Cricket Wireless 2011 Annual Report Download - page 139

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LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Stock Units
Under guidance for share-based compensation, the fair value of the Company’s deferred stock units is based
on the grant date fair value of the Company’s common stock. All deferred stock units were granted with no
purchase price. There were no deferred stock units issued, vested or outstanding during 2010 and 2009. The
Company issued 90,000 deferred stock units at a weighted-average grant date fair value of $12.39 per share
during the year ended December 31, 2011. The deferred stock units contain performance conditions which will
determine the number of shares that will be ultimately issued when the awards vest, which could result in the
Company issuing 90,000 to 320,000 shares. The shares underlying these deferred stock units will be issued and
vest upon the completion of a three year service period. The Company has estimated the total number of shares
that will vest and the related share-based expense in accordance with the authoritative guidance for share-based
payments with performance conditions. At December 31, 2011, total unrecognized compensation cost related to
deferred stock units was $1.9 million, which is expected to be recognized over a weighted-average period of
2.0 years.
Employee Stock Purchase Plan
The Company’s Employee Stock Purchase Plan (the “ESP Plan”) allows eligible employees to purchase
shares of common stock during a specified offering period. The purchase price is 85% of the lower of the fair
market value of such stock on the first or last day of the offering period. Employees may authorize the Company
to withhold up to 15% of their compensation during any offering period for the purchase of shares under the ESP
Plan, subject to certain limitations. A total of 800,000 shares of common stock were reserved for issuance under
the ESP Plan, and a total of 216,254 shares remained available for issuance under the ESP Plan as of
December 31, 2011. The most recent offering period under the ESP Plan was from July 1, 2011 through
December 31, 2011.
Allocation of Share-based Compensation Expense
Total share-based compensation expense related to all of the Company’s share-based awards for the years
ended December 31, 2011, 2010 and 2009 was allocated in the consolidated statements of operations as follows
(in thousands, except per share data):
Year Ended December 31,
2011 2010 2009
Cost of service .......................................... $ 1,734 $ 3,673 $ 3,546
Selling and marketing expense .............................. 1,985 5,781 6,264
General and administrative expense .......................... 11,609 27,155 32,903
Share-based compensation expense ........................ $15,328 $36,609 $42,713
Share-based compensation expense per share:
Basic ................................................ $ 0.20 $ 0.48 $ 0.59
Diluted .............................................. $ 0.20 $ 0.48 $ 0.59
Note 13. Employee Savings and Retirement Plan
The Company’s 401(k) plan allows eligible employees to contribute up to 30% of their salary, subject to
annual limits. The Company matches a portion of the employee contributions and may, at its discretion, make
additional contributions based upon earnings. The Company’s contributions were approximately $5.6 million,
$5.4 million and $4.8 million for the years ended December 31, 2011, 2010 and 2009, respectively.
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