<PAGE>
EXHIBIT 10.5
(FEBRUARY 2008 VESTING)
CERTAIN MATERIAL (INDICATED BY AN ASTERISK)
HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
LEAP WIRELESS INTERNATIONAL, INC.
2004 STOCK OPTION, RESTRICTED STOCK
AND DEFERRED STOCK UNIT PLAN
STOCK OPTION GRANT NOTICE AND NON-QUALIFIED
STOCK OPTION AGREEMENT
Leap
Wireless International, Inc. (the "COMPANY"), pursuant to its
2004
Stock Option, Restricted Stock and Deferred
Stock Unit Plan (the "PLAN"), hereby
grants to the holder listed below
("HOLDER"), an option to purchase the number
of shares of the Company's Common Stock set
forth below (the "OPTION"). This
Option is subject to all of the terms and
conditions as set forth herein and in
the Non-Qualified Stock Option Agreement
attached hereto as Exhibit A (the
"STOCK OPTION AGREEMENT") and the Plan,
each of which are incorporated herein by
reference. Unless otherwise defined herein,
the terms defined in the Plan shall
have the same defined meanings in this
Grant Notice and the Stock Option
Agreement.
HOLDER:
____________________
GRANT DATE:
____________________
EXERCISE PRICE PER SHARE:
$___________ per share
TOTAL NUMBER OF SHARES SUBJECT TO THE
OPTION:
____________________
EXPIRATION DATE:
____________________
TYPE OF OPTION:
This Option is a Non-Qualified Stock
Option and is not an incentive stock option within the
meaning of Section 422 of the Code.
VESTING SCHEDULE: The shares
of Common Stock subject to
the Option (rounded down to the next whole number of
shares) shall vest and become exercisable on the dates
and in the percentages indicated in Exhibit B to this
Grant Notice.
By his or
her signature and the Company's signature below, Holder agrees
to be bound by the terms and conditions of
the Plan, the Stock Option Agreement
and this Grant Notice. Holder has reviewed
the Stock Option Agreement, the Plan
and this Grant Notice in their entirety,
has had an opportunity to obtain the
advice of counsel prior to executing this
Grant Notice and fully understands all
provisions of this Grant Notice, the Stock
Option Agreement and the Plan. Holder
hereby agrees to accept as binding,
conclusive and final all decisions or
interpretations of the Administrator of the
Plan upon any questions arising
under the Plan or the Option.
LEAP WIRELESS INTERNATIONAL, INC.
HOLDER:
By: ______________________________________
By:
___________________________
Print Name: _____________________________
Print
Name: ____________________
Title: __________________________________
Title:
_________________________
Address: 10307 Pacific Center Court
Address: _______________________
San Diego, California 92121
_______________________
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EXHIBIT A
TO STOCK OPTION GRANT NOTICE
NON-QUALIFIED STOCK OPTION AGREEMENT
Pursuant
to the Stock Option Grant Notice ("GRANT NOTICE") to which this
Non-Qualified Stock Option Agreement (this
"AGREEMENT") is attached, Leap
Wireless International, Inc. (the
"COMPANY") has granted to Holder an option
under the Company's 2004 Stock Option,
Restricted Stock and Deferred Stock Unit
Plan (the "PLAN") to purchase the number of
shares of Common Stock indicated in
the Grant Notice.
ARTICLE I
GENERAL
1.1
Defined Terms. Capitalized terms not specifically defined herein
shall
have the meanings specified in the Plan and
the Grant Notice.
1.2
Incorporation of Terms of Plan. The Option is subject to the terms
and
conditions of the Plan which are
incorporated herein by reference.
ARTICLE II
GRANT OF OPTION
2.1 Grant
of Option. In consideration of Holder's past and/or continued
employment with or service to the Company
or its Subsidiaries and for other good
and valuable consideration, effective as of
the Grant Date set forth in the
Grant Notice (the "GRANT DATE"), the
Company irrevocably grants to Holder the
Option to purchase any part or all of an
aggregate of the number of shares of
Common Stock set forth in the Grant Notice,
upon the terms and conditions set
forth in the Plan and this Agreement. The
Option shall be a Non-Qualified Stock
Option and shall not be an incentive stock
option within the meaning of Section
422 of the Code.
2.2
Purchase Price. The purchase price of the shares of Common
Stock
subject to the Option shall be as set forth
in the Grant Notice, without
commission or other charge.
ARTICLE III
PERIOD OF EXERCISABILITY
3.1
Commencement of Exercisability.
(a) Subject to Sections 3.3 and 5.8, the Option shall become
vested
and exercisable in such amounts and at such
times as are set forth in Exhibit B
to the Grant Notice.
(b) No portion of the Option which has not become vested and
exercisable at Termination of Employment,
Termination of Directorship or
Termination of Consultancy, as
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<PAGE>
applicable, shall thereafter become vested
and exercisable, except as may be
otherwise provided by the Administrator or
as set forth in a written agreement
between the Company and Holder.
3.2
Duration of Exercisability. The installments provided for in
the
vesting schedule set forth in Exhibit B to
the Grant Notice are cumulative. Each
such installment which becomes vested and
exercisable pursuant to the vesting
schedule set forth in Exhibit B to the
Grant Notice shall remain vested and
exercisable until it becomes unexercisable
under Section 3.3.
3.3
Expiration of Option.
(a) The Option may not be exercised to any extent by anyone
after
the first to occur of the following
events:
(i) The expiration of ten (10) years from the Grant Date; or
(ii) The expiration of ninety (90) days following the date of
Holder's Termination of Employment,
Termination of Directorship or Termination
of Consultancy, as applicable, unless such
termination occurs by reason of
Holder's death or Disability (as defined
below) or the Holder's termination by
the Company for Cause (as defined in
Exhibit B to the Grant Notice);
(iii) The expiration of one (1) year following the date of
Holder's Termination of Employment,
Termination of Directorship or Termination
of Consultancy, as applicable, by reason of
Holder's death or Disability; or
(iv) The date of Termination of Employment, Termination of the
Directorship, or Termination of Consultancy
for Cause (as defined in Exhibit B
to the Grant Notice).
(b) For purposes of this Agreement, "DISABILITY" means permanent
and
total disability within the meaning of
Section 22(e)(3) of the Code.
ARTICLE IV
EXERCISE OF OPTION
4.1 Person
Eligible to Exercise. Except as provided in Sections 5.2(b) and
5.2(c), during the lifetime of Holder, only
Holder may exercise the Option or
any portion thereof. After the death of
Holder, any exercisable portion of the
Option may, prior to the time when the
Option becomes unexercisable under
Section 3.3, be exercised by Holder's
personal representative or by any person
empowered to do so under the deceased
Holder's will or under the then applicable
laws of descent and distribution.
4.2
Partial Exercise. Any exercisable portion of the Option or the
entire
Option, if then wholly exercisable, may be
exercised in whole or in part at any
time prior to the time when the Option or
portion thereof becomes unexercisable
under Section 3.3.
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4.3 Manner
of Exercise. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the
Secretary of the Company or the
Secretary's office of all of the following
prior to the time when the Option or
such portion thereof becomes unexercisable
under Section 3.3:
(a) An Exercise Notice in writing signed by Holder or any other
person then entitled to exercise the Option
or portion thereof, stating that the
Option or portion thereof is thereby
exercised, such notice complying with all
applicable rules established by the
Administrator. Such notice shall be
substantially in the form attached as
Exhibit C to the Grant Notice (or such
other form as is prescribed by the
Administrator); and
(b) Subject to Section 6.2(d) of the Plan:
(i) Full payment (in cash or by check) for the shares with
respect to which the Option or portion
thereof is exercised; or
(ii) With the consent of the Administrator, such payment may
be made, in whole or in part, through the
delivery of shares of Common Stock
which have been owned by Holder for at
least six (6) months, duly endorsed for
transfer to the Company with a Fair Market
Value on the date of delivery equal
to the aggregate exercise price of the
Option or exercised portion thereof; or
(iii) To the extent permitted under applicable laws, through
the delivery of a notice that Holder has
placed a market sell order with a
broker with respect to shares of Common
Stock then issuable upon exercise of the
Option, and that the broker has been
directed to pay a sufficient portion of the
net proceeds of the sale to the Company in
satisfaction of the Option exercise
price, provided, that payment of such
proceeds is made to the Company upon
settlement of such sale; or
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing
paragraphs (i), (ii) and (iii); and
(c) A bona fide written representation and agreement, in such
form
as is prescribed by the Administrator,
signed by Holder or the other person then
entitled to exercise such Option or portion
thereof, stating that the shares of
Common Stock are being acquired for
Holder's own account, for investment and
without any present intention of
distributing or reselling said shares or any of
them except as may be permitted under the
Securities Act and then applicable
rules and regulations thereunder, and that
Holder or other person then entitled
to exercise such Option or portion thereof
will indemnify the Company against
and hold it free and harmless from any
loss, damage, expense or liability
resulting to the Company if any sale or
distribution of the shares by such
person is contrary to the representation
and agreement referred to above. The
Administrator may, in its absolute
discretion, take whatever additional actions
it deems appropriate to ensure the
observance and performance of such
representation and agreement and to effect
compliance with the Securities Act
and any other federal or state securities
laws or regulations. Without limiting
the generality of the foregoing, the
Administrator may require an opinion of
counsel acceptable to it to the effect that
any subsequent transfer of shares
acquired on an Option exercise does not
violate the Securities Act,
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and may issue stop-transfer orders covering
such shares. Share certificates
evidencing Common Stock issued on exercise
of the Option shall bear an
appropriate legend referring to the
provisions of this subsection (c) and the
agreements herein. The written
representation and agreement referred to in the
first sentence of this subsection (c)
shall, however, not be required if the
shares to be issued pursuant to such
exercise have been registered under the
Securities Act, and such registration is
then effective in respect of such
shares; and
(d) The receipt by the Company of full payment for such shares,
including payment of any applicable
withholding tax, which in the discretion of
the Administrator may be in the form of
consideration used by Holder to pay for
such shares under Section 4.3(b), subject
to Section 10.4 of the Plan; and
(e) In the event the Option or portion thereof shall be
exercised
pursuant to Section 4.1 by any person or
persons other than Holder, appropriate
proof of the right of such person or
persons to exercise the Option.
4.4
Conditions to Issuance of Stock Certificates. The shares of
Common
Stock deliverable upon the exercise of the
Option, or any portion thereof, may
be either previously authorized but
unissued shares or issued shares which have
then been reacquired by the Company. Such
shares shall be fully paid and
nonassessable. The Company shall not be
required to issue or deliver any shares
of Common Stock purchased upon the exercise
of the Option or portion thereof
prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock
exchanges
on which such Common Stock is then listed;
and
(b) The completion of any registration or other qualification
of
such shares under any state or federal law
or under rulings or regulations of
the Securities and Exchange Commission or
of any other governmental regulatory
body, which the Administrator shall, in its
absolute discretion, deem necessary
or advisable; and
(c) The obtaining of any approval or other clearance from any
state
or federal governmental agency which the
Administrator shall, in its absolute
discretion, determine to be necessary or
advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator
may from time to time establish for
reasons of administrative convenience;
and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable
withholding tax, which in the discretion of
the Administrator may be in the form of
consideration used by the Holder to pay
for such shares under Section 4.3(b),
subject to Section 10.4 of the Plan.
4.5 Rights
as Stockholder. The holder of the Option shall not be, nor have
any of the rights or privileges of, a
stockholder of the Company in respect of
any shares purchasable upon the exercise of
any part of the Option unless and
until such shares shall have been issued by
the Company to such holder.
<PAGE>
ARTICLE V
OTHER PROVISIONS
5.1
Administration. The Administrator shall have the power to
interpret
the Plan and this Agreement and to adopt
such rules for the administration,
interpretation and application of the Plan
as are consistent therewith and to
interpret, amend or revoke any such rules.
All actions taken and all
interpretations and determinations made by
the Administrator in good faith shall
be final and binding upon Holder, the
Company and all other interested persons.
No member of the Administrator shall be
personally liable for any action,
determination or interpretation made in
good faith with respect to the Plan,
this Agreement or the Option. In its
absolute discretion, the Board may at any
time and from time to time exercise any and
all rights and duties of the
Administrator under the Plan and this
Agreement.
5.2 Option
Not Transferable.
(a) Subject to Section 5.2(b), the Option may not be sold,
pledged,
assigned or transferred in any manner other
than by will or the laws of descent
and distribution or, subject to the consent
of the Administrator, pursuant to a
DRO, unless and until the shares underlying
the Option have been issued, and all
restrictions applicable to such shares have
lapsed. Neither the Option nor any
interest or right therein shall be liable
for the debts, contracts or
engagements of Holder or his or her
successors in interest or shall be subject
to disposition by transfer, alienation,
anticipation, pledge, encumbrance,
assignment or any other means whether such
disposition be voluntary or
involuntary or by operation of law by
judgment, levy, attachment, garnishment or
any other legal or equitable proceedings
(including bankruptcy), and any
attempted disposition thereof shall be null
and void and of no effect, except to
the extent that such disposition is
permitted by the preceding sentence.
(b) Notwithstanding any other provision in this Agreement, with
the
consent of the Administrator and to the
extent the Option is not intended to
qualify as an Incentive Stock Option, the
Option may be transferred to one or
more Permitted Transferees, subject to the
terms and conditions set forth in
Section 10.1 of the Plan.
(c) Unless transferred to a Permitted Transferee in accordance
with
Section 5.2(b), during the lifetime of
Holder, only Holder may exercise the
Option or any portion thereof unless it has
been disposed of pursuant to a DRO.
After the death of Holder, any exercisable
portion of the Option may, prior to
the time when the Option becomes
unexercisable under Section 3.3, be exercised
by Holder's personal representative or by
any person empowered to do so under
the deceased Holder's will or under the
then applicable laws of descent and
distribution.
5.3
Restrictive Legends and Stop-Transfer Orders.
(a) The share certificate or certificates evidencing the shares
of
Common Stock purchased hereunder shall be
endorsed with any legends that may be
required by state or federal securities
laws.
(b) Holder agrees that, in order to ensure compliance with the
restrictions referred to herein, the
Company may issue appropriate "stop
transfer" instructions to its transfer
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agent, if any, and that, if the Company
transfers its own securities, it may
make appropriate notations to the same
effect in its own records.
(c) The Company shall not be required: (i) to transfer on its
books
any shares of Common Stock that have been
sold or otherwise transferred in
violation of any of the provisions of this
Agreement, or (ii) to treat as owner
of such shares of Common Stock or to accord
the right to vote or pay dividends
to any purchaser or other transferee to
whom such shares shall have been so
transferred.
5.4 Shares
to Be Reserved. The Company shall at all times during the term
of the Option reserve and keep available
such number of shares of Common Stock
as will be sufficient to satisfy the
requirements of this Agreement.
5.5
Notices. Any notice to be given under the terms of this Agreement
to
the Company shall be addressed to the
Company in care of the Secretary of the
Company, and any notice to be given to
Holder shall be addressed to Holder at
the address given beneath Holder's
signature on the Grant Notice. By a notice
given pursuant to this Section 5.5, either
party may hereafter designate a
different address for notices to be given
to that party. Any notice which is
required to be given to Holder shall, if
Holder is then deceased, be given to
the person entitled to exercise his or her
Option pursuant to Section 4.1 by
written notice under this Section 5.5. Any
notice shall be deemed duly given
when sent via email or when sent by
certified mail (return receipt requested)
and deposited (with postage prepaid) in a
post office or branch post office
regularly maintained by the United States
Postal Service.
5.6
Titles. Titles are provided herein for convenience only and are not
to
serve as a basis for interpretation or
construction of this Agreement.
5.7
