Cricket Wireless 2012 Annual Report Download - page 52

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 1, 2013, 79,134,930 shares of Leap common stock were issued and outstanding, and
5,508,696 additional shares of Leap common stock were reserved for issuance, including 3,444,075 shares
reserved for issuance upon the exercise of outstanding stock options and deferred stock units under our 2004
Stock Option, Restricted Stock and Deferred Stock Unit Plan, as amended, 1,476,488 shares of common stock
available for future issuance under our 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan,
483,225 shares reserved for issuance upon the exercise of outstanding stock options under our 2009 Employment
Inducement Equity Incentive Plan, 65,612 shares of common stock available for future issuance under our 2009
Employment Inducement Equity Incentive Plan, and 39,296 shares available for future issuance under our
Amended and Restated Employee Stock Purchase Plan. On December 19, 2012, our board of directors approved
an amendment to the Amended and Restated Employee Stock Purchase Plan to add 400,000 shares for issuance
thereunder, subject to, and contingent upon, the approval of our stockholders, which approval will be requested at
our Annual Meeting of Stockholders to be held in 2013.
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 Amended and Restated 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 Credit Agreement and 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;
38