SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 17, 2006
LEAP WIRELESS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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| Delaware
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000-29752
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33-0811062 |
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(State or other jurisdiction of
incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
10307 Pacific Center Court
San Diego, California 92121
(Address of Principal Executive Offices)
(858) 882-6000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
Executive Officer Compensation.
Effective February 17, 2006, the Compensation Committee (the “Committee”) of the Board of Directors
(the “Board”) of Leap Wireless International, Inc. (the “Company”), approved the following salaries
and target bonuses for executive officers of the Company:
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| Name |
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Title |
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Salary* |
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Target Bonus |
S. Douglas Hutcheson |
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President & CEO |
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$ |
550,000 |
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100 |
% |
Albin Moschner |
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EVP & Chief Marketing Officer |
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$ |
330,000 |
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80 |
% |
Glenn Umetsu |
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EVP & Chief Technical Officer |
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$ |
336,000 |
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80 |
% |
Dean Luvisa |
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CFO (Acting) |
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$ |
292,600 |
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65 |
% |
Leonard Stephens |
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SVP Human Resources |
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$ |
282,500 |
** |
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65 |
% |
David Davis |
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SVP Sales Operations |
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$ |
275,600 |
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65 |
% |
Robert Irving |
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SVP Legal & General Counsel |
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$ |
287,500 |
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65 |
% |
Linda Wokoun |
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SVP Marketing |
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$ |
262,500 |
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65 |
% |
* Retroactive to January 28, 2006.
** Exclusive of a lump sum merit adjustment of $10,000, paid February 17, 2006.
In addition, the Committee approved a revision to Mr. Hutcheson’s severance benefits so that if Mr.
Hutcheson were terminated without “Cause” or resigned for “Good Reason” (in each case, with such
terms as defined in the Executive Employment Agreement, dated as of January 10, 2005, by and among
the Company, Cricket Communications, Inc. and Mr. Hutcheson, as amended to date (the “Hutcheson
Employment Agreement”)), then Mr. Hutcheson would be entitled to a severance benefit equal to 1 1/2
times the sum of his base salary and annual target bonus.
In approving Mr. Hutcheson’s salary, target bonus and severance benefit, the Committee authorized a
second amendment to the Hutcheson Employment Agreement. The Amended and Restated Executive
Employment Agreement among Leap Wireless International, Inc., Cricket Communications, Inc., and S.
Douglas Hutcheson, dated as of January 10, 2005 was filed as an exhibit to the Company’s 2004
Annual Report on Form 10-K filed with the SEC on May 16, 2005. The First Amendment to Amended and
Restated Executive Employment Agreement, effective as of June 17, 2005, between the Company,
Cricket Communications, Inc. and S. Douglas Hutcheson was filed as an exhibit to the Company’s
Current Report on Form 8-K filed with the SEC on June 23, 2005.
Non-employee Director Compensation.
Effective February 22, 2006, the Board approved an annual compensation package for non-employee
directors consisting of a cash component and an equity component. The cash component will be paid,
and the equity component will be awarded, each year following the annual meeting of stockholders of
the Company.
Each non-employee director will receive annual cash compensation of $40,000. The chairman of the
Board will receive additional cash compensation of $20,000; the chairman of the Audit Committee
will receive additional cash compensation of $15,000, and each of the chairman of the Compensation
Committee and the chairman of the Nominating/Corporate Governance Committee will receive additional
cash compensation of $5,000.
Non-employee directors will also receive $100,000 in Company restricted common stock pursuant to
the Company’s 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the “2004 Plan”).
The purchase price for each share of Company restricted common stock will be $.0001 and each such
share will be valued at fair market value (as defined in the 2004 Plan) on the date of grant. One
third of each award of restricted common stock will vest on each of the first, second and third
anniversaries of the effective date of the grant. All unvested shares under each outstanding award
will vest upon a change of control (as defined in the 2004 Plan).
The Company filed a Current Report on Form 8-K on January 6, 2005, describing the material terms of
the 2004 Plan. The 2004 Plan is attached as an exhibit to the Current Report on Form 8-K filed by
the Company with the SEC on January 11, 2005.
Stock Option Award to Acting Chief Financial Officer
Effective February 22, 2006, the Board also granted Dean Luvisa, the Company’s acting chief
financial officer, an option to purchase 10,000 shares of the Company’s common stock pursuant to
the 2004 Plan. The options may be exercised at fair market value (as defined in the 2004 Plan) and
vest on the fifth anniversary of the date of grant, if Mr. Luvisa is an employee, consultant or
director of the Company or its subsidiaries on such date. Up to thirty percent per year of the
grant can vest based on the Company’s achieving performance targets specified by the Board with
respect to each of 2007, 2008 and 2009. In the event of a change of control (as defined in the 2004
Plan), one-third of the unvested shares would vest immediately, one-third would vest on the first
anniversary of the change of control, and the remaining one-third would vest on the second
anniversary of the change of control. All remaining unvested shares would vest upon a termination
of Mr. Luvisa’s employment by the Company without cause or by Mr. Luvisa with good reason within 90
days prior to or twelve months after a change in control.