Document:

exv10w15

EXHIBIT 10.15

THE 2009 EMPLOYMENT INDUCEMENT EQUITY INCENTIVE PLAN

OF LEAP WIRELESS INTERNATIONAL, INC.

          Leap Wireless International, Inc., a Delaware corporation, has adopted the 2009 Employment
Inducement Equity Incentive Plan of Leap Wireless International, Inc. (the “Plan”),
effective February 10, 2009 (the “Effective Date”), for the benefit of Eligible Individuals
(as defined below).

          The purposes of the Plan are as follows:

          (1) To provide an additional incentive for Eligible Individuals to further the growth,
development and financial success of the Company by personally benefiting through the ownership of
Company stock and/or rights which recognize such growth, development and financial success.

          (2) To enable the Company to obtain and retain the services of Eligible Individuals considered
essential to the long-range success of the Company by offering them an opportunity to own stock in
the Company which will reflect the growth, development and financial success of the Company.

          All Awards granted under the Plan are intended to constitute “employment inducement awards”
within the meaning of Nasdaq Stock Market Rule 4350(i)(1)(A)(iv). Awards under the Plan may only
be made in compliance with such rule and other requirements as may be imposed by The Nasdaq Stock
Market in connection with employment inducement awards.

ARTICLE I.

DEFINITIONS

          Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

          1.1. “Administrator” shall mean the entity that conducts the general administration of
the Plan as provided herein. The term “Administrator” shall refer to the Committee unless the
Board has elected to exercise any of the rights and duties of the Committee under the Plan
generally as provided in Section 9.2.

          1.2. “Award” shall mean an Option, a Restricted Stock award or a Deferred Stock Unit
award granted or awarded under the Plan.

          1.3. “Award Agreement” shall mean a written agreement executed by an authorized
officer of the Company and the Holder which shall contain such terms and conditions with respect to
an Award as the Administrator shall determine, consistent with the Plan.

 

 

          1.4. “Board” shall mean the Board of Directors of the Company.

          1.5. “Change in Control” shall mean the occurrence of any of the following events, if
such event occurs on or after the Effective Date:

               (a) the occurrence of clauses (I) and (II), where clause (I) is: the acquisition, directly or
indirectly, by any “person” or “group” (as those terms are defined in Sections 3(a)(9), 13(d), and
14(d) of the Exchange Act and the rules thereunder) of “beneficial ownership” (as determined
pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the
election of directors (“voting securities”) of the Company that represent thirty-five percent (35%)
or more of the combined voting power of the Company’s then outstanding voting securities, other
than

          (i) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company or
any person controlled by the Company or by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any person controlled by the
Company, or

          (ii) an acquisition of voting securities, directly or indirectly by the
Company, or

          (iii) an acquisition of voting securities pursuant to a transaction described
in subsection (c) below that would not be a Change in Control under subsection (c),
or

          (iv) an acquisition of voting securities, directly or indirectly, by a person
who or group which beneficially owns, as of the Effective Date, voting securities of
the Company that represent five percent (5%) or more of the combined voting power of
the Company’s outstanding voting securities on such Effective Date;

provided, however, that, notwithstanding the foregoing, an acquisition of the Company’s securities
by the Company which causes the Company’s voting securities beneficially owned by a person or group
to represent thirty-five percent (35%) or more of the combined voting power of the Company’s then
outstanding voting securities shall not constitute an “acquisition” by any person or group for
purposes of this clause (I); provided further, that if a person or group shall become the
beneficial owner of thirty-five percent (35%) or more of the combined voting power of the Company’s
then outstanding voting securities by reason of share acquisitions by the Company as described
above and shall, after such share acquisitions by the Company, become the beneficial owner of any
additional voting securities of the Company, then such acquisition shall constitute an acquisition
for purposes of clause (I); and

clause (II) is the circumstance of individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”) ceasing for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a Director subsequent to the Effective Date whose
appointment, election, or nomination for election by the Company’s shareholders was

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approved by a vote of at least a majority of the Directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office as a Director occurs as a
result of an actual or threatened election contest with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board.

Notwithstanding the foregoing, clause (II) shall not apply, and the occurrence of clause (I) shall
be sufficient to constitute a Change in Control if the acquisition described in clause (I) is by a
Strategic Investor; provided, however, that clause (II) shall nonetheless apply if the Strategic
Investor enters into a standstill agreement with the Company (for the duration of such agreement).
For purposes of this subsection (a),“Strategic Investor” shall mean any buyer of or investor in of
voting securities of the Company whose primary business is not financial investing;

               (b) the consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more subsidiaries or intermediaries) of: (i) a merger,
consolidation, reorganization, or business combination or (ii) a sale or other disposition of all
or substantially all of the Company’s assets, other than a transaction

          (I) which results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding or
by being converted into voting securities of the Company or the person that, as a
result of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person, the
“Company Successor Entity”)), directly or indirectly, more than fifty percent (50%)
of the combined voting power of the Company Successor Entity’s outstanding voting
securities immediately after the transaction, and

          (II) after which more than fifty percent (50%) of the members of the board of
directors of the Company Successor Entity were members of the Incumbent Board at the
time of the Board’s approval of the agreement providing for the transaction or other
action of the Board approving the transaction, and

          (III) after which no person or group beneficially owns voting securities
representing thirty-five percent (35%) or more of the combined voting power of the
Company Successor Entity; provided, however, that no person or group shall be
treated for purposes of this clause (III) as beneficially owning thirty-five percent
(35%) or more of the combined voting power of the Company Successor Entity solely as
a result of the voting power held in the Company by such person or group prior to
the consummation of the transaction;

               (c) a liquidation or dissolution of the Company;

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               (d) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and the rules thereunder) of
“beneficial ownership” (as determined pursuant to Rule l3d-3 under the Exchange Act) of securities
entitled to vote generally in the election of directors (“voting securities”) of Cricket
Communications, Inc. (“Cricket”)that represent fifty percent (50%) or more of the combined voting
power of Cricket’s then outstanding voting securities, other than

          (i) an acquisition of Cricket’s voting securities, directly or indirectly, by
the Company or any person controlled by the Company, or

          (ii) an acquisition of Cricket’s voting securities pursuant to a transaction
described in subsection (e) below that would not be a Change in Control under
subsection (e); or

               (e) the consummation by Cricket (whether directly involving Cricket or indirectly involving
Cricket through one or more subsidiaries or intermediaries) of (i) a merger, consolidation,
reorganization, or business combination or (ii) a sale or other disposition of all or substantially
all of Cricket’s assets, other than a transaction which results in Cricket’s voting securities
outstanding immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of Cricket or the person that, as a result
of the transaction, controls, directly or indirectly, Cricket or owns, directly or indirectly, all
or substantially all of Cricket’s assets or otherwise succeeds to the business of Cricket (Cricket
or such person, the “Cricket Successor Entity “)),directly or indirectly, more than fifty percent
(50%) of the combined voting power of the Cricket Successor Entity’s outstanding voting securities
immediately after the transaction.

For purposes of subsection (a) above, the calculation of voting power shall be made as if the date
of the acquisition were a record date for a vote of the Company’s shareholders, and for purposes of
subsection (b) above, the calculation of voting power shall be made as if the date of the
consummation of the transaction were a record date for a vote of the Company’s shareholders. For
purposes of subsection (d) above, the calculation of voting power shall be made as if the date of
the acquisition were a record date for a vote of Cricket’s shareholders, and for purposes of
subsection (e) above, the calculation of voting power shall be made as if the date of the
consummation of the transaction were a record date for a vote of Cricket’s shareholders.

          1.6. “Code” shall mean the Internal Revenue Code of 1986, as amended.

          1.7. “Committee” shall mean the Compensation Committee of the Board, or another
committee or subcommittee of the Board, appointed as provided in Section 9.1 or 9.5.

          1.8. “Common Stock” shall mean the common stock of the Company, par value $.0001 per
share.

          1.9. “Company” shall mean Leap Wireless International, Inc., a Delaware corporation.

          1.10. “Consultant” shall mean any consultant or adviser if (a) the consultant or
adviser renders bona fide services to the Company or a Subsidiary, (b) the services rendered by

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the consultant or adviser are not in connection with the offer or sale of securities in a
capital raising transaction and do not directly or indirectly promote or maintain a market for the
Company’s securities, and (c) the consultant or adviser is a natural person who has contracted
directly with the Company or a Subsidiary to render such services.

          1.11. “Deferred Stock Unit” shall mean a deferred stock unit award awarded under
Article VIII of the Plan.

          1.12. “Director” shall mean a member of the Board.

          1.13. “DRO” shall mean a domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

          1.14. “Eligible Individual” means any Employee who has not previously been an Employee
or member of the Board or an Employee or member of the board of directors of any Parent or
Subsidiary, or following a bona fide period of non-employment by the Company or a Parent or
Subsidiary, if he or she is granted an Award in connection with his or her commencement of
employment with the Company or a Subsidiary and such grant is an inducement material to his or her
entering into employment with the Company or a Subsidiary. The Administrator may, in its
discretion, adopt procedures from time to time to ensure that an Employee is eligible to
participate in the Plan prior to the granting of any Awards to such Employee under the Plan

          1.15. “Employee” shall mean any officer or other employee (as defined in accordance
with Section 3401(c) of the Code) of the Company, or of any corporation which is a Subsidiary.

          1.16. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          1.17. “Fair Market Value” of a share of Common Stock as of a given date shall be: (a)
the closing price of a share of Common Stock 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), on such date, or if shares were not traded on such date, then on the next preceding date
on which a trade occurred, or (b) if the Common Stock is not publicly traded on an exchange but is
quoted on an automated quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on such date as reported by such automated quotation system, or (c) if
Common Stock is not publicly traded on an exchange, and not quoted on an automated quotation
system, the fair market value of a share of Common Stock as established by the Administrator acting
in good faith.

          1.18. “Holder” shall mean a person who has been granted an Award.

          1.19. “Incentive Stock Option” shall mean an option which conforms to the applicable
provisions of Section 422 of the Code and which is designated as an Incentive Stock Option by the
Administrator.

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          1.20. “Independent Director” shall mean a Director of the Company who is not an
Employee and who qualifies as “independent” within the meaning of Nasdaq Stock Market Rule
4200(a)(14), if the Company’s securities are traded on the Nasdaq Global Market, or the
requirements of any other established stock exchange on which the Company’s securities are traded,
as such rules or requirements may be amended from time to time.

          1.21. “Non-Qualified Stock Option” shall mean an Option which is not an Incentive
Stock Option.

          1.22. “Option” shall mean a stock option granted under Article IV of the Plan. An
Option granted under the Plan shall be a Non-Qualified Stock Option.

          1.23. “Parent” shall mean any corporation in an unbroken chain of corporations ending
with the Company if each of the corporations other than the last corporation in the unbroken chain
then owns stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain or any other entity which
beneficially owns directly or indirectly a majority of the outstanding voting stock or voting power
of the Company.

          1.24. “Plan” shall mean the 2009 Employment Inducement Equity Incentive Plan of Leap
Wireless International, Inc.

          1.25. “Restricted Stock” shall mean shares of Common Stock awarded under Article VII
of the Plan.

          1.26. “Rule 16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act, as such
Rule may be amended from time to time.

          1.27. “Securities Act” shall mean the Securities Act of 1933, as amended.

          1.28. “Subsidiary” shall mean any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain or any other entity of
which a majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

          1.29. “Substitute Award” shall mean an Option granted under this Plan upon the
assumption of, or in substitution for, outstanding equity awards previously granted by a company or
other entity in connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no event shall the
term “Substitute Award” be construed to refer to an award made in connection with the cancellation
and repricing of an Option.

          1.30. “Termination of Consultancy” shall mean the time when the engagement of a Holder
as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, by resignation, discharge, death, disability or
retirement, but excluding terminations where there is a simultaneous commencement of

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employment with the Company or any Subsidiary. The Administrator, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination of Consultancy
resulted from a termination for cause, and all questions of whether a particular leave of absence
constitutes a Termination of Consultancy.

          1.31. “Termination of Directorship” shall mean the time when a Holder who is a
Director ceases to be a Director for any reason, including, but not by way of limitation, a
termination by resignation, removal, failure to be elected or reelected, death, disability or
retirement. The Administrator, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship, including, but not by way of
limitation, the question of whether a Termination of Directorship resulted from a termination for
cause, and all questions of whether a particular leave of absence constitutes a Termination of
Directorship.

          1.32. “Termination of Employment” shall mean the time when the employee-employer
relationship between a Holder and the Company or any Subsidiary is terminated for any reason, with
or without cause, including, but not by way of limitation, a termination by resignation, discharge,
death, disability or retirement; but excluding (a) terminations where there is a simultaneous
reemployment or continuing employment of a Holder by the Company or any Subsidiary, (b) at the
discretion of the Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting or directorship relationship by the
Company or a Subsidiary with the former employee. The Administrator, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment.

ARTICLE II.

SHARES SUBJECT TO PLAN

          2.1. Shares Subject to Plan. The shares of stock subject to Awards shall be Common
Stock, subject to adjustment as provided in Section 10.3. Subject to adjustment as provided in
Section 10.3, the aggregate number of such shares which may be issued with respect to Awards
granted under the Plan shall not exceed 300,000. The shares of Common Stock issuable with respect
to such Awards may be either previously authorized but unissued shares or treasury shares.

          2.2. Add-Back of Options and Other Rights. If any Award expires, terminates or is
canceled without having been fully exercised, the number of shares subject to such Award but as to
which such Award was not exercised prior to its expiration, termination or cancellation may again
be optioned hereunder, subject to the limitations of Section 2.1. If any shares of Restricted
Stock are surrendered by the Holder or repurchased by the Company pursuant to Section 7.4 or 7.5
hereof, such shares may again be granted or awarded hereunder, subject to the limitations of
Section 2.1. Furthermore, any shares subject to Awards which are adjusted pursuant to Section 10.3
and become exercisable with respect to shares of stock of another

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corporation shall be considered cancelled for purposes of this Section 2.2 and may again be
granted or awarded hereunder, subject to the limitations of Section 2.1. Shares of Common Stock
which are delivered by the Holder or withheld by the Company upon the exercise of any Award under
the Plan, in payment of the exercise or purchase price thereof, or tax withholding thereon, may
again be granted or awarded hereunder, subject to the limitations of Section 2.1.

ARTICLE III.

GRANTING OF AWARDS

          3.1. Award Agreement. Each Award shall be evidenced by an Award Agreement. The
Administrator may, in its discretion, include such further provisions and limitations in any Award
Agreement at the time of the grant of such Award which are not inconsistent with the terms of the
Plan.

          3.2. Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule
16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, the Plan and Awards granted hereunder shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.

          3.3. At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder
shall confer upon any Holder any right to continue in the employ of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which
are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever or no
reason, with or without cause, except to the extent expressly provided otherwise in a written
employment agreement between the Holder and the Company or any Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS

          4.1. Eligibility. Any Eligible Individual selected by the Administrator pursuant to
Section 4.2(a)(i) shall be eligible to be granted an Option.

          4.2. Granting of Options to Eligible Individuals.

               (a) The Administrator shall from time to time, in its absolute discretion, and subject to
applicable limitations of the Plan:

          (i) Select from among the Eligible Individuals such of them as in its opinion
should be granted Options;

          (ii) Determine the number of shares to be subject to such Options granted to
the selected Eligible Individuals;

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          (iii) Subject to Articles V and VI, determine the terms and conditions of such
Options, consistent with the Plan (including, without limitation, the exercise price
per share, vesting, exercisability and term of the Option, the manner in which the
exercise price shall be paid, the terms and conditions under which the Option may be
exercised prior to vesting for restricted shares of Common Stock, the transfer,
escrow, repurchase and other restrictions applicable to such restricted shares of
Common Stock, and the extent to which an election under Section 83(b) of the Code
may be made with respect to such restricted shares of Common Stock).

               (b) Upon the selection of an Eligible Individual to be granted an Option, the Administrator
shall instruct the Secretary of the Company to issue the Option and may impose such conditions on
the grant of the Option as it deems appropriate.

ARTICLE V.

TERMS OF OPTIONS

          5.1. Option Price. The price per share of the shares subject to each Option granted
to Eligible Individuals shall be set by the Administrator; provided, however, that such price shall
be no less than the par value of a share of Common Stock, unless otherwise permitted by applicable
state law.

          5.2. Option Term. The term of an Option granted to an Eligible Individual shall be
set by the Administrator in its discretion.

          5.3. Option Vesting.

               (a) The period during which the right to exercise, in whole or in part, an Option granted to
an Eligible Individual vests in the Holder shall be set by the Administrator and the Administrator
may determine that an Option may not be exercised in whole or in part for a specified period after
it is granted. At any time after grant of an Option, the Administrator may, in its sole and
absolute discretion and subject to whatever terms and conditions it selects, accelerate the period
during which an Option granted to an Eligible Individual vests.

               (b) No portion of an Option granted to an Eligible Individual which is unexercisable at
Termination of Employment, Termination of Consultancy or Termination of Directorship, as
applicable, shall thereafter become exercisable, except as may be otherwise provided by the
Administrator either in the Award Agreement or by action of the Administrator following the grant
of the Option.

          5.4. Substitute Awards. Notwithstanding any of the foregoing provisions of this
Article V to the contrary, in the case of an Option that is a Substitute Award, the price per share
of the shares subject to such Option may be less than the Fair Market Value per share on the date
of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award; over (b) the aggregate
exercise price thereof, does not exceed the excess of: (c) the aggregate fair market value (as of
the time immediately preceding the transaction giving rise to the Substitute Award,

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such fair market value to be determined by the Administrator) of the shares of the predecessor
entity that were subject to the grant assumed or substituted for by the Company; over (d) the
aggregate exercise price of such shares.

ARTICLE VI.

EXERCISE OF OPTIONS

          6.1. Partial Exercise. An exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to fractional shares and the Administrator
may require that, by the terms of the Option, a partial exercise be with respect to a minimum
number of shares.

          6.2. Manner of Exercise. All or a portion of an exercisable Option shall be deemed
exercised upon delivery of all of the following to the Secretary of the Company (or the Company
office designated by the Secretary of the Company):

               (a) A written notice complying with the applicable rules established by the Administrator
stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the
Holder or other person then entitled to exercise the Option or such portion of the Option;

               (b) Such representations and documents as the Administrator, in its absolute discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal or state securities laws or regulations. The Administrator may, in its
absolute discretion, also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;

               (c) In the event that the Option shall be exercised pursuant to Section 9.1 by any person or
persons other than the Holder, appropriate proof of the right of such person or persons to exercise
the Option; and

               (d) Full cash payment to the Secretary of the Company for the shares with respect to which the
Option, or portion thereof, is exercised. However, the Administrator may, in its discretion, (i)
allow payment, in whole or in part, through the delivery of shares of Common Stock which have been
owned by the Holder for at least six months, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (ii) allow payment, in whole or in part, through the surrender of shares
of Common Stock then issuable upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof;
(iii) allow payment, in whole or in part, through the delivery of a notice that the Holder has
placed a market sell order with a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that
payment of such proceeds is then made to the Company upon settlement of such sale; or (iv) allow
payment through any combination of the

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consideration provided in the foregoing subparagraphs (i), (ii) and (iii). Payment in the
manner prescribed by the preceding sentences shall not be permitted to the extent that the
Administrator determines that payment in such manner may result in an extension or maintenance of
credit, an arrangement for the extension of credit, or a renewal of an extension of credit in the
form of a personal loan to or for any Director or executive officer of the Company that is
prohibited by Section 13(k) of the Exchange Act or other applicable law.

          6.3. Conditions to Issuance of Stock Certificates. The Company shall not be required
to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise
of any Option or portion thereof prior to fulfillment of all of the following conditions:

               (a) The admission of such shares to listing on all stock exchanges on which such class of
stock is then listed;

               (b) The completion of any registration or other qualification of such shares under any state
or federal law, or under the rulings or regulations of the Securities and Exchange Commission or
any other governmental regulatory body which the Administrator shall, in its absolute discretion,
deem necessary or advisable;

               (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable;

               (d) The lapse of such reasonable period of time following the exercise of the Option as the
Administrator may establish from time to time for reasons of administrative convenience; and

               (e) The receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which in the discretion of the Administrator may be in the form of
consideration used by the Holder to pay for such shares under Section 6.2(d), subject to Section
10.4.

          6.4. Rights as Stockholders. Holders shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable upon the exercise
of any part of an Option unless and until certificates representing such shares have been issued by
the Company to such Holders.

          6.5. Exercise Ownership and Transfer Restrictions. The Administrator, in its absolute
discretion, may impose such restrictions on the exercise of an Option and the ownership and
transferability of the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Award Agreement and may be referred to on
the certificates evidencing such shares.

          6.6. Limitations on Exercise of Options Granted to Employees and Consultants. Unless
otherwise provided by the Administrator in the Award Agreement, no Option granted to an Eligible
Individual may be exercised to any extent by anyone after the first to occur of the following
events:

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               (a) The expiration of twelve (12) months from the date of the Holder’s death;

               (b) The expiration of twelve (12) months from the date of the Holder’s Termination of
Employment, Termination of Consultancy or Termination of Directorship, as applicable, as
applicable, by reason of his or her permanent and total disability (within the meaning of Section
22(e)(3) of the Code);

               (c) The expiration of three months from the date of the Holder’s Termination of Employment,
Termination of Consultancy or Termination of Directorship, as applicable, for any reason other than
such Holder’s termination by the Company or a Subsidiary for “Cause” (as defined in the Holder’s
employment or consulting agreement with the Company in effect on the grant date of the Option, or,
if the Holder does not have an employment or consulting agreement with the Company or the Holder’s
employment or consulting agreement does not include a definition of “Cause”, as defined in the
Award Agreement), death or permanent and total disability, unless the Holder dies within said
three-month period;

               (d) The Holder’s termination by the Company or a Subsidiary for “Cause” (as defined in the
Holder’s employment or consulting agreement with the Company in effect on the grant date of the
Option, or, if the Holder does not have an employment or consulting agreement with the Company or
the Holder’s employment or consulting agreement does not include a definition of “Cause”, as
defined in the Award Agreement); or

               (e) The expiration of ten (10) years from the date the Option was granted.

          6.7. Additional Limitations on Exercise of Options. Holders may be required to comply
with any timing or other restrictions with respect to the settlement or exercise of an Option,
including a window-period limitation, as may be imposed in the discretion of the Administrator.

ARTICLE VII.

AWARDING OF RESTRICTED STOCK

          7.1. Eligibility. Shares of Restricted Stock may be awarded to any Eligible
Individual whom the Administrator determines determines should receive such an Award.

          7.2. Award of Restricted Stock.

               (a) The Administrator may from time to time, in its absolute discretion:

          (i) Select from among the Eligible Individuals such of them as in its opinion
should be awarded Restricted Stock; and

          (ii) Determine the terms and conditions applicable to such Restricted Stock,
consistent with the Plan.

12

 

               (b) The Administrator shall establish the purchase price, if any, and form of payment for
Restricted Stock; provided, however, that such purchase price shall be no less than the par value
of the Common Stock to be purchased, unless otherwise permitted by applicable state law. In all
cases, legal consideration shall be required for each issuance of Restricted Stock.

               (c) Upon the selection of an Eligible Individual to be awarded Restricted Stock, the
Administrator shall instruct the Secretary of the Company to issue such Restricted Stock and may
impose such conditions on the issuance of such Restricted Stock, as it deems appropriate.

          7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 7.6, the Holder shall have, unless
otherwise provided by the Administrator, all the rights of a stockholder with respect to said
shares, subject to the restrictions in his or her Award Agreement, including the right to receive
all dividends and other distributions paid or made with respect to the shares; provided, however,
that, in the discretion of the Administrator, any extraordinary distributions with respect to the
Common Stock shall be subject to the restrictions set forth in Section 7.4.

          7.4. Restriction. All shares of Restricted Stock issued under the Plan (including any
shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock
dividends, stock splits or any other form of recapitalization) shall, in the terms of each
individual Award Agreement, be subject to such restrictions as the Administrator shall provide,
which restrictions may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment or consultancy with the Company,
Company performance and individual performance; provided, however, by action taken after the shares
of Restricted Stock are issued, the Administrator may, in its sole and absolute discretion and
subject to whatever terms and conditions it determines, remove any or all of the restrictions
imposed by the terms of the Award Agreement. Shares of Restricted Stock may not be sold or
encumbered until all restrictions are terminated or expire. Except as otherwise provided in the
Award Agreement, if no consideration was paid by the Holder upon issuance, a Holder’s rights in
unvested Shares of Restricted Stock shall lapse, and such shares of Restricted Stock shall be
surrendered to the Company without consideration, upon Termination of Employment, Termination of
Consultancy or Termination of Directorship, as applicable.

          7.5. Repurchase of Restricted Stock. The Administrator may provide in the terms of
each individual Award Agreement that the Company shall have the right to repurchase from the Holder
the shares of Restricted Stock then subject to restrictions under the Award Agreement immediately
upon a Termination of Employment, Termination of Consultancy or Termination of Directorship, as
applicable, at a cash price per share equal to the price paid by the Holder for such Restricted
Stock.

          7.6. Escrow. The Secretary of the Company or such other escrow holder as the
Administrator may appoint shall retain physical custody of each certificate representing shares of
Restricted Stock until all of the restrictions imposed under the Award Agreement with respect to
the shares evidenced by such certificate expire or shall have been removed.

13

 

          7.7. Legend. In order to enforce the restrictions imposed upon shares of Restricted
Stock hereunder, the Administrator shall cause a legend or legends to be placed on certificates
representing all shares of Restricted Stock that are still subject to restrictions under Award
Agreements, which legend or legends shall make appropriate reference to the conditions imposed
thereby.

          7.8. Code Section 83(b) Election. If a Holder makes an election under Section 83(b)
of the Code, or any successor section thereto, to be taxed with respect to the Restricted Stock as
of the date of transfer of the shares of Restricted Stock rather than as of the date or dates upon
which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall
deliver a copy of such election to the Company immediately after filing such election with the
Internal Revenue Service.

          7.9. Conditions to Issuance of Shares of Common Stock. The Company shall not be
required to issue or deliver any certificate or certificates for shares of Restricted Stock prior
to fulfillment of all of the conditions set forth in Section 6.3.

ARTICLE VIII.

AWARDING OF DEFERRED STOCK UNITS

          8.1. Eligibility. Deferred Stock Unit awards may be awarded to any Eligible
Individual whom the Administrator who the Administrator determines should receive such an Award. A
Deferred Stock Unit shall represent the right to receive shares of Common Stock in accordance with
this Article VIII.

          8.2. Awards of Deferred Stock Units.

               (a) The Administrator may from time to time, in its absolute discretion:

          (i) Select from among the Eligible Individuals such of them as in its opinion
should be awarded Deferred Stock Unit awards;

          (ii) Determine the number of Deferred Stock Units to be awarded; and

          (iii) Determine the terms and conditions applicable to such Deferred Stock Unit
award, consistent with the Plan.

               (b) The Administrator shall establish the purchase price, if any, and form of payment for
Deferred Stock Unit awards; provided, however, that such purchase price shall be no less than the
par value of the Common Stock to be purchased, unless otherwise permitted by applicable state law.
In all cases, legal consideration shall be required for each issuance of shares of Common Stock
pursuant to Deferred Stock Units.

               (c) The Administrator shall determine the terms regarding the issuance of shares of Common
Stock issuable pursuant to a Deferred Stock Unit award and may provide

14

 

that such terms are subject to an election by the Eligible Individual to whom such Award is to
be or has been awarded in accordance with Section 8.5. The Administrator may provide for the
deferral of the issuance of the shares of Common Stock issuable pursuant to a Deferred Stock Unit
award at the election of the Employee, Director or Consultant to whom the Award is to be or has
been awarded.

          8.3. Issuance of Common Stock; Rights as Stockholder. Shares of Common Stock
underlying a Deferred Stock Unit award will not be issued until the Deferred Stock Unit award has
vested, pursuant to a vesting schedule or performance goals set by the Administrator, and such
shares of Common Stock become issuable pursuant to the terms of the Deferred Stock Unit award.
Unless otherwise provided by the Administrator, a Holder of a Deferred Stock Unit award shall have
no rights as a Company stockholder with respect to the shares of Common Stock underlying such
Deferred Stock Unit award until such time as the Award has vested and the Shares of Common Stock
underlying the Award have been issued pursuant to the Deferred Stock Unit award.

          8.4. Form of Payment. Payment of the amount determined under Section 8.2(b) above
shall be in cash, in Common Stock or a combination of both, as determined by the Administrator.

          8.5. Conditions to Issuance of Shares of Common Stock. The Company shall not be
required to issue or deliver any certificate or certificates for shares of Common Stock issuable
pursuant to the terms of a Deferred Stock Unit award prior to fulfillment of all of the conditions
set forth in Section 6.3.

ARTICLE IX.

ADMINISTRATION

          9.1. Administrator. The Plan will be administered by a Committee of two or more
Independent Directors, and the term “Administrator” will apply to any person or persons to whom
such authority has been delegated. As of the Effective Date, the Plan will be administered by the
Compensation Committee of the Board. The Board may at any time re-vest in the Board the
administration of the Plan and thereafter for purposes of the Plan the term “Administrator” as used
in this Plan will be deemed to refer to the Board; provided, however, that any action taken by the
Board in connection with the administration of the Plan shall not be deemed approved by the Board
unless such action is approved by a majority of the Independent Directors. Appointment of
Committee members shall be effective upon acceptance of appointment. Committee members may resign
at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by
the Board. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3
promulgated under the Exchange Act, Awards under the Plan may be made by the entire Board
(provided, however, that any action taken by the Board in connection with the administration of the
Plan shall not be deemed approved by the Board unless such action is approved by a majority of the
Independent Directors) or a Committee meeting the requirements set forth above and such other
requirements as may be established from time to time by the Securities and Exchange Commission for
Awards intended to qualify for exemption under Rule 16b-3 promulgated under the Exchange Act.

15

 

          9.2. Duties and Powers of Committee. It shall be the duty of the Committee to conduct
the general administration of the Plan in accordance with its provisions. The Committee shall have
the power to interpret the Plan and the Award Agreements, and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent therewith, and to
interpret, amend or revoke any such rules. The Committee shall also have the power to amend any
Award Agreement provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement are not affected adversely; provided, however, that without the
approval of the stockholders of the Company, neither the Committee nor the Board shall authorize
the amendment of any outstanding Option to reduce its exercise price. Notwithstanding anything
contained herein, no Option shall be canceled and replaced with the grant of an Option having a
lesser exercise price without the approval of the stockholders of the Company. Grants of Options
under the Plan need not be the same with respect to each Holder. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and duties of the Committee
under the Plan.

          9.3. Majority Rule; Unanimous Written Consent. The Committee shall act by a majority
of its members in attendance at a meeting at which a quorum is present or by a memorandum or other
written instrument signed by all members of the Committee.

          9.4. Compensation; Professional Assistance; Good Faith Actions. Members of the
Committee shall receive such compensation, if any, for their services as members as may be
determined by the Board. All expenses and liabilities which members of the Committee incur in
connection with the administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers or
other persons. The Committee, the Company and the Company’s officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee or the Board in good faith shall
be final and binding upon all Holders, the Company and all other interested persons. No members of
the Committee or Board shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or Awards, and all members of the Committee and the
Board shall be fully protected by the Company in respect of any such action, determination or
interpretation.

ARTICLE X.

MISCELLANEOUS PROVISIONS

          10.1. Transferability of Awards.

               (a) Except as otherwise provided in Section 10.1(b):

          (i) No Award or interest or right therein may be sold, pledged, assigned or
transferred in any manner other than by will or the laws of descent and distribution
or, subject to the consent of the Administrator, pursuant to a DRO; provided,
however, after the shares underlying an Award have been issued, and all restrictions
applicable to such shares have terminated or lapsed, then such shares may be sold,
pledged, assigned or transferred;

16

 

          (ii) The interest or rights of a Holder, or his or her successors in interest,
in an Award shall not be subject to any liability for the debts, contracts or
engagements of the Holder or his or her successors in interest, and no Award or
interest or right therein shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of no
effect, except to the extent that such disposition is permitted by paragraph (i);
and

          (iii) During the lifetime of the Holder, only he or she may exercise an Option
(or any portion thereof) granted to him or her under the Plan, unless it has been
disposed of pursuant to a DRO or to a Permitted Transferee. After the death of the
Holder, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Award Agreement, be
exercised by his personal representative or by any person empowered to do so under
the deceased Holder’s will or under the then applicable laws of descent and
distribution.

               (b) Notwithstanding Section 10.1(a), the Administrator, in its sole discretion, may determine
to permit a Holder to transfer a Non-Qualified Stock Option to any one or more Permitted
Transferees (as defined below), subject to the following terms and conditions: (i) a Non-Qualified
Stock Option transferred to a Permitted Transferee shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent and distribution; (ii) any
Non-Qualified Stock Option which is transferred to a Permitted Transferee shall continue to be
subject to all the terms and conditions of the Non-Qualified Stock Option as applicable to the
original Holder (other than the ability to further transfer the Non-Qualified Stock Option); and
(iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation documents to (A) confirm the status of the transferee
as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under
applicable federal and state securities laws and (C) evidence the transfer. For purposes of this
Section 10.1(b), “Permitted Transferee” shall mean, with respect to a Holder, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Holder’s household (other than a tenant or
employee), a trust in which these persons (or the Holder) control the management of assets, and any
other entity in which these persons (or the Holder) own more than fifty percent (50%) of the voting
interests, or any other transferee specifically approved by the Administrator after taking into
account any state or federal tax or securities laws applicable to transferable Non-Qualified Stock
Options.

     10.2. Amendment Suspension or Termination of the Plan. Except as otherwise provided
in this Section 10.2, the Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board. No amendment, suspension or
termination of the Plan shall, without the consent of the Holder, alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the

17

 

Award itself otherwise expressly so provides. No Awards may be granted or awarded during any
period of suspension or after termination of the Plan, and in no event may any Award be granted
under the Plan after the expiration of ten (10) years from the date the Plan is adopted by the
Board.

          10.3. Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.

               (a) Subject to Section 10.3(d), in the event 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
affects the Common Stock, then the Administrator shall equitably adjust any or all of the following
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 an Award:

          (i) The number and kind of shares of Common Stock (or other securities
or property) with respect to which Awards may be granted or awarded
(including, but not limited to, adjustments of the limitations in Section
2.1 on the maximum number and kind of shares which may be issued);

          (ii) The number and kind of shares of Common Stock (or other securities
or property) subject to outstanding Awards; and

          (iii) The grant or exercise price with respect to any Award;

provided, however, that no such adjustment shall be made in the event of ordinary cash dividends
with respect to the Common Stock.

               (b) Subject to Section 10.3(d), in the event of a Change in Control, or any transaction or
event described in Section 10.3(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, either by the terms of the Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Holder’s request, is hereby authorized to
take any one or more of the following actions whenever the Administrator determines that such
action is appropriate and equitable 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 any Award 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 either the purchase of such Award for an amount of cash
equal to the amount that could have been obtained upon the

18

 

exercise, vesting or distribution of such Award, or realization of the Holder’s rights under such Award,
had such Award been currently and fully exercisable or distributable for all of the
shares subject thereto and had all of the shares subject to such Award been
currently and fully vested or distributable and had any and all restrictions on such
shares currently and fully terminated and lapsed;

          (ii) To provide that such Award cannot be exercised on or after such Change in
Control, transaction or event; provided, however, that, immediately prior to such
Change in Control, transaction or event, (A) any such Award shall automatically
become fully vested and exercisable for any and all of the shares at the time
subject to such Award and shall be exercisable for any or all of those shares as
fully-vested shares, and (B) any and all of the restricted shares granted or
purchased pursuant to any Award shall automatically cease to be subject to any and
all restrictions on such shares and such restrictions shall terminate and lapse;

          (iii) To provide that such Award shall be exercisable, vested and/or
distributable as to any and all shares covered thereby, notwithstanding anything to
the contrary in Section 5.3 or the provisions of such Award;

          (iv) To provide that such Award shall be assumed by the successor or survivor
corporation (or a parent thereof), or shall be substituted for by comparable rights
with respect to the capital stock of the successor or survivor corporation (or a
parent thereof), with appropriate and equitable adjustments as to the number and
kind of shares and prices;

          (v) To make adjustments in the number and type of shares of Common Stock (or
other securities or property) subject to such Award; and

          (vi) To provide that such restrictions imposed under such Award upon any and
all shares purchased upon exercise of the Award, and any and all of shares granted
or awarded pursuant to the Award, shall terminate and lapse.

               (c) The Company shall provide all Holders, in the event of any Change in Control (other than a
Change in Control described in Section 1.5(a) or (b)) or any other transaction or event described
in Section 10.3(b), with:

          (i) twenty (20) days’ prior written notice (or such lesser prior written notice
as the Administrator determines, in its discretion, is appropriate or
administratively practicable under the circumstances) of:

               (A) any such Change in Control; and

               (B) in the event of any such Change in Control or any other such transaction or
event, the action, if any, which the Administrator intends to take under Section 10.3(b); provided that no notice shall be required under this

19

 

subparagraph (B) if the Administrator does not intend to take any action under
Section 10.3(b); and

          (ii) an opportunity to exercise each outstanding Award held by such Holder, to
the extent such Award is exercisable pursuant to the terms hereof or thereof, which
exercise may be conditioned on the consummation of such Change in Control,
transaction or event.

               (d) No such adjustment or action shall be authorized to the extent such adjustment or action
would result in short-swing profits liability under Section 16 or violate the exemptive conditions
of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to any Award shall always be
rounded to the next whole number.

               (e) The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not
affect or restrict in any way the right or power of the Company or the stockholders 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.

               (f) In the event of any Change in Control or any other transaction described in Section
10.3(b), for reasons of administrative convenience, the Company in its sole discretion may refuse
to permit the exercise of any Award during a period of thirty (30) days prior to the consummation
of any such transaction.

          10.4. Tax Withholding. The Company shall be entitled to require payment in cash or
deduction from other compensation payable to each Holder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting, exercise or payment of any
Award. 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 issuable
under such Award (or allow the return of shares of Common Stock) having a Fair Market Value equal
to the sums required to be withheld or, to the extent allowed by applicable laws, elect to pay such
sums through the delivery of a notice that Holder has placed a market sell order with a broker with
respect to shares of Common Stock subject to issuance, vesting, or payment under such Award and
that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of such tax withholding. Notwithstanding any other provision of the
Plan, the number of shares of Common Stock which may be withheld with respect to the issuance,
vesting, exercise or payment of any Award (or which may be repurchased from the Holder of such
Award within six months after such shares of Common Stock were acquired by the Holder from the
Company) in order to satisfy the Holder’s federal and state income and payroll tax liabilities with
respect to the issuance, vesting, exercise or payment of the Award shall be limited to the number of shares

20

 

which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for federal and state
tax income and payroll tax purposes that are applicable to such supplemental taxable income.

          10.5. Loans. The Administrator may, in its discretion, extend one or more loans to
Eligible Individuals in connection with the exercise of an Award granted under the Plan, or the
issuance of restricted Common Stock upon the exercise of an Option. The terms and conditions of
any such loan shall be set by the Administrator. Notwithstanding the foregoing, no loan shall be
made to an Eligible Individual under this Section 10.5 to the extent such loan shall result in an
extension or maintenance of credit, an arrangement for the extension of credit, or a renewal of an
extension of credit in the form of a personal loan to or for any Director or executive officer of
the Company that is prohibited by Section 13(k) of the Exchange Act or other applicable law. In
the event that the Administrator determines in its discretion that any loan under this Section 10.5
may be or will become prohibited by Section 13(k) of the Exchange Act or other applicable law, the
Administrator may provide that such loan shall be immediately due and payable in full and may take
any other action in connection with such loan as the Administrator determines in its discretion to
be necessary or appropriate for the repayment, cancellation or extinguishment of such loan.

          10.6. Effect of Plan upon Compensation Plans. The adoption of the Plan shall not
affect any other compensation or incentive plans in effect for the Company or any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the Company (a) to establish any other
forms of incentives or compensation for Employees, Consultants or Directors of the Company or any
Subsidiary, or (b) to grant or assume options or other rights or awards otherwise than under the
Plan in connection with any proper corporate purpose including but not by way of limitation, the
grant or assumption of options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.

          10.7. Compliance with Laws. The Plan, the granting and vesting of Awards under the
Plan and the issuance and delivery of shares of Common Stock and the payment of money under the
Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to state and federal
securities law and federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable
in connection therewith. Any securities delivered under the Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem necessary or desirable
to assure compliance with all applicable legal requirements. To the extent permitted by applicable
law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

          10.8. Stockholder Approval Not Required. It is expressly intended that approval of
the Company’s stockholders not be required as a condition of the effectiveness of the Plan, and the
Plan’s provisions shall be interpreted in a manner consistent with such intent for all purposes.
Specifically, Rule 4350(i) promulgated by The Nasdaq Stock Market generally requires stockholder approval for stock option plans or other equity compensation arrangements

21

 

adopted by companies whose securities are listed on the Nasdaq Global Market pursuant to which
stock awards or stock may be acquired by officers, directors, employees, or consultants of such
companies. Nasdaq Stock Market Rule 4350(i)(1)(A)(iv) provides an exception to this requirement
for issuances of securities to a person not previously an employee or director of the issuer, or
following a bona fide period of non-employment, as an inducement material to the individual’s
entering into employment with the issuer, provided such issuances are approved by either the
issuer’s independent compensation committee or a majority of the issuer’s independent directors.
Notwithstanding anything to the contrary herein, Awards under this Plan may only be made to
Employees who have not previously been an Employee or member of the Board of the Company or an
Employee or director of a Parent or Subsidiary, or following a bona fide period of non-employment
by the Company or a Parent or Subsidiary, as an inducement material to the Employee’s entering into
employment with the Company or a Subsidiary. Awards under the Plan will be approved as set forth
in Section 9.1 above by (i) the Committee, provided it is comprised solely of two or more
Independent Directors or (ii) a majority of the Company’s Independent Directors. Accordingly,
pursuant to Nasdaq Stock Market Rule 4350(i)(1)(A)(iv), the issuance of Awards and the shares of
Common Stock issuable upon exercise or vesting of such Awards pursuant to this Plan are not subject
to the approval of the Company’s stockholders.

          10.9. Section 409A. To the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued
after the adoption of the Plan. Notwithstanding any provision of the Plan to the contrary, in the
event that following the adoption of the Plan the Administrator determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the adoption of the Plan), the Administrator
may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies
and procedures (including amendments, policies and procedures with retroactive effect), or take any
other actions, that the Administrator determines are necessary or appropriate to (a) exempt the
Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code
and related Department of Treasury guidance.

          10.10. Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Holder pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Holder any rights that
are greater than those of a general creditor of the Company or any Parent or Subsidiary.

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

22

 

          10.12. Governing Law. The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Delaware without regard to
conflicts of laws thereof.

23exv10w15w1

EXHIBIT 10.15.1

(FOUR YEAR TIME BASED VESTING)

LEAP WIRELESS INTERNATIONAL, INC.

2009 EMPLOYMENT INDUCEMENT EQUITY INCENTIVE PLAN

STOCK OPTION GRANT NOTICE AND NON-QUALIFIED

STOCK OPTION AGREEMENT

     Leap Wireless International, Inc. (the “Company”), pursuant to its 2009 Employment Inducement
Equity Incentive Plan (the “Plan”), hereby grants to the holder listed below (“Holder”), an option
to purchase the number of shares of the Company’s Common Stock set forth below (the “Option”).
This Option is subject to all of the terms and conditions as set forth herein and in the
Non-Qualified Stock Option Agreement attached hereto as Exhibit A (the “Stock Option
Agreement”) and the Plan, each of which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant
Notice and the Stock Option Agreement.

	 	 	 	 	 
	Holder:
	 	 	 	 
	 

	 	 

	 	 
	Option Number:
	 	 	 	 
	 

	 	 	 	 
	Grant Date:
	 	 	 	 
	 

	 	 	 	 
	Exercise Price per Share:

	 	$                      per share	 	 
	Total Number of Shares

 Subject to
the Option:
	 	 	 	 
	 

	 	 	 	 
	Expiration Date:
	 	 	 	 
	 

	 	 	 	 

	 	 	 
	Type of Option:

	 	This Option is a Non-Qualified Stock Option and is not an incentive stock
option within the meaning of Section
422 of the Code.
	Vesting Schedule:

	 	The shares of Common Stock subject to
the Option (rounded down to the next
whole number of shares) shall vest and
become exercisable on the dates and in
the amounts indicated in Exhibit B to
this Grant Notice.

     By Holder’s signature below, or by Holder’s submitting his or her electronic acceptance of the
Option subject to this Grant Notice online using the website of the Company’s designated brokerage
firm, Holder agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement
and this Grant Notice. Holder agrees to access copies of the Plan and the prospectus governing the
Plan (the “Plan Documents”) on the Company’s intranet or on the website of the Company’s designated
brokerage firm. Paper copies are also available upon request to the Secretary of the Company at
the Company’s corporate offices.

     Holder has reviewed this Grant Notice, the Stock Option Agreement and the Plan Documents in
their entirety, has had an opportunity to obtain the advice of counsel prior to executing this
Grant Notice or accepting the Option subject hereto and fully understands all provisions of this
Grant Notice, the Stock Option Agreement and the Plan. Holder hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator of the Plan upon any
questions arising under the Plan, this Grant Notice or the Stock Option Agreement.

	 	 	 	 	 
	 	 	HOLDER:
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Print Name:
	 

	 	Title:	 	 
	 

	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

4-Year Time Based Vesting Stock Options

 

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

NON-QUALIFIED STOCK OPTION AGREEMENT

     Pursuant to the Stock Option Grant Notice (“Grant Notice”) to which this Non-Qualified Stock
Option Agreement (this “Agreement”) is attached, Leap Wireless International, Inc. (the “Company”)
has granted to Holder an option under the Company’s 2009 Employment Inducement Equity Incentive
Plan (the “Plan”) to purchase the number of shares of Common Stock indicated in the Grant Notice.
Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and
the Grant Notice. The Option is subject to the terms and conditions of the Plan which are
incorporated herein by reference.

ARTICLE I

GRANT OF OPTION

     1.1 Grant of Option. In consideration of Holder’s continued employment with or
service to the Company or its Subsidiaries and for other good and valuable consideration, effective
as of the Grant Date set forth in the Grant Notice (the “Grant Date”), and as an inducement
material to Holder’s entering into employment with the Company or a Subsidiary, the Company
irrevocably grants to Holder the Option to purchase any part or all of an aggregate of the number
of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in
the Plan and this Agreement. The Option shall be a Non-Qualified Stock Option and shall not be an
incentive stock option within the meaning of Section 422 of the Code.

     1.2 Purchase Price. The purchase price of the shares of Common Stock subject to the
Option shall be as set forth in the Grant Notice, without commission or other charge.

ARTICLE II

PERIOD OF EXERCISABILITY

     2.1 Commencement of Exercisability.

          (a) Subject to Sections 2.3 and 4.8, the Option shall become vested and exercisable in such
amounts and at such times as are set forth in Exhibit B to the Grant Notice.

          (b) No portion of the Option which has not become vested and exercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as applicable, shall
thereafter become vested and exercisable, except as may be otherwise provided by the Administrator
or as set forth in a written agreement between the Company and Holder.

     2.2 Duration of Exercisability. The installments provided for in the vesting schedule
set forth in Exhibit B to the Grant Notice are cumulative. Each such installment which becomes
vested and exercisable pursuant to the vesting schedule set forth in Exhibit B to the Grant
Notice shall remain vested and exercisable until it becomes unexercisable under Section 2.3.

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     2.3 Expiration of Option.

          (a) The Option may not be exercised to any extent by anyone after the first to occur of the
following events:

               (i) The expiration of ten (10) years from the Grant Date; or

               (ii) The expiration of ninety (90) days following the date of Holder’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, as applicable, unless such
termination occurs by reason of Holder’s death or Disability (as defined below) or the Holder’s
termination by the Company for Cause (as defined in Exhibit B to the Grant Notice);

               (iii) The expiration of one (1) year following the date of Holder’s Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable, by reason of Holder’s
death or Disability; or

               (iv) The date of Termination of Employment, Termination of the Directorship, or Termination of
Consultancy for Cause (as defined in Exhibit B to the Grant Notice).

          (b) For purposes of this Agreement, “Disability” means permanent and total disability within
the meaning of Section 22(e)(3) of the Code.

ARTICLE III

EXERCISE OF OPTION

     3.1 Person Eligible to Exercise. Except as provided in Sections 4.1(b) and 4.1(c),
during the lifetime of Holder, only Holder may exercise the Option or any portion thereof. After
the death of Holder, any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 2.3, be exercised by Holder’s personal representative or by any
person empowered to do so under the deceased Holder’s will or under the then applicable laws of
descent and distribution.

     3.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof becomes unexercisable under Section 2.3.

     3.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of
the following prior to the time when the Option or such portion thereof becomes unexercisable under
Section 2.3:

          (a) An exercise notice signed or submitted online using the website of the Company’s
designated brokerage firm by Holder or any other person then entitled to exercise the Option or
portion thereof, stating that the Option or portion thereof is thereby exercised, such

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notice complying with all applicable rules established by the Administrator. Such notice shall
be substantially in such form as is prescribed by the Administrator; and

          (b) Subject to Section 6.2(d) of the Plan:

               (i) Full payment (in cash or by check) for the shares with respect to which the Option or
portion thereof is exercised; or

               (ii) With the consent of the Administrator, such payment may be made, in whole or in part,
through the delivery of shares of Common Stock which have been owned by Holder for at least six (6)
months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised portion thereof; or

               (iii) To the extent permitted under applicable laws, through the delivery of a notice that
Holder has placed a market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided, that payment of such proceeds is made to the Company upon settlement of such sale;
or

               (iv) With the consent of the Administrator, any combination of the consideration provided in
the foregoing paragraphs (i), (ii) and (iii); and

          (c) Such representations and documents as the Administrator, in its absolute discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal or state securities laws or regulations. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to ensure the observance
and performance of such representation and agreement and to effect compliance with the Securities
Act and any other federal or state securities laws or regulations; and

          (d) The receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which in the discretion of the Administrator may be in the form of
consideration used by Holder to pay for such shares under Section 3.3(b), subject to Section 10.4
of the Plan; and

          (e) In the event the Option or portion thereof shall be exercised pursuant to Section 3.1 by
any person or persons other than Holder, appropriate proof of the right of such person or persons
to exercise the Option.

     3.4 Conditions to Issuance of Stock Certificates. The Company shall not be required
to issue or deliver any shares of Common Stock purchased upon the exercise of the Option or portion
thereof prior to fulfillment of all of the conditions set forth in Section 6.3 of the Plan.

     3.5 Rights as Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon

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the exercise of any part of the Option unless and until such shares shall have been issued by
the Company to such holder.

ARTICLE IV

OTHER PROVISIONS

     4.1 Option Not Transferable.

          (a) Subject to Section 4.1(b), the Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or, subject to the consent of
the Administrator, pursuant to a DRO, unless and until the shares underlying the Option have been
issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein shall be liable for the debts, contracts or engagements of Holder or his
or her successors in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any
other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof
shall be null and void and of no effect, except to the extent that such disposition is permitted by
the preceding sentence.

          (b) Notwithstanding any other provision in this Agreement, with the consent of the
Administrator, the Option may be transferred to one or more Permitted Transferees, subject to the
terms and conditions set forth in Section 10.1 of the Plan.

          (c) Unless transferred to a Permitted Transferee in accordance with Section 4.1(b), during the
lifetime of Holder, only Holder may exercise the Option or any portion thereof unless it has been
disposed of pursuant to a DRO. After the death of Holder, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable under Section 2.3, be exercised by
Holder’s personal representative or by any person empowered to do so under the deceased Holder’s
will or under the then applicable laws of descent and distribution.

     4.2 Restrictive Legends and Stop-Transfer Orders.

          (a) The share certificate or certificates evidencing the shares of Common Stock purchased
hereunder shall be endorsed with any legends that may be required by state or federal securities
laws.

          (b) Holder agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

          (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock
that have been sold or otherwise transferred in violation of any of the provisions of this
Agreement, or (ii) to treat as owner of such shares of Common Stock or to

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accord the right to vote or pay dividends to any purchaser or other transferee to whom such
shares shall have been so transferred.

     4.3 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company, and any notice to be
given to Holder shall be addressed to Holder at the address given beneath Holder’s signature on the
Grant Notice or to the most recent address for Holder in the Company’s personnel records (or, if
sent by email, to the most recent email address for Holder in the Company’s personnel records). By
a notice given pursuant to this Section 3.4, either party may hereafter designate a different
address for notices to be given to that party. Any notice shall be deemed duly given when sent via
email or when sent by certified mail (return receipt requested) and deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the United States Postal
Service.

     4.4 Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

     4.5 Governing Law; Severability. This Agreement shall be administered, interpreted
and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof.
Should any provision of this Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     4.6 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to
conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and
any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder,
and state securities laws and regulations. Notwithstanding anything herein to the contrary, the
Plan shall be administered, and the Option is granted and may be exercised, only in such a manner
as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws,
rules and regulations.

     4.7 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by Holder or such other person as may be permitted to exercise the
Option pursuant to Section 3.1 and by a duly authorized representative of the Company.

     4.8 No Employment Rights. If Holder is an Employee, nothing in the Plan or this
Agreement shall confer upon Holder any right to continue in the employ of the Company or any
Subsidiary or shall interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided otherwise in a written
agreement between the Company and Holder.

     4.9 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,

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this Agreement shall be binding upon Holder and his or her heirs, executors, administrators,
successors and assigns.

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EXHIBIT B

TO STOCK OPTION GRANT NOTICE

VESTING AND EXERCISABILITY PROVISIONS

     Capitalized terms used in this Exhibit B and not defined below shall have the meanings
given them in the Grant Notice and the Stock Option Agreement.

     1. Time-Based Vesting. Subject to any accelerated vesting and exercisability pursuant
to paragraph 2 below (which shall be in addition to the vesting and exercisability under this
paragraph 1), and other provisions of the Grant Notice and the Stock Option Agreement, the shares
of Common Stock subject to the Option shall vest and become exercisable in installments as follows:

	 	 	 
	Percentage of the Total Shares Subject to	 	 
	the Option that Vest and Become	 	 
	Exercisable	 	Vesting Date
	25% of Total Number of Shares Subject to
the Option

	 	First Anniversary of the Grant Date
	 
	 	 
	25% of Total Number of Shares Subject to
the Option

	 	Second Anniversary of the Grant Date
	 
	 	 
	25% of Total Number of Shares Subject to
the Option

	 	Third Anniversary of the Grant Date
	 
	 	 
	25% of the Total Number of Shares
Subject to the Option

	 	Fourth Anniversary of the Grant Date

The vesting and exercisability of the Option as to shares of Common Stock specified in this
paragraph 1 shall be cumulative. The Option shall vest and become exercisable as to shares of
Common Stock pursuant to this paragraph 1 only if Holder is an Employee, Director or Consultant of
the Company or any of its Subsidiaries on the applicable Vesting Date.

     2. Change in Control Accelerated Vesting.

          (a) Termination of Employment in the Event of a Change in Control. In the event of a
Change in Control, if Holder has a Termination of Employment by reason of discharge by the Company
other than for Cause (as defined below), or by reason of resignation by Holder for Good Reason (as
defined below), during the period commencing ninety (90) days prior to such Change in Control and
ending twelve (12) months after such Change in Control, then the remaining unvested shares of
Common Stock subject to the Option shall vest and become exercisable on the date of Holder’s
Termination of Employment (or, if later, immediately prior to the date of the occurrence of such
Change in Control).

4-Year Time Based Vesting Stock Options

 

 

          (b) Definitions of Cause and Good Reason. For purposes of this Exhibit B, the
terms “Cause” and “Good Reason” shall have the meanings given to such terms in Holder’s employment
or severance agreement with the Company in effect on the Grant Date and if Holder does not have an
employment or severance agreement or Holder’s employment or severance agreement does not include
definitions of “Cause” and “Good Reason,” the terms shall be defined for purposes of this
Exhibit B as follows:

          (i) “Cause” shall mean termination of Holder’s employment by the Company (or any Parent
or Subsidiary or any successor thereof) for any one or more of the following occurrences:
(A) Holder’s material breach of any provision of the Employee Confidentiality and Invention
Assignment Agreement or any other agreement between Holder and the Company (or any Parent or
Subsidiary or any successor thereof), after a written notice from the Company is delivered
to Holder describing Holder’s breach and Holder is afforded a period of at least thirty (30)
days to correct the breach and fails to do so within such period; (B) Holder’s conviction
by, or entry of a plea of guilty or nolo contendere in, a court of competent and final
jurisdiction for (i) any felony, or (ii) other illegal conduct (other than minor traffic
violations) that is likely to inflict or has inflicted material injury on the business of
the Company (or any Parent or Subsidiary or any successor thereof); (C) Holder’s commission
of an act of fraud, embezzlement or dishonesty, whether prior to or subsequent to the date
hereof upon the Company (or any Parent or Subsidiary or any successor thereof); (D) Holder’s
willful neglect of or willful failure to substantially perform (i) Holder’s duties with the
Company (or any Parent or Subsidiary or any successor thereof) or (ii) the lawful and
reasonable directions of the Board of Directors of the Company (or any Parent or Subsidiary
or any successor thereof which employs Holder or for which Holder serves as an officer) or
of the individual to whom Holder reports (other than any such neglect or failure occurring
after Holder’s issuance of a notice of termination for Good Reason), after a written notice
from the Company is delivered to Holder describing Holder’s neglect or failure to perform
and Holder 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 (E) Holder’s gross misconduct
affecting or material violation of any duty of loyalty to the Company (or any Parent or
Subsidiary or any successor thereof).

          (ii) “Good Reason” shall mean, without Holder’s express written consent, the occurrence
of any of the following circumstances: (A) a material diminution in Holder’s authority,
duties or responsibilities with the Company (or any Parent or Subsidiary or any successor
thereof), including, without limitation, the continuous assignment to Holder of any duties
materially inconsistent with Holder’s position with the Company (or any Parent or Subsidiary
or any successor thereof), or a material negative change in the nature or status of Holder’s
responsibilities or the conditions of Holder’s employment with the Company (or any Parent or
Subsidiary or any successor thereof); (B) a material diminution in Holder’s annualized cash
and benefits compensation opportunity, which shall include Holder’s base compensation,
Holder’s annual target bonus opportunity and Holder’s aggregate employee benefits, as in
effect on the Grant Date as the same may be increased from time to time thereafter; (C) a
material change in the geographic location at which Holder must perform his or her duties
(and the Company and Holder agree that any involuntary relocation of the

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Company’s offices (or the offices of any Parent or Subsidiary or any successor thereof)
at which Holder is principally employed to a location more than sixty (60) miles from such
location would constitute a material change); or (D) a material breach by the Company (or
any Parent or Subsidiary or any successor thereof) of its obligations to Holder under a
written severance agreement that expressly provides that Holder’s resignation of employment
with the Company (or any Parent or Subsidiary thereof) following a material breach of such
written severance agreement constitutes a resignation of employment for “Good Reason”
thereunder.

Holder’s right to terminate employment with the Company (or any Parent or Subsidiary or any
successor thereof) pursuant to this subparagraph shall not be affected by Holder’s
incapacity due to physical or mental illness. Holder’s continued employment with the
Company (or any Parent or Subsidiary or any successor thereof) shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good Reason
hereunder.

Holder must provide written notice to the Company of the occurrence of any of the foregoing
events or conditions without Holder’s written consent within ninety (90) days of the initial
occurrence of such event or condition. The Company (or any Parent or Subsidiary 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 Holder. Holder must resign
for Good Reason within one (1) year following the initial existence of the event or
condition constituting Good Reason.

          (c) Condition to Accelerated Vesting and Exercisability. The accelerated vesting and
exercisability of shares of Common Stock subject to the Option pursuant to subparagraph 2(a) shall
be conditioned on the Holder’s delivery to the Company of an executed General Release substantially
in the form attached as Exhibit C to the Grant Notice (which General Release shall be
subject to revision from time-to-time by the Company due to, among other things, changing legal and
regulatory requirements) and the Holder’s non-revocation of such General Release during the time
period for such revocation set forth therein.

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EXHIBIT C

TO STOCK OPTION GRANT NOTICE

FORM OF GENERAL RELEASE

     1. General Release of Claims. In consideration of certain rights to accelerated
vesting and exercisability of options to purchase shares of common stock of Leap Wireless
International, Inc. (the “Company”) granted to the undersigned (“Holder”) pursuant to the 2009
Employment Inducement Equity Incentive Plan of Leap Wireless International, Inc. (the “Plan”),
Holder does hereby for himself or herself and his or her spouse, beneficiaries, heirs, successors
and assigns, release, acquit and forever discharge the Company and Cricket Communications, Inc.
(collectively, 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 (collectively, 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 Holder 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, Holder’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 (collectively, “Claims”). This General Release shall not, however, constitute a waiver of any
of Holder’s vested rights under any outstanding award granted to Holder pursuant to the Plan or
under the terms of any employee benefit plan of the Companies in which Holder is a participant.

     2. Release of Unknown Claims. In addition, Holder 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. Holder agrees and expressly acknowledges
that this General Release includes a waiver and release of all claims which Holder 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 this General Release is written in a manner calculated to be understood by Holder.

          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 Holder signs this General Release.

4-Year Time Based Vesting Stock Options

 

 

          c. The rights to accelerated vesting and exercisability of options to purchase shares of the
Company’s common stock provide for consideration in addition to anything of value to which Holder
is already entitled.

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

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

          f. In the event that any termination of Holder’s employment is in connection with an exit
incentive or other employment termination program, Holder 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. Holder 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 Holder will not receive the benefits described in Paragraph 1
above.

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

     4. No Assignment of Claims. Holder represents and warrants to the Releasees that
there has been no assignment or other transfer of any interest in any Claim which Holder may have
against the Releasees, or any of them, and Holder 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. Holder 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

4-Year Time Based Vesting Stock Options

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Releasees in defending or otherwise responding to said suit or Claim.

     6. No Admission. Holder 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.

	 	 	 	 	 
	 	 	HOLDER
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

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