Exhibit 10.1.3
LEAP WIRELESS INTERNATIONAL, INC.
2004 STOCK OPTION, RESTRICTED STOCK AND
DEFERRED STOCK UNIT PLAN
RESTRICTED STOCK AWARD GRANT NOTICE AND
RESTRICTED STOCK AWARD AGREEMENT
Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004
Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby
grants to the holder listed below ("HOLDER"), the right to purchase the number
of shares of the Company's Common Stock set forth below (the "SHARES") at the
purchase price set forth below. This Restricted Stock award is subject to all of
the terms and conditions as set forth herein and in the Restricted Stock Award
Agreement attached hereto as Exhibit A (the "RESTRICTED STOCK 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 Restricted Stock Agreement.
HOLDER: Xxxxxxx X. Xxxxxxxx
XXXXX DATE: July 8, 2005
PURCHASE PRICE PER SHARE: $0.0001 per share
TOTAL NUMBER OF SHARES OF RESTRICTED STOCK: 14,100
VESTING SCHEDULE: The Shares shall be released from
the Company's Repurchase Option
set forth in Section 3.1 of the
Restricted Stock Agreement on the
dates and in the amounts indicated
in Exhibit B to this Grant Notice.
By his signature and the Company's signature below, Xxxxxx agrees to be bound by
the terms and conditions of the Plan, the Restricted Stock Agreement and this
Grant Notice. Holder has reviewed the Restricted Stock Agreement, the Plan and
this Grant Notice in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Grant Notice and fully understands all
provisions of this Grant Notice, the Restricted Stock 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 Restricted Stock Agreement. If Xxxxxx
is married, his spouse has signed the Consent of Spouse attached to this Grant
Notice as Exhibit C.
LEAP WIRELESS INTERNATIONAL, INC. HOLDER:
By: /s/ X. Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: X. Xxxxxxx Xxxxxxxxx Print Name: Xxxxxxx X. Xxxxxxxx
Title: CEO Title: Senior Vice President
Address: 00000 Xxxxxxx Xxxxxx Xxxxx Address:
San Xxxxx, Xxxxxxxxxx 00000 ___________________________
___________________________
EXHIBIT A
TO RESTRICTED STOCK AWARD GRANT NOTICE
RESTRICTED STOCK AWARD AGREEMENT
Pursuant to the Restricted Stock Award Grant Notice ("GRANT NOTICE") to
which this Restricted Stock Award Agreement (this "AGREEMENT") is attached, Leap
Wireless International, Inc. (the "COMPANY") has granted to Holder the right to
purchase the number of shares of Restricted Stock under the Company's 2004 Stock
Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") indicated in
the Grant Notice.
ARTICLE I
GENERAL
1.1 Defined Terms. Capitalized terms not specifically defined herein
shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Shares are subject to the terms
and conditions of the Plan which are incorporated herein by reference.
ARTICLE II
GRANT OF RESTRICTED STOCK
2.1 Grant of Restricted Stock. In consideration of Holder's past and/or
continued employment with or service to the Company or its Subsidiaries,
Holder's agreement to the release and settlement of claims set forth in Section
2.6 below, and for other good and valuable consideration, effective as of the
Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company
irrevocably grants to Holder the right to purchase the number of shares of
Common Stock set forth in the Grant Notice (the "SHARES"), upon the terms and
conditions set forth in the Plan and this Agreement.
2.2 Purchase Price. The purchase price of the Shares shall be as set
forth in the Grant Notice, without commission or other charge. The payment of
the purchase price shall be paid by cash or check.
2.3 Issuance of Shares. The issuance of the Shares under this Agreement
shall occur at the principal office of the Company simultaneously with the
execution of this Agreement by the parties or on such other date as the Company
and Holder shall agree (the "ISSUANCE DATE"). Subject to the provisions of
Section 2.4 and Article IV below, on the Issuance Date, the Company shall issue
the Shares (which shall be issued in Holder's name).
2.4 Conditions to Issuance of Stock Certificates. The Shares, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such Shares shall
be fully paid and nonassessable. The Company
shall not be required to issue or deliver any Shares prior to fulfillment of all
of the following conditions:
(a) The admission of such Shares to listing on all stock exchanges
on which such Common Stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Administrator shall, in its absolute discretion, deem necessary
or advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
Issuance Date as the Administrator may from time to time establish for reasons
of administrative convenience; and
(e) The receipt by the Company of full payment for such Shares,
including payment of any applicable withholding tax, which in the discretion of
the Administrator may be in the form of consideration used by Holder to pay for
such Shares, subject to Section 10.4 of the Plan.
2.5 Rights as Stockholder. Except as otherwise provided herein, upon
delivery of the Shares to the escrow holder pursuant to Article IV, Holder shall
have all the rights of a stockholder with respect to said Shares, subject to the
restrictions herein, including the right to vote the Shares and to receive all
dividends or other distributions paid or made with respect to the Shares;
provided, however, that any and all cash dividends paid on such Shares and any
and all shares of Common Stock, capital stock or other securities received by or
distributed to Holder with respect to the Shares as a result of any stock
dividend stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company
shall also be subject to the Repurchase Option (as defined in Section 3.1 below)
and the restrictions on transfer in Section 3.4 below until such restrictions on
the underlying Shares lapse or are removed pursuant to this Agreement.
2.6 Release and Settlement.
(a) As partial consideration for the award to be made to Holder
hereunder, Xxxxxx does hereby for himself and his spouse, beneficiaries, heirs,
successors and assigns, release, acquit and forever discharge the Released
Parties (as defined below) from any and all claims, actions, charges,
complaints, causes of actions, rights, demands, debts, liabilities, damages,
losses, costs and expenses of any nature whatsoever, known or unknown, fixed or
contingent ("CLAIMS"), under, relating to, or in connection with:
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(i) the Company's Executive Retirement Contribution Plan
(the "EXECUTIVE RETIREMENT PLAN");
(ii) the Company's Executive Retirement Matching Contribution
Plan (the "EXECUTIVE MATCHING CONTRIBUTION PLAN");
(iii) the Trust established under the Trust Agreement Between
the Company and Fidelity Management Trust Company ("FIDELITY"), dated as
of September 30, 1998, as amended to date (the "EXECUTIVE RETIREMENT
TRUST"), and any assets or funds of the Executive Retirement Trust or any
interest therein; and
(iv) any benefits or other amounts payable to Holder under,
relating to or in connection with any of the foregoing, including, without
limitation, any Claims under the Employee Retirement Income Security Act
of 1974, as amended (collectively, the "RELEASED CLAIMS").
(b) IN ADDITION, HOLDER EXPRESSLY WAIVES ALL RIGHTS UNDER
SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA, WHICH READS AS
FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
WITH FULL AWARENESS AND UNDERSTANDING OF THE ABOVE PROVISIONS, HOLDER HEREBY
WAIVES ANY RIGHTS HE MAY HAVE UNDER SECTION 1542, AS WELL AS UNDER ANY OTHER
STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT, WITH RESPECT TO THE
RELEASED CLAIMS. HOLDER INTENDS TO, AND XXXXXX DOES, RELEASE THE RELEASED
PARTIES FROM CLAIMS WHICH XXXXXX DOES NOT PRESENTLY KNOW OR SUSPECT TO EXIST AT
THIS TIME WITH RESPECT TO THE RELEASED CLAIMS.
(c) As used in this Section 2.6, the term "RELEASED PARTIES"
means: the Company; all Subsidiaries of the Company; any affiliate (as such term
is defined in Rule 144 under the Securities Act of 1933, as amended) of the
Company; the Executive Retirement Plan; the Executive Matching Contribution
Plan; the Executive Retirement Trust; Fidelity, in its capacity as the trustee
of the Executive Retirement Trust; and any past, present and future director,
officer, employee, representative, stockholder, administrator, trustee,
fiduciary, affiliate or agent of any of the foregoing and all persons acting by,
through or in concert with them. The term "RELEASED PARTY" shall not include the
Leap Wireless International, Inc. Liquidating Trust (the "LEAP CREDITOR TRUST"),
and this Section 2.6 shall not release or discharge any claim Holder may have as
a general unsecured creditor of the Company to a pro rata distribution of
beneficial interests in the Leap Creditor Trust (as contemplated by Article III
of the Fifth Amended Joint Plan of Reorganization of the Company and the other
debtors identified therein, dated as of July
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30, 2003, as amended) with respect to any claim filed by Xxxxxx against the
Company in connection with the Company's bankruptcy.
(d) Xxxxxx is advised to consult an attorney before signing
the Restricted Stock Award Xxxxx Xxxxxx (to which this Agreement is attached and
made expressly a part thereof).
ARTICLE III
RESTRICTIONS ON SHARES
3.1 Repurchase Option. Subject to the provisions of Section 3.2 below,
if Holder has a Termination of Employment before all of the Shares are released
from the Company's Repurchase Option (as defined below), the Company shall, upon
the date of such Termination (as reasonably fixed and determined by the
Company), have an irrevocable, exclusive option, but not the obligation, for a
period of sixty (60) days, commencing on the first day after the date Holder has
a Termination of Employment, to repurchase all or any portion of the Unreleased
Shares (as defined below in Section 3.3) at such time (the "REPURCHASE OPTION")
at the original cash purchase price per share (the "REPURCHASE PRICE"). The
Repurchase Option shall lapse and terminate on the last day of such 60-day
period. The Repurchase Option shall be exercisable by the Company by written
notice to Holder or Holder's executor (with a copy to the escrow agent appointed
pursuant to Section 4.1 below) and shall be exercisable, at the Company's
option, by delivery to Holder or Holder's executor with such notice of a check
in the amount of the Repurchase Price times the number of Shares to be
repurchased (the "AGGREGATE REPURCHASE PRICE"). Upon delivery of such notice and
the payment of the Aggregate Repurchase Price, the Company shall become the
legal and beneficial owner of the Shares being repurchased and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the number of Shares being repurchased by
the Company. In the event the Company repurchases any Shares under this Section
3.1, any dividends or other distributions paid on such Shares and held by the
escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be
promptly paid by the escrow agent to the Company.
3.2 Release of Shares from Repurchase Restriction. The Shares shall be
released from the Company's Repurchase Option as indicated in Exhibit B to the
Grant Notice. Any of the Shares released from the Company's Repurchase Option
shall thereupon be released from the restrictions on transfer under Section 3.4.
In the event any of the Shares are released from the Company's Repurchase
Option, any dividends or other distributions paid on such Shares and held by the
escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be
promptly paid by the escrow agent to Holder.
3.3 Unreleased Shares. Any of the Shares which, from time to time, have
not yet been released from the Company's Repurchase Option are referred to
herein as "UNRELEASED SHARES."
3.4 Restrictions on Transfer. Unless otherwise permitted by the
Administrator pursuant to the Plan, no Unreleased Shares or any dividends or
other distributions thereon or any interest or right therein or part thereof,
shall be liable for the debts, contracts or engagements of
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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, 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.
ARTICLE IV
ESCROW OF SHARES
4.1 Escrow of Shares. To insure the availability for delivery of
Xxxxxx's Unreleased Shares upon repurchase by the Company pursuant to the
Repurchase Option under Section 3.1, Holder hereby appoints the Secretary of the
Company, or any other person designated by the Administrator as escrow agent, as
his attorney-in-fact to assign and transfer unto the Company, such Unreleased
Shares, if any, repurchased by the Company pursuant to the Repurchase Option
pursuant to Section 3.1 and any dividends or other distributions thereon, and
shall, upon execution of this Agreement, deliver and deposit with the Secretary
of the Company, or such other person designated by the Administrator, any share
certificates representing the Unreleased Shares, together with the stock
assignment duly endorsed in blank, attached to the Grant Notice as Exhibit D to
the Grant Notice. The Unreleased Shares and stock assignment shall be held by
the Secretary of the Company, or such other person designated by the
Administrator, in escrow, pursuant to the Joint Escrow Instructions of the
Company and Holder attached as Exhibit E to the Grant Notice, until the Company
exercises its Repurchase Option as provided in Section 3.1, until such
Unreleased Shares are released from the Company's Repurchase Option, or until
such time as this Agreement no longer is in effect. Upon release of the
Unreleased Shares, the escrow agent shall deliver to Holder the certificate or
certificates representing such Shares in the escrow agent's possession belonging
to Holder in accordance with the terms of the Joint Escrow Instructions attached
as Exhibit E to the Grant Notice, and the escrow agent shall be discharged of
all further obligations hereunder; provided, however, that the escrow agent
shall nevertheless retain such certificate or certificates as escrow agent if so
required pursuant to other restrictions imposed pursuant to this Agreement. If
the Shares are held in book entry form, then such entry will reflect that the
Shares are subject to the restrictions of this Agreement. If any dividends or
other distributions are paid on the Unreleased Shares held by the escrow agent
pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends
or other distributions shall also be subject to the restrictions set forth in
this Agreement and held in escrow pending release of the Unreleased Shares with
respect to which such dividends or other distributions were paid from the
Company's Repurchase Option.
4.2 Transfer of Repurchased Shares. Xxxxxx hereby authorizes and directs
the Secretary of the Company, or such other person designated by the
Administrator, to transfer the Unreleased Shares as to which the Repurchase
Option has been exercised from Holder to the Company.
4.3 No Liability for Actions in Connection with Escrow. The Company, or
its designee, shall not be liable for any act it may do or omit to do with
respect to holding the Shares in escrow and while acting in good faith and in
the exercise of its judgment.
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ARTICLE V
OTHER PROVISIONS
5.1 Adjustment for Stock Split. In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company, the
Administrator shall make appropriate and equitable adjustments in the Unreleased
Shares subject to the Repurchase Option and the number of Shares, consistent
with any adjustment under Section 10.3 of the Plan. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Shares, to any and all shares of capital stock or other securities which may be
issued in respect of, in exchange for, or in substitution of the Shares, and
shall be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
5.2 Taxes. Xxxxxx has reviewed with Xxxxxx's own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by the Grant Notice and this Agreement. Holder is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Holder understands that Holder (and not the
Company) shall be responsible for Xxxxxx's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
Holder understands that Holder will recognize ordinary income for federal income
tax purposes under Section 83 of the Code. In this context, "restriction"
includes the right of the Company to repurchase the Shares pursuant to its
Repurchase Option set forth in Section 3.1. Holder understands that Holder may
elect to be taxed for federal income tax purposes at the time the Shares are
purchased rather than as and when the Repurchase Option lapses by filing an
election under Section 83(b) of the Code with the Internal Revenue Service
within thirty (30) days from the date of purchase. A form of election under
Section 83(b) of the Code is attached to the Grant Notice as Exhibit X.
XXXXXX ACKNOWLEDGES THAT IT IS XXXXXX'S SOLE RESPONSIBILITY AND NOT THE
COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER
REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HOLDER'S
BEHALF
5.3 Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan or this Agreement, if Holder is subject to Section
16 of the Exchange Act, the Plan, the Shares and this Agreement shall be subject
to any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the
Exchange Act) that are requirements for the application of such exemptive rule.
To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
5.4 Administration. The Administrator shall have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall
be
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final and binding upon Holder, the Company and all other interested persons. No
member of the Administrator shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Shares. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Administrator under the Plan and this Agreement.
5.5 Restrictive Legends and Stop-Transfer Orders.
(a) Any share certificate(s) evidencing the Shares issued
hereunder shall be endorsed with the following legend and any other legend
required by any applicable federal and state securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
REPURCHASE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN
THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
(b) Xxxxxx agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
(c) The Company shall not be required: (i) to transfer on its
books any shares of Common Stock that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, or (ii) to treat as owner
of such shares of Common Stock or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such shares shall have been so
transferred.
5.6 Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to Holder shall be addressed to Holder at
the address given beneath Xxxxxx's signature on the Grant Notice. By a notice
given pursuant to this Section 5.6, either party may hereafter designate a
different address for notices to be given to that party. Any notice shall be
deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
5.7 Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
5.8 Governing Law; Severability. This Agreement shall be administered,
interpreted and enforced under the laws of the State of Delaware without regard
to conflicts of laws thereof. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.
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5.9 Conformity to Securities Laws. Holder acknowledges that the Plan is
intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Shares are to be issued, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
5.10 Amendments. This Agreement may not be modified, amended or
terminated except by an instrument in writing, signed by Xxxxxx and by a duly
authorized representative of the Company.
5.11 No Employment Rights. If Holder is an Employee, nothing in the Plan
or this Agreement shall confer upon Holder any right to continue in the employ
of the Company or any Subsidiary or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries, which are expressly reserved, to
discharge Holder at any time for any reason whatsoever, with or without cause,
except to the extent expressly provided otherwise in a written agreement between
the Company and Holder.
5.12 Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Xxxxxx and his or her heirs, executors, administrators, successors and
assigns.
* * *
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EXHIBIT B
TO RESTRICTED STOCK AWARD GRANT NOTICE
VESTING PROVISIONS
Capitalized terms used in this Exhibit B and not defined below shall have
the meanings given them in the Agreement to which this Exhibit B is attached.
1. Time-Based Vesting. Subject to any accelerated vesting pursuant to
paragraph 2 below, one-half of the Unreleased Shares shall be released from the
Company's Repurchase Option on November 15, 2005, if Holder then remains an
Employee on such date, and any remaining Unreleased Shares shall be released
from the Company's Repurchase Option on November 15, 2006, if Xxxxxx then
remains an Employee on such date.
2. Accelerated Vesting.
(a) Termination of Employment. If Xxxxxx has a Termination of
Employment by reason of discharge by the Company or any Subsidiary other
than for Cause (as defined below), or by reason of resignation by Holder
for Good Reason (as defined below), or by reason of Holder's incapacity
due to death, disability or physical or mental illness, then the remaining
Unreleased Shares shall be released from the Company's Repurchase Option
in their entirety on the date of Holder's Termination of Employment.
(b) Definitions of Cause and Good Reason. For purposes of this
Exhibit B, the terms "CAUSE" and "GOOD REASON" shall be defined as
follows:
(ii) "CAUSE" shall mean termination of Holder's employment by
the Company or any Subsidiary: (A) upon Xxxxxx's willful failure
substantially to perform Holder's duties with the Company or any
Subsidiary (or any successor thereof) (other than any such failure
resulting from Xxxxxx's incapacity due to death, disability or physical or
mental illness, or any such actual or anticipated failure after Xxxxxx's
issuance of a Notice of Termination (as described below) for Good Reason),
as reasonably determined by the Company, or, if Xxxxxx is then employed in
a position as Senior Vice President of the Company or any Subsidiary or a
more senior officer of the Company or any Subsidiary, by the Board of
Directors of the Company after a written demand for substantial
performance is delivered to Holder by the Company, or the Board of
Directors of the Company, as the case may be, which demand specifically
identifies the manner in which the Company or the Board of Directors of
the Company, as the case may be, believes that Xxxxxx has not
substantially performed such duties, provided that Holder shall have been
given a reasonable period, not to exceed fifteen (15) days, in which to
cure such failure (provided such failure is capable of being cured), (B)
upon Xxxxxx's willful failure substantially to follow and comply with the
specific and lawful directives of the Company or any Subsidiary or, if
Holder is then employed in a position as a Senior Vice President of the
Company or any Subsidiary or a more senior officer of the Company or any
Subsidiary, by the Board of Directors of the Company or duly adopted
policies of the Company or any Subsidiary which are consistent with
Holder's duties with the Company or any Subsidiary, as reasonably
determined by the Company or, if Holder
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is then employed in a position as a Senior Vice President of the Company
or any Subsidiary or a more senior officer of the Company or any
Subsidiary, by the Board of Directors of the Company (other than any such
failure resulting from Xxxxxx's incapacity due to death, disability or
physical or mental illness, or any such actual or anticipated failure
after Xxxxxx's issuance of a Notice of Termination for Good Reason), after
a written demand for substantial performance is delivered to Holder by the
Company or the Board of Directors of the Company, as the case may be,
which demand specifically identifies the manner in which the Company or
the Board of Directors of the Company, as the case may be, believes that
Holder has not substantially performed such directives, provided that the
Holder shall have been given a reasonable period not to exceed fifteen
(15) days in which to cure such failure (provided such failure is capable
of being cured), (C) upon Holder's commission of an act of fraud or
dishonesty impacting or involving the Company or any Subsidiary (or any
successor thereof), (D) upon Xxxxxx's willful engagement in illegal
conduct or gross misconduct affecting the Company or any Subsidiary, or
(E) upon the Holder's being convicted of, or pleading nolo contendere to,
the commission of a felony.
(iii) "GOOD REASON" shall mean, without Xxxxxx's express
written consent, the occurrence of any of the following circumstances
unless such circumstances are cured (provided such circumstances are
capable of being cured) prior to the Date of Termination specified in a
Notice of Termination given by Holder in respect thereof: (A) the
continuous assignment to Holder of any duties materially inconsistent with
Xxxxxx's positions with the Company or any Subsidiary (or any successor
thereof), a significant adverse alteration in the nature or status of
Holder's responsibilities or the conditions of Xxxxxx's employment with
the Company or any Subsidiary (or any successor thereof), or any other
action that results in a material diminution in Holder's position,
authority, title, duties or responsibilities with the Company or any
Subsidiary (or any successor thereof); (B) reduction of Holder's annual
base salary as in effect on the Grant Date or as the same may be increased
from time to time thereafter; (C) the relocation of the offices at which
Holder is principally employed to a location more than sixty (60) miles
from such location; (D) the Company's or Subsidiary's failure (or the
failure of any successor) to pay Holder any portion of Holder's current
compensation; (E) the Company's or Subsidiary's failure (or the failure of
any successor) to continue in effect any material compensation or benefit
plan in which Holder participates, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the Company's or Subsidiary's failure to continue
Holder's participation therein (or in such substitute or alternative plan)
on the basis not materially less favorable, both in terms of the amount of
benefits provided and the level of Holder's participation relative to
other participants; (F) the Company's or Subsidiary's failure (or the
failure of any successor) to continue to provide Holder with benefits
substantially similar in the aggregate to those enjoyed by Holder under
any of the Company's or Subsidiary's life insurance, medical, health and
accident, disability, pension, retirement, or other benefit plans in which
Holder or Xxxxxx's eligible family members were participating immediately
prior thereto, or the taking of any action by the Company or Subsidiary
(or any successor thereof) which would directly or indirectly materially
reduce any of such benefits; or (G) the continuation or repetition, after
written notice of objection from Holder, of harassing or denigrating
treatment of Holder by the Company
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or Subsidiary (or any successor thereof) inconsistent with Xxxxxx's
position with the Company or Subsidiary. Holder's right to terminate
employment with the Company or Subsidiary (or any successor thereof)
pursuant to this subparagraph shall not be affected by Xxxxxx's incapacity
due to disability or physical or mental illness. Xxxxxx's continued
employment with the Company or Subsidiary (or any successor thereof) shall
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason thereunder.
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EXHIBIT C
TO RESTRICTED STOCK AWARD GRANT NOTICE
CONSENT OF SPOUSE
I, ________________________, spouse of Xxxxxxx X. Xxxxxxxx, have read and
approve the foregoing Agreement. In consideration of issuing to my spouse the
shares of the common stock of Leap Wireless International, Inc. set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares of the common stock of Leap Wireless International, Inc. issued
pursuant thereto under the community property laws or similar laws relating to
marital property in effect in the state of our residence as of the date of the
signing of the foregoing Agreement.
Dated: July __, 2005
--------------------------------
Signature of Spouse
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EXHIBIT D
TO RESTRICTED STOCK AWARD GRANT NOTICE
STOCK ASSIGNMENT
FOR VALUE RECEIVED, the undersigned, _____________ , hereby sells, assigns
and transfers unto LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation,
[_______] shares of the Common Stock of LEAP WIRELESS INTERNATIONAL, INC., a
Delaware corporation, standing in its name of the books of said corporation
represented by Certificate No. [____] herewith and do hereby irrevocably
constitute and appoint [____________________] to transfer the said stock on the
books of the within named corporation with full power of substitution in the
premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Award Agreement between LEAP WIRELESS INTERNATIONAL, INC. and the
undersigned dated [___________], 2005.
Dated: _______________, ____
--------------------------------
Xxxxxxx X. Xxxxxxxx
INSTRUCTIONS: Please do not fill in the blanks other than the signature
line. The purpose of this assignment is to enable the Company to exercise its
"Repurchase Option," as set forth in the Restricted Stock Award Agreement,
without requiring additional signatures on the part of Holder.
D-1
EXHIBIT E
TO RESTRICTED STOCK AWARD GRANT NOTICE
JOINT ESCROW INSTRUCTIONS
July __, 2005
Secretary
Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
As escrow agent (the "ESCROW AGENT") for both Leap Wireless International,
Inc., a Delaware corporation (the "COMPANY"), and the undersigned recipient of
stock of the Company (the "HOLDER"), you are hereby authorized and directed to
hold in escrow the documents delivered to you pursuant to the terms of that
certain Restricted Stock Award Agreement ("AGREEMENT") between the Company and
the undersigned (the "Escrow"), including the stock certificate and the
Assignment in Blank, in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "COMPANY") exercises the
Company's Repurchase Option as defined in the Agreement), the Company shall give
to the Holder and you a written notice specifying the number of shares of stock
to be purchased, the purchase price and the time for a closing hereunder at the
principal office of the Company. The Holder and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. As of the date of closing of the repurchase indicated in such
notice, you are directed (a) to date the stock assignments necessary for the
repurchase and transfer in question, (b) to fill in the number of shares being
repurchased and transferred, and (c) to deliver the same, together with the
certificate evidencing the shares of stock to be repurchased and transferred, to
the Company or its assignee.
3. Holder irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement. Xxxxxx
does hereby irrevocably constitute and appoint you as Xxxxxx's attorney-in-fact
and agent for the term of this escrow to execute with respect to such securities
all documents necessary or appropriate to make such securities negotiable and to
complete any transaction herein contemplated, including but not limited to the
filing with any applicable state blue sky authority of any required applications
for consent to, or notice of transfer of, the securities. Subject to the
provisions of this paragraph and the Agreement, Holder shall exercise all rights
and privileges of a stockholder of the Company while the stock is held by you.
E-1
4. Upon written request of Xxxxxx, but no more than once per calendar
year, unless the Company's Repurchase Option has been exercised, you will
deliver to Holder a certificate or certificates representing so many shares of
stock as are not then subject to the Repurchase Option. At the written request
of Xxxxxx, on or prior to the later of (i) seventy (70) days after any voluntary
or involuntary termination of Holder's services to the Company for any or no
reason and (ii) ten (10) days after your receipt of Holder's written request,
you will deliver to Holder a certificate or certificates representing the
aggregate number of shares held or issued pursuant to the Agreement and not
repurchased pursuant to the Repurchase Option set forth in Section 3.1 of the
Agreement.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Xxxxxx, you
shall deliver all of the same to the Holder and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Holder while acting in good faith, and
any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the expiration of any rights under any
applicable state, federal or local statute of limitations or similar statute or
regulation with respect to these Joint Escrow Instructions or any documents
deposited with you.
11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor. The Company will reimburse you
for any reasonable attorneys' fees with respect thereto.
E-2
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Xxxxxx Agent.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to the Holder or you shall be addressed to
the address given beneath Holder's and your signatures on the signature page to
this Agreement. By a notice given pursuant to this Section 15, any party may
hereafter designate a different address for notices to be given to that party.
Any notice, which is required to be given to Holder, shall, if the Holder is
then deceased, be given to Xxxxxx's designated beneficiary, if any by written
notice under this Section 15. Any notice shall be deemed duly given when sent
via email or when sent by certified mail (return receipt requested) and
deposited (with postage prepaid) in a post office or branch post office
regularly obtained by the United States Postal Service.
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to conflicts of law thereof.
(Signature Page Follows)
E-3
IN WITNESS WHEREOF, the parties have executed these Joint Escrow
Instructions as of the date first written above.
Very truly yours,
LEAP WIRELESS INTERNATIONAL, INC.
By:
_____________________________________
Name:
Title:
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HOLDER:
_________________________________________
Address
_________________________________
_________________________________
ESCROW AGENT:
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx,
Secretary, Leap Wireless International, Inc.
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
E-4
EXHIBIT F
TO RESTRICTED STOCK AWARD GRANT NOTICE
FORM OF 83(B) ELECTION AND INSTRUCTIONS
These instructions are provided to assist you if you choose to make an
election under Section 83(b) of the Internal Revenue Code, as amended, with
respect to the shares of common stock, par value $0.0001, of Leap Wireless
International, Inc. transferred to you. PLEASE CONSULT WITH YOUR PERSONAL TAX
ADVISOR AS TO WHETHER AN ELECTION OF THIS NATURE WILL BE IN YOUR BEST INTERESTS
IN LIGHT OF YOUR PERSONAL TAX SITUATION.
The executed original of the Section 83(b) election must be filed with the
Internal Revenue Service not later than 30 days after the date the shares were
transferred to you. PLEASE NOTE: There is no remedy for failure to file on time.
The steps outlined below should be followed to ensure the election is mailed and
filed correctly and in a timely manner. ALSO, PLEASE NOTE: If you make the
Section 83(b) election, the election is irrevocable.
1. Complete Section 83(b) election form (attached as Attachment 1) and make
four (4) copies of the signed election form. (Your spouse, if any, should
sign Section 83(b) election form as well.)
2. Prepare the cover letter to the Internal Revenue Service (sample letter
attached as Attachment 2).
3. Send the cover letter with the originally executed Section 83(b) election
form and one (1) copy via certified mail, return receipt requested to the
Internal Revenue Service at the address of the Internal Revenue Service
where you file your personal tax returns. We suggest that you have the
package date-stamped at the post office. The post office will provide you
with a white certified receipt that includes a dated postmark. Enclose a
self-addressed, stamped envelope so that the Internal Revenue Service may
return a date-stamped copy to you. However, your postmarked receipt is
your proof of having timely filed the Section 83(b) election if you do not
receive confirmation from the Internal Revenue Service.
4. One (1) copy must be sent to Leap Wireless International, Inc. for its
records and one (1) copy must be attached to your federal income tax
return for the applicable calendar year.
5. Retain the Internal Revenue Service file stamped copy (when returned) for
your records.
Please consult your personal tax advisor for the address of the office of
the Internal Revenue Service to which you should mail your election form.
F-1
ATTACHMENT 1 TO EXHIBIT F
ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer's receipt of shares (the "Shares") of Common Stock,
par value $0.0001 per share, of Leap Wireless International, Inc., a Delaware
corporation (the "Company").
1. The name, address and taxpayer identification number of the undersigned
taxpayer are:
__________________________________
__________________________________
SSN:
The name, address and taxpayer identification number of the Taxpayer's
spouse are (complete if applicable):
__________________________________
__________________________________
__________________________________
SSN:
2. Description of the property with respect to which the election is being
made:
__________________(_____) shares of Common Stock, par value $0.0001 per
share, of the Company.
3. The date on which the property was transferred was ______________. The
taxable year to which this election relates is calendar year 200_.
4. Nature of restrictions to which the property is subject:
The Shares are subject to repurchase at their original purchase price if
unvested as of the date of termination of employment, directorship or
consultancy with the Company.
5. The fair market value at the time of transfer (determined without regard
to any lapse restrictions, as defined in Treasury Regulation Section
1.83-3(a)) of the Shares was $___________ per Share.
6. The amount paid by the taxpayer for Shares was per share.
7. A copy of this statement has been furnished to the Company.
Dated: _____________, 200_ Taxpayer Signature ____________________
F-1-1
The undersigned spouse of Xxxxxxxx joins in this election. (Complete if
applicable).
Dated: ______________, 200_ Spouse's Signature ____________________
Signature(s) Notarized by:
_____________________________
_____________________________
F-1-2
ATTACHMENT 2 TO EXHIBIT F
SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE
__________________, 200_
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Internal Revenue Service
[Address where taxpayer files returns]
Re: Election under Section 83(b) of the Internal Revenue Code of 1986
Taxpayer: ________________________________________________________________
Taxpayer's Social Security Number: _______________________________________
Taxpayer's Spouse: _______________________________________________________
Taxpayer's Spouse's Social Security Number: ______________________________
Ladies and Gentlemen:
Enclosed please find an original and one copy of an Election under Section
83(b) of the Internal Revenue Code of 1986, as amended, being made by the
taxpayer referenced above. Please acknowledge receipt of the enclosed materials
by stamping the enclosed copy of the Election and returning it to me in the
self-addressed stamped envelope provided herewith.
Very truly yours,
__________________________________
Enclosures
cc: Leap Wireless International, Inc.
F-2-1
