THE 2009 EMPLOYMENT INDUCEMENT
EQUITY INCENTIVE PLAN
OF LEAP WIRELESS INTERNATIONAL,
INC.
Leap
Wireless International, Inc., a Delaware corporation, has adopted
the 2009 Employment Inducement Equity Incentive Plan of Leap
Wireless International, Inc. (the “ Plan ”),
effective February 10, 2009 (the “ Effective Date
”), for the benefit of Eligible Individuals (as defined
below).
The
purposes of the Plan are as follows:
(1) To
provide an additional incentive for Eligible Individuals to further
the growth, development and financial success of the Company by
personally benefiting through the ownership of Company stock and/or
rights which recognize such growth, development and financial
success.
(2) To
enable the Company to obtain and retain the services of Eligible
Individuals considered essential to the long-range success of the
Company by offering them an opportunity to own stock in the Company
which will reflect the growth, development and financial success of
the Company.
All
Awards granted under the Plan are intended to constitute
“employment inducement awards” within the meaning of
Nasdaq Stock Market Rule 4350(i)(1)(A)(iv). Awards under the
Plan may only be made in compliance with such rule and other
requirements as may be imposed by The Nasdaq Stock Market in
connection with employment inducement awards.
Wherever
the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the
context so indicates.
1.1.
“ Administrator ” shall mean the entity that
conducts the general administration of the Plan as provided herein.
The term “Administrator” shall refer to the Committee
unless the Board has elected to exercise any of the rights and
duties of the Committee under the Plan generally as provided in
Section 9.2.
1.2.
“ Award ” shall mean an Option, a Restricted
Stock award or a Deferred Stock Unit award granted or awarded under
the Plan.
1.3.
“ Award Agreement ” shall mean a written
agreement executed by an authorized officer of the Company and the
Holder which shall contain such terms and conditions with respect
to an Award as the Administrator shall determine, consistent with
the Plan.
1.4.
“ Board ” shall mean the Board of Directors of
the Company.
1.5.
“ Change in Control ” shall mean the occurrence
of any of the following events, if such event occurs on or after
the Effective Date:
(a) the
occurrence of clauses (I) and (II), where clause (I) is:
the acquisition, directly or indirectly, by any
“person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange
Act and the rules thereunder) of “beneficial ownership”
(as determined pursuant to Rule 13d-3 under the Exchange Act)
of securities entitled to vote generally in the election of
directors (“voting securities”) of the Company that
represent thirty-five percent (35%) or more of the combined voting
power of the Company’s then outstanding voting securities,
other than
(i)
an acquisition by a trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or
maintained by the Company or any person controlled by the Company
or by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any person controlled by the Company,
or
(ii)
an acquisition of voting securities, directly or indirectly by the
Company, or
(iii)
an acquisition of voting securities pursuant to a transaction
described in subsection (c) below that would not be a Change
in Control under subsection (c), or
(iv)
an acquisition of voting securities, directly or indirectly, by a
person who or group which beneficially owns, as of the Effective
Date, voting securities of the Company that represent five percent
(5%) or more of the combined voting power of the Company’s
outstanding voting securities on such Effective Date;
provided,
however , that,
notwithstanding the foregoing, an acquisition of the
Company’s securities by the Company which causes the
Company’s voting securities beneficially owned by a person or
group to represent thirty-five percent (35%) or more of the
combined voting power of the Company’s then outstanding
voting securities shall not constitute an “acquisition”
by any person or group for purposes of this clause (I); provided
further , that if a person or group shall become the beneficial
owner of thirty-five percent (35%) or more of the combined voting
power of the Company’s then outstanding voting securities by
reason of share acquisitions by the Company as described above and
shall, after such share acquisitions by the Company, become the
beneficial owner of any additional voting securities of the
Company, then such acquisition shall constitute an acquisition for
purposes of clause (I); and
clause
(II) is the circumstance of individuals who, as of the
Effective Date, constitute the Board (the “Incumbent
Board”) ceasing for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a Director subsequent to the Effective Date
whose appointment, election, or nomination for election by the
Company’s shareholders was
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approved by a
vote of at least a majority of the Directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office as a
Director occurs as a result of an actual or threatened election
contest with respect to the election or removal of Directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board.
Notwithstanding
the foregoing, clause (II) shall not apply, and the occurrence
of clause (I) shall be sufficient to constitute a Change in
Control if the acquisition described in clause (I) is by a
Strategic Investor; provided, however, that clause
(II) shall nonetheless apply if the Strategic Investor enters
into a standstill agreement with the Company (for the duration of
such agreement). For purposes of this subsection
(a),“Strategic Investor” shall mean any buyer of or
investor in of voting securities of the Company whose primary
business is not financial investing;
(b) the
consummation by the Company (whether directly involving the Company
or indirectly involving the Company through one or more
subsidiaries or intermediaries) of: (i) a merger,
consolidation, reorganization, or business combination or
(ii) a sale or other disposition of all or substantially all
of the Company’s assets, other than a transaction
(I)
which results in the Company’s voting securities outstanding
immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the Company or the person that, as a result of the
transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of the
Company (the Company or such person, the “Company Successor
Entity”)), directly or indirectly, more than fifty percent
(50%) of the combined voting power of the Company Successor
Entity’s outstanding voting securities immediately after the
transaction, and
(II)
after which more than fifty percent (50%) of the members of the
board of directors of the Company Successor Entity were members of
the Incumbent Board at the time of the Board’s approval of
the agreement providing for the transaction or other action of the
Board approving the transaction, and
(III)
after which no person or group beneficially owns voting securities
representing thirty-five percent (35%) or more of the combined
voting power of the Company Successor Entity; provided, however,
that no person or group shall be treated for purposes of this
clause (III) as beneficially owning thirty-five percent (35%)
or more of the combined voting power of the Company Successor
Entity solely as a result of the voting power held in the Company
by such person or group prior to the consummation of the
transaction;
(c) a
liquidation or dissolution of the Company;
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(d) the
acquisition, directly or indirectly, by any “person” or
“group” (as those terms are defined in
Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and the
rules thereunder) of “beneficial ownership” (as
determined pursuant to Rule l3d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors
(“voting securities”) of Cricket Communications, Inc.
(“Cricket”)that represent fifty percent (50%) or more
of the combined voting power of Cricket’s then outstanding
voting securities, other than
(i)
an acquisition of Cricket’s voting securities, directly or
indirectly, by the Company or any person controlled by the Company,
or
(ii)
an acquisition of Cricket’s voting securities pursuant to a
transaction described in subsection (e) below that would not
be a Change in Control under subsection (e); or
(e) the
consummation by Cricket (whether directly involving Cricket or
indirectly involving Cricket through one or more subsidiaries or
intermediaries) of (i) a merger, consolidation,
reorganization, or business combination or (ii) a sale or
other disposition of all or substantially all of Cricket’s
assets, other than a transaction which results in Cricket’s
voting securities outstanding immediately before the transaction
continuing to represent (either by remaining outstanding or by
being converted into voting securities of Cricket or the person
that, as a result of the transaction, controls, directly or
indirectly, Cricket or owns, directly or indirectly, all or
substantially all of Cricket’s assets or otherwise succeeds
to the business of Cricket (Cricket or such person, the
“Cricket Successor Entity “)),directly or indirectly,
more than fifty percent (50%) of the combined voting power of the
Cricket Successor Entity’s outstanding voting securities
immediately after the transaction.
For purposes of
subsection (a) above, the calculation of voting power shall be
made as if the date of the acquisition were a record date for a
vote of the Company’s shareholders, and for purposes of
subsection (b) above, the calculation of voting power shall be
made as if the date of the consummation of the transaction were a
record date for a vote of the Company’s shareholders. For
purposes of subsection (d) above, the calculation of voting
power shall be made as if the date of the acquisition were a record
date for a vote of Cricket’s shareholders, and for purposes
of subsection (e) above, the calculation of voting power shall
be made as if the date of the consummation of the transaction were
a record date for a vote of Cricket’s
shareholders.
1.6.
“ Code ” shall mean the Internal Revenue Code of
1986, as amended.
1.7.
“ Committee ” shall mean the Compensation
Committee of the Board, or another committee or subcommittee of the
Board, appointed as provided in Section 9.1 or 9.5.
1.8.
“ Common Stock ” shall mean the common stock of
the Company, par value $.0001 per share.
1.9.
“ Company ” shall mean Leap Wireless
International, Inc., a Delaware corporation.
1.10.
“ Consultant ” shall mean any consultant or
adviser if (a) the consultant or adviser renders bona fide
services to the Company or a Subsidiary, (b) the services
rendered by
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the consultant
or adviser are not in connection with the offer or sale of
securities in a capital raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s
securities, and (c) the consultant or adviser is a natural
person who has contracted directly with the Company or a Subsidiary
to render such services.
1.11.
“ Deferred Stock Unit ” shall mean a deferred
stock unit award awarded under Article VIII of the
Plan.
1.12.
“ Director ” shall mean a member of the
Board.
1.13.
“ DRO ” shall mean a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules
thereunder.
1.14.
“ Eligible Individual ” means any Employee who
has not previously been an Employee or member of the Board or an
Employee or member of the board of directors of any Parent or
Subsidiary, or following a bona fide period of non-employment by
the Company or a Parent or Subsidiary, if he or she is granted an
Award in connection with his or her commencement of employment with
the Company or a Subsidiary and such grant is an inducement
material to his or her entering into employment with the Company or
a Subsidiary. The Administrator may, in its discretion, adopt
procedures from time to time to ensure that an Employee is eligible
to participate in the Plan prior to the granting of any Awards to
such Employee under the Plan
1.15.
“ Employee ” shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the
Code) of the Company, or of any corporation which is a
Subsidiary.
1.16.
“ Exchange Act ” shall mean the Securities
Exchange Act of 1934, as amended.
1.17.
“ Fair Market Value ” of a share of Common Stock
as of a given date shall be: (a) the closing price of a share of
Common Stock on the principal exchange on which shares of Common
Stock are then trading, if any (or as reported on any composite
index which includes such principal exchange), on such date, or if
shares were not traded on such date, then on the next preceding
date on which a trade occurred, or (b) if the Common Stock is
not publicly traded on an exchange but is quoted on an automated
quotation system, the mean between the closing representative bid
and asked prices for the Common Stock on such date as reported by
such automated quotation system, or (c) if Common Stock is not
publicly traded on an exchange, and not quoted on an automated
quotation system, the fair market value of a share of Common Stock
as established by the Administrator acting in good
faith.
1.18.
“ Holder ” shall mean a person who has been
granted an Award.
1.19.
“ Incentive Stock Option ” shall mean an option
which conforms to the applicable provisions of Section 422 of
the Code and which is designated as an Incentive Stock Option by
the Administrator.
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1.20.
“ Independent Director ” shall mean a Director
of the Company who is not an Employee and who qualifies as
“independent” within the meaning of Nasdaq Stock Market
Rule 4200(a)(14), if the Company’s securities are traded on
the Nasdaq Global Market, or the requirements of any other
established stock exchange on which the Company’s securities
are traded, as such rules or requirements may be amended from time
to time.
1.21.
“ Non-Qualified Stock Option ” shall mean an
Option which is not an Incentive Stock Option.
1.22.
“ Option ” shall mean a stock option granted
under Article IV of the Plan. An Option granted under the Plan
shall be a Non-Qualified Stock Option.
1.23.
“ Parent ” shall mean any corporation in an
unbroken chain of corporations ending with the Company if each of
the corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain or any other entity which
beneficially owns directly or indirectly a majority of the
outstanding voting stock or voting power of the Company.
1.24.
“ Plan ” shall mean the 2009 Employment
Inducement Equity Incentive Plan of Leap Wireless International,
Inc.
1.25.
“ Restricted Stock ” shall mean shares of Common
Stock awarded under Article VII of the Plan.
1.26.
“ Rule 16b-3 ” shall mean Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended
from time to time.
1.27.
“ Securities Act ” shall mean the Securities Act
of 1933, as amended.
1.28.
“ Subsidiary ” shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each
of the corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain or any other entity of which a
majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the
Company.
1.29.
“ Substitute Award ” shall mean an Option
granted under this Plan upon the assumption of, or in substitution
for, outstanding equity awards previously granted by a company or
other entity in connection with a corporate transaction, such as a
merger, combination, consolidation or acquisition of property or
stock; provided, however, that in no event shall the term
“Substitute Award” be construed to refer to an award
made in connection with the cancellation and repricing of an
Option.
1.30.
“ Termination of Consultancy ” shall mean the
time when the engagement of a Holder as a Consultant to the Company
or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, by resignation,
discharge, death, disability or retirement, but excluding
terminations where there is a simultaneous commencement
of
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employment with
the Company or any Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way
of limitation, the question of whether a Termination of Consultancy
resulted from a termination for cause, and all questions of whether
a particular leave of absence constitutes a Termination of
Consultancy.
1.31.
“ Termination of Directorship ” shall mean the
time when a Holder who is a Director ceases to be a Director for
any reason, including, but not by way of limitation, a termination
by resignation, removal, failure to be elected or reelected, death,
disability or retirement. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship, including, but not by way
of limitation, the question of whether a Termination of
Directorship resulted from a termination for cause, and all
questions of whether a particular leave of absence constitutes a
Termination of Directorship.
1.32.
“ Termination of Employment ” shall mean the
time when the employee-employer relationship between a Holder and
the Company or any Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or
retirement; but excluding (a) terminations where there is a
simultaneous reemployment or continuing employment of a Holder by
the Company or any Subsidiary, (b) at the discretion of the
Administrator, terminations which result in a temporary severance
of the employee-employer relationship, and (c) at the
discretion of the Administrator, terminations which are followed by
the simultaneous establishment of a consulting or directorship
relationship by the Company or a Subsidiary with the former
employee. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to
Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a
discharge for cause, and all questions of whether a particular
leave of absence constitutes a Termination of
Employment.
2.1.
Shares Subject to Plan . The shares of stock subject to
Awards shall be Common Stock, subject to adjustment as provided in
Section 10.3. Subject to adjustment as provided in
Section 10.3, the aggregate number of such shares which may be
issued with respect to Awards granted under the Plan shall not
exceed 300,000. The shares of Common Stock issuable with respect to
such Awards may be either previously authorized but unissued shares
or treasury shares.
2.2.
Add-Back of Options and Other Rights . If any Award expires,
terminates or is canceled without having been fully exercised, the
number of shares subject to such Award but as to which such Award
was not exercised prior to its expiration, termination or
cancellation may again be optioned hereunder, subject to the
limitations of Section 2.1. If any shares of Restricted Stock
are surrendered by the Holder or repurchased by the Company
pursuant to Section 7.4 or 7.5 hereof, such shares may again
be granted or awarded hereunder, subject to the limitations of
Section 2.1. Furthermore, any shares subject to Awards which
are adjusted pursuant to Section 10.3 and become exercisable
with respect to shares of stock of another
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corporation
shall be considered cancelled for purposes of this Section 2.2
and may again be granted or awarded hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which are
delivered by the Holder or withheld by the Company upon the
exercise of any Award under the Plan, in payment of the exercise or
purchase price thereof, or tax withholding thereon, may again be
granted or awarded hereunder, subject to the limitations of
Section 2.1.
3.1.
Award Agreement . Each Award shall be evidenced by an Award
Agreement. The Administrator may, in its discretion, include such
further provisions and limitations in any Award Agreement at the
time of the grant of such Award which are not inconsistent with the
terms of the Plan.
3.2.
Limitations Applicable to Section 16 Persons .
Notwithstanding any other provision of the Plan, the Plan, and any
Award granted to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment
to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by
applicable law, the Plan and Awards granted hereunder shall be
deemed amended to the extent necessary to conform to such
applicable exemptive rule.
3.3.
At-Will Employment . Nothing in the Plan or in any Award
Agreement hereunder shall confer upon any Holder any right to
continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and
any Subsidiary, which are hereby expressly reserved, to discharge
any Holder at any time for any reason whatsoever or no reason, with
or without cause, except to the extent expressly provided otherwise
in a written employment agreement between the Holder and the
Company or any Subsidiary.
4.1.
Eligibility . Any Eligible Individual selected by the
Administrator pursuant to Section 4.2(a)(i) shall be eligible
to be granted an Option.
4.2.
Granting of Options to Eligible Individuals .
(a) The
Administrator shall from time to time, in its absolute discretion,
and subject to applicable limitations of the Plan:
(i)
Select from among the Eligible Individuals such of them as in its
opinion should be granted Options;
(ii)
Determine the number of shares to be subject to such Options
granted to the selected Eligible Individuals;
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(iii)
Subject to Articles V and VI, determine the terms and conditions of
such Options, consistent with the Plan (including, without
limitation, the exercise price per share, vesting, exercisability
and term of the Option, the manner in which the exercise price
shall be paid, the terms and conditions under which the Option may
be exercised prior to vesting for restricted shares of Common
Stock, the transfer, escrow, repurchase and other restrictions
applicable to such restricted shares of Common Stock, and the
extent to which an election under Section 83(b) of the Code may be
made with respect to such restricted shares of Common
Stock).
(b) Upon
the selection of an Eligible Individual to be granted an Option,
the Administrator shall instruct the Secretary of the Company to
issue the Option and may impose such conditions on the grant of the
Option as it deems appropriate.
5.1.
Option Price . The price per share of the shares subject to
each Option granted to Eligible Individuals shall be set by the
Administrator; provided, however, that such price shall be
no less than the par value of a share of Common Stock, unless
otherwise permitted by applicable state law.
5.2.
Option Term . The term of an Option granted to an Eligible
Individual shall be set by the Administrator in its
discretion.
(a) The
period during which the right to exercise, in whole or in part, an
Option granted to an Eligible Individual vests in the Holder shall
be set by the Administrator and the Administrator may determine
that an Option may not be exercised in whole or in part for a
specified period after it is granted. At any time after grant of an
Option, the Administrator may, in its sole and absolute discretion
and subject to whatever terms and conditions it selects, accelerate
the period during which an Option granted to an Eligible Individual
vests.
(b) No
portion of an Option granted to an Eligible Individual which is
unexercisable at Termination of Employment, Termination of
Consultancy or Termination of Directorship, as applicable, shall
thereafter become exercisable, except as may be otherwise provided
by the Administrator either in the Award Agreement or by action of
the Administrator following the grant of the Option.
5.4.
Substitute Awards . Notwithstanding any of the foregoing
provisions of this Article V to the contrary, in the case of
an Option that is a Substitute Award, the price per share of the
shares subject to such Option may be less than the Fair Market
Value per share on the date of grant, provided, that the
excess of: (a) the aggregate Fair Market Value (as of the date
such Substitute Award is granted) of the shares subject to the
Substitute Award; over (b) the aggregate exercise price
thereof, does not exceed the excess of: (c) the aggregate fair
market value (as of the time immediately preceding the transaction
giving rise to the Substitute Award,
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such fair
market value to be determined by the Administrator) of the shares
of the predecessor entity that were subject to the grant assumed or
substituted for by the Company; over (d) the aggregate
exercise price of such shares.
6.1.
Partial Exercise . An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Administrator may require
that, by the terms of the Option, a partial exercise be with
respect to a
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