trust has sent notice about its approval of the deal. "This action alone was sufficient to obtain the vote of the EchoStar common stockholders necessary to approve the Hughes/EchoStar merger," the filing said.

From SkyReport (Used with permission)


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