Cricket Wireless 2010 Annual Report Download - page 46

universal shelf registration statement with the SEC to register various debt, equity and other securities, including
debt securities, common stock, preferred stock, depository shares, rights and warrants. The securities under this
registration statement may be offered from time to time, separately or together, directly by us or through
underwriters, at amounts, prices, interest rates and other terms to be determined at the time of any offering. To
the extent that we were to elect to raise equity capital, this financing may not be available in sufficient amounts or on
terms acceptable to us and could be dilutive to existing stockholders. In addition, these sales could reduce the
trading price of Leap common stock and impede our ability to raise future capital.
Your Ownership Interest in Leap Will Be Diluted upon Issuance of Shares We Have Reserved for
Future Issuances, and Future Issuances or Sales of Such Shares May Adversely Affect the Market Price
of Leap Common Stock.
As of February 18, 2011, 78,653,765 shares of Leap common stock were issued and outstanding, and
5,595,695 additional shares of Leap common stock were reserved for issuance, including 4,402,710 shares reserved
for issuance upon the exercise of outstanding stock options under our 2004 Stock Option, Restricted Stock and
Deferred Stock Unit Plan, as amended, 523,863 shares of common stock available for future issuance under our
2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan, 287,000 shares reserved for issuance upon the
exercise of outstanding stock options under our 2009 Employment Inducement Equity Incentive Plan, 13,975 shares
of common stock available for future issuance under our 2009 Employment Inducement Equity Incentive Plan, and
368,147 shares available for future issuance under our Employee Stock Purchase Plan.
Leap has also reserved up to 4,761,000 shares of its common stock for issuance upon conversion of its
$250 million in aggregate principal amount of convertible senior notes due 2014. Holders may convert their notes
into shares of Leap common stock at any time on or prior to the third scheduled trading day prior to the maturity date
of the notes, July 15, 2014. If, at the time of conversion, the applicable stock price of Leap common stock is less than
or equal to approximately $93.21 per share, the notes will be convertible into 10.7290 shares of Leap common stock
per $1,000 principal amount of the notes (referred to as the “base conversion rate”), subject to adjustment upon the
occurrence of certain events. If, at the time of conversion, the applicable stock price of Leap common stock exceeds
approximately $93.21 per share, the conversion rate will be determined pursuant to a formula based on the base
conversion rate and an incremental share factor of 8.3150 shares per $1,000 principal amount of the notes, subject to
adjustment. At an applicable stock price of approximately $93.21 per share, the number of shares of common stock
issuable upon full conversion of the convertible senior notes would be 2,682,250 shares. Upon the occurrence of a
“make-whole fundamental change” of Leap under the indenture, under certain circumstances the maximum number
of shares of common stock issuable upon full conversion of the convertible senior notes would be 4,761,000 shares.
In addition, we have registered all shares of common stock that we may issue under our 2004 Stock Option,
Restricted Stock and Deferred Stock Unit Plan, under our 2009 Employment Inducement Equity Incentive Plan and
under our Employee Stock Purchase Plan. When we issue shares under these stock plans, they can be freely sold in
the public market. If any of Leap’s stockholders causes a large number of securities to be sold in the public market,
these sales could reduce the trading price of Leap common stock. These sales also could impede our ability to raise
future capital.
Provisions in Our Amended and Restated Certificate of Incorporation and Bylaws, under Delaware
Law, in Our Indentures, or in Our Tax Benefit Preservation Plan Might Discourage, Delay or Prevent a
Change in Control of Our Company or Changes in Our Management and, Therefore, Depress the
Trading Price of Leap Common Stock.
Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the
trading price of Leap common stock by acting to discourage, delay or prevent a change in control of our company or
changes in our management that our stockholders may deem advantageous. These provisions:
• require super-majority voting to amend some provisions in our amended and restated certificate of
incorporation and bylaws;
• authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the
number of outstanding shares to discourage a takeover attempt;
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