Exhibit 10.39

 

STOCK OPTION AGREEMENT

 

This Incentive Stock Option Agreement (“Agreement”) is entered into effective as
of [Grant Date], by and between EchoStar Communications Corporation, a Nevada
corporation (the “Company”), and [Participant 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:

 

1.                                      Grant of Option

 

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 [Number of Shares Granted] shares of the Class A Common Stock of
the Company, par value $0.01 per share (the “Common Shares”), at the price of
$[Grant 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: ]

 

(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)

 

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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 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

 

(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, or in the event that Employee
violates the covenants set forth in Section 5 hereof, 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

 

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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.

 

(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.

 

4.                                      Manner of Exercise

 

(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 100 Inverness Terrace East, 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 Shares until it has
confirmed to its satisfaction that all events requisite for exercise have been
accomplished. Any notice of exercise shall be void and of no effect if all
requisite events have not been accomplished.

 

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(d)                                 The certificate or certificates for the
Common Shares as to which this Option shall be exercised may be registered only
in the name of the Employee (or if the Employee so requests in the notice
exercising this Option, jointly in the name of the Employee and with a member of
the Employee’s family, with the right of survivorship, or in the event of the
death of Employee, in the name of such survivor of the Employee as the person
with the right to exercise shall designate).

 

5.                                      Covenant Not to Compete and Protection
of Confidential Information

 

(a)                                 Employee shall serve the Company and its
subsidiaries (collectively, the “Company” for purposes of this Paragraph 5), in
good faith and use the Employee’s best efforts to promote the Company’s
interests. Employee hereby agrees not to compete with the Company, and agrees to
protect from disclosure certain information, pursuant to the terms and
conditions hereinafter set forth.

 

(c)                                  Employee further agrees to hold in a
fiduciary capacity for the benefit of the Company all proprietary and
confidential information, knowledge, ideas and data, including, without
limitation, customer lists and the Company’s products, processes and programs
(“Confidential Information”), relating in any way to the present or future
business or activities of the Company for as long as such Confidential
Information remains confidential. All such Confidential Information, together
with all copies thereof and notes and other references thereto, shall remain the
sole property of the Company. Employee acknowledges that all Confidential
Information is essential to the Company’s present and future business and
activities, and is therefore deemed trade secrets and is considered proprietary
to, and treated as confidential by, the Company. This obligation of
confidentiality is intended to supplement, and is not intended to supersede or
limit, the obligations of confidentiality Employee has to the Company by
agreement, law or otherwise. If any court of competent jurisdiction shall
determine that the foregoing covenants are invalid in any respect, the parties
hereto agree that any court so holding may limit such covenant in time, in area
or in any other manner which the court determines such that the covenant shall
be enforceable against Employee. Employee acknowledges that the remedy at law
for any breach of the foregoing covenants will be inadequate, and that the
Company shall be entitled, in addition to any remedy at law, to preliminary and
permanent injunctive relief.

 

6.                                      Settlement of Disputes

 

(a)                                 In consideration of the rights, terms and
conditions of this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employee and Company
agree that any claim, controversy and/or dispute between them, arising out  of
and/or in any way related to (1) Employee’s application for employment,
employment and/or termination of employment (collectively “employment-related
disputes”) and/or (2) this Agreement (Option disputes), whenever and wherever
brought, shall be resolved by arbitration. The Employee agrees that this
agreement to arbitrate is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1
et seq., and is fully enforceable. For purposes of this paragraph only, Company
shall be defined to include its direct and indirect subsidiaries, and to the
employees, shareholders, officers, and directors of any of the foregoing
entities.

 

(b)                                 For employment-related disputes, the Company
agrees to pay all the arbitrator’s and arbitration fees and expenses until
otherwise ordered by the arbitrator, except that Company shall not be
responsible for the Employee’s legal fees and costs, unless awarded to the
Employee by the arbitrator. The arbitration shall be governed by the substantive
law of the State of Colorado, without giving effect to choice of law principles.
A single arbitrator engaged in the practice of law from the American

 

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Arbitration Association (“AAA”) shall conduct the arbitration of
employment-related disputes under the then current procedures of the AAA’s
National Rules for the Resolution of Employment Disputes (“Rules”). A single
arbitrator engaged in  the practice of law from the American Arbitration
Association (“AAA”) shall conduct the arbitration of Option disputes under the
then current procedures of the AAA’s Commercial Dispute Resolution Procedures
(“Procedures”). Regardless of what the above-mentioned Procedures and
Rules state, all arbitration proceedings, including but not limited to hearings,
discovery, settlements, and awards shall be confidential and the arbitration and
any hearings shall be held in the City and County of Denver, Colorado. The
arbitrator’s decision shall be final and binding, and judgment upon the
arbitrator’s decision and/or award may be entered in any court of competent
jurisdiction.

 

(c)                                  The prevailing party in any arbitration of
common law claims pursuant to this agreement to arbitrate shall be entitled to
its, his, or her reasonable attorneys’ fees and to reimbursement of costs of
arbitrator’s fees and arbitration expenses. Nothing in this Agreement shall
require Employee to reimburse Company for its attorneys’ fees and costs,
including arbitration fees and costs, incurred when Company prevails in defense
of any statutory claim of unlawful discrimination, unless said claim brought by
Employee is frivolous, unreasonable or without foundation, or Employee continues
to prosecute a claim after the claim became frivolous, unreasonable or without
foundation. In the event either party hereto files a judicial or administrative
action asserting claims subject to this arbitration provision, and the other
party successfully stays such action and/or compels arbitration of the claims
made in such an action, the party filing the administrative or judicial action
shall pay the other party’s reasonable attorneys’ fees and costs incurred in
obtaining a stay and/or compelling arbitration.

 

(d)                                 Notwithstanding the foregoing, this
agreement to arbitrate all employment-related claims shall not apply to Employee
claims for statutory unemployment compensation benefits, statutory worker’s
compensation benefits, and claims for benefits from a Company-sponsored
“employee benefit plan,” as that term is defined in 29 U.S.C. §1002(3). Further,
and notwithstanding the foregoing, Company shall have the right to seek any
temporary restraining orders, preliminary and/or permanent injunctions in a
court of competent jurisdiction based on Company’s claims that the Employee is
violating Company’s rights regarding (1) non-competition agreements or
obligations, (2) intellectual property, including but not limited to copyrights,
patent rights, trade secrets, know-how and/or (3) confidential information.

 

(e)                                  If any provision of this agreement to
arbitrate is declared by any court of competent jurisdiction to be invalid for
any reason, the remaining provisions of this agreement to arbitrate shall be
fully enforceable to the maximum extent permitted by law. This Agreement
supersedes and renders void any prior agreement(s) to arbitrate between Employee
and Company, and there are no agreements, verbal or written or otherwise,
between the parties hereto regarding arbitration of employment-related disputes
and Option disputes other than as expressly set forth in this Agreement. Other
than as set forth above regarding venue, governing law and the confidential
nature of proceedings, in the event of a conflict between the AAA Rules and/or
Procedures, and this Agreement, the terms of the applicable Procedures and
Rules shall control.

 

(f)                                   THE RIGHT TO A TRIAL, TO A TRIAL BY JURY,
AND TO COMMON LAW CLAIMS FOR PUNITIVE AND/OR EXEMPLARY DAMAGES ARE OF VALUE AND
ARE WAIVED PURSUANT TO THIS AGREEMENT. Other than potential rights to a trial, a
jury trial, and common law claims for punitive and/or exemplary damages, nothing
in this agreement to arbitrate limits any statutory remedy to which the Employee
may be entitled under law.

 

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(g)                                  The parties acknowledge that this agreement
shall not alter the at-will nature of their employment relationship MEANING THAT
YOU MAY TERMINATE YOUR EMPLOYMENT WITH THE COMPANY AT ANY TIME WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE, AND THE COMPANY RESERVES THE SAME RIGHTS TO
TERMINATE YOUR EMPLOYMENT.

 

7.                                      Miscellaneous

 

(a)                                 This Option is issued pursuant to the Plan
and is subject to its terms. The terms of the Plan are available for inspection
during normal business  hours at the principal offices of the Company.

 

(b)                                 This Agreement shall not confer on Employee
any right with respect to continuance of employment by the Company or any of its
subsidiaries, nor will it interfere in any way with the right of the Company to
terminate such employment or to demote Employee at any time for any reason.
Employee shall have none of the rights of a shareholder with respect to shares
subject to this Option until such shares shall have been issued to Employee upon
exercise of this Option.

 

(c)                                  The exercise of all or any parts of this
Option shall only be effective at such time that the issuance and sale of Common
Shares prior or pursuant to such exercise will not violate any state or federal
securities or other laws.

 

(d)                                 If there shall be any change in the Common
Shares of the Company through merger, consolidation, reorganization,
recapitalization, dividend in the form of stock (of whatever amount), stock
split or other change in the corporate structure of the Company, and all or any
portion of the Option shall then be exercised and not yet expired, then
appropriate adjustments shall be made by the Company, as determined in the sole
discretion of the Board, or the Committee at its discretion, in order to prevent
dilution or enlargement of Employee’s rights under this Option. Such adjustments
shall include, where appropriate, changes in the number of shares of Common
Shares and the price per share subject to the outstanding Option.
Notwithstanding the above, in no event shall action be taken which would modify
the treatment of this Option under the Code without the agreement of the Company
and the Employee.

 

(e)                                  The Company shall at all times during the
term of this Option reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement. If the Company in its
sole discretion so elects, it may register the Common Shares purchasable upon
the exercise of this Option under the Securities Act of 1933, as amended (the
“Securities Act”), and on any securities exchange. In the absence of such
election, the Employee understands that neither this Option nor the Common
Shares subject thereto and issuable upon the exercise thereof will be registered
under the Securities Act, or tradeable on any securities exchange, and the
Employee represents that this Option is being acquired, and that such Common
Shares which will be acquired pursuant to the exercise of this Option will be
acquired, by the Employee for investment and not with a view to distribution
thereof.

 

In the absence of an effective Prospectus meeting the requirements of the
Securities Act, upon any sale or transfer of the Common Stock purchased upon the
exercise of this Option, the Employee shall deliver to the Company an opinion of
counsel satisfactory to the Company to the effect that the sale or transfer of
the Common Shares does not violate any provision of the Securities Act or the
Securities Exchange Act of 1934, as amended, and the certificates for the Common
Shares purchased may bear, in that event, the following legend:

 

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“The shares represented by this Certificate have not  been registered under the
Securities Act of 1933, as amended (the “Act”), or state securities laws, and
are “restricted securities” as that term is defined in Rule 144 under the Act.
The shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act and compliance
with any applicable state securities laws, or pursuant to an exemption
therefrom, the availability of which must be established to the satisfaction of
the Company.”

 

(f)                                   If Employee shall dispose of any of the
Common Shares of the Company acquired by Employee pursuant to the exercise of
this Option within two (2) years from the date this Option was granted or within
one (1) year after the transfer of any such shares to Employee upon exercise of
this Option, then, in order to provide the Company with the opportunity to claim
the benefit of any income tax deduction which may be available to it under the
circumstances, Employee shall promptly notify the Company of the dates of
acquisition and disposition of such shares, the number of shares  so disposed
of, and the consideration, if any, received for such shares. In order to comply
with all applicable federal or state income tax laws or regulations, the Company
may take such action as it deems appropriate to insure: (i) notice to the
Company of any disposition of the Common Shares of the Company within the time
periods described above; and (ii) that, if necessary, all applicable federal or
state payroll, withholding, income or other taxes are withheld or collected from
Employee.

 

(g)                                  The holder of this Option will not have any
right to dividends or any other right of a shareholder with respect to the
Common Shares subject to this Option until such Common Shares shall have been
issued to the Employee, upon the exercise of this Option and the consummation of
the purchase of such Common Shares (as evidenced by the records of the transfer
agent of the Company).

 

(h)                                 Employee agrees to treat with
confidentiality the existence, terms and conditions of this Option, and agrees
that failure to do so may result in immediate termination of this Option.

 

(i)                                     This Agreement sets forth the entire,
final and complete understanding between the parties hereto relevant to the
subject matter of this Agreement, and it supersedes and replaces all previous
understandings or agreements, written, oral, or implied, relevant to the subject
matter of this Agreement made or existing before the date of this Agreement.
Except as expressly provided by this Agreement, no waiver or modification of any
of the terms or conditions of this Agreement shall be effective unless in
writing and signed by both parties. The failure of any party to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.

 

(j)                                    The parties agree that each provision of
this Agreement shall be construed as separable and divisible from every other
provision and that the enforceability of any one provision shall not limit the
enforceability, in whole or in part, of any other provision hereof. In the event
that a court of competent jurisdiction determines that any term or provision
herein, or the application thereof to any person, entity, or circumstance, shall
to any extent be invalid or unenforceable, the remaining terms and provisions of
this Agreement shall not be affected thereby, and shall be interpreted as if the
invalid term or provision were not a part hereof. Any provision of this
Agreement which logically would be expected to survive termination or
expiration, shall survive for a reasonable time period under the circumstances,
whether or not specifically provided in this Agreement.

 

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(k)                                 In the event the Company provides Employee
(or anyone acting on behalf of Employee) with summary or other information
concerning, including, or otherwise relating to Employee’s rights or benefits
under this Agreement (including without limitation the Option, and any vesting
thereof), such summary or other information shall in all cases be qualified in
its entirety by this Agreement and, unless it explicitly states otherwise and is
signed by an officer of the Company, shall not constitute an amendment or other
modification hereto.

 

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Upon Employee’s acceptance of the terms and conditions set forth in this
Incentive Stock Option Agreement through the electronic grant process, this
Incentive  Stock Option Agreement becomes effective between the parties as of
the date first written above.

 

ECHOSTAR COMMUNICATIONS CORPORATION

 

EMPLOYEE — [Participant Name]

Accepted on [Acceptance Date]

 

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INCENTIVE STOCK OPTION PLAN

 

Explanation of Beneficiary Designation

 

The Incentive Stock Option Plan provides that although an option is exercisable
during the optionee’s lifetime only by him or her, an option may be exercised
after the death of any optionee (if it has not otherwise terminated or been
exercised in full) by the person whom the optionee shall have designated as
Beneficiary or, if no designation has been made, by the person to whom the
optionee’s rights shall have passed by Will or the laws of descent and
distribution. (Note: An option is not otherwise assignable or transferable.)

 

The right to designate Beneficiaries could provide certain advantages including
avoidance of probate (and attendant costs) with respect to the option. Since 
the individual circumstances of each optionee differ, however, and since the
Company cannot warrant the validity or effect of such a designation of
Beneficiary, it is recommended that you consult your personal tax advisor before
making any decision, particularly if you propose to designate a trust as
Beneficiary.

 

Please indicate your decision through Fidelity’s on-line process or by calling
Fidelity to designate a Beneficiary or Beneficiaries.

 

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