<PAGE> 1
As filed with the Securities and Exchange Commission on January 11, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEAP WIRELESS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0811062
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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10307 PACIFIC CENTER COURT
SAN DIEGO, CALIFORNIA 92121
(858) 882-6000
(Address of principal executive offices, Zip Code, and telephone number)
THE LEAP WIRELESS INTERNATIONAL, INC.
EXECUTIVE OFFICER DEFERRED STOCK PLAN
(Full title of the plan)
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HARVEY P. WHITE Copies to:
CHIEF EXECUTIVE OFFICER SCOTT N. WOLFE, ESQ.
LEAP WIRELESS INTERNATIONAL, INC. BARRY M. CLARKSON, ESQ.
10307 PACIFIC CENTER COURT LATHAM & WATKINS
SAN DIEGO, CALIFORNIA 92121 701 "B" STREET, SUITE 2100
(858) 882-6000 SAN DIEGO, CALIFORNIA 92101
(Name, address including zip code, and telephone number, (619) 236-1234
including area code, of agent for service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
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=============================================================================================================
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Each Class of To Be Offering Offering Registration
Securities to be Registered Registered(1) Price Per Share Price(2) Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.0001 par value(3) 25,000 (2) $1,631,250 $431
=============================================================================================================
</TABLE>
(1) A maximum of 25,000 shares of common stock were reserved for issuance
under The Leap Wireless International, Inc. Executive Officer Deferred
Stock Plan (the "Plan"). All shares reserved for issuance under the Plan
are being registered hereunder.
(2) Estimated in accordance with Rule 457(h) solely for purposes of
computing the registration fee for shares for which the offering price
cannot be presently determined. The Proposed Maximum Offering Price is
$65.25 per share of common stock, which is based on the average of the
high and low prices for the Company's common stock as reported on the
Nasdaq National Market System on January 6, 1999.
(3) Each share of common stock includes a right to purchase one
one-thousandth of a share of Series A Junior Participating preferred
stock, par value $0.0001 per share.
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1
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PART I
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this Registration Statement, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we have filed, or may file,
with the SEC:
- Our Annual Report on Form 10-K for the fiscal year ended August 31, 1999
filed with the SEC on October 20, 1999 and Amendment No. 1 thereto filed
on Form 10-K/A with the SEC on December 13, 1999;
- The description of our common stock and the attached purchase rights
contained in our Registration Statement on Form 10 filed with the SEC on
July 1, 1998, as amended;
- Our Proxy Statement for the 1999 Annual Meeting of Stockholders filed
with the SEC on November 2, 1999; and
- All documents filed by us with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 after the date this
Registration Statement is filed with the SEC and prior to the filing of
a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration
Statement and to be a part of it from the respective dates of filing of
those documents.
A statement contained in a document incorporated by reference herein shall be
deemed to be modified or superceded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which is also incorporated herein modifies or replaces such
statement. Any statements so modified or superceded shall not be deemed, except
as so modified or superceded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Officers and directors of Leap are covered by certain provisions of the
Delaware General Corporation Law ("DGCL"), the charter, the bylaws,
indemnification agreements and insurance policies which serve to limit, and, in
certain instances, to indemnify them against, certain liabilities which they may
incur in such capacities. None of these provisions would have retroactive effect
for periods before the distribution of Leap. These various provisions are
described below.
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Elimination of Liability in Certain Circumstances. In June 1986, Delaware
enacted legislation which authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their stockholders for
monetary damages for breach of directors' fiduciary duty of care. This duty of
care requires that, when acting on behalf of the corporation, directors must
exercise an informed business judgment based on all significant information
reasonably available to them. Absent the limitations now authorized by such
legislation, directors are accountable to corporations and their stockholders
for monetary damages for conduct constituting negligence or gross negligence in
the exercise of their duty of care. Although the statute does not change
directors' duty of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission. The charter limits the
liability of Directors to Leap or its stockholders (in their capacity as
directors but not in their capacity as officers) to the fullest extent permitted
by such legislation. Specifically, the directors of Leap will not be personally
liable for monetary damages for breach of a director's fiduciary duty as
director, except for liability: (1) for any breach of the director's duty of
loyalty to Leap or its stockholders; (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (3) for
unlawful payments of dividends or unlawful share repurchases or redemptions as
provided in Section 174 of the DGCL; or (4) for any transaction from which the
director derived an improper personal benefit.
Indemnification and Insurance. As a Delaware corporation, Leap has the power,
under specified circumstances generally requiring the director or officer to act
in good faith and in a manner he reasonably believes to be in or not opposed to
Leap's best interests, to indemnify its directors and officers in connection
with actions, suits or proceedings brought against them by a third party or in
the name of Leap, by reason of the fact that they were or are such directors or
officers, against expenses, judgments, fines and amounts paid in settlement in
connection with any such action, suit or proceeding. The bylaws generally
provide for mandatory indemnification of Leap's directors and officers to the
full extent provided by Delaware corporate law. In addition, Leap has entered
into indemnification agreements with its directors and officers which generally
provide for mandatory indemnification under circumstances for which
indemnification would otherwise be discretionary under Delaware law.
Leap intends to purchase and maintain insurance on behalf of any person who
is or was a director or officer of Leap, or is or was a director or officer of
Leap serving at the request of Leap as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not Leap
would have the power or obligation to indemnify him against such liability under
the provisions of the bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
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4.1(1) Form of Common Stock Certificate.
4.2.1(2) Letter, dated as of May 5, 1999, from Qualcomm
Incorporated (Qualcomm) to the Registrant.
4.2.2(3) Superceding Warrant, dated as of August 9, 1999,
issued to Qualcomm.
4.2.3(3) Form of Voting Agreement, dated as of April 1, 1999,
between the Registrant and various officers and
directors of Qualcomm Incorporated.
4.2.4(3) Amended and Restated Agreement Concerning Share
Ownership, dated as of August 4, 1999, between the
Registrant and Qualcomm Incorporated.
4.3(4) Rights Agreement, dated as of September 14, 1998,
between the Registrant and Harris Trust Company of
California.
4.4* The Leap Wireless International, Inc. Executive
Officer Deferred Stock Plan.
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<TABLE>
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5.1* Opinion of Latham & Watkins.
23.1* Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Price Waterhouse, independent accountants.
23.3* Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.4* Consent of PricewaterhouseCoopers, independent
accountants.
23.5* Consent of Latham & Watkins. Reference is made to
Exhibit 5.1.
24.1* Power of Attorney (included in signature page).
</TABLE>
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* Filed herewith.
(1) Filed as an exhibit to Leap's Registration Statement on Form 10, as
amended (File No. 0-29752), and incorporated herein by reference.
(2) Filed as an exhibit to Leap's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1999, as filed with the SEC on April 14,
1999, and incorporated herein by reference.
(3) Filed as an exhibit to Leap's Post-Effective Amendment No. 2 to
Registration Statement on Form S-1 (File No. 333-64459) dated August 10,
1999, and incorporated herein by reference.
(4) Filed as an exhibit to Leap's Current Report on Form 8-K dated September
14, 1998, and incorporated herein by reference.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
the Commission by the
4
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Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, County of San Diego, State of
California, on January 11, 2000.
By: /s/ Thomas D. Willardson
------------------------------------
Thomas D. Willardson
Senior Vice President, Finance and
Treasurer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harvey P. White and James E. Hoffmann and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments, exhibits thereto and other documents in connection therewith) to
this Registration Statement and any subsequent registration statement filed by
the registrant pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, which relates to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
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<CAPTION>
SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ Harvey P. White Chief Executive Officer and Director January 11, 2000
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Harvey P. White
/s/ Thomas D. Willardson Senior Vice President, Finance and Treasurer January 11, 2000
- --------------------------------------------
Thomas D. Willardson
/s/ Thomas J. Bernard Vice Chairman, President-- January 11, 2000
- -------------------------------------------- International Business Division and Director
Thomas J. Bernard
/s/ Susan G. Swenson President, Chief Operating Officer and January 11, 2000
- -------------------------------------------- Director
Susan G. Swenson
Director January , 2000
- --------------------------------------------
Alejandro Burillo Azcarraga
/s/ Robert C. Dynes Director January 11, 2000
- --------------------------------------------
Robert C. Dynes
/s/ Scot B. Jarvis Director January 11, 2000
- --------------------------------------------
Scot B. Jarvis
Director January , 2000
- --------------------------------------------
John J. Moores
/s/ Michael B. Targoff Director January 11, 2000
- --------------------------------------------
Michael B. Targoff
/s/ Jeffrey P. Williams Director January 11, 2000
- --------------------------------------------
Jeffrey P. Williams
</TABLE>
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EXHIBIT INDEX
EXHIBIT
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4.1(1) Form of Common Stock Certificate.
4.2.1(2) Letter, dated as of May 5, 1999, from Qualcomm
Incorporated (Qualcomm) to the Registrant.
4.2.2(3) Superceding Warrant, dated as of August 9, 1999,
issued to Qualcomm.
4.2.3(3) Form of Voting Agreement, dated as of April 1, 1999,
between the Registrant and various officers and
directors of Qualcomm Incorporated.
4.2.4(3) Amended and Restated Agreement Concerning Share
Ownership, dated as of August 4, 1999, between the
Registrant and Qualcomm Incorporated.
4.3(4) Rights Agreement, dated as of September 14, 1998,
between the Registrant and Harris Trust Company of
California.
4.4* The Leap Wireless International, Inc. Executive
Officer Deferred Stock Plan.
5.1* Opinion of Latham & Watkins.
23.1* Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Price Waterhouse, independent accountants.
23.3* Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.4* Consent of PricewaterhouseCoopers, independent
accountants.
23.5* Consent of Latham & Watkins. Reference is made to
Exhibit 5.1.
24.1* Power of Attorney (included in signature page).
</TABLE>
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* Filed herewith.
(1) Filed as an exhibit to Leap's Registration Statement on Form 10, as
amended (File No. 0-29752), and incorporated herein by reference.
(2) Filed as an exhibit to Leap's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1999, as filed with the SEC on April 14,
1999, and incorporated herein by reference.
(3) Filed as an exhibit to Leap's Post-Effective Amendment No. 2 to
Registration Statement on Form S-1 (File No. 333-64459) dated August 10,
1999, and incorporated herein by reference.
(4) Filed as an exhibit to Leap's Current Report on Form 8-K dated September
14, 1998, and incorporated herein by reference.
<PAGE> 1
EXHIBIT 4.4
THE LEAP WIRELESS INTERNATIONAL, INC.
EXECUTIVE OFFICER DEFERRED STOCK PLAN
<PAGE> 2
THE LEAP WIRELESS INTERNATIONAL, INC.
EXECUTIVE OFFICER DEFERRED STOCK PLAN
TABLE OF CONTENTS
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PAGE
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ARTICLE I. DEFINITIONS.......................................................................1
Section 1.1 - General................................................................1
Section 1.2 - Accounts...............................................................1
Section 1.3 - Active Participant.....................................................1
Section 1.4 - Administrator..........................................................1
Section 1.5 - Beneficiary............................................................2
Section 1.6 - Board..................................................................2
Section 1.7 - Bonus..................................................................2
Section 1.8 - Bonus Payday...........................................................2
Section 1.9 - Cause..................................................................2
Section 1.10 - Code..................................................................2
Section 1.11 - Committee.............................................................3
Section 1.12 - Company; Company Affiliate............................................3
Section 1.13 - Deferred Bonus........................................................3
Section 1.14 - Deferred Bonus Share Account..........................................3
Section 1.15 - Disability............................................................3
Section 1.16 - Employee..............................................................3
Section 1.17 - ERISA.................................................................3
Section 1.18 - Executive Officer.....................................................3
Section 1.19 - Fair Market Value.....................................................3
Section 1.20 - Matching Share Account................................................4
Section 1.21 - Participant...........................................................4
Section 1.22 - Plan..................................................................4
Section 1.23 - Plan Year.............................................................4
Section 1.24 - Separation from the Service...........................................4
Section 1.25 - Share Unit............................................................4
Section 1.26 - Vested................................................................4
ARTICLE II. ELIGIBILITY......................................................................5
Section 2.1 - Requirements for Participation.........................................5
Section 2.2 - Bonus Deferral Election Procedure......................................5
Section 2.3 - Content of Deferral Election Form......................................5
ARTICLE III. PARTICIPANT BONUS DEFERRALS.....................................................6
Section 3.1 - Mandatory Bonus Deferrals..............................................6
Section 3.2 - Voluntary Bonus Deferrals..............................................6
ARTICLE IV. SHARE CREDITS....................................................................6
Section 4.1 - Deferred Bonus Share Credits...........................................6
Section 4.2 - Matching Share Credits.................................................6
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ARTICLE V. ACCOUNTS..........................................................................6
Section 5.1 - Deferred Bonus Share Account...........................................6
Section 5.2 - Matching Share Account.................................................7
Section 5.3 - Assignments, etc. Prohibited...........................................7
ARTICLE VI. ACCOUNT BALANCES.................................................................7
Section 6.1 - Account Balances.......................................................7
Section 6.2 - Dividends and Distributions on Common Stock............................7
ARTICLE VII. VESTING OF ACCOUNTS.............................................................8
Section 7.1 - Vesting of Accounts....................................................8
Section 7.2 - Additional Vesting of Matching Share Accounts..........................8
ARTICLE VIII. DISTRIBUTION OF BENEFITS TO PARTICIPANTS.......................................8
Section 8.1 - Distribution Prior to Separation from the Service......................8
Section 8.2 - Distribution on Separation from the Service............................9
Section 8.3 - Effect of Delay or Failure to Ascertain Amount Distributable or
to Locate Distributee..................................................9
Section 8.4 - Forfeitures............................................................9
ARTICLE IX. BENEFITS UPON DEATH..............................................................9
Section 9.1 - Designation of Beneficiary.............................................9
Section 9.2 - Distribution upon Death................................................9
ARTICLE X. ADMINISTRATIVE PROVISIONS........................................................10
Section 10.1 - Duties and Powers of the Administrator...............................10
Section 10.2 - Committee............................................................10
Section 10.3 - Limitations upon Powers of the Administrator.........................11
Section 10.4 - Compensation and Indemnification of Administrator; Expenses of
Administration.......................................................11
Section 10.5 - Effect of Administrator Action.......................................11
Section 10.6 - Recordkeeping........................................................12
Section 10.7 - Statement to Participants............................................12
Section 10.8 - Inspection of Records................................................12
Section 10.9 - Identification of Fiduciaries........................................12
Section 10.10 - Procedure for Allocation of Administrative Responsibilities.........12
Section 10.11 - Claims Procedure....................................................13
Section 10.12 - Conflicting Claims..................................................14
Section 10.13 - Service of Process..................................................14
ARTICLE XI. MISCELLANEOUS PROVISIONS........................................................14
Section 11.1 - Termination of the Plan..............................................14
Section 11.2 - Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company and Other Corporate Events.............14
Section 11.3 - Limitation on Rights of Employees....................................15
Section 11.4 - Unfunded Obligations of the Company..................................15
Section 11.5 - Grantor Trust........................................................16
Section 11.6 - Consolidation or Merger..............................................17
Section 11.7 - Errors and Misstatements.............................................17
Section 11.8 - Payment on Behalf of Minor, etc......................................17
</TABLE>
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Section 11.9 - Amendment of Plan....................................................17
Section 11.10 - Tax Withholding.....................................................17
Section 11.11 - Governing Law.......................................................17
Section 11.12 - Pronouns and Plurality..............................................18
Section 11.13 - Titles..............................................................18
Section 11.14 - References..........................................................18
</TABLE>
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THE LEAP WIRELESS INTERNATIONAL, INC.
EXECUTIVE OFFICER DEFERRED STOCK PLAN
Leap Wireless International, Inc., a Delaware corporation (the
"Company"), by resolution of its Board of Directors, adopted The Leap Wireless
International, Inc. Executive Officer Deferred Stock Plan (the "Plan"),
effective as of December 9, 1999, for the benefit of the executive officers of
the Company.
The Plan is a nonqualified deferred compensation plan pursuant to which
twenty-five percent (25%) of an executive officer's Bonus (as defined herein)
will be deferred and converted into Share Units (as defined herein) credited to
the officer's account under the Plan. Share Units will represent the right to
receive shares of the Company's Common Stock, par value $0.0001 per share
("Common Stock"), in accordance with the Plan. The Plan also provides that an
executive officer may elect to defer all or any portion of the remainder of such
executive officer's Bonus and that amounts the deferred at the election of an
executive officer will be converted into Share Units credited to the officer's
account under the Plan. Finally, the Plan provides for additional Share Units
that will be credited to the executive officer's account under the Plan,
determined based on the executive officer's Bonus deferrals pursuant to the
Plan. The Plan provides that the Share Units credited to an executive officer's
account will be distributed to such executive officer upon the earlier of the
date or dates designated by the officer or the officer's retirement, death,
Disability (as defined herein) or other termination of employment.
The Plan is unfunded and is maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.
The Company may establish a grantor trust pursuant to the Plan and may
make contributions to the trust to provide for distributions of benefits to be
made under the Plan. The Company's contributions may be in the form of cash,
shares of Common Stock or other securities or property.
ARTICLE I.
DEFINITIONS
Section 1.1 - General
Whenever the following terms are used in the Plan with the first letter
capitalized, they shall have the meanings specified below unless the context
clearly indicates to the contrary.
Section 1.2 - Accounts
"Accounts" of a Participant shall mean, as the context indicates, either
or both of his Deferred Bonus Share Account and his Matching Share Account.
Section 1.3 - Active Participant
"Active Participant" shall mean any Employee who is participating in the
Plan for the Plan Year in question as provided in Article II.
Section 1.4 - Administrator
"Administrator" shall mean Leap Wireless International, Inc., acting
through the Board or its delegates, except that if Leap Wireless International,
Inc. appoints a Committee under Section 10.2, the term "Administrator" shall
mean the Committee as to those duties, powers and responsibilities specifically
conferred upon the
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Committee. Leap Wireless International, Inc. shall have all duties and
responsibilities imposed by ERISA, except as specifically assigned to, delegated
to or reserved to the Board or the Committee under the Plan.
Section 1.5 - Beneficiary
"Beneficiary" of a Participant shall mean the person or persons
designated by the Participant in accordance with Section 9.1 and the Rules of
the Plan.
Section 1.6 - Board
"Board" shall mean the Board of Directors of Leap Wireless
International, Inc. The Board may delegate any power or duty otherwise allocated
to the Administrator to any other person or persons, including a Committee
appointed under Section 10.2.
Section 1.7 - Bonus
"Bonus" of an Active Participant for any Plan Year shall mean the amount
of his or her bonus or bonuses earned for such Plan Year, prior to the deferral
of all or any portion thereof in accordance with the Plan, determined under any
bonus program maintained by the Company for Executive Officers for such Plan
Year. The "Bonus" of an Active Participant for a Plan Year shall be determined
without regard to whether the bonus or bonuses earned by such Active Participant
for such Plan Year would otherwise be paid by the Company during such Plan Year
or the next following Plan Year.
Section 1.8 - Bonus Payday
"Bonus Payday" of an Active Participant for any Plan Year shall mean the
day or days established by the Company on which such Active Participant's Bonus
(or any portion thereof) would otherwise be paid.
Section 1.9 - Cause
"Cause" with respect to a Participant shall mean:
(a) willful misconduct by the Participant that is materially
damaging to the Company or any Company Affiliate (whether financially or
otherwise),
(b) the Participant's conviction of, or the entry by the
Participant of a guilty or no contest plea to, a felony or a misdemeanor
involving moral turpitude,
(c) the Participant's commission of fraud, misappropriation or
embezzlement in connection with the business of the Company or a Company
Affiliate, or
(d) the Participant's willful and repeated failure to perform the
Participant's duties as an Executive Officer as directed by the Board.
Section 1.10 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
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Section 1.11 - Committee
"Committee" shall mean the Committee, if any, appointed in accordance
with Section 10.2.
Section 1.12 - Company; Company Affiliate
(a) "Company" shall mean Leap Wireless International, Inc., and
any successor company which continues the Plan under Section 11.5.
(b) "Company Affiliate" shall mean any employer which, at the
time of reference, was, with the Company, a member of a controlled group of
corporations or trades or businesses under common control, or a member of an
affiliated service group, as determined under regulations issued by the
Secretary of the Treasury or his delegate under Code Sections 414(b), (c), (m)
and any other entity required to be aggregated with the Company pursuant to
regulations issued under Code Section 414(o).
Section 1.13 - Deferred Bonus
"Deferred Bonus" of an Active Participant on any Bonus Payday shall mean
the dollar amount of such Active Participant's Bonus (or portion thereof) for
such Bonus Payday that is deferred under Section 3.1 or 3.2.
Section 1.14 - Deferred Bonus Share Account
"Deferred Bonus Share Account" of a Participant shall mean his
individual account, if any, in the Plan established in accordance with Section
5.1.
Section 1.15 - Disability
"Disability" of a Participant shall mean the Participant's complete
inability to engage in any substantial gainful activity or wage or profit for
reason of any medically determinable physical or mental impairment which can be
expected to result in death or has lasted or is expected to last for a
continuous period of not less than 12 months, as determined by the Administrator
in good faith, based on competent medical evidence.
Section 1.16 - Employee
"Employee" shall mean any person who renders services to the Company in
the status of an employee as that term is defined in Code Section 3121(d).
Section 1.17 - ERISA
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
Section 1.18 - Executive Officer
"Executive Officer" shall mean an Employee who holds the position of
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
Executive Vice President, Senior Vice President or Vice President of the
Company.
Section 1.19 - Fair Market Value
"Fair Market Value" as of a given date shall mean (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), or the trading day previous to such date, or
if shares were not
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traded on the trading day preceding such date, then on the next preceding date
on which a trade occurred, or (b) if Common Stock is not traded on an exchange
but is quoted on NASDAQ or a successor quotation system, the mean between the
closing representative bid and asked prices for the Common Stock on the trading
day previous to such date as reported by NASDAQ or such successor quotation
system, or (c) if Common Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the fair market value of a
share of Common Stock as established by the Administrator acting in good faith.
Section 1.20 - Matching Share Account
"Matching Share Account" of a Participant shall mean his individual
account, if any, in the Plan established in accordance with Section 5.2.
Section 1.21 - Participant
"Participant" shall mean an Employee who is an Active Participant for
the Plan Year in question, or who was an Active Participant for a prior Plan
Year.
Section 1.22 - Plan
"Plan" shall mean The Leap Wireless International, Inc. Executive
Officer Deferred Stock Plan.
Section 1.23 - Plan Year
"Plan Year" shall mean the fiscal year of the Company.
Section 1.24 - Separation from the Service
(a) "Separation from the Service" of an Employee shall mean his
resignation from or discharge by a Company or a Company Affiliate, or his
Disability, death or retirement, but shall not include his transfer among the
Company and the Company Affiliates.
(b) A leave of absence or sick leave authorized by the Company or
a Company Affiliate in accordance with established policies, a vacation period,
a temporary layoff for lack of work or a military leave shall not constitute a
Separation from the Service.
Section 1.25 - Share Unit
"Share Unit" shall mean a nominal unit credited under the Plan, which
represents the right to receive a share of Common Stock in accordance with the
Plan.
Section 1.26 - Vested
"Vested," when used with reference to a Participant's Accounts, shall
mean nonforfeitable, except as provided in the Plan.
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ARTICLE II.
ELIGIBILITY
Section 2.1 - Requirements for Participation
(a) An Employee who was an Executive Officer on December 9,1999
shall be an Active Participant for the Plan Year ended on September 30, 1999.
(b) An Employee who was an Executive Officer on December 9, 1999
shall be an Active Participant for the Plan Year beginning on October 1, 1999.
(c) An Employee who on the first day of any Plan Year beginning
after October 1, 1999 is an Executive Officer shall be an Active Participant for
such Plan Year.
(d) An Employee who is an Active Participant for any Plan Year
shall not be an Active Participant for any subsequent Plan Year unless such
Employee satisfies the requirements of subsection (b) or (c) with respect to
such Plan Year.
Section 2.2 - Bonus Deferral Election Procedure
The Administrator shall provide each Active Participant for a Plan Year
with a Bonus deferral election form on which the Active Participant may elect to
defer all or a portion of his Bonus in accordance with Section 3.2. Each Active
Participant electing to defer Bonus under Section 3.2 for a Plan Year shall
complete and execute the Bonus deferral election form and return it to the
Administrator in accordance with the Rules of the Plan.
Section 2.3 - Content of Deferral Election Form
(a) Each Active Participant for a Plan Year shall set forth on
his Bonus deferral election form for such Plan Year
(i) his consent that he, his successors in interest and
assigns and all persons claiming under him shall be bound, to the extent
authorized by law, by the statements contained therein and by the
provisions of the Plan as they now exist, and as they may be amended
from time to time,
(ii) the percentage (if any) of his Bonus for such Plan
Year to be deferred under Section 3.2 and, in such case, his
authorization to the Company to reduce his Bonus in accordance with
Section 3.2(a),
(iii) such other information as may be required for the
administration of the Plan.
(b) In addition, each Active Participant shall set forth on his
Bonus deferral election form for each Plan Year the Distribution Date for such
Plan Year.
(c) For purposes of this Article and Article VIII, the
"Distribution Date" of an Active Participant for a Plan Year shall mean the
first day of a calendar month designated by such Active Participant; provided,
however, that such "Distribution Date" shall not be earlier than the third
anniversary of the latest Bonus Payday for such Participant for such Plan Year
and shall not be later than the [tenth] anniversary on the last Bonus Payday for
such Participant for such Plan Year.
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ARTICLE III.
PARTICIPANT BONUS DEFERRALS
Section 3.1 - Mandatory Bonus Deferrals
Each Active Participant for a Plan Year shall defer to his Deferred
Bonus Share Account an amount equal to twenty-five percent (25%) of his Bonus
for each Bonus Payday for such Plan Year.
Section 3.2 - Voluntary Bonus Deferrals
(a) An Active Participant for a Plan Year beginning on or after
October 1, 1999 may elect, in accordance with the Rules of the Plan, to defer to
his Deferred Bonus Share Account an amount equal to any whole number percentage,
which is not greater than seventy-five percent (75%) (or such other percentage
as is established by the Administrator for such Plan Year), of his Bonus for
such Plan Year.
(b) An Active Participant's Bonus deferral election under
subsection (a) shall be made on the form described in Section 2.3 and shall be
delivered to the Administrator not later than the last day of the next preceding
Plan Year; provided, however, that, for the Plan Year beginning on September 1,
1999, an Active Participant shall be delivered to the Administrator not later
than August 31, 2000.
ARTICLE IV.
SHARE CREDITS
Section 4.1 - Deferred Bonus Share Credits
For each Bonus Payday for a Plan Year, an Active Participant's Deferred
Bonus Share Account shall be credited with the number of full and fractional
Share Units equal to:
(a) the amount of such Active Participant's Deferred Bonus
for such Bonus Payday, divided by
(b) the Fair Market Value on such Bonus Payday.
Such Share Units shall be credited to the Active Participant's Deferred
Bonus Share Account as of such Bonus Payday.
Section 4.2 - Matching Share Credits
For each Bonus Payday for a Plan Year, an Active Participant's
Matching Share Account shall be credited with the number of full and fractional
Share Units equal to twenty percent (20%) of the number of Share Units credited
to such Active Participant's Deferred Bonus Share Account as of such Bonus
Payday under Section 4.1. Such Share Units shall be credited to the Active
Participant's Matching Share Account as of such Bonus Payday.
ARTICLE V.
ACCOUNTS
Section 5.1 - Deferred Bonus Share Account
The Administrator shall establish and maintain for each Participant a
Deferred Bonus Share Account to which shall be credited the Share Units under
Sections 4.1 and 6.2 and debited the Share Units distributed or forfeited under
Articles VIII and IX.
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Section 5.2 - Matching Share Account
The Administrator shall establish and maintain for each Participant a
Matching Share Account to which shall be credited the Share Units under Sections
4.2 and 6.2 and debited the Share Units distributed or forfeited under Articles
VIII and IX.
Section 5.3 - Assignments, etc. Prohibited
No part of the Accounts of a Participant shall be liable for the debts,
contracts or engagements of such Participant, his Beneficiary or Beneficiaries
or successors in interest, or be taken in execution by levy, attachment or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any rights to alienate, anticipate, commute, pledge, encumber or
assign any benefits or payments hereunder in any manner whatsoever, except to
designate a Beneficiary or Beneficiaries as provided in Section 9.2.
ARTICLE VI.
ACCOUNT BALANCES
Section 6.1 - Account Balances
A Participant's Account balances shall be denominated in full and
fractional Share Units.
Section 6.2 - Dividends and Distributions on Common Stock
(a) In the event that any dividend or other distribution (other
than a dividend in the form of shares of Common Stock) is paid or distributed on
shares of Common Stock, a Participant's Accounts shall be credited, as of the
payment or distribution date of such dividend or other distribution, with the
number of full and fractional Share Credits equal to:
(i) the product of
(A) the number of Share Units credited to such
Participant's Accounts, as of the record date of such dividend or
other distribution, multiplied by
(B) the dollar amount of such dividend or
distribution per share of Common Stock (if such dividend or
payment or distribution is paid in cash), or the fair market
value (as determined by the Administrator) of such dividend or
distribution per share of Common Stock (if such dividend or
distribution is distributed in kind), as of the date of payment
or distribution, divided by
(ii) the Fair Market Value, determined as of the date of
payment or distribution.
(b) In the event that any dividend in the form of shares of
Common Stock is distributed on shares of Common Stock, a Participant's Accounts
shall be credited, as of the distribution date of such dividend, with the number
of full and fractional Share Credits equal to:
(i) the number of Share Units credited to such
Participant's Accounts, as of the record date of such dividend,
multiplied by
(ii) the number of shares of Common Stock distributed with
respect to such dividend per share of Common Stock.
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ARTICLE VII.
VESTING OF ACCOUNTS
Section 7.1 - Vesting of Accounts
(a) Except as provided in Section 8.3, a Participant shall be
Vested at all times in all of the Share Units credited to his Deferred Bonus
Share Account.
(b) Subject to Sections 8.3 and 8.4, a Participant shall become
Vested in the Share Units credited to his Matching Share Account as of a Bonus
Payday as provided as follows:
(i) one-third of such Share Units shall become Vested on
the first anniversary of such Bonus Payday,
(ii) one-third of such Share Units shall become Vested on
the second anniversary of such Bonus Payday, and
(iii) one-third of such Share Units shall become Vested on
the third anniversary of such Bonus Payday.
Any Share Units that are credited to a Participant's Matching Share
Account as a result of any dividend or other distribution paid or distributed on
shares of Common Stock, with respect to the Share Units credited on the record
date of such dividend or distribution, in accordance with Section 6.2, shall
become Vested on such date as the Share Units credited on the record date become
Vested under this subsection.
Section 7.2 - Additional Vesting of Matching Share Accounts
Except as provided in Section 8.3, a Participant shall become Vested in
all of the Share Units credited to his Matching Share Account upon the earliest
to occur of his Separation from the Service by reason of:
(a) his retirement after attaining age 65,
(b) his death,
(c) his Disability, or
(d) his discharge other than for Cause.
ARTICLE VIII.
DISTRIBUTION OF BENEFITS TO PARTICIPANTS
Section 8.1 - Distribution Prior to Separation from the Service
A Participant who has elected to receive the distribution of the
Share Units credited for a Plan Year as of the Distribution Date for such Plan
Year, and who has not had a Separation from the Service before such Distribution
Date, shall receive a distribution of the Vested Share Units credited to his
Accounts for such Plan Year (and any Share Units credited with respect thereto
under Section 6.2), less any amounts required to be withheld by law, in one lump
sum, not later than 30 days after the end of the calendar month in which such
Distribution Date occurs. Such distribution shall be made by the Company in the
form of whole shares of Common Stock (and cash in an amount equal to the value
of any fractional Share Unit, determined based on the Fair Market Value as of
the Distribution Date). Such Participant's Accounts shall be debited the number
of Share Units distributed.
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Section 8.2 - Distribution on Separation from the Service
A Participant who has a Separation from the Service (other than
by reason of his death) shall receive a distribution of the Vested Share Units
credited to his Accounts, less any amounts required to be withheld by law, in
one lump sum, not later than 30 days after the end of the calendar month in
which his Separation from the Service occurs. Such distribution shall be made by
the Company in the form of whole shares of Common Stock (and cash in an amount
equal to the value of any fractional Share Unit, determined based on the Fair
Market Value as of the distribution date). Such Participant's Accounts shall be
debited the number of Share Units distributed.
Section 8.3 - Effect of Delay or Failure to Ascertain Amount Distributable or
to Locate Distributee
(a) If the person to whom an amount distributable or payable
under Article VIII or IX has not been ascertained or located within the stated
time limits and reasonable efforts to do so have been made, then distribution or
payment shall be made not later than 30 days after such amount is determined or
such person is ascertained or located, or as prescribed in subsection (b).
(b) If, within one year after a Participant has a Separation from
the Service, the Administrator, in the exercise of due diligence, has failed to
locate him (or if such Separation from the Service is by reason of his death,
has failed to locate the person entitled to the amount in his Accounts under
Article IX), the Share Units credited to his Accounts in the Plan shall be
forfeited (and debited from his Accounts); provided, however, that if the
Participant (or in the case of his death, the person entitled thereto under
Article IX) makes proper claim therefor under Section 10.11, the amount so
forfeited (without interest, dividends or distributions thereon) shall be paid
to such Participant or such person, in one lump sum, not later than 30 days
after such claim is made.
Section 8.4 - Forfeitures
If a Participant has a Separation from the Service, the portion of his
Matching Share Account which is not Vested as of the date of his Separation from
the Service shall be immediately forfeited (and debited from his Accounts) and
the Company shall cease to be obligated under Articles VIII and IX with respect
to the portion of such Matching Share Account that is forfeited.
ARTICLE IX.
BENEFITS UPON DEATH
Section 9.1 - Designation of Beneficiary
(a) Each Participant shall have the right to designate, revoke
and redesignate one or more Beneficiaries hereunder and to direct distribution
of the Vested Share Units credited to his Accounts to such Beneficiaries.
(b) Designation, revocation and redesignation of Beneficiaries
must be made in writing in accordance with the Rules of the Plan on a form
provided by the Administrator and shall be effective upon delivery to the
Administrator.
Section 9.2 - Distribution upon Death
(a) Upon the death of a Participant, the Vested Share Units
credited to his Accounts, less any amounts required to be withheld by law, shall
be distributed to such Participant's Beneficiary or Beneficiaries designated
under Section 9.1, in one lump sum, not later than 30 days after the end of the
calendar month in which such Participant's death occurs. In the event that the
Participant has failed to designate a Beneficiary, or no Beneficiary survives
the Participant, the Share Units credited to his Accounts, less any amounts
required to be withheld by law, shall be distributed to such Participant's
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estate, in one lump sum, not later than 30 days after the end of the calendar
month in which the Participant's death occurs. Such distribution shall be made
by the Company in the form of whole shares of Common Stock (and cash in an
amount equal to the value of any fractional Share Unit, determined based on the
Fair Market Value as of the distribution date). Such Participant's Accounts
shall be debited the number of Share Units distributed.
(b) A Beneficiary shall cease to be entitled to benefits upon the
Administrator's determination that such Beneficiary did not survive the
Participant, or the Administrator's failure to locate such Beneficiary, after
making reasonable efforts to do so.
ARTICLE X.
ADMINISTRATIVE PROVISIONS
Section 10.1 - Duties and Powers of the Administrator
(a) The Administrator shall administer the Plan in accordance
with the Plan and ERISA and shall have full discretionary power and authority:
(i) to engage actuaries, attorneys, accountants,
appraisers, brokers, consultants, administrators, physicians or other
firms or persons and (with its officers, directors and Employees) to
rely upon the reports, advice, opinions or valuations of any such
persons except as required by law;
(ii) to adopt Rules of the Plan that are not inconsistent
with the Plan or applicable law and to amend or revoke any such rules;
(iii) to construe the Plan and the Rules of the Plan;
(iv) to determine questions of eligibility and vesting of
Participants;
(v) to determine entitlement to a Benefit and to
distributions of Participants, "Beneficiaries", and all other persons;
(vi) to make findings of fact as necessary to make any
determinations and decisions in the exercise of such discretionary power
and authority;
(vii) to appoint claims and review officials to conduct
claims procedures as provided in Section 10.11; and
(viii) to delegate any duty, power or responsibility to
the Committee, to any firm or person engaged under paragraph (i) or to
any other person or persons.
(b) Every finding, decision, and determination made by the
Administrator (or its delegate) shall, to the full extent permitted by law, be
final and binding upon all parties, except to the extent found by a court of
competent jurisdiction to constitute an abuse of discretion.
Section 10.2 - Committee
(a) The Board may establish a Committee consisting of three or
more members to hold office at the pleasure of the Board.
(b) The Committee shall have such powers, duties and
responsibilities as are delegated to it by the Board. The Board may amend,
modify or terminate the delegation of powers, duties and responsibilities to the
Committee from time to time. Any power, duty or responsibility no longer
delegated to the Committee shall
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become a power, duty or responsibility of the Board, and may be delegated by the
Board to such person or persons as the Board determines appropriate. Committee
members shall not receive payment for their services as such.
(c) Appointment of Committee members shall be effective upon
filing of written acceptance of appointment with the Board. A Committee member
may resign at any time by delivery of written notice to the Board.
(d) Vacancies in the Committee shall be filled in accordance with
subsection (a).
(e) The Committee shall act by a majority of its members in
office, either by meeting or by a written instrument executed by a majority of
the Committee members. The Committee may, by a written instrument executed by
all of the Committee members then in office, authorize one of its members to
execute any instrument required to be executed by the Committee.
(f) The Chairperson of the Committee shall appoint a Secretary to
keep the minutes of its meetings.
Section 10.3 - Limitations upon Powers of the Administrator
The Plan shall be uniformly and consistently interpreted and applied
with regard to all Participants in similar circumstances. The Plan shall be
administered, interpreted and applied fairly and equitably and in accordance
with the specified purposes of the Plan.
Section 10.4 - Compensation and Indemnification of Administrator; Expenses of
Administration
(a) The Company shall pay or reimburse the Chief Executive
Officer of Leap Wireless International, Inc. (and his delegates), each Committee
member and each Employee functioning under Section 10.1(a)(viii) for all
expenses (including reasonable attorneys' fees) properly incurred by him in the
administration of the Plan.
(b) The Company shall indemnify and hold each such Employee and
Committee member harmless from all claims, liabilities and costs (including
reasonable attorneys' fees) arising out of the good faith performance of his
functions hereunder.
(c) The Company may obtain and provide for any Employee and
Committee member, at the expense of the Companies, liability insurance against
liabilities imposed on him by law.
(d) Legal fees incurred in the preparation and amendment of
documents shall be paid by the Companies.
(e) Except as provided in subsection (a), fees and expenses of
persons rendering services to the Plan shall not be paid or reimbursed by the
Companies, except as agreed upon by the Companies.
Section 10.5 - Effect of Administrator Action
Except as provided in Section 10.3, all actions taken and all
determinations made by the Administrator (or its delegate) in good faith shall
be final and binding upon all Participants, their Beneficiaries and any other
person.
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Section 10.6 - Recordkeeping
(a) The Administrator shall maintain suitable records as follows:
(i) records of each Participant's Accounts which, among
other things, shall show separately Compensation deferral and matching
credits, and
(ii) records of its deliberations and decisions.
(b) The Administrator shall appoint a secretary, and at its
discretion, an assistant secretary, to keep the record of proceedings, to
transmit its decisions, instructions, consents or directions to any interested
party, to execute and file, on behalf of the Administrator, such documents,
reports or other matters as may be necessary or appropriate under ERISA and to
perform ministerial acts.
(c) The Administrator shall not be required to maintain any
records or accounts which duplicate any records or accounts maintained by the
Companies.
Section 10.7 - Statement to Participants
Within 30 days after the last day of each Plan Year, the Administrator
shall furnish to each Participant a statement setting forth the value of his
Accounts and such other information as the Administrator shall deem advisable to
furnish.
Section 10.8 - Inspection of Records
Copies of the Plan and the records of a Participant's Accounts shall be
open to inspection by him or his duly authorized representatives at the office
of the Administrator at any reasonable business hour.
Section 10.9 - Identification of Fiduciaries
(a) The Administrator shall be the named fiduciary of the Plan
and, as permitted or required by law, shall have exclusive authority and
discretion to operate and administer the Plan.
(b) The named fiduciary, the Board, the Company, and every person
who exercises any discretionary authority or discretionary control respecting
the Plan or who has any discretionary authority or discretionary responsibility
in the administration of the Plan, including any person designated by the named
fiduciary to carry out fiduciary responsibilities under the Plan, shall be a
fiduciary and as such shall be subject to provisions of ERISA and other
applicable laws governing fiduciaries.
Section 10.10 - Procedure for Allocation of Administrative Responsibilities
(a) Administrative responsibilities under the Plan shall be
allocated as follows:
(i) the sole duties, responsibilities and powers allocated
to the Board, any Company, the Committee and any other person shall be
those expressly provided in the relevant Sections of the Plan, and
(ii) all administrative responsibilities not allocated to
the Board, or the Companies, are allocated to the Administrator, subject
to delegation.
(b) Administrative responsibilities under the Plan may be
reallocated among fiduciaries by amending the Plan in the manner prescribed in
Section 11.8, followed by the fiduciaries' acceptance of, or operation under,
such amended Plan.
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Section 10.11 - Claims Procedure
(a) A claim by a Participant, Beneficiary or any other person
shall be presented to the claims official appointed by the Administrator (or its
delegate) in writing within the maximum time permitted by law or under the
regulations of the Secretary of Labor or his delegate pertaining to claims
procedures.
(b) The claims official shall, within a reasonable time, consider
the claim and shall issue his determination thereon in writing.
(c) If the claim is granted, the appropriate distribution or
payment shall be made by the Companies.
(d) If the claim is wholly or partially denied, the claims
official shall, within 90 days (or such longer period as may be reasonably
necessary), provide the claimant with written notice of such denial, setting
forth, in a manner calculated to be understood by the claimant
(i) the specific reason or reasons for such denial;
(ii) specific reference to pertinent Plan provisions on
which the denial is based;
(iii) a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and
(iv) an explanation of the Plan's claims review procedure.
(e) The Administrator (or its delegate) shall provide each
claimant with a reasonable opportunity to appeal the claim official's denial of
a claim to a review official (appointed by the Administrator (or its delegate)
in writing) for a full and fair review. The claimant or his duly authorized
representative
(i) may request a review upon written application to the
review official (which shall be filed with it),
(ii) may review pertinent documents, and
(iii) may submit issues and comments in writing.
(f) The review official may establish such time limits within
which a claimant may request review of a denied claim as are reasonable in
relation to the nature of the benefit which is the subject of the claim and to
other attendant circumstances but which, in no event, shall be less than 60 days
after receipt by the claimant of written notice of denial of his claim.
(g) The decision by the review official upon review of a claim
shall be made not later than 60 days after his receipt of the request for
review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of such request for review.
(h) The decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated to be
understood by the claimant with specific references to the pertinent Plan
provisions on which the decision is based.
(i) In considering claims under this claims procedure, the claims
official and the review official shall have fiduciary and discretionary
authority to make findings of fact and to construe the terms of the
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Plan and, to the full extent permitted by law, the determination of the claims
official (if no review is properly requested or the decision of the review
official on review, if review has been properly requested) shall be final and
binding on all parties unless held by a court of competent jurisdiction to
constitute an abuse of discretion.
Section 10.12 - Conflicting Claims
If the Administrator is confronted with conflicting claims concerning a
Participant's Accounts, the Administrator may interplead the claimants in an
action at law, or in an arbitration conducted in accordance with the rules of
the American Arbitration Association, as the Administrator shall elect in its
sole discretion, and in either case, the attorneys' fees, expenses and costs
reasonably incurred by the Administrator in such proceeding shall be paid from
the Participant's Accounts.
Section 10.13 - Service of Process
The Secretary of Leap Wireless International, Inc. is hereby designated
as agent of the Plan for the service of legal process.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1 - Termination of the Plan
(a) While the Plan is intended as a permanent program, the Board
shall have the right at any time to declare the Plan terminated; provided,
however, that no amendment shall decrease the Vested percentage or amount of
interest any Participant, any Beneficiary or any other person entitled to
payment under the Plan has in the Participant's Accounts.
(b) In the event of any termination, the Administrator shall
distribute Participants' Accounts as provided by the Board.
Section 11.2 - Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events
(a) Notwithstanding Section 6.2, in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to a Participant's Accounts under the Plan, then
the Administrator shall, in such manner as it may deem equitable, adjust the
number of Share Units (or other units or amounts) credited or to be credited to
Participants' Accounts under the Plan and the number and kind of shares of
Common Stock (or other securities or property) or amounts to be distributed to
Participants and Beneficiaries under the Plan.
(b) In the event of any transaction or event described in Section
11.2(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Administrator, in its sole and absolute discretion,
and on such terms and conditions as it deems appropriate, by action taken prior
to the occurrence of such transaction or event and either automatically or upon
the Participant's request, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential
14
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benefits intended to be made available under the Plan or with respect to such
Participant's Matching Share Account under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:
(i) To provide for the early distribution of the Share
Units credited to such Participant's Accounts in shares of Common Stock
(or other securities or property) or in cash;
(ii) To provide that such Participant's Matching Share
Account cannot become Vested after such event;
(iii) To provide that such Participant's Matching Share
Account shall become fully Vested;
(iv) To provide that the obligations of the Company with
respect to such Participant's Accounts be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or the rights
of such Participant with respect to such Participant's Accounts shall be
substituted for by similar rights covering units or amounts representing
the stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and
kind of Share Units or other units or amounts credited to such
Participant; and
(v) To make adjustments in the number and type of shares
of Common Stock (or other securities or property) or cash amounts to be
distributed to Participants and Beneficiaries under the Plan.
(c) The existence of the Plan and the Accounts of Participants
under the Plan shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
Section 11.3 - Limitation on Rights of Employees
The Plan is strictly a voluntary undertaking on the part of the Company
and shall not constitute a contract between a Company and any Employee with
respect to, or consideration for, or an inducement or condition of, the
employment of an Employee. Nothing contained in the Plan shall give any Employee
the right to be retained in the service of a Company or to interfere with or
restrict the rights of the Company, which are hereby expressly reserved, to
discharge or retire any Employee, except as provided by law, at any time without
notice and with or without cause. Inclusion under the Plan will not give any
Employee any right or claim to any benefit hereunder except to the extent such
right has specifically become fixed under the terms of the Plan. The doctrine of
substantial performance shall have no application to Employees, Participants,
"Beneficiaries" or any other persons entitled to payments under the Plan. Each
condition and provision, including numerical items, has been carefully
considered and constitutes the minimum limit on performance which will give rise
to the applicable right.
Section 11.4 - Unfunded Obligations of the Company
The obligations of the Company under the Plan shall be unfunded and
unsecured, and nothing contained herein shall be construed as providing for
assets to be held in trust or escrow or any other form of segregation of the
assets of the Company for the benefit of any Participant, any Beneficiary or any
other person or persons to whom benefits are to be paid pursuant to the terms of
the Plan. The interest of any Participant, any Beneficiary or any other person
hereunder shall be limited to the right to receive the benefits as set forth
herein. To the extent
15
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that a Participant, any Beneficiary or any other person acquires a right to
receive benefits under the Plan, such rights shall be no greater than the right
of an unsecured general creditor of the Companies.
Section 11.5 - Grantor Trust
(a) The Company may establish a grantor trust (the "Trust") in
connection with the Plan, and may make irrevocable contributions to the Trust in
accordance with the terms of the trust agreement (the "Trust Agreement")
establishing the Trust. The Company shall designate the trustee of the Trust.
The Trust Agreement shall provide that the Trust assets shall be subject to the
claims of the creditors of the Company in the event of the "Insolvency" (as
defined in the Trust Agreement) of the Company, and that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan for purposes of the Code and ERISA.
(b) The Trust Agreement may provide that the trustee of the Trust
shall invest the assets in the Trust as directed by the Company. The Company
may, but shall not be obligated to, direct the trustee to invest the assets of
the Trust in shares of Common Stock.
(c) The Company may cause the payment of benefits under the Plan
to be made, in whole or in part, by the Trust in accordance with the terms of
the Trust Agreement.
(d) Any payment of benefits by the Trust shall be in satisfaction
of the obligations of the Company under the Plan. Notwithstanding the
establishment of the Trust, and any contributions made by the Company to the
Trust, the Company shall remain obligated to make all payments of benefits under
the Plan, except to the extent such payments are made by the Trust in accordance
with the Trust Agreement.
(e) To the extent the Company establishes the Trust and directs
that the assets of the Trust be invested in shares of Common Stock, all voting
rights on shares of Company Stock in the Trust Fund held by the Trust shall be
exercised by the Trustee in accordance with instructions from the Participants
with respect to the Share Units credited to their Accounts, or the Administrator
in accordance with the following provisions of this Section:
(i) All voting rights on shares of Company Stock in the
Trust shall be exercised by the Trustee only as directed by the
Participants with respect to shares of Company Stock attributable to the
Share Units credited to their Accounts in accordance with the following
provisions of subsections (ii) and (iii) below.
(ii) As soon as practicable before each annual or special
shareholders' meeting of the Company at which shares of Company Stock
are entitled to vote, the Trustee shall furnish to each Participant a
copy of the proxy solicitation material sent generally to stockholders,
together with a form requesting confidential instructions on how the
shares of Company Stock attributable to the Share Units credited to such
Participant's Accounts (including fractional shares to 1/1000th of a
share) are to be voted. The Company shall cooperate with the Trustee to
ensure that Participants receive the requisite information in a timely
manner. The materials furnished to the Participants shall include a
notice from the Trustee explaining each Participant's right to instruct
the Trustee with respect to the voting of the shares of Company Stock
attributable to the Share Units credited to the Participant's Accounts.
Upon timely receipt of such instructions, the Trustee (after combining
votes of fractional shares to give effect to the greatest extent to
Participants' instructions) shall vote the shares as instructed. If
voting instructions for shares of Company Stock to the Accounts of any
Participant are not timely received by the Trustee for a particular
stockholders' meeting, such shares shall not be voted in accordance with
the instructions but shall be voted as provided in subsection (c) below.
The instructions received by the Trustee from Participants shall be held
by the Trustee in strict confidence and shall not be divulged or
released to any person including directors, officers or employees of the
Company, or of any other company, except as otherwise required by law.
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(iii) All shares of Company Stock attributable to Share
Units credited to the Accounts of Participants shall be voted only in
accordance with the directions of such Participants as given to the
Trustee. Each Participant shall be entitled to 1/1000th of a share)
attributable to Share Units credited to his Accounts. If, however,
voting instructions for shares of Company Stock to the Participant's
Accounts are not timely received by the Trustee for a particular
stockholders' meeting, such shares shall be voted by the Trustee as
directed by the Administrator.
Section 11.6 - Consolidation or Merger
In the event of the consolidation or merger of a Company with or
into any other corporation, or the sale by a Company of its assets, the
resulting successor may continue the Plan by adopting it in a resolution of its
board of directors or agreement of its partners. If within 90 days from the
effective date of such consolidation, merger or sale of assets, such new
corporation does not adopt the Plan, the Plan shall be terminated.
Section 11.7 - Errors and Misstatements
In the event of any misstatement or omission of fact by a Participant to
the Administrator or any clerical error resulting in payment of benefits in an
incorrect amount, the Administrator shall promptly cause the amount of future
payments to be corrected upon discovery of the facts and the Companies shall pay
the Participant or any other person entitled to payment under the Plan any
underpayment in cash in a lump sum or to recoup any overpayment from future
payments to the Participant or any other person entitled to payment under the
Plan in such amounts as the Administrator shall direct or to proceed against the
Participant or any other person entitled to payment under the Plan for recovery
of any such overpayment.
Section 11.8 - Payment on Behalf of Minor, etc.
In the event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Administrator is considered by reason of
physical or mental condition to be unable to give a valid receipt therefor, the
Administrator may direct that such payment be made to any person found by the
Administrator in its sole judgment, to have assumed the care of such minor or
other person. Any payment made pursuant to such determination shall constitute a
full release and discharge of the Companies, the Board, the Administrator, the
Committee and their officers, directors and Employees.
Section 11.9 - Amendment of Plan
As limited by any applicable law, the Plan may be wholly or partially
amended by the Board from time to time including retroactive amendments
necessary to conform to the provisions and requirements of ERISA or the Code or
regulations pursuant thereto; provided, however, that no amendment shall
decrease the Vested percentage or amount of interest any Participant or any
other person entitled to payment under the Plan has in the Participant's
Nonqualified Accounts.
Section 11.10 - Tax Withholding
The Company shall be entitled to require payment in cash or deduction
from other compensation payable to a Participant of any sums required by
federal, state or local tax law to be withheld with respect to the crediting of
Share Units to a Participant's Accounts and the distribution of amounts to such
Participant. The Administrator may in its discretion and in satisfaction of the
foregoing requirement allow such Holder to elect to have the Company withhold
shares of Common Stock otherwise distributable under the Plan (or allow the
return of shares of Common Stock) having a Fair Market Value equal to the sums
required to be withheld.
Section 11.11 - Governing Law
This Plan shall be construed, administered and governed in all respects
under and by applicable federal laws and, where state law is applicable, the
laws of the State of California.
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Section 11.12 - Pronouns and Plurality
The masculine pronoun shall include the feminine pronoun, and the
singular the plural where the context so indicates.
Section 11.13 - Titles
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.
Section 11.14 - References
Unless the context clearly indicates to the contrary, a reference to a
statute, regulation or document shall be construed as referring to any
subsequently enacted, adopted or executed statute, regulation or document.
Executed as of December 9, 1999 at San Diego, California.
LEAP WIRELESS INTERNATIONAL, INC.
By: /s/ James E. Hoffmann
James E. Hoffmann
Title: Senior Vice President, General Counsel
and Secretary
18
<PAGE> 1
EXHIBIT 5.1
[LATHAM & WATKINS LETTERHEAD]
January 11, 2000
Leap Wireless International, Inc.
10307 Pacific Center Court
San Diego, California 92121
Re: Form S-8 Registration Statement
25,000 Shares of Common Stock
Ladies and Gentlemen:
In connection with the registration by Leap Wireless
International, Inc., a Delaware corporation (the "Registrant"), of 25,000 shares
of common stock, par value $0.0001 per share (the "Shares"), of the Registrant
to be issued pursuant to The Leap Wireless International, Inc. Executive Officer
Deferred Stock Plan (the "Plan") under the Securities Act of 1933, as amended
(the "Act"), on a Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on January 11, 2000 (as amended from time to time, the
"Registration Statement"), you have requested our opinion with respect to the
matters set forth below.
In our capacity as your counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Registrant in connection with the authorization, issuance and sale
of the Shares. In addition, we have made such legal and factual examinations and
inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and instruments, as we have deemed necessary or appropriate for purposes of this
opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
<PAGE> 2
LATHAM & WATKINS
Leap Wireless International, Inc.
January 11, 2000
Page 2
We are opining herein as to the effect on the subject transaction
only of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or any other laws, or as to any matters of
municipal law or the laws of any other local agencies within the state.
Subject to the foregoing, it is our opinion that as of the date
hereof the Shares have been duly authorized, and, upon the issuance of the
Shares in accordance with the terms set forth in the Plan, the Shares will be
validly issued, fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated October 18, 1999, relating to the
consolidated financial statements, which appears in the 1999 Annual Report to
Shareholders of Leap Wireless International, Inc., which is incorporated by
reference in Leap Wireless International, Inc.'s Annual Report on Form 10K for
the year ended August 31, 1999. We also consent to the incorporation by
reference of our report dated October 18, 1999 relating to the financial
statement schedule, which appears in such Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
San Diego, California
January 4, 2000
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 25, 1999, except as to Note
14 b) which is as of March 16, 1999; Note 14 c) which is as of April 19, 1999;
and Note 14 d) which is as of October 12, 1999, relating to the financial
statements of Smartcom S.A., formerly named Chilesat Telefonia Personal S.A.,
which appears in such Registration Statement.
/s/ Price Waterhouse
Santiago, Chile
January 4, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 30, 1999 except for Note 1, as
to which the date is October 15, 1999, relating to the consolidated financial
statements of Orrengrove Investments Ltd. and Subsidiaries (a Development Stage
Company), which appears in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
McLean, Virginia
January 4, 2000
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 15, 1999, relating to the
consolidated financial statements of Pegaso Telecomunicaciones, S.A. de C.V.,
which appears in such Registration Statement.
/s/ PricewaterhouseCoopers
Mexico City, Mexico
January 4, 2000
