Document:

exv10w7

 

EXHIBIT 10.7

AMENDED AND RESTATED SEVERANCE BENEFITS AGREEMENT

               This Amended and Restated Severance Benefits Agreement (this “Agreement”) by and between
                                     (“Executive”), Leap Wireless International, Inc., a Delaware corporation
(“Leap”), and Cricket Communications, Inc., a Delaware corporation (“Cricket”) (individually, a
“Party” and collectively, the “Parties”) is made and entered into as of [Insert Date] (the
“Effective Date”). Leap and Cricket are hereinafter collectively referred to as the “Companies.”

               WHEREAS, Leap, Cricket and Executive entered into a Severance Benefits Agreement, dated as of
                   (the “Prior Agreement”); and

               WHEREAS, Leap, Cricket and Executive desire to amend and restate the Prior Agreement to revise
the definitions of “Cause” and “Good Reason,” to conform to the requirements of Section 409A of the
Code (as defined below) and the Treasury Regulations thereunder, or certain exemptions from Section
409A of the Code, and to make additional revisions as set forth herein; and

               WHEREAS, Executive is an officer of Leap and Cricket, and is presently employed by Cricket;
and

               WHEREAS, Cricket desires to provide Executive with certain severance benefits as an incentive
to remain in the employ of Cricket; and

               WHEREAS, the Boards of Directors of Leap and Cricket have determined that it is in the best
interests of Leap and Cricket, respectively, and their stockholders, to enter in this amendment and
restatement of the Prior Agreement.

               NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for
other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged by each Party hereto, the Parties hereby agree as follows:

          1. Term of Agreement. This Agreement shall commence on the Effective Date and shall
continue in effect through December 31, 2008; provided, however, that commencing on December 31,
2008 and on each December 31 thereafter, the term of this Agreement shall be automatically extended
for one additional year unless, not later than the immediately preceding January 1, Leap or Cricket
shall have given notice to Executive that the term of this Agreement shall not be further extended.
[Revise 2008 dates for agreements entered into after December 31, 2008].

 

 

          2. Severance Benefits.

          a. Severance Benefits. In the event of the Involuntary Termination (as defined
below) of Executive during the term of this Agreement, Executive shall be entitled to the
following:

               (i) Cricket shall pay promptly to Executive, following the date of the
Involuntary Termination, Executive’s accrued, unpaid base salary through the date of
the Involuntary Termination, and Leap and Cricket, as applicable, shall pay all
other amounts to which Executive is then entitled under any compensation or benefit
plan of Leap and Cricket in accordance with the terms and conditions of such plans.

               (ii) Cricket shall pay to Executive, following the date of the Involuntary
Termination and in accordance with Section 2(i), a lump sum severance benefit in
cash (the “Severance Payment”) in the amount set forth on Attachment A
hereto.

               (iii) To the extent Executive elects continuation health care coverage for
Executive and his or her eligible dependents under Section 4980B(f) of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”) and Sections 601-608
of the Employee Retirement Income Security Act of 1974, as amended (“COBRA
Coverage”), Executive shall not be required to pay premiums for such COBRA Coverage
for the time period set forth on Attachment A hereto, commencing on
the date of Involuntary Termination (or, if earlier, until Executive is eligible for
comparable coverage with a subsequent employer).

	 	b.	 	Cause. For purposes of this Section 2,
“Cause” shall mean any one or more of the following occurrences:

               (i) Executive’s material breach of any provision of the Employee
Confidentiality and Invention Assignment Agreement or any other agreement between
Executive and Cricket (or any parent or subsidiary of Cricket or any successor
thereof), after a written notice from Cricket is delivered to Executive describing
Executive’s breach and Executive is afforded a period of at least thirty (30) days
to correct the breach and fails to do so within such period;

               (ii) Executive’s conviction by, or entry of a plea of guilty or nolo
contendere in, a court of competent and final jurisdiction for (a) any felony, or
(b) other illegal conduct (other than minor traffic violations) that is likely to
inflict or has inflicted material injury on the business of Cricket (or any parent
or subsidiary of Cricket or any successor thereof);

               (iii) Executive’s commission of an act of fraud, embezzlement or dishonesty,
whether prior to or subsequent to the date hereof upon Cricket (or any parent or
subsidiary of Cricket or any successor thereof);

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               (iv) Executive’s willful neglect of or willful failure to substantially
perform (A) Executive’s duties with Cricket (or any parent or subsidiary of Cricket
or any successor thereof) or (B) the lawful and reasonable directions of the Board
of Directors of Cricket (or any parent or subsidiary of Cricket or any successor
thereof which employs Executive or for which Executive serves as an officer) or of
the individual to whom Executive reports( other than any such neglect or failure
occurring after Executive’s issuance of a Notice of Termination for Good Reason),
after a written notice from Cricket is delivered to Executive describing Executive’s
neglect or failure to perform and Executive is afforded a period of at least thirty
(30) days to correct the neglect or failure to perform and fails to do so within
such period; or

               (v) Executive’s gross misconduct affecting or material violation of any
duty of loyalty to Cricket (or any parent or subsidiary of Cricket or any successor
thereof).

     c. Good Reason. For purposes of this Section 2, “Good Reason” shall
mean, without Executive’s express written consent, the occurrence of any of the
following circumstances:

               (i)  a material diminution in Executive’s authority, duties or responsibilities
with Cricket (or any parent or subsidiary of Cricket or any successor thereof),
including, without limitation, the continuous assignment to Executive of any duties
materially inconsistent with Executive’s position with Cricket (or any parent or
subsidiary of Cricket or any successor thereof), or a material negative change in
the nature or status of Executive’s responsibilities or the conditions of
Executive’s employment with Cricket (or any parent or subsidiary of Cricket or any
successor thereof);

               (ii)  a material diminution in Executive’s annualized cash and benefits
compensation opportunity, which shall include Executive’s base compensation,
Executive’s annual target bonus opportunity and Executive’s aggregate employee
benefits, as in effect on the Effective Date as the same may be increased from time
to time thereafter;

               (iii)  a material change in the geographic location at which Executive must
perform his or her duties (and Cricket and Executive agree that any involuntary
relocation of Cricket’s offices (or the offices of any parent or subsidiary of
Cricket or any successor thereof) at which Executive is principally employed to
a location more than sixty (60) miles from such location would constitute a material
change); or

               (iv)  any other action or inaction that constitutes a material breach by
Cricket (or any parent or subsidiary of Cricket or any successor thereof) of its
obligations to Executive under this Agreement.

Executive’s right to terminate employment with Cricket (or any parent or

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subsidiary
of Cricket or any successor thereof) pursuant to this Section 2(c) shall not be
affected by Executive’s incapacity due to physical or mental illness. Executive’s
continued employment with Cricket (or any parent or subsidiary of Cricket or any
successor thereof) shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

Executive must provide written notice to Cricket of the occurrence of any of the
foregoing events or conditions without Executive’s written consent within ninety
(90) days of the initial occurrence of such event or condition. Cricket (or any
parent or subsidiary of Cricket or any successor thereof) shall have a period of
thirty (30) days to cure such event or condition after receipt of written notice of
such event or condition from Executive.

                         d. Involuntary Termination. For purposes of this Agreement, “Involuntary
Termination” shall mean (a) Executive’s Separation from Service by reason of a termination
of employment by the Cricket other than for Cause, or (b) Executive’s Separation from
Service by reason of resignation of employment with the Cricket for Good Reason.
Executive’s Separation from Service by reason of resignation from employment with the
Cricket for Good Reason shall be treated as involuntary. Executive’s Separation from
Service by reason of resignation from employment with Cricket for Good Reason shall be an
“Involuntary Termination” only if such Separation from Service occurs within one (1) year
following the initial existence of the event or condition constituting Good Reason.
Executive’s Separation from Service by reason of Executive’s death or disability shall not
constitute an Involuntary Termination.

                         e. Separation from Service. For purposes of this Agreement, “Separation from
Service,” with respect to Executive means Executive’s “separation from service,” as defined
in Treasury Regulation Section 1.409A-1(h).

                         g. Date of Termination. For purposes of this Agreement, “Date of Termination”
shall mean the date of Executive’s Separation from Service.

                         h. General Release. In consideration of, and as a condition to receiving, the
severance benefits to be provided to Executive under Sections 2(a)(ii) and (iii), Executive
shall execute and deliver to the Companies the “General Release” set forth on Attachment
B hereto on or after the date of the Involuntary Termination and not later than
twenty-one (21) days after the date of the Involuntary Termination (or, in the event that
the Involuntary Termination of Executive is in connection with an exit incentive or other
employment termination program offered to a group or class of employees, not later than
forty-five (45) days after the date of the Involuntary Termination (or, if later, the date
Executive is provided with the information required in accordance with Section 3(f) of the
General Release)). In the event that Executive fails to execute and deliver to the
Companies the General Release in accordance with this Section 2(f) within fifty-five (55)
days following the Date of Termination, or Executive
revokes the General Release in accordance with the terms thereof, Executive shall not
receive the severance benefits set forth in Sections 2(a)(ii) and (iii).

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                         i. Timing of Severance Payment. Subject to Section 3(b), the Severance Payment
provided for in Section 2(a)(ii) shall be made not later than the tenth (10th)
day following the date on which the General Release by Executive becomes irrevocable.

     3. Code Section 409A.

                         a. Short-Term Deferral Exemption. This Agreement is not intended to provide
for any deferral of compensation subject to Section 409A of the Code and, accordingly, the
Severance Payment payable under Section 2(a)(ii) shall be paid not later than the later of:
(i) the fifteenth (15th) day of the third (3rd) month following
Executive’s first taxable year in which such severance benefit is no longer subject to a
substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third
(3rd) month following first taxable year of the Companies in which such severance
benefit is no longer subject to substantial risk of forfeiture, as determined in accordance
with Section 409A of the Code and any Treasury Regulations and other guidance issued
thereunder.

                         b. Delayed Distribution under Section 409A of the Code. Notwithstanding
anything to the contrary in this Agreement, if Executive is a Specified Employee on the date
of Executive’s Involuntary Termination, to the extent that the payments or benefits under
this Agreement are subject to Section 409A of the Code and the delayed payment or
distribution of all or any portion of such amounts to which Executive is entitled under this
Agreement is required in order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, then such portion shall be paid or distributed to Executive
during the thirty (30) day period commencing on the earlier of (a) the expiration of the six
(6)-month period measured from the date of Executive’s Separation from Service or (b) the
date of Executive’s death. Upon the expiration of the applicable six (6) month period under
Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 3(b)
shall be paid in a lump sum payment to Executive. Any remaining payments due under the
Agreement shall be paid as otherwise provided herein.

                         c. Transition Relief. As provided in Internal Revenue Notice 2006-79 and
2007-86, notwithstanding any other provision of this Agreement, with respect to an election
or amendment to change a time and form of payment under this Agreement made on or after
January 1, 2007 and on or before December 31, 2007, the election or amendment may apply only
to amounts that would not otherwise be payable in 2007 and may not cause an amount to be
paid in 2007 that would not otherwise be payable in 2007.

                         d. Definition of Service Provider. For purposes of this Agreement, “Service
Provider” means Executive or any other “service provider,” as defined in Treasury Regulation
Section 1.409A-1(f).

                         e. Definition of Service Recipient. For purposes of this Agreement, “Service
Recipient,” with respect to Executive, means Cricket and all persons considered part of the
“service recipient,” as defined in Treasury Regulation Section 1.409A-1(g), as determined
from time to time. As provided in Treasury Regulation Section 1.409A-1(g),

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the “Service
Recipient” shall mean the person for whom the services are performed and with respect to
whom the legally binding right to compensation arises, and all persons with whom such person
would be considered a single employer under Section 414(b) or 414(c) of the Code.

                         f. Definition of Specified Employee. For purposes of this Agreement,
“Specified Employee” means a Service Provider who, as of the date of the Service Provider’s
“separation from service,” as defined in Treasury Regulation Section 1.409A-1(h), is a “Key
Employee” of the Service Recipient any stock of which is publicly traded on an established
securities market or otherwise. For purposes of this definition, a Service Provider is a
“Key Employee” if the Service Provider meets the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code (applied in accordance with the Treasury Regulations thereunder
and disregarding Section 416(i)(5) of the Code) at any time during the Testing Year. If a
Service Provider is a “Key Employee” (as defined above) as of a Specified Employee
Identification Date, the Service Provider shall be treated as “Key Employee” for the entire
twelve (12) month period beginning on the Specified Employee Effective Date. For purposes
of this definition, a Service Provider’s compensation for a Testing Year shall mean such
Service Provider’s compensation, as determined under Treasury Regulation Section
1.415(c)-2(d)(4), from the Service Recipient for such Testing Year. The “Specified
Employees” shall be determined in accordance with Section 409A(a)(2)(B)(i) of the Code and
Treasury Regulation Section 1.409A-1(i).

                         g. Definition of Specified Employee Effective Date. For purposes of this
Agreement, “Specified Employee Effective Date” means the first day of the fourth
(4th) month following the Specified Employee Identification Date. The Specified
Employee Effective Date may be changed by Cricket, in its discretion, in accordance with
Treasury Regulation Section 1.409A-1(i)(4).

                         h. Definition of Specified Employee Identification Date. For purposes of this
Agreement, “Specified Employee Identification Date,” for purposes of Treasury Regulation
Section 1.409A-1(i)(3), means December 31. The “Specified Employee Identification Date”
shall apply to all “nonqualified deferred compensation plans” (as defined in Treasury
Regulation Section 1.409A-1(a)) of the Service Recipient and all affected Service Providers.
The “Specified Employee Identification Date” may be changed by the Cricket, in its
discretion, in accordance with Treasury Regulation Section 1.409A-1(i)(3).

                         i. Definition of Testing Year. For purposes of this Agreement, “Testing Year”
means the twelve (12) month period ending on the Specified Employee Identification Date, as
determined from time to time.

          4. Successors; Binding Agreement. This Agreement shall inure to the benefit of and
shall be binding upon the Companies and their respective successors and assigns, including any
purchaser of all or substantially all of their respective assets, and shall be binding upon
Executive’s assigns, executors, administrators, beneficiaries, or their legal representatives. The

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Companies will require any successor (whether direct or indirect, by purchase, merger or otherwise)
to all or substantially all of the business or assets of the Companies expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that the Companies would
be required to perform it if no such succession had taken place; provided, however, that no such
assumption shall relieve the Companies of their obligations hereunder. The Companies’ failure to do
so shall be considered a material breach of this Agreement. As used in this Agreement, the
“Companies” shall mean the Companies as hereinbefore defined and any successor to its business
and/or assets as aforesaid.

          5. Notice. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed to the last known mailing address of the respective Party, provided that
all notices to Cricket shall be directed to the attention of the Board of Directors of Cricket with
a copy to the Secretary of Cricket, and all notices to Leap shall be directed to the attention of
the Board of Directors of Leap with a copy to the Secretary of Leap, or to such other address as
any Party may have furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

          6. Non-Compete, Confidentiality and Non-Solicitation Covenants. In consideration of
the provisions of Section 2 of this Agreement, and in order to protect the goodwill of the
Companies, Executive hereby agrees to the following covenants.

                         a. Confidentiality. For the period of three (3) years commencing on the Date
of Termination, Executive shall not, directly or indirectly, disclose or make available to
any person, firm, corporation, association or other entity for any reason or purpose
whatsoever, any Confidential Information (as defined below). Executive agrees that, upon
termination of Executive’s employment with Cricket, all Confidential Information in
Executive’s possession that is in writing or other tangible form (together with all copies
or duplicates thereof, including computer files) shall be returned to Cricket and shall not
be retained by Executive or furnished to any third party, in any form except as provided
herein; provided, however, that Executive shall not be obligated to treat as confidential,
or return to Cricket copies of any Confidential Information that (i) was publicly known at
the time of disclosure to Executive, (ii) becomes publicly known or available thereafter
other than by any means in violation of this Agreement or any other duty owed to the
Companies or any of their respective affiliates by any person or entity, or (iii) is
lawfully disclosed to Executive by a third party. As used in this Agreement, the term
“Confidential Information” means: information disclosed to Executive or known by Executive
as a consequence of or through Executive’s relationship with Cricket, about the customers,
employees, business methods, technical
operations, public relations methods, organization, procedures or finances, including,
without limitation, information of or relating to customer lists, of the Companies and their
respective affiliates.

                         b. Non-Solicitation. For the period commencing on the Date of Termination and
terminating on the third (3rd) anniversary thereof, Executive shall not, either
on Executive’s own account or jointly with or as a manager, agent, officer,

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employee,
consultant, partner, joint venture, owner or shareholder or otherwise on behalf of any other
person, firm or corporation, directly or indirectly solicit or attempt to solicit away from
the Companies or any of their respective affiliates, any of their officers or employees or
offer employment to any person who, on or during the six (6) months immediately preceding
the date of such solicitation or offer, is or was an officer or employee of the Companies or
any of their respective affiliates; provided, however, that a general advertisement to which
an employee of the Companies or any of their respective affiliates, responds shall in no
event be deemed to result in a breach of this Section 6(b).

                         c. Breach of Covenants. In the event that Executive breaches any of the
provisions of this Section 6, or threatens to do so, in addition to and without limiting or
waiving any other remedies available to the Companies in law or in equity, the Companies
shall be entitled to immediate injunctive relief in any court having the capacity to grant
such relief, to restrain such breach or threatened breach and to enforce this Section 6.
Executive acknowledges that it is impossible to measure in money the damages that the
Companies will sustain in the event that Executive breaches or threatens to breach this
Section 6 and, in the event that the Companies institute any action or proceeding to enforce
this Section 6 seeking injunctive relief, Executive hereby waives and agrees not to assert
or use as a defense a claim or defense that the Companies have an adequate remedy at law.
Also, in addition to any other remedies available to the Companies in law or in equity, in
the event that Executive breaches the provisions of this Section 6 in any material respect,
Executive shall forfeit Executive’s right to further benefits under Section 2 and Executive
shall be obligated to repay to Cricket the benefits that Executive has received under
Section 2. If a court or arbitrator shall hold that the duration, scope or area restriction
or other provision of this Section 6 is unreasonable under the circumstances now or then
existing, the Parties hereto agree that the maximum duration, scope or area restriction
reasonable under the circumstances shall be substituted for the stated duration, scope or
area restriction.

          7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer of Cricket and Leap as may be specifically designated thereby. No
waiver by any Party hereto at any time of any breach by any other Party hereto of or compliance
with, any condition or provision of this Agreement to be performed by such other Party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any Party which are not expressly set forth
in this Agreement. Executive acknowledges that Executive has consulted with counsel (or
has had a reasonable opportunity to consult with counsel) and is fully aware of Executive’s
rights and obligations under this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of California without
regard to its conflicts of law principles. All references to sections of any federal, state or
local law shall be deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required under federal,
state or local law. The Section headings contained in this Agreement are for convenience only, and
shall not affect the interpretation of this Agreement. This Agreement supersedes the Prior
Agreement in

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its entirety, effective as of the date hereof, and the Prior Agreement shall have no
further force and effect.

          8. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

          9. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the
same instrument.

          10. Venue. Except as set forth in Section 11, the parties expressly agree that the
only proper venue for any action, lawsuit or administrative proceeding to interpret or enforce this
Agreement, relating to this Agreement and/or arising out of a breach of this Agreement shall be in
the City and County of San Diego, California and the parties, on behalf of themselves and their
officers, directors, principals, managing agents, insurers, attorneys and personal representatives
irrevocably submit to the personal jurisdiction of such state or federal court or forum in respect
of any such action, lawsuit or proceeding for purposes of service of process, discovery proceedings
and trial. The parties waive any objection that they may now have or hereafter have to venue in a
court or forum in the City and County of San Diego.

          11. Agreement to Arbitrate. Except as set forth in Section 6(c), any dispute, claim
or controversy based on, arising out of or relating to Executive’s employment or this Agreement
shall be settled by final and binding arbitration in San Diego County, California, before a single
neutral arbitrator in accordance with the National Rules for the Resolution of Employment Disputes
(the “Rules”) of the American Arbitration Association (“AAA”), and judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction. Arbitration may be compelled
pursuant to the California Arbitration Act (Code of Civil Procedure §§ 1280 et
seq.). If the parties are unable to agree upon an arbitrator, one shall be appointed by
the AAA in accordance with its Rules. Each party shall pay the fees of its own attorneys, the
expenses of its witnesses and all other expenses connected with presenting its case; provided that
Cricket shall pay to Executive all reasonable arbitration expenses and legal fees incurred by
Executive if Executive prevails in enforcing or obtaining his or her rights or benefits provided by
this Agreement. Such payments shall be made within five (5) days after Executive’s request for
payment accompanied with evidence of fees and expenses incurred as Cricket may reasonably request.
Other costs of the arbitration, including the cost of any record or transcripts of the arbitration,
AAA’s administrative fees, the fee of the arbitrator, and all other fees and costs, shall be borne
by the Companies. Except as set forth in Section 6(c), this Section 11 is intended to be
the exclusive method for resolving any and all claims by the parties against each other for
payment of damages under this Agreement or relating to Executive’s employment; provided, however,
that neither this Agreement nor the submission to arbitration shall limit the parties’ right to
seek provisional relief, including without limitation injunctive relief, in any court of competent
jurisdiction pursuant to California Code of Civil Procedure § 1281.8 or any similar statute of an
applicable jurisdiction. Seeking any such relief shall not be deemed to be a waiver of such
party’s right to compel arbitration. Both Executive and the Companies expressly waive their right
to a jury trial.

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          12. At-Will Employment. Nothing in the foregoing diminishes or alters Cricket’s
policy of at-will employment for all employees, where both Cricket and Executive may terminate the
employment relationship at any time and for any reason, with or without cause or notice.

          13. Entire Agreement. This Agreement sets forth the entire agreement of the Parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto.

          IN WITNESS WHEREOF, the Parties have signed their names as of the day and year first above
written.

LEAP WIRELESS INTERNATIONAL, INC.

By:                                                                       
         

Name: S. Douglas Hutcheson

Title: President and Chief Executive Officer

CRICKET COMMUNICATIONS, INC.

By:                                                                       
         

Name: S. Douglas Hutcheson

Title: President and Chief Executive Officer

EXECUTIVE

By:                                                                       
         

Name:                                                                       
    

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ATTACHMENT A

SEVERANCE PAYMENT:

[___] times the sum
of (i) Executive’s annual base salary plus (ii) Executive’s target annual bonus.

COBRA COVERAGE: 

Executive shall not be required to pay the premiums associated with Executive’s COBRA Coverage for
[ ] years.

Insert as indicated:

          For CEO: 2.0

          For Other Executive Leadership Team Members: 1.5

          For Other Senior Vice Presidents: 1.0

 

 

ATTACHMENT B

GENERAL RELEASE

          1. General Release of Claims. In consideration of the benefits under Section 2 of the
Amended and Restated Severance Benefits Agreement (the “Agreement”), effective as of November ___,
2007, by and among Leap Wireless International, Inc. (“Leap”), Cricket Communications, Inc.
(“Cricket”) (collectively, the “Companies”) and                                          (“Executive”), Executive
does hereby for himself or herself and his or her spouse, beneficiaries, heirs, successors and
assigns, release, acquit and forever discharge the Companies and their respective stockholders,
officers, directors, managers, employees, representatives, related entities, successors and
assigns, and all persons acting by, through or in concert with them (the “Releasees”) of and from
any and all claims, actions, charges, complaints, causes of action, rights, demands, debts,
damages, or accountings of whatever nature, except for criminal activity, known or unknown, which
Executive may have against the Releasees based on any actions or events which occurred prior to the
date of this General Release, including, but not limited to, those related to, or arising from,
Executive’s employment with the Companies, or the termination thereof, any claims under Title VII
of the Civil Rights Act of 1964, the Federal Age Discrimination and Employment Act and the
California Fair Employment and Housing Act, but excluding claims under the Agreement (collectively,
“Claims”). This General Release shall not, however, constitute a waiver of any of Executive’s
rights under the Agreement or under any outstanding stock option granted to Executive, or under the
terms of any employee benefit plan of the Companies in which Executive is a participant.

          2. Release of Unknown Claims. In addition, Executive expressly waives all rights
under Section 1542 of the Civil Code of the State of California, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

          3. Older Worker’s Benefit Protection Act. Executive agrees and expressly acknowledges
that this General Release includes a waiver and release of all claims which Executive has or may
have under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621,
et seq. (“ADEA”). The following terms and conditions apply to and are part of the
waiver and release of the ADEA claims under this General Release:

          a. That the Agreement and this General Release are written in a manner calculated to be
understood by Executive.

          b. The waiver and release of claims under the ADEA contained in this General Release do
not cover rights or claims that may arise after the date on which Executive signs this
General Release.

          c. The Agreement provides for consideration in addition to anything of value to which
Executive is already entitled.

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          d. Executive is advised to consult an attorney before signing this General Release.

          e. Executive is afforded twenty-one (21) days (or, in the event that the Involuntary
Termination of Executive is in connection with an exit incentive or other employment
termination program, forty-five (45) days) after Executive is provided with this General
Release to decide whether or not to sign this General Release. If Executive executes this
General Release prior to the expiration of such period, Executive does so voluntarily and
after having had the opportunity to consult with an attorney.

          f. In the event that the Involuntary Termination of Executive’s employment is in
connection with an exit incentive or other employment termination program, Executive is
provided with written information, calculated to be understood by the average individual
eligible to participate, as to:

               (i) any class, unit, or group of individuals covered by such program, any
eligibility factors for such program, and any time limits applicable to such
programs; and

               (ii) the job titles and ages of all individuals eligible or selected for the
program, and the ages of all individuals in the same job classification or
organizational unit who are not eligible or not selected for the program.

          g. Executive will have the right to revoke this General Release within seven (7) days
of signing this General Release. In the event this General Release is revoked, this General
Release will be null and void in its entirety, and Executive will not receive the benefits
described in Section 2 of the Agreement.

          h. If Executive wishes to revoke the General Release, Executive shall deliver written
notice stating his or her intent to revoke this General Release to Cricket’s President on or
before the seventh (7th) day after the date hereof.

          4. No Assignment of Claims. Executive represents and warrants to the Releasees that
there has been no assignment or other transfer of any interest in any Claim which Executive may
have against the Releasees, or any of them, and Executive agrees to indemnify and hold the
Releasees harmless from any liability, claims, demands, damages, costs, expenses and attorneys’
fees incurred as a result of any person asserting any such assignment or transfer of any rights or
Claims under any such assignment or transfer from such party.

          5. No Suits or Actions. Executive agrees that if he or she hereafter commences, joins
in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any
of the Claims released hereunder, or in any manner asserts against the Releasees any of the Claims
released hereunder, then he or she will pay to the Releasees against whom such suit or Claim is
asserted, in addition to any other damages caused thereby, all attorneys’ fees incurred by such
Releasees in defending or otherwise responding to said suit or Claim.

B-2

 

          6. No Admission. Executive further understands and agrees that neither the payment of
money nor the execution of this Release shall constitute or be construed as an admission of any
liability whatsoever by the Releasees.

	 	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 	 	 
	 

	 	 	 	 	 	 

B-3exv10w10w18

 

EXHIBIT 10.10.18

CONSULTING AGREEMENT — 2008

BETWEEN

LEAP WIRELESS INTERNATIONAL, INC.

AND

STEVEN R. MARTIN

     This Consulting Agreement – 2008 (the “Agreement”) is entered into effective as of January 5,
2008 (the “Effective Date”) between Leap Wireless International, Inc. (“Leap”), a corporation
organized and existing under the laws of the State of Delaware and having its principal place of
business located at 10307 Pacific Center Court, San Diego, CA 92121, and Steven R. Martin
(“Contractor”), having his principal place of business at P.O. Box 3223, La Jolla, California
92038.

     In consideration of the promises and mutual covenants hereinafter set forth, Leap and
Contractor hereby agree as follows:

	1.	 	SCOPE OF AGREEMENT
	 
	 	 	Contractor shall perform the consulting services described in Exhibit A including
supervision, labor, necessary materials and equipment (hereinafter referred to as the
“Services”). The Services shall be performed with promptness and diligence in a thorough,
workmanlike manner to the satisfaction of Leap.

	 	1.1	 	Contractor shall proceed with promptness and diligence and the Services shall
be performed to Leap’s satisfaction in accordance with the highest professional
standards in the field.
	 
	 	1.2	 	Contractor shall remove, at Leap’s request, any employee or subcontractor
furnished by Contractor, who in Leap’s opinion is incapable, uncooperative, or
otherwise unacceptable in the performance of the Services.

	2.	 	COMPENSATION
	 
	 	 	 a. Payment. Leap shall compensate Contractor for the Services in accordance with
Exhibit B; provided, however, that Leap’s total liability under this Agreement shall not
exceed $225,000 (calculated without regard to the restricted stock granted to Contractor as described in Exhibit B) unless Leap so agrees in
writing.

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	 	 	b. Invoices. Contractor shall submit to Leap on a monthly basis invoices requesting
payment, and such invoices will be paid by Leap within thirty (30) days after receipt.
Invoices shall clearly invoice all details as more particularly described in Exhibit B.
	 
	3.	 	CONFIDENTIALITY

	 	3.1.	 	Use of Confidential Information Received. Leap may from time to time
communicate to Contractor, or Contractor may otherwise gain access to, certain
confidential business and/or technical information with respect to Leap’s operations,
business plans and/or intellectual property (the “Information”). Contractor shall
treat all Information as confidential, whether or not so identified, and shall not
disclose, or permit the disclosure of, any Information without the prior written
consent of Leap. Contractor shall limit the use and disclosure of the Information
within its organization to the extent necessary to perform the Services and shall
inform all such disclosees of the confidential nature of such Information and of
Contractor’s obligations under this Paragraph 3. The foregoing obligations of this
Paragraph 3 shall not apply to any Information which has been or is through no fault of
Contractor hereafter disclosed in publicly available sources of information. The terms
of this Agreement are in addition to the terms of any nondisclosure agreement currently
in effect between Leap and Contractor, and in the event of any inconsistency between
the terms of such agreements, those terms which are most protective of the Information
shall prevail.
	 
	 	3.2.	 	Confidentiality of Work Product. Contractor shall not disclose to any
party, including but not limited to any subcontractor, without the prior written
consent of Leap any of (i) Contractor’s works, discoveries, inventions and innovations
resulting from Contractor’s performance of the Services, or (ii) any proposals,
research, records, reports, recommendations, manuals, findings, evaluations, forms,
reviews, information, data, computer programs and software originated or prepared by
Contractor for or in the performance of the Services (the items listed in clauses (i)
and (ii) being hereinafter referred to collectively and severally as “Work Product”).
	 
	 	3.3.	 	Return of Information and Work Product. In the event of any
termination, expiration or upon request by Leap, all copies of such Information and all
Work Product shall be immediately returned to Leap.

2

 

	4.	 	PROPRIETARY RIGHTS

	 	4.1.	 	Rights to Information. Contractor acknowledges and agrees that all
Information shall remain the property of Leap, and no license, express or implied, to
use any of Leap’s intellectual property is granted under this Agreement, except as
specifically required to provide the Services.
	 
	 	4.2.	 	Assignment of Work Product. All Work Product shall be promptly
communicated to Leap. As additional consideration for the compensation to be paid to
Contractor under this Agreement, Contractor shall assign to Leap all of its right,
title and interest in and to all Work Product immediately upon origination, preparation
or discovery thereof and regardless of the medium of expression thereof. Contractor
shall communicate to Leap or its representatives all facts known to it respecting such
Work Product. Further, whenever requested, Contractor shall testify in all legal
proceedings, sign all lawful papers and otherwise perform all acts necessary or
appropriate to enable Leap and its successors and assigns to obtain and enforce legal
protections for all such Work Product in all countries, for which Leap may pay
Contractor a reasonable fee. All Work Product shall become the exclusive property of
Leap, and Contractor shall be deemed to have relinquished all right, title and interest
in and to such Work Product by virtue of this Paragraph 4.2.

	5.	 	TERM OF AGREEMENT
	 
	 	 	This Agreement shall become effective on the date first set forth above and shall remain in
full force and effect until July 4, 2008 unless sooner terminated by either party upon
thirty (30) days’ written notice to the other party. In the event of such termination or
upon expiration of this Agreement, Contractor shall return to Leap any and all equipment,
documents and other materials containing any Information which Contractor has received from
Leap, any and all Work Product, and all copies thereof made by Contractor, and Leap’s sole
obligation shall be to pay Contractor in accordance with Paragraph 2 above the compensation
due for the Services actually completed as of the effective date of such termination or
expiration, provided, however, any such payment shall be subject to any provision for the
limit of expenditures set forth in Section 2 of this Agreement.
	 
	6.	 	INDEPENDENT CONTRACTOR
	 
	 	 	The parties expressly intend and agree that Contractor is acting as an independent
contractor and not as an employee of Leap. Contractor retains sole and absolute discretion, control and judgment regarding the manner and 

3

 

	 	 	means of
performing and providing the Services, except as to the policies and procedures set forth
herein. Contractor understands and agrees that it shall not be entitled to any of the
rights and privileges established for Leap’s employees, including but not limited to:
retirement benefits; medical, life insurance or disability coverage; severance pay; and paid
vacation or sick pay. Contractor understands and agrees that Leap will not pay or withhold
from the compensation paid to Contractor any sums customarily paid or withheld for or on
behalf of employees for income tax, unemployment insurance, social security, workers
compensation or any other withholding tax, insurance or payment, and all such payments as
may be required by law are the sole responsibility of Contractor. Contractor agrees to hold
Leap harmless against and indemnify Leap for any of such payments of liabilities for which
Contractor may become liable with respect to such matters. This Agreement shall not be
construed as a partnership agreement. Leap shall have no responsibility for any of
Contractor’s debts, liabilities or other obligations or for the intentional, reckless or
negligent acts or omissions of Contractor or Contractor’s employees, subcontractors or
agents.
	 
	7.	 	INTELLECTUAL PROPERTY INDEMNIFICATION
	 
	 	 	Contractor, at its sole expense, shall indemnify, defend and hold Leap and its affiliates
and agents harmless against any and all claims or actions brought against any of them to the
extent such claim or action is based on a claim that Contractor’s performance of Services or
any Work Product infringes a patent, copyright, trademark, service mark, trade secret, trade
name or other legally protected proprietary right of any party. Contractor shall pay all
costs, fees (including reasonable attorneys’ fees) and damages which may be incurred by Leap
and its affiliates and agents in connection with any such claim or action, including but not
limited to the settlement thereof.
	 
	8.	 	OMITTED
	 
	9.	 	OMITTED
	 
	10.	 	LAWS, RULES AND REGULATIONS
	 
	 	 	Contractor shall comply at its own expense with the provisions of the Fair Labor Standards
Act of 1938, as amended, and all other applicable state and municipal requirements and those
state and federal laws applicable to Contractor as an employer of labor or otherwise.

4

 

	11.	 	LEAP’S PROPERTY

	 	11.1.	 	Title to all property owned by Leap (or any affiliate of Leap) and furnished
to Contractor shall remain in Leap (or the affiliate).
	 
	 	11.2.	 	Any property owned by Leap (or any affiliate of Leap) and in Contractor’s
possession or control shall be used only in the performance of this Agreement unless
Leap authorizes another use in writing. Contractor shall adequately protect such
property and shall return it to Leap or otherwise dispose of it as directed by Leap.
	 
	 	11.3.	 	Contractor shall be responsible for any loss or damage to any property owned
by Leap (or any affiliate of Leap) and in Contractor’s possession or control.
	 
	 	11.4.	 	As used in this Agreement, the term “affiliate” shall mean any person that
directly or indirectly, through one or more affiliates, controls, is controlled by or
is under common control of Leap.

	12.	 	PREMISES RULES AND SECURITY REQUIREMENTS
	 
	 	 	The employees, permitted subcontractors and agents of each party, while on the premises of
the other, shall comply with all rules and regulations in effect at such premises, including
security requirements.
	 
	13.	 	NOTICES
	 
	 	 	All notices and billings shall be in writing and sent by registered or certified mail,
postage prepaid, or via facsimile with confirmation to the following addresses:

	 	 	 
	To Leap:

	To Contractor:
	 
	 	 
	Leap Wireless International, Inc.

	 	Steven R. Martin
	10307 Pacific Center Court

	 	P.O Box 3223
	San Diego, CA 92121

	 	La Jolla, CA 92038
	ATTN: General Counsel

	 	ATTN: Steven R. Martin

5

 

	14.	 	PUBLICITY
	 
	 	 	Contractor shall not issue or release for publication any articles or advertising or
publicity matter relating to the work to be performed hereunder or mentioning or implying
the name of Leap, or any affiliate of Leap or any of their personnel, unless prior written
permission is granted by Leap.
	 
	15.	 	RECORDS AND AUDIT
	 
	 	 	With the exception of the fixed charges, which are agreed to herein, Contractor shall
maintain complete records of all costs either charged on an hourly or daily basis or all
costs reimbursable by Leap under the terms of this Agreement. All such records shall be
maintained in accordance with recognized accounting practices. Leap shall have the right,
either on its own or through its accredited representatives, to examine and audit such
records at any reasonable time. The correctness of Contractor’s invoices shall be
determined by such audits.
	 
	16.	 	GENERAL PROVISIONS

	 	a.	 	Survivability. The terms and conditions of this Agreement that by
their sense and context are intended to survive after performance hereunder shall
survive the termination or expiration of this Agreement, including but not limited to
Paragraphs 3, 4, 6, 7, 11 and 14.
	 
	 	b.	 	Assignment. Contractor shall not assign any of its rights or
obligations under this Agreement and shall not subcontract any of the Services to be
performed hereunder without the prior written consent of Leap. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors and
permitted assigns. Leap may assign its rights, duties and obligations under this
Agreement to any affiliates of Leap, or any legal entity or legal entities in which
Leap or any of its affiliates has or will have any interest.
	 
	 	c.	 	Applicable Law. This Agreement shall be governed by the laws of the
State of California, and any action to enforce or interpret the provisions of this
Agreement or the rights and obligations of the parties arising hereunder shall be
maintained only in the courts of San Diego County, California.
	 
	 	d.	 	Omitted.
	 
	 	e.	 	Entire Agreement; Modification. This Agreement, together with the
exhibits attached hereto, which are incorporated herein by this reference, constitutes

6

 

	 	 	 	the entire agreement between the parties and supersedes all prior oral or written
negotiations and agreements between the parties with respect to the subject matter
hereof. No modification, variation or amendment of this Agreement (including any
exhibit hereto) shall be effective unless made in writing and signed by both parties.

	 	f.	 	Severability; Non-Waiver. In the event that any of the terms,
conditions, or provisions of this Agreement are held to be illegal, unenforceable, or
invalid by any court of competent jurisdiction, the remaining terms, conditions, or
provisions hereof shall remain in full force and effect. The failure or delay of
either party to enforce at any time any provision of this Agreement shall not
constitute a waiver of such party’s right thereafter to enforce each and every
provision of this Agreement.
	 
	 	g.	 	Contractor shall comply at its own expense with the provisions of all
applicable federal, state and municipal requirements applicable to Contractor as an
employer of labor and as applicable to the provision of the Services under this
Agreement.
	 
	 	h.	 	Contractor and its employees, agents, and permitted subcontractors shall not
offer or give to an officer, employee, or agent of Leap any services, gifts,
entertainment, payments, loans or other special favors which might appear to be offered
to influence or possibly influence the award of a contract or to obtain favorable
treatment under a contract. Contractor and its employees, agents and permitted
subcontractors further agree not to perform services for or engage in activities with
any officer, employee or agent of Leap that would in any way present a conflict of
interest with respect to the Services performed under this Agreement. Violation of
this provision may be deemed by Leap to be a material breach and subject all contracts
or agreements with Contractor to termination for default, as well as any other remedy
available at law or in equity.

	17.	 	POSITION AS OFFICER OF LEAP
	 
	 	 	17.1 Leap’s Board appointed Contractor as acting chief accounting officer, to serve in such
position at the pleasure of the Leap Board, and Contractor agrees that he will accept such
appointment and serve in such position at the pleasure of the Leap Board during the term of
this Agreement, subject to Leap’s compliance with the provisions of Section 17.3.
	 
	 	 	17.2 Leap and Contractor have entered into an Indemnification Agreement.

7

 

	 	 	17.3 Leap has added Contractor as an “insured” under its existing directors’ and officers’
insurance policies.

	 	 	 	 	 	 	 	 	 
	Leap Wireless International, Inc.	 	 	 	Steven R. Martin
	 
	 	 	 	 	 	 	 	 
	Name:

	 	/s/ Robert J. Irving, Jr.
	 	 	 	Name:
	 	/s/ Steve Martin
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	SVP
	 	 	 	Title:
	 	Acting Chief Accounting Officer
	Date:

	 	02/27/08
	 	 	 	Date:
	 	02/27/08

8

 

CONTRACTOR INFORMATION

	 	 	 	 
	For Tax Purposes:
	 	 	 
	Contractor Name:

	 	Steven R. Martin	 
	Corporation:
	 	 No 	 
	Social Security Number:

	 	W-9 on file	 

 

 

EXHIBIT A

Contractor Services

Statement of Work

In performing services under this agreement, Contractor will report to the chief financial officer
(including as applicable the acting chief financial officer) of Leap. On a day to day basis,
Contractor will coordinate his activities with Bill Ingram, unless otherwise directed by the chief
financial officer (including as applicable the acting chief financial officer).

Contractor will perform the following tasks and have the following responsibilities:

The primary responsibilities for this position will be to manage and direct the monthly and
quarterly financial closing calendar, oversee technical accounting matters, be the primary
contact for PWC audit coordination, support the CEO/CFO certifications on financials,
oversee financial reporting, support SEC filings, provide management reporting, work in
cooperation with internal audit, ensure timely tax filings and work closely with the CFO on
other financial matters.

Additionally, the position will support communications with the Audit Committee, assist in
remediation of internal control weaknesses, shorten the monthly financial closing cycle,
complete the 2008 baseline budget, develop a forecasting and budget calendar for 2008 and
2009, and create accurate forecast updates to senior management on a timely basis. 
Contractor will serve as a representative for the accounting group on issues and
opportunities within all Leap operations, direct the hiring of the open accounting
positions, and oversee the development of a comprehensive training program for remediation
of material control weaknesses.

In addition, as noted in Section 17, Contractor agrees to serve as the chief accounting
officer of Leap, and to serve at the pleasure of the Leap Board.

 

 

EXHIBIT B

Compensation and Reimbursement

Compensation:

Contractor shall be paid $25,000 per month to be billed on a monthly basis.

In addition, subject to and effective upon the date of Contractor’s appointment by the Leap Board
as the chief accounting officer of Leap, Contractor shall be granted 3,000 shares of Leap
restricted stock at a purchase price of $0.0001 per share, with such restricted stock to vest in
full on June 30, 2008 conditioned on the performance of Services by Contractor through such date.
In addition, such restricted stock shall vest in full on June 30, 2008 if this Consulting Agreement
is terminated by the Company without “cause” or is terminated by Contractor for “good reason” (as
such terms are defined in the restricted stock agreement.).

One thousand of such shares (if vested) will be deliverable to Contractor on June 30, 2008 and
2,000 of such shares (if vested) will be deliverable to Contractor on December 31, 2008. The terms
of the restricted stock agreement governing Contractor’s award of restricted stock shall be
substantially in accordance with Leap’s standard form of restricted stock agreement except as
otherwise described above.

Contractor will also be eligible for a consulting term bonus of up to $50,000, payable at the
discretion of the Company based upon management’s evaluation of Contractor’s performance under the
Agreement.

The compensation specified above includes all elements of Contractor’s cost of providing Services
(e.g., direct labor, overhead, general and administrative expenses and profit), excluding out of
pocket expenses reimbursable to Consultant in accordance with the Company’s standard expense
reimbursement practices.

In no event shall the total payments made under this Agreement exceed the maximum amount specified
in Section 2(a) of this Agreement, without execution of a written amendment to this Agreement by
duly authorized representatives of Leap and Contractor.

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