Cricket Wireless 2011 Annual Report Download - page 52

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 after the recipient satisfies any vesting period applicable to the shares. 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;
• prohibit stockholder action by written consent, and require that all stockholder actions be taken at a
meeting of our stockholders;
• provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and
• establish advance notice requirements for nominations for elections to our board or for proposing matters
that can be acted upon by stockholders at stockholder meetings.
We are also subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a
Delaware corporation from engaging in any of a broad range of business combinations with any “interested”
stockholder for a period of three years following the date on which the stockholder became an “interested”
stockholder and which may discourage, delay or prevent a change in control of our company.
In addition, under the indentures governing our secured and unsecured senior notes and convertible senior
notes, if certain “change of control” events occur, each holder of notes may require us to repurchase all of such
holder’s notes at a purchase price equal to 101% of the principal amount of secured or unsecured senior notes, or
100% of the principal amount of convertible senior notes, plus accrued and unpaid interest. See “Part II - Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations -Liquidity and Capital
Resources” of this report.
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