Certain Relationships and Related-Party Transactions

12 Months Ended

Mar. 30, 2012

Certain Relationships and Related-Party Transactions [Abstract]

Certain Relationships and Related-Party Transactions

Note 16 — Certain Relationships and Related-Party Transactions

Michael Targoff, who served as a director of the Company between February 2003 and February 2012, currently serves as the Chief Executive Officer and the Vice Chairman of the board of directors of Loral, the parent of SS/L, and is also a director of Telesat Holdings Inc., a joint venture company formed by Loral and the Public Sector Pension Investment Board to acquire Telesat Canada in October 2007. John Stenbit, a director of the Company since August 2004, also currently serves on the board of directors of Loral.

In January 2008, the Company entered into a satellite construction contract with SS/L under which the Company purchased a new high-capacity Ka-band spot-beam satellite, ViaSat-1, designed by the Company and constructed by SS/L. In addition, the Company entered into a beam sharing agreement with Loral, whereby Loral is responsible for contributing 15% of the total costs associated with the ViaSat-1 satellite project. The Company’s purchase of the ViaSat-1 satellite from SS/L was approved by the disinterested members of the Company’s Board of Directors, after a determination by the disinterested members of the Company’s Board that the terms and conditions of the purchase were fair to and in the best interests of the Company and its stockholders. On March 1, 2011, Loral entered into agreements with Telesat Canada pursuant to which Loral assigned to Telesat Canada and Telesat Canada assumed from Loral all of Loral’s rights and obligations with respect to the Canadian beams on ViaSat-1. In October 2011, ViaSat-1 was successfully launched into orbit. SS/L handed over operation of the satellite to the Company in December 2011 following the successful completion of the manufacturer’s in-orbit testing. The Company’s contract with SS/L requires the Company to make monthly satellite performance incentive payments, including interest, over a fifteen-year period, commencing from the transfer of title of the satellite to the Company, subject to the continued satisfactory performance of the satellite (see Note 11). Material amounts related to the satellite construction contract with SS/L are disclosed in the tables below.

In addition, from time to time, the Company enters into various contracts in the ordinary course of business with SS/L and Telesat Canada. Material amounts related to these contracts are disclosed in the tables below.

Current payables included in accrued liabilities, collection in excess of revenues and deferred revenues included in accrued liabilities and long-term payables included in other liabilities as of March 30, 2012 and April 1, 2011 were as follows:

	As of March 30, 2012		As of April 1, 2011
	(In thousands)
Payables, current
Loral – satellite construction contract	$	1,599	$	—
Collections in excess of revenues and deferred revenues
Loral – ordinary course of business		*		1,376
Payables, long-term
Loral – satellite construction contract (estimated satellite performance incentives)		20,910		—

^{*  Amounts were not meaningful.}

Revenue and expense for the fiscal years ended March 30, 2012, April 1, 2011 and April 2, 2010 were as follows:

	Fiscal Years Ended
	March 30, 2012		April 1, 2011		April 2, 2010
	(In thousands)
Revenue
Loral – ordinary course of business	$	3,983	$	3,282	$	—
Expense
Telesat Canada – ordinary course of business		3,380		2,153		2,146

Cash received and cash paid during the fiscal years ended March 30, 2012, April 1, 2011 and April 2, 2010 were as follows:

	Fiscal Years Ended
	March 30, 2012		April 1, 2011		April 2, 2010
	(In thousands)
Cash received
Loral – Beam Sharing Agreement	$	4,298	$	8,230	$	2,609
Telesat Canada – Beam Sharing Agreement		9,159		—		—
Loral – ordinary course of business		1,194		3,876		—
Telesat Canada – ordinary course of business		2,930		1,239		1,922
Cash paid
Loral – satellite construction contract (including estimated satellite performance incentives)		4,174		25,020		62,883
Telesat Canada – ordinary course of business		7,606		7,178		2,126

As discussed in Note 1, the Company entered into the Indemnification Agreement with the Indemnitors in connection with the Company’s acquisition of WildBlue. Pursuant to the terms of the Indemnification Agreement, the Indemnitors agreed to indemnify the Company for any damages relating to, among other things, the Action. During the third quarter of fiscal year 2012, the parties to the Action entered into a settlement agreement whereby the parties agreed to release all claims in exchange for a payment of $20.5 million by WildBlue to the plaintiffs. Payment of this amount by WildBlue was expressly conditioned upon the Indemnitors fully funding an escrow account covering all amounts other than the $0.5 million the Company was obligated to pay under the Indemnification Agreement. In January 2012, in accordance with the terms of the settlement agreement, the Company received $20.0 million in cash from the Indemnitors and paid $20.5 million to the plaintiffs in the Action. One of the former WildBlue stockholders and plaintiffs in the Action was TimesArrow Capital I, LLC. Thomas Moore, Senior Vice President of the Company, served as the administrative member of, and held 33.3% of the equity interests in, TimesArrow. Of the $20.5 million paid to the plaintiffs in the Action, TimesArrow and Mr. Moore received $3.0 million and $1.0 million, respectively.