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                                                                     EXHIBIT 4.3




                      THE LEAP WIRELESS INTERNATIONAL, INC.
                2001 EXECUTIVE OFFICER DEFERRED BONUS STOCK PLAN


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                      THE LEAP WIRELESS INTERNATIONAL, INC.
                2001 EXECUTIVE OFFICER DEFERRED BONUS STOCK PLAN

                                TABLE OF CONTENTS

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ARTICLE I. DEFINITIONS.......................................................................2

        Section 1.1   - General..............................................................2
        Section 1.2   - Accounts.............................................................2
        Section 1.3   - Active Participant...................................................2
        Section 1.4   - Administrator........................................................2
        Section 1.5   - Beneficiary..........................................................2
        Section 1.6   - Board................................................................2
        Section 1.7   - Bonus................................................................2
        Section 1.8   - Bonus Payday.........................................................3
        Section 1.9   - Cause................................................................3
        Section 1.10  - Code.................................................................3
        Section 1.11  - Committee............................................................3
        Section 1.12  - Company; Company Affiliate...........................................3
        Section 1.13  - Deferred Bonus.......................................................4
        Section 1.14  - Deferred Bonus Share Account.........................................4
        Section 1.15  - Disability...........................................................4
        Section 1.16  - Employee.............................................................4
        Section 1.17  - ERISA................................................................4
        Section 1.18  - Executive Officer....................................................4
        Section 1.19  - Fair Market Value....................................................4
        Section 1.20  - Matching Share Account...............................................5
        Section 1.21  - Participant..........................................................5
        Section 1.22  - Plan.................................................................5
        Section 1.23  - Plan Year............................................................5
        Section 1.24  - Separation from the Service..........................................5
        Section 1.25  -  Share Unit..........................................................5
        Section 1.26  - Vested...............................................................5

ARTICLE II. ELIGIBILITY......................................................................6

        Section 2.1   - Requirements for Participation.......................................6
        Section 2.2   - Bonus Deferral Election Procedure....................................6
        Section 2.3   - Content of Deferral Election Form....................................6

ARTICLE III. PARTICIPANT BONUS DEFERRALS.....................................................7

        Section 3.1   - Mandatory Bonus Deferrals............................................7
        Section 3.2   - Voluntary Bonus Deferrals............................................7
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ARTICLE IV. SHARE CREDITS....................................................................7

        Section 4.1   - Deferred Bonus Share Credits.........................................7
        Section 4.2   - Matching Share Credits...............................................8
        Section 4.3   - Share Units Subject to the Plan......................................8

ARTICLE V. ACCOUNTS..........................................................................8

        Section 5.1   - Deferred Bonus Share Account.........................................8
        Section 5.2   - Matching Share Account...............................................8
        Section 5.3   - Assignments, etc. Prohibited.........................................9

ARTICLE VI. ACCOUNT BALANCES.................................................................9

        Section 6.1   - Account Balances.....................................................9
        Section 6.2   - Dividends and Distributions on Common Stock..........................9

ARTICLE VII. VESTING OF ACCOUNTS............................................................10

        Section 7.1   - Vesting of Accounts.................................................10
        Section 7.2   - Additional Vesting of Matching Share Accounts.......................10

ARTICLE VIII. DISTRIBUTION OF BENEFITS TO PARTICIPANTS......................................11

        Section 8.1   - Distribution Prior to Separation from the Service...................11
        Section 8.2   - Distribution on Separation from the Service.........................11
        Section 8.3   - Effect of Delay or Failure to Ascertain Amount Distributable
                        or to Locate Distributee............................................11
        Section 8.4   - Forfeitures.........................................................12

ARTICLE IX. BENEFITS UPON DEATH.............................................................12

        Section 9.1   - Designation of Beneficiary..........................................12
        Section 9.2   - Distribution upon Death.............................................12

ARTICLE X. ADMINISTRATIVE PROVISIONS........................................................13

        Section 10.1  - Duties and Powers of the Administrator..............................13
        Section 10.2  - Committee...........................................................13
        Section 10.3  - Limitations upon Powers of the Administrator........................14
        Section 10.4  - Compensation and Indemnification of Administrator; Expenses
                        of Administration...................................................14
        Section 10.5  - Effect of Administrator Action......................................15
        Section 10.6  - Recordkeeping.......................................................15
        Section 10.7  - Statement to Participants...........................................15
        Section 10.8  - Inspection of Records...............................................15
        Section 10.9  - Identification of Fiduciaries.......................................15
        Section 10.10 - Procedure for Allocation of Administrative Responsibilities.........16
        Section 10.11 - Claims Procedure....................................................16
        Section 10.12 - Conflicting Claims..................................................17
        Section 10.13 - Service of Process..................................................18
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ARTICLE XI. MISCELLANEOUS PROVISIONS........................................................18

        Section 11.1  - Termination of the Plan.............................................18
        Section 11.2  - Changes in Common Stock or Assets of the Company,
                        Acquisition or Liquidation of the Company and Other Corporate
                        Events..............................................................18
        Section 11.3  - Limitation on Rights of Employees...................................19
        Section 11.4  - Unfunded Obligations of the Company.................................20
        Section 11.5  - Grantor Trust.......................................................20
        Section 11.6  - Consolidation or Merger.............................................21
        Section 11.7  - Errors and Misstatements............................................22
        Section 11.8  - Payment on Behalf of Minor, etc.....................................22
        Section 11.9  - Amendment of Plan...................................................22
        Section 11.10 - Tax Withholding.....................................................22
        Section 11.11 - Governing Law.......................................................23
        Section 11.12 - Pronouns and Plurality..............................................23
        Section 11.13 - Titles..............................................................23
        Section 11.14 - References..........................................................23
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                      THE LEAP WIRELESS INTERNATIONAL, INC.
                2001 EXECUTIVE OFFICER DEFERRED BONUS STOCK PLAN


               Leap Wireless International, Inc., a Delaware corporation (the
"Company"), by resolution of its Board of Directors, adopted The Leap Wireless
International, Inc. 2001 Executive Officer Deferred Bonus Stock Plan (the
"Plan"), for the benefit of certain executive officers of the Company, subject
to the approval of the stockholders of the Company at the annual meeting to be
held on April 19, 2001.

               The Plan shall become effective as of January 1, 2001, subject to
the approval of the Plan by the stockholders of the Company. The first Plan Year
shall be the Company's fiscal year beginning on January 1, 2001. The first Bonus
of eligible Executive Officers deferred under the Plan shall be the Bonus earned
for the first Plan Year.

               The Plan is a nonqualified deferred compensation plan pursuant to
which twenty-five percent (25%) of an eligible executive officer's Bonus (as
defined herein) will be deferred and converted into Share Units (as defined
herein) credited to the officer's account under the Plan. Share Units will
represent the right to receive shares of the Company's Common Stock, par value
$0.0001 per share ("Common Stock"), in accordance with the Plan. The Plan also
provides that an eligible executive officer may elect to defer all or any
portion of the remainder of such eligible executive officer's Bonus and that
amounts deferred at the election of an eligible executive officer will be
converted into Share Units credited to the officer's account under the Plan.
Finally, the Plan provides for additional Share Units that will be credited to
the eligible executive officer's account under the Plan, determined based on
such executive officer's Bonus deferrals pursuant to the Plan. The Plan provides
that the Share Units credited to an eligible executive officer's account will be
distributed to such eligible executive officer upon the earlier of the date or
dates designated by the officer or the officer's retirement, death, Disability
(as defined herein) or other termination of employment. Subject to the
provisions of the Plan, the aggregate number of Share Units credited under the
Plan shall not exceed 275,000 Share Units.

               The Plan is unfunded and is maintained primarily for the purpose
of providing deferred compensation for a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

               The Company may establish a grantor trust pursuant to the Plan
and may make contributions to the trust to provide for distributions of benefits
to be made under the Plan. The Company's contributions may be in the form of
cash, shares of Common Stock or other securities or property.



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                                   ARTICLE I.
                                   DEFINITIONS

Section 1.1   - General

               Whenever the following terms are used in the Plan with the first
letter capitalized, they shall have the meanings specified below unless the
context clearly indicates to the contrary.

Section 1.2   - Accounts

               "Accounts" of a Participant shall mean, as the context indicates,
either or both of his or her Deferred Bonus Share Account and his or her
Matching Share Account.

Section 1.3   - Active Participant

               "Active Participant" shall mean any Employee who is participating
in the Plan for the Plan Year in question as provided in Article II.

Section 1.4   - Administrator

               "Administrator" shall mean Leap Wireless International, Inc.,
acting through the Board or its delegates, except that if Leap Wireless
International, Inc. appoints a Committee under Section 10.2, the term
"Administrator" shall mean the Committee as to those duties, powers and
responsibilities specifically conferred upon the Committee. Leap Wireless
International, Inc. shall have all duties and responsibilities imposed by ERISA,
except as specifically assigned to, delegated to or reserved to the Board or the
Committee under the Plan.

Section 1.5   - Beneficiary

               "Beneficiary" of a Participant shall mean the person or persons
designated by the Participant in accordance with Section 9.1 and the Rules of
the Plan.

Section 1.6   - Board

               "Board" shall mean the Board of Directors of Leap Wireless
International, Inc. The Board may delegate any power or duty otherwise allocated
to the Administrator to any other person or persons, including a Committee
appointed under Section 10.2.

Section 1.7   - Bonus

               "Bonus" of an Active Participant for any Plan Year shall mean the
amount of his or her bonus or bonuses earned for such Plan Year, prior to the
deferral of all or any portion thereof in accordance with the Plan, determined
under any bonus program maintained by the Company for Executive Officers for
such Plan Year. The "Bonus" of an Active Participant for a Plan Year shall be
determined without regard to whether the bonus or bonuses earned by such Active
Participant


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for such Plan Year would otherwise be paid by the Company during such Plan Year
or the next following Plan Year.

Section 1.8   - Bonus Payday

               "Bonus Payday" of an Active Participant for any Plan Year shall
mean the day or days established by the Company on which such Active
Participant's Bonus (or any portion thereof) would otherwise be paid.

Section 1.9   - Cause

               "Cause" with respect to a Participant shall mean:

               (a) willful misconduct by the Participant that is materially
damaging to the Company or any Company Affiliate (whether financially or
otherwise),

               (b) the Participant's conviction of, or the entry by the
Participant of a guilty or no contest plea to, a felony, or a misdemeanor
involving moral turpitude,

               (c) the Participant's commission of fraud, misappropriation or
embezzlement in connection with the business of the Company or a Company
Affiliate, or

               (d) the Participant's willful and repeated failure to perform the
Participant's duties as an Executive Officer as directed by the Board.

Section 1.10  - Code

               "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

Section 1.11  - Committee

               "Committee" shall mean the Committee, if any, appointed in
accordance with Section 10.2.

Section 1.12  - Company; Company Affiliate

               (a) "Company" shall mean Leap Wireless International, Inc., and
any successor company which continues the Plan under Section 11.5.

               (b) "Company Affiliate" shall mean any employer which, at the
time of reference, was, with the Company, a member of a controlled group of
corporations or trades or businesses under common control, or a member of an
affiliated service group, as determined under regulations issued by the
Secretary of the Treasury or his delegate under Code Sections 414(b), (c), (m)
and any other entity required to be aggregated with the Company pursuant to
regulations issued under Code Section 414(o).

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Section 1.13  - Deferred Bonus

               "Deferred Bonus" of an Active Participant on any Bonus Payday
shall mean the dollar amount of such Active Participant's Bonus (or portion
thereof) for such Bonus Payday that is deferred under Section 3.1 or 3.2.

Section 1.14  - Deferred Bonus Share Account

               "Deferred Bonus Share Account" of a Participant shall mean his or
her individual account, if any, in the Plan established in accordance with
Section 5.1.

Section 1.15  - Disability

               "Disability" of a Participant shall mean the Participant's
complete inability to engage in any substantial gainful activity or wage or
profit for reason of any medically determinable physical or mental impairment
which can be expected to result in death or has lasted or is expected to last
for a continuous period of not less than 12 months, as determined by the
Administrator in good faith, based on competent medical evidence.

Section 1.16  - Employee

               "Employee" shall mean any person who renders services to the
Company in the status of an employee as that term is defined in Code Section
3121(d).

Section 1.17  - ERISA

               "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

Section 1.18  - Executive Officer

               "Executive Officer" shall mean an Employee who holds the position
of Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
Executive Vice President or Senior Vice President of the Company.

Section 1.19 - Fair Market Value

               "Fair Market Value" as of a given date shall mean (a) the closing
price of a share of Common Stock on the trading day prior to such date on the
principal exchange on which shares of Common Stock are then trading, if any (or
as reported on any composite index which includes such principal exchange), or,
if shares were not traded on the day prior to such date, then on the next
preceding date on which trading occurred, or (b) if Common Stock is not traded
on an exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system, or (c) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation

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system, the fair market value of a share of Common Stock as established by the
Administrator acting in good faith.

Section 1.20  - Matching Share Account

               "Matching Share Account" of a Participant shall mean his or her
individual account, if any, in the Plan established in accordance with Section
5.2.

Section 1.21  - Participant

               "Participant" shall mean an Employee who is an Active Participant
for the Plan Year in question, or who was an Active Participant for a prior Plan
Year.

Section 1.22  - Plan

               "Plan" shall mean The Leap Wireless International, Inc. 2001
Executive Officer Deferred Bonus Stock Plan.

Section 1.23  - Plan Year

               "Plan Year" shall mean the fiscal year of the Company. The first
Plan Year shall be the Company's fiscal year beginning on January 1, 2001.

Section 1.24  - Separation from the Service

               (a) "Separation from the Service" of an Employee shall mean his
or her resignation from or discharge by a Company or a Company Affiliate, or his
or her Disability, death or retirement, but shall not include his or her
transfer among the Company and the Company Affiliates.

               (b) A leave of absence or sick leave authorized by the Company or
a Company Affiliate in accordance with established policies, a vacation period,
a temporary layoff for lack of work or a military leave shall not constitute a
Separation from the Service.

Section 1.25  - Share Unit

               "Share Unit" shall mean a nominal unit credited under the Plan,
which represents the right to receive a share of Common Stock in accordance with
the Plan.

Section 1.26  - Vested

               "Vested," when used with reference to a Participant's Accounts,
shall mean nonforfeitable, except as provided in the Plan.

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                                   ARTICLE II.
                                   ELIGIBILITY

Section 2.1   - Requirements for Participation

               (a) An Employee who is an Executive Officer on January 1, 2001
shall be an Active Participant for the Plan Year ending on December 31, 2001.

               (b) An Employee who on the first day of any Plan Year beginning
after January 1, 2001 is an Executive Officer shall be an Active Participant for
such Plan Year.

               (c) An Employee who is an Active Participant for any Plan Year
shall not be an Active Participant for any subsequent Plan Year unless such
Employee satisfies the requirements of subsection (b) with respect to such Plan
Year.

Section 2.2   - Bonus Deferral Election Procedure

               The Administrator shall provide each Active Participant for a
Plan Year with a Bonus deferral election form on which the Active Participant
may elect to defer all or a portion of his or her Bonus in accordance with
Section 3.2. Each Active Participant electing to defer Bonus under Section 3.2
for a Plan Year shall complete and execute the Bonus deferral election form and
return it to the Administrator in accordance with the Rules of the Plan. For
each Plan Year, an Active Participant shall complete and execute the Bonus
deferral election form and return it to the Administrator no later than the last
day of the third quarter of the Company's fiscal year coinciding with the
relevant Plan Year.

Section 2.3   - Content of Deferral Election Form

               (a) Each Active Participant for a Plan Year shall set forth on
his or her Bonus deferral election form for such Plan Year

                      (i) his or her consent that he or she, his or her
        successors in interest and assigns and all persons claiming under him or
        her shall be bound, to the extent authorized by law, by the statements
        contained therein and by the provisions of the Plan as they now exist,
        and as they may be amended from time to time,

                      (ii) the percentage (if any) of his or her Bonus for such
        Plan Year to be deferred under Section 3.2 and, in such case, his or her
        authorization to the Company to reduce his or her Bonus in accordance
        with Section 3.2(a),

                      (iii)  such other information as may be required for the
        administration of the Plan.

               (b) In addition, each Active Participant shall set forth on his
or her Bonus deferral election form for each Plan Year the Distribution Date for
such Plan Year.

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               (c) For purposes of this Article and Article VIII, the
"Distribution Date" of an Active Participant for a Plan Year shall mean the
first day of a calendar month designated by such Active Participant; provided,
however, that such "Distribution Date" shall not be earlier than the third
anniversary of the latest Bonus Payday for such Participant for such Plan Year
and shall not be later than the tenth anniversary on the last Bonus Payday for
such Participant for such Plan Year.

                                  ARTICLE III.
                           PARTICIPANT BONUS DEFERRALS

Section 3.1   - Mandatory Bonus Deferrals

               Each Active Participant for a Plan Year shall defer to his or her
Deferred Bonus Share Account an amount equal to twenty-five percent (25%) of his
or her Bonus for each Bonus Payday for such Plan Year.

Section 3.2   - Voluntary Bonus Deferrals

               (a) An Active Participant may elect, in accordance with Section
2.2 above and the Rules of the Plan, to defer to his or her Deferred Bonus Share
Account an amount equal to any whole number percentage, which is not greater
than seventy-five percent (75%) (or such other percentage as is established by
the Administrator for such Plan Year), of that portion of his or her Bonus for
such Plan Year which is paid by the Company to the Active Participant during the
next following Plan Year.

               (b) An Active Participant's Bonus deferral election under
subsection (a) shall be made on the form described in Section 2.3 and shall be
delivered to the Administrator in accordance with Section 2.2 above and the
Rules of the Plan.

                                   ARTICLE IV.
                                  SHARE CREDITS

Section 4.1   - Deferred Bonus Share Credits

               Subject to Section 4.3, for each Bonus Payday for a Plan Year, an
Active Participant's Deferred Bonus Share Account shall be credited with the
number of full and fractional Share Units equal to:

                      (a) the amount of such Active Participant's Deferred Bonus
        for such Bonus Payday, divided by

                      (b) the Fair Market Value on such Bonus Payday.

Such Share Units shall be determined by rounding down, disregarding any
fractional Share Unit and refunding the dollar amount, if any, of such
Participant's Deferred Bonus which is not sufficient to credit one full Share
Unit, to the Participant for the Bonus Payday in question. Such

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Share Units shall be credited to the Active Participant's Deferred Bonus Share
Account as of such Bonus Payday.

Section 4.2   - Matching Share Credits

               Subject to Section 4.3, for each Bonus Payday for a Plan Year, an
Active Participant's Matching Share Account shall be credited with the number of
full and fractional Share Units equal to twenty percent (20%) of the number of
Share Units credited to such Active Participant's Deferred Bonus Share Account
as of such Bonus Payday under Section 4.1. Such Share Units shall be determined
by rounding down and disregarding any fractional Share Unit. Such Share Units
shall be credited to the Active Participant's Matching Share Account as of such
Bonus Payday.

Section 4.3   - Share Units Subject to the Plan

               (a) Subject to adjustments under Section 11.2, the aggregate
number of Share Units that shall be credited under the Plan shall not exceed
275,000 Share Units. Share Units debited upon distribution under Articles VIII
and IX shall not be available for subsequent crediting under this Article IV.
Share Units that are forfeited under Section 8.4 shall be available for
subsequent crediting under this Article IV.

               (b) If the Share Units that would otherwise be credited under
Section 4.1, 4.2 or 6.2 on any date would cause the aggregate number of Share
Units credited under the Plan to exceed the limit prescribed under subsection
(a), the Administrator shall make a pro rata allocation (and in full Share
Units) of the available remaining Share Units in as nearly a uniform manner as
shall be practicable and the dollar amounts not credited as Share Units shall be
refunded to the Active participant (in the case of an Active Participant's
Deferred Bonus under Section 4.1), forfeited (in the case of amounts to be
credited under Section 4.2), or distributed in cash to the Participant in an
amount equal to the Fair Market Value thereof (in the case of amounts under
Section 6.2).

                                   ARTICLE V.
                                    ACCOUNTS

Section 5.1   - Deferred Bonus Share Account

               The Administrator shall establish and maintain for each
Participant a Deferred Bonus Share Account to which shall be credited the Share
Units under Sections 4.1 and 6.2 and debited the Share Units distributed or
forfeited under Articles VIII and IX.

Section 5.2   - Matching Share Account

               The Administrator shall establish and maintain for each
Participant a Matching Share Account to which shall be credited the Share Units
under Sections 4.2 and 6.2 and debited the Share Units distributed or forfeited
under Articles VIII and IX.

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Section 5.3   - Assignments, etc. Prohibited

               No part of the Accounts of a Participant shall be liable for the
debts, contracts or engagements of such Participant, his or her Beneficiary or
Beneficiaries or successors in interest, or be taken in execution by levy,
attachment or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any rights to alienate, anticipate, commute, pledge,
encumber or assign any benefits or payments hereunder in any manner whatsoever,
except to designate a Beneficiary or Beneficiaries as provided in Section 9.2.

                                   ARTICLE VI.
                                ACCOUNT BALANCES

Section 6.1   - Account Balances

               A Participant's Account balances shall be denominated in full and
fractional Share Units.

Section 6.2   - Dividends and Distributions on Common Stock

               (a) Subject to Section 4.3, in the event that any dividend or
other distribution (other than a dividend in the form of shares of Common Stock)
is paid or distributed on shares of Common Stock, a Participant's Accounts shall
be credited, as of the payment or distribution date of such dividend or other
distribution, with the number of full and fractional Share Units equal to:

                      (i)    the product of

                             (A) the number of Share Units credited to such
               Participant's Accounts, as of the record date of such dividend or
               other distribution, multiplied by

                             (B) the dollar amount of such dividend or
               distribution per share of Common Stock (if such dividend or
               payment or distribution is paid in cash), or the fair market
               value (as determined by the Administrator) of such dividend or
               distribution per share of Common Stock (if such dividend or
               distribution is distributed in kind), as of the date of payment
               or distribution, divided by

                      (ii)   the Fair Market Value, determined as of the date
        of payment or distribution.

               (b) Subject to Section 4.3, in the event that any dividend in the
form of shares of Common Stock is distributed on shares of Common Stock, a
Participant's Accounts shall be credited, as of the distribution date of such
dividend, with the number of full and fractional Share Units equal to:

                      (i)  the number of Share Units credited to such
        Participant's Accounts, as of the record date of such dividend,
        multiplied by

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                      (ii) the number of shares of Common Stock distributed with
        respect to such dividend per share of Common Stock.

                                  ARTICLE VII.
                               VESTING OF ACCOUNTS

Section 7.1   - Vesting of Accounts

               (a) Except as provided in Section 8.3, a Participant shall be
Vested at all times in all of the Share Units credited to his or her Deferred
Bonus Share Account.

               (b) Subject to Sections 8.3 and 8.4, a Participant shall become
Vested in the Share Units credited to his or her Matching Share Account as of a
Bonus Payday as follows:

                      (i) one-third of such Share Units credited as of a Bonus
        Payday shall become Vested on the first anniversary of such Bonus
        Payday; provided, however, that if the resulting number of Share Units
        then becoming Vested produces a fractional Share Unit, the fractional
        Share Unit shall be rounded up to the next whole number of Share Units,

                      (ii) one-third of such Share Units credited as of a Bonus
        Payday shall become Vested on the second anniversary of such Bonus
        Payday; provided, however, that if the resulting number of Share Units
        then becoming Vested produces a fractional Share Unit, the fractional
        Share Unit shall be rounded up to the next whole number of Share Units,
        and

                      (iii) one-third of such Share Units credited as of a Bonus
        Payday shall become Vested on the third anniversary of such Bonus
        Payday; provided, however, that if the resulting number of Share Units
        then becoming Vested produces a fractional Share Unit, the fractional
        Share Unit shall be rounded down to the remaining number of Share Units
        credited to the Participant's Matching Share Account so that the
        Participant shall become fully Vested in the Share Units credited to his
        or her Matching Share Account as of such Bonus Payday as of the third
        anniversary of such Bonus Payday.

Any Share Units that are credited to a Participant's Matching Share Account as a
result of any dividend or other distribution paid or distributed on shares of
Common Stock, with respect to the Share Units credited on the record date of
such dividend or distribution, in accordance with Section 6.2, shall become
Vested on such date as the Share Units credited on the record date become Vested
under this subsection.

Section 7.2   - Additional Vesting of Matching Share Accounts

               Except as provided in Section 8.3, a Participant shall become
Vested in all of the Share Units credited to his or her Matching Share Account
upon the earliest to occur of his or her Separation from the Service by reason
of:

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               (a)    his or her retirement after attaining age 65,

               (b)    his or her death,

               (c)    his or her Disability, or

               (d)    his or her discharge other than for Cause.

                                  ARTICLE VIII.
                    DISTRIBUTION OF BENEFITS TO PARTICIPANTS

Section 8.1   - Distribution Prior to Separation from the Service

               A Participant who has elected to receive the distribution of the
Share Units credited for a Plan Year as of the Distribution Date for such Plan
Year, and who has not had a Separation from the Service before such Distribution
Date, shall receive a distribution of the Vested Share Units credited to his or
her Accounts for such Plan Year (and any Share Units credited with respect
thereto under Section 6.2), less any amounts required to be withheld by law, in
one lump sum, not later than 30 days after the end of the calendar month in
which such Distribution Date occurs. Such distribution shall be made by the
Company in the form of whole shares of Common Stock. Such Participant's Accounts
shall be debited the number of Share Units distributed.

Section 8.2   - Distribution on Separation from the Service

               A Participant who has a Separation from the Service (other than
by reason of his or her death) shall receive a distribution of the Vested Share
Units credited to his or her Accounts, less any amounts required to be withheld
by law, in one lump sum, not later than 30 days after the end of the calendar
month in which his or her Separation from the Service occurs. Such distribution
shall be made by the Company in the form of whole shares of Common Stock. Such
Participant's Accounts shall be debited the number of Share Units distributed.

Section 8.3   - Effect of Delay or Failure to Ascertain
                Amount Distributable or to Locate Distributee

               (a) If the person to whom an amount distributable or payable
under Article VIII or IX has not been ascertained or located within the stated
time limits and reasonable efforts to do so have been made, then distribution or
payment shall be made not later than 30 days after such amount is determined or
such person is ascertained or located, or as prescribed in subsection (b).

               (b) If, within one year after a Participant has a Separation from
the Service, the Administrator, in the exercise of due diligence, has failed to
locate him or her (or if such Separation from the Service is by reason of his or
her death, has failed to locate the person entitled to the amount in his or her
Accounts under Article IX), the Share Units credited to his or her Accounts in
the Plan shall be forfeited (and debited from his or her Accounts); provided,

                                       11
<PAGE>   16

however, that if the Participant (or in the case of his or her death, the person
entitled thereto under Article IX) makes proper claim therefor under Section
10.11, the amount so forfeited (without interest, dividends or distributions
thereon) shall be paid to such Participant or such person, in one lump sum, not
later than 30 days after such claim is made.

Section 8.4   - Forfeitures

               If a Participant has a Separation from the Service, the portion
of his or her Matching Share Account which is not Vested as of the date of his
or her Separation from the Service shall be immediately forfeited (and debited
from his or her Accounts) and the Company shall cease to be obligated under
Articles VIII and IX with respect to the portion of such Matching Share Account
that is forfeited.

                                   ARTICLE IX.
                               BENEFITS UPON DEATH

Section 9.1  - Designation of Beneficiary

               (a) Each Participant shall have the right to designate, revoke
and redesignate one or more Beneficiaries hereunder and to direct distribution
of the Vested Share Units credited to his or her Accounts to such Beneficiaries.

               (b) Designation, revocation and redesignation of Beneficiaries
must be made in writing in accordance with the Rules of the Plan on a form
provided by the Administrator and shall be effective upon delivery to the
Administrator.

Section 9.2  - Distribution upon Death

               (a) Upon the death of a Participant, the Vested Share Units
credited to his or her Accounts, less any amounts required to be withheld by
law, shall be distributed to such Participant's Beneficiary or Beneficiaries
designated under Section 9.1, in one lump sum, not later than 30 days after the
end of the calendar month in which such Participant's death occurs. In the event
that the Participant has failed to designate a Beneficiary, or no Beneficiary
survives the Participant, the Share Units credited to his or her Accounts, less
any amounts required to be withheld by law, shall be distributed to such
Participant's estate, in one lump sum, not later than 30 days after the end of
the calendar month in which the Participant's death occurs. Such distribution
shall be made by the Company in the form of whole shares of Common Stock. Such
Participant's Accounts shall be debited the number of Share Units distributed.

               (b) A Beneficiary shall cease to be entitled to benefits upon the
Administrator's determination that such Beneficiary did not survive the
Participant, or the Administrator's failure to locate such Beneficiary, after
making reasonable efforts to do so.

                                       12
<PAGE>   17

                                   ARTICLE X.
                            ADMINISTRATIVE PROVISIONS

Section 10.1  - Duties and Powers of the Administrator

               (a) The Administrator shall administer the Plan in accordance
with the Plan and ERISA and shall have full discretionary power and authority:

                      (i) to engage actuaries, attorneys, accountants,
        appraisers, brokers, consultants, administrators, physicians or other
        firms or persons and (with its officers, directors and Employees) to
        rely upon the reports, advice, opinions or valuations of any such
        persons except as required by law;

                      (ii) to adopt Rules of the Plan that are not inconsistent
        with the Plan or applicable law and to amend or revoke any such rules;

                      (iii) to construe the Plan and the Rules of the Plan;

                      (iv) to determine questions of eligibility and vesting of
        Participants;

                      (v) to determine entitlement to a Benefit and to
        distributions of Participants, "Beneficiaries," and all other persons;

                      (vi) to make findings of fact as necessary to make any
        determinations and decisions in the exercise of such discretionary power
        and authority;

                      (vii) to appoint claims and review officials to conduct
        claims procedures as provided in Section 10.11; and

                      (viii) to delegate any duty, power or responsibility to
        the Committee, to any firm or person engaged under paragraph (i) or to
        any other person or persons.

               (b) Every finding, decision, and determination made by the
Administrator (or its delegate) shall, to the full extent permitted by law, be
final and binding upon all parties, except to the extent found by a court of
competent jurisdiction to constitute an abuse of discretion.

Section 10.2  - Committee

               (a) The Board may establish a Committee consisting of three or
more members to hold office at the pleasure of the Board.

               (b) The Committee shall have such powers, duties and
responsibilities as are delegated to it by the Board. The Board may amend,
modify or terminate the delegation of powers, duties and responsibilities to the
Committee from time to time. Any power, duty or responsibility no longer
delegated to the Committee shall become a power, duty or responsibility

                                       13
<PAGE>   18

of the Board, and may be delegated by the Board to such person or persons as the
Board determines appropriate. Committee members shall not receive payment for
their services as such.

               (c) Appointment of Committee members shall be effective upon
filing of written acceptance of appointment with the Board. A Committee member
may resign at any time by delivery of written notice to the Board.

               (d) Vacancies in the Committee shall be filled in accordance with
subsection (a).

               (e) The Committee shall act by a majority of its members in
office, either by meeting or by a written instrument executed by a majority of
the Committee members. The Committee may, by a written instrument executed by
all of the Committee members then in office, authorize one of its members to
execute any instrument required to be executed by the Committee.

               (f) The Chairperson of the Committee shall appoint a Secretary to
keep the minutes of its meetings.

Section 10.3  - Limitations upon Powers of the Administrator

               The Plan shall be uniformly and consistently interpreted and
applied with regard to all Participants in similar circumstances. The Plan shall
be administered, interpreted and applied fairly and equitably and in accordance
with the specified purposes of the Plan.

Section 10.4  - Compensation and Indemnification of
                Administrator; Expenses of Administration

               (a) The Company shall pay or reimburse the Chief Executive
Officer of Leap Wireless International, Inc. (and his or her delegates), each
Committee member and each Employee functioning under Section 10.1(a)(viii) for
all expenses (including reasonable attorneys' fees) properly incurred by him or
her in the administration of the Plan.

               (b) The Company shall indemnify and hold each such Employee and
Committee member harmless from all claims, liabilities and costs (including
reasonable attorneys' fees) arising out of the good faith performance of his or
her functions hereunder.

               (c) The Company may obtain and provide for any Employee and
Committee member, at the expense of the Company, liability insurance against
liabilities imposed on him or her by law.

               (d) Legal fees incurred in the preparation and amendment of
documents shall be paid by the Company.

                                       14
<PAGE>   19

               (e) Except as provided in subsection (a), fees and expenses of
persons rendering services to the Plan shall not be paid or reimbursed by the
Company, except as agreed upon by the Company.

Section 10.5  - Effect of Administrator Action

               Except as provided in Section 10.3, all actions taken and all
determinations made by the Administrator (or its delegate) in good faith shall
be final and binding upon all Participants, their Beneficiaries and any other
person.

Section 10.6  - Recordkeeping

               (a) The Administrator shall maintain suitable records as follows:

                      (i) records of each Participant's Accounts which, among
        other things, shall show separately Compensation deferral and matching
        credits, and

                      (ii) records of its deliberations and decisions.

               (b) The Administrator shall appoint a secretary, and at its
discretion, an assistant secretary, to keep the record of proceedings, to
transmit its decisions, instructions, consents or directions to any interested
party, to execute and file, on behalf of the Administrator, such documents,
reports or other matters as may be necessary or appropriate under ERISA and to
perform ministerial acts.

               (c) The Administrator shall not be required to maintain any
records or accounts which duplicate any records or accounts maintained by the
Company.

Section 10.7  - Statement to Participants

               Within 30 days after the last day of each Plan Year, the
Administrator shall furnish to each Participant a statement setting forth the
value of his or her Accounts and such other information as the Administrator
shall deem advisable to furnish.

Section 10.8  - Inspection of Records

               Copies of the Plan and the records of a Participant's Accounts
shall be open to inspection by him or her or his or her duly authorized
representatives at the office of the Administrator at any reasonable business
hour.

Section 10.9  - Identification of Fiduciaries

               (a) The Administrator shall be the named fiduciary of the Plan
and, as permitted or required by law, shall have exclusive authority and
discretion to operate and administer the Plan.

                                       15
<PAGE>   20

               (b) The named fiduciary, the Board, the Company, and every person
who exercises any discretionary authority or discretionary control respecting
the Plan or who has any discretionary authority or discretionary responsibility
in the administration of the Plan, including any person designated by the named
fiduciary to carry out fiduciary responsibilities under the Plan, shall be a
fiduciary and as such shall be subject to provisions of ERISA and other
applicable laws governing fiduciaries.

Section 10.10 - Procedure for Allocation of Administrative Responsibilities

               (a) Administrative responsibilities under the Plan shall be
allocated as follows:

                      (i) the sole duties, responsibilities and powers allocated
        to the Board, the Company, the Committee and any other person shall be
        those expressly provided in the relevant Sections of the Plan, and

                      (ii) all administrative responsibilities not allocated to
        the Board, or the Company, are allocated to the Administrator, subject
        to delegation.

               (b) Administrative responsibilities under the Plan may be
reallocated among fiduciaries by amending the Plan in the manner prescribed in
Section 11.8, followed by the fiduciaries' acceptance of, or operation under,
such amended Plan.

Section 10.11 - Claims Procedure

               (a) A claim by a Participant, Beneficiary or any other person
shall be presented to the claims official appointed by the Administrator (or its
delegate) in writing within the maximum time permitted by law or under the
regulations of the Secretary of Labor or his or her delegate pertaining to
claims procedures.

               (b) The claims official shall, within a reasonable time, consider
the claim and shall issue his or her determination thereon in writing.

               (c) If the claim is granted, the appropriate distribution or
payment shall be made by the Company.

               (d) If the claim is wholly or partially denied, the claims
official shall, within 90 days (or such longer period as may be reasonably
necessary), provide the claimant with written notice of such denial, setting
forth, in a manner calculated to be understood by the claimant

                      (i) the specific reason or reasons for such denial;

                      (ii) specific reference to pertinent Plan provisions on
        which the denial is based;

                                       16
<PAGE>   21

                      (iii) a description of any additional material or
        information necessary for the claimant to perfect the claim and an
        explanation of why such material or information is necessary; and

                      (iv) an explanation of the Plan's claims review procedure.

               (e) The Administrator (or its delegate) shall provide each
claimant with a reasonable opportunity to appeal the claim official's denial of
a claim to a review official (appointed by the Administrator (or its delegate)
in writing) for a full and fair review. The claimant or his or her duly
authorized representative

                      (i) may request a review upon written application to the
        review official (which shall be filed with it),

                      (ii) may review pertinent documents, and

                      (iii) may submit issues and comments in writing.

               (f) The review official may establish such time limits within
which a claimant may request review of a denied claim as are reasonable in
relation to the nature of the benefit which is the subject of the claim and to
other attendant circumstances but which, in no event, shall be less than 60 days
after receipt by the claimant of written notice of denial of his or her claim.

               (g) The decision by the review official upon review of a claim
shall be made not later than 60 days after his or her receipt of the request for
review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of such request for review.

               (h) The decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated to be
understood by the claimant with specific references to the pertinent Plan
provisions on which the decision is based.

               (i) In considering claims under this claims procedure, the claims
official and the review official shall have fiduciary and discretionary
authority to make findings of fact and to construe the terms of the Plan and, to
the full extent permitted by law, the determination of the claims official (if
no review is properly requested or the decision of the review official on
review, if review has been properly requested) shall be final and binding on all
parties unless held by a court of competent jurisdiction to constitute an abuse
of discretion.

Section 10.12  - Conflicting Claims

               If the Administrator is confronted with conflicting claims
concerning a Participant's Accounts, the Administrator may interplead the
claimants in an action at law, or in an arbitration conducted in accordance with
the rules of the American Arbitration Association, as the Administrator shall
elect in its sole discretion, and in either case, the attorneys' fees, expenses

                                       17
<PAGE>   22

and costs reasonably incurred by the Administrator in such proceeding shall be
paid from the Participant's Accounts.

Section 10.13  - Service of Process

               The Secretary of Leap Wireless International, Inc. is hereby
designated as agent of the Plan for the service of legal process.

                                   ARTICLE XI.
                            MISCELLANEOUS PROVISIONS

Section 11.1  - Termination of the Plan

               (a) While the Plan is intended as a permanent program, the Board
shall have the right at any time to declare the Plan terminated; provided,
however, that no amendment shall decrease the Vested percentage or amount of
interest any Participant, any Beneficiary or any other person entitled to
payment under the Plan has in the Participant's Accounts.

               (b) In the event of any termination, the Administrator shall
distribute Participants' Accounts as provided by the Board.

Section 11.2 - Changes in Common Stock or Assets of the Company,
               Acquisition or Liquidation of the Company and Other Corporate
               Events

               (a) Notwithstanding Section 6.2, in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to a Participant's Accounts under the Plan, then
the Administrator shall, in such manner as it may deem equitable, adjust the
aggregate number of Share Units that shall be credited under the Plan under
Section 4.3 and the number of Share Units (or other units or amounts) credited
or to be credited to Participants' Accounts under the Plan and the number and
kind of shares of Common Stock (or other securities or property) or amounts to
be distributed to Participants and Beneficiaries under the Plan.

               (b) In the event of any transaction or event described in Section
11.2(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Administrator, in its sole and absolute discretion,
and on such terms and conditions as it deems appropriate, by action taken prior
to the occurrence

                                       18
<PAGE>   23

of such transaction or event and either automatically or upon the Participant's
request, is hereby authorized to take any one or more of the following actions
whenever the Administrator determines that such action is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to such
Participant's Matching Share Account under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

                      (i) To provide for the early distribution of the Share
        Units credited to such Participant's Accounts in shares of Common Stock
        (or other securities or property) or in cash;

                      (ii) To provide that such Participant's Matching Share
        Account cannot become Vested after such event;

                      (iii) To provide that such Participant's Matching Share
        Account shall become fully Vested;

                      (iv) To provide that the obligations of the Company with
        respect to such Participant's Accounts be assumed by the successor or
        survivor corporation, or a parent or subsidiary thereof, or the rights
        of such Participant with respect to such Participant's Accounts shall be
        substituted for by similar rights covering units or amounts representing
        the stock of the successor or survivor corporation, or a parent or
        subsidiary thereof, with appropriate adjustments as to the number and
        kind of Share Units or other units or amounts credited to such
        Participant; and

                      (v) To make adjustments in the number and type of shares
        of Common Stock (or other securities or property) or cash amounts to be
        distributed to Participants and Beneficiaries under the Plan.

               (c) The existence of the Plan and the Accounts of Participants
under the Plan shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

Section 11.3  - Limitation on Rights of Employees

               The Plan is strictly a voluntary undertaking on the part of the
Company and shall not constitute a contract between a Company and any Employee
with respect to, or consideration for, or an inducement or condition of, the
employment of an Employee. Nothing contained in the Plan shall give any Employee
the right to be retained in the service of a Company or to interfere

                                       19
<PAGE>   24

with or restrict the rights of the Company, which are hereby expressly reserved,
to discharge or retire any Employee, except as provided by law, at any time
without notice and with or without cause. Inclusion under the Plan will not give
any Employee any right or claim to any benefit hereunder except to the extent
such right has specifically become fixed under the terms of the Plan. The
doctrine of substantial performance shall have no application to Employees,
Participants, "Beneficiaries" or any other persons entitled to payments under
the Plan. Each condition and provision, including numerical items, has been
carefully considered and constitutes the minimum limit on performance which will
give rise to the applicable right.

Section 11.4  - Unfunded Obligations of the Company

               The obligations of the Company under the Plan shall be unfunded
and unsecured, and nothing contained herein shall be construed as providing for
assets to be held in trust or escrow or any other form of segregation of the
assets of the Company for the benefit of any Participant, any Beneficiary or any
other person or persons to whom benefits are to be paid pursuant to the terms of
the Plan. The interest of any Participant, any Beneficiary or any other person
hereunder shall be limited to the right to receive the benefits as set forth
herein. To the extent that a Participant, any Beneficiary or any other person
acquires a right to receive benefits under the Plan, such rights shall be no
greater than the right of an unsecured general creditor of the Companies.

Section 11.5  - Grantor Trust

               (a) The Company may establish a grantor trust (the "Trust") in
connection with the Plan, and may make irrevocable contributions to the Trust in
accordance with the terms of the trust agreement (the "Trust Agreement")
establishing the Trust. The Company shall designate the trustee of the Trust.
The Trust Agreement shall provide that the Trust assets shall be subject to the
claims of the creditors of the Company in the event of the "Insolvency" (as
defined in the Trust Agreement) of the Company, and that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan for purposes of the Code and ERISA.

               (b) The Trust Agreement may provide that the trustee of the Trust
shall invest the assets in the Trust as directed by the Company. The Company
may, but shall not be obligated to, direct the trustee to invest the assets of
the Trust in shares of Common Stock.

               (c) The Company may cause the payment of benefits under the Plan
to be made, in whole or in part, by the Trust in accordance with the terms of
the Trust Agreement.

               (d) Any payment of benefits by the Trust shall be in satisfaction
of the obligations of the Company under the Plan. Notwithstanding the
establishment of the Trust, and any contributions made by the Company to the
Trust, the Company shall remain obligated to make all payments of benefits under
the Plan, except to the extent such payments are made by the Trust in accordance
with the Trust Agreement.

                                       20
<PAGE>   25

               (e) To the extent the Company establishes the Trust and directs
that the assets of the Trust be invested in shares of Common Stock, all voting
rights on shares of Company Stock in the Trust Fund held by the Trust shall be
exercised by the Trustee in accordance with instructions from the Participants
with respect to the Share Units credited to their Accounts, or the Administrator
in accordance with the following provisions of this Section:

                      (i) All voting rights on shares of Company Stock in the
        Trust shall be exercised by the Trustee only as directed by the
        Participants with respect to shares of Company Stock attributable to the
        Share Units credited to their Accounts in accordance with the following
        provisions of subsections (ii) and (iii) below.

                      (ii) As soon as practicable before each annual or special
        shareholders' meeting of the Company at which shares of Company Stock
        are entitled to vote, the Trustee shall furnish to each Participant a
        copy of the proxy solicitation material sent generally to stockholders,
        together with a form requesting confidential instructions on how the
        shares of Company Stock attributable to the Share Units credited to such
        Participant's Accounts (including fractional shares to 1/1000th of a
        share) are to be voted. The Company shall cooperate with the Trustee to
        ensure that Participants receive the requisite information in a timely
        manner. The materials furnished to the Participants shall include a
        notice from the Trustee explaining each Participant's right to instruct
        the Trustee with respect to the voting of the shares of Company Stock
        attributable to the Share Units credited to the Participant's Accounts.
        Upon timely receipt of such instructions, the Trustee (after combining
        votes of fractional shares to give effect to the greatest extent to
        Participants' instructions) shall vote the shares as instructed. If
        voting instructions for shares of Company Stock to the Accounts of any
        Participant are not timely received by the Trustee for a particular
        stockholders' meeting, such shares shall not be voted in accordance with
        the instructions but shall be voted as provided in subsection (iii)
        below. The instructions received by the Trustee from Participants shall
        be held by the Trustee in strict confidence and shall not be divulged or
        released to any person including directors, officers or employees of the
        Company, or of any other company, except as otherwise required by law.

                      (iii) All shares of Company Stock attributable to Share
        Units credited to the Accounts of Participants shall be voted only in
        accordance with the directions of such Participants as given to the
        Trustee. Each Participant shall be entitled to 1/1000th of a share)
        attributable to Share Units credited to his or her Accounts. If,
        however, voting instructions for shares of Company Stock to the
        Participant's Accounts are not timely received by the Trustee for a
        particular stockholders' meeting, such shares shall be voted by the
        Trustee as directed by the Administrator.

Section 11.6  - Consolidation or Merger

               In the event of the consolidation or merger of a Company with or
into any other corporation, or the sale by a Company of its assets, the
resulting successor may continue the Plan by adopting it in a resolution of its
board of directors or agreement of its partners. If within 90

                                       21
<PAGE>   26

days from the effective date of such consolidation, merger or sale of assets,
such new corporation does not adopt the Plan, the Plan shall be terminated.

Section 11.7 - Errors and Misstatements

               In the event of any misstatement or omission of fact by a
Participant to the Administrator or any clerical error resulting in payment of
benefits in an incorrect amount, the Administrator shall promptly cause the
amount of future payments to be corrected upon discovery of the facts and the
Companies shall pay the Participant or any other person entitled to payment
under the Plan any underpayment in cash in a lump sum or to recoup any
overpayment from future payments to the Participant or any other person entitled
to payment under the Plan in such amounts as the Administrator shall direct or
to proceed against the Participant or any other person entitled to payment under
the Plan for recovery of any such overpayment.

Section 11.8 - Payment on Behalf of Minor, etc.

               In the event any amount becomes payable under the Plan to a minor
or a person who, in the sole judgment of the Administrator is considered by
reason of physical or mental condition to be unable to give a valid receipt
therefor, the Administrator may direct that such payment be made to any person
found by the Administrator in its sole judgment, to have assumed the care of
such minor or other person. Any payment made pursuant to such determination
shall constitute a full release and discharge of the Companies, the Board, the
Administrator, the Committee and their officers, directors and Employees.

Section 11.9 - Amendment of Plan

               As limited by any applicable law, the Plan may be wholly or
partially amended by the Board from time to time including retroactive
amendments necessary to conform to the provisions and requirements of ERISA or
the Code or regulations pursuant thereto; provided, however, that no amendment
shall decrease the Vested percentage or amount of interest any Participant or
any other person entitled to payment under the Plan has in the Participant's
Nonqualified Accounts.

Section 11.10 - Tax Withholding

               The Company shall be entitled to require payment in cash or
deduction from other compensation payable to a Participant of any sums required
by federal, state or local tax law to be withheld with respect to the crediting
of Share Units to a Participant's Accounts and the distribution of amounts to
such Participant. The Administrator may in its discretion and in satisfaction of
the foregoing requirement allow such Holder to elect to have the Company
withhold shares of Common Stock otherwise distributable under the Plan (or allow
the return of shares of Common Stock) having a Fair Market Value equal to the
sums required to be withheld.

                                       22
<PAGE>   27

Section 11.11 - Governing Law

               This Plan shall be construed, administered and governed in all
respects under and by applicable federal laws and, where state law is
applicable, the laws of the State of California.

Section 11.12 - Pronouns and Plurality

               The masculine pronoun shall include the feminine pronoun, and the
singular the plural where the context so indicates.

Section 11.13 - Titles

               Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.

Section 11.14 - References

               Unless the context clearly indicates to the contrary, a reference
to a statute, regulation or document shall be construed as referring to any
subsequently enacted, adopted or executed statute, regulation or document.


                                       23