(FOUR YEAR TIME BASED
VESTING)
LEAP WIRELESS INTERNATIONAL,
INC.
2009 EMPLOYMENT INDUCEMENT EQUITY
INCENTIVE PLAN
STOCK OPTION GRANT NOTICE AND
NON-QUALIFIED
STOCK OPTION AGREEMENT
Leap Wireless
International, Inc. (the “ Company ”),
pursuant to its 2009 Employment Inducement Equity Incentive 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.
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Exercise
Price per Share:
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$
per share
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Total Number
of Shares
Subject to the Option:
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This Option is
a Non-Qualified Stock Option and is not an incentive stock option
within the meaning of Section 422 of the Code.
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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 amounts indicated in Exhibit B to this Grant
Notice.
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By Holder’s
signature below, or by Holder’s submitting his or her
electronic acceptance of the Option subject to this Grant Notice
online using the website of the Company’s designated
brokerage firm, Holder agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant
Notice. Holder agrees to access copies of the Plan and the
prospectus governing the Plan (the “Plan
Documents” ) on the Company’s intranet or on
the website of the Company’s designated brokerage firm. Paper
copies are also available upon request to the Secretary of the
Company at the Company’s corporate offices.
Holder has
reviewed this Grant Notice, the Stock Option Agreement and the Plan
Documents in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Grant Notice or accepting
the Option subject hereto 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, this Grant Notice or the
Stock Option Agreement.
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HOLDER:
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By:
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Print
Name:
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Title:
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Address:
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4-Year Time
Based Vesting Stock Options
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 2009
Employment Inducement Equity Incentive Plan (the “
Plan ”) to purchase the number of shares of
Common Stock indicated in the Grant Notice. Capitalized terms not
specifically defined herein shall have the meanings specified in
the Plan and the Grant Notice. The Option is subject to the terms
and conditions of the Plan which are incorporated herein by
reference.
1.1 Grant of
Option . In consideration of Holder’s 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 ”), and as an inducement material to
Holder’s entering into employment with the Company or a
Subsidiary, 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.
1.2 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.
2.1
Commencement of Exercisability .
(a) Subject
to Sections 2.3 and 4.8, 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 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.
2.2 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 2.3.
4-Year Time
Based Vesting Stock Options
2.3 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.
3.1 Person
Eligible to Exercise . Except as provided in
Sections 4.1(b) and 4.1(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 2.3, 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.
3.2 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 2.3.
3.3 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 2.3:
(a) An
exercise notice signed or submitted online using the website of the
Company’s designated brokerage firm 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
4-Year Time
Based Vesting Stock Options
A-2
notice
complying with all applicable rules established by the
Administrator. Such notice shall be substantially in such 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) Such
representations and documents as the Administrator, in its absolute
discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other
federal or state securities laws or regulations. 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; 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 3.3(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 3.1 by any person or persons other than Holder,
appropriate proof of the right of such person or persons to
exercise the Option.
3.4 Conditions
to Issuance of Stock Certificates . 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 conditions set forth in Section 6.3
of the Plan.
3.5 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
4-Year Time
Based Vesting Stock Options
A-3
the exercise of
any part of the Option unless and until such shares shall have been
issued by the Company to such holder.
4.1 Option Not
Transferable .
(a) Subject
to Section 4.1(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, 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 4.1(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 2.3, 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 Restrictive
Legends and Stop-Transfer Orders .
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