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8-K - FORM 8-K - LEAP WIRELESS INTERNATIONAL INC | a59786e8vk.htm |
EX-4.1 - EX-4.1 - LEAP WIRELESS INTERNATIONAL INC | a59786exv4w1.htm |
EX-3.1 - EX-3.1 - LEAP WIRELESS INTERNATIONAL INC | a59786exv3w1.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Greg Lund, Media Relations
858-882-9105
glund@leapwireless.com
or
Amy Wakeham, Investor Relations
858-882-9876
awakeham@leapwireless.com
858-882-9105
glund@leapwireless.com
or
Amy Wakeham, Investor Relations
858-882-9876
awakeham@leapwireless.com
Leap Terminates Tax Benefit Preservation Plan
SAN DIEGO June 21, 2011 Leap Wireless International, Inc. (NASDAQ: LEAP), a leading provider
of innovative and value-driven wireless communications services, announced today that it has
terminated its Tax Benefit Preservation Plan (the Plan), effective as of June 21, 2011. The
termination of the Plan was authorized and approved by Leaps Board of Directors on June 16, 2011.
Leaps Board adopted the Plan in September 2010 to protect the value of the Companys significant
net operating loss carryforwards (referred to as NOLs) and reduce the likelihood of an ownership
change under Section 382 of the Internal Revenue Code, which would substantially limit the
Companys ability to use these NOLs. In general, an ownership change would occur if there were a
collective shift in the ownership in the Company by more than 50 percentage points by one or more
5% stockholders within a three-year period.
Since the implementation of the Plan last September, the Board has continued to monitor changes in
our investor base to determine what effect they may have on our ability to use our NOLs, said Doug
Hutcheson, Leaps president and CEO. In the months since September 2010, the Companys cumulative
change in ownership has decreased substantially as a result of the application of Section 382 and
its rolling three-year look-back period. As a result, the Board determined that the Plan was no
longer necessary to protect the value of our NOLs and authorized the termination of the Plan.
Under the Plan, the Company had distributed one preferred stock purchase right for each share of
Leaps common stock outstanding at the close of business on September 24, 2010, with the rights
becoming exercisable in the event that any person or group acquired beneficial ownership
of 4.99% or more of Leaps outstanding common stock without the approval of the Board of Directors,
subject to certain exceptions. To effect the termination of the Plan, the Plan was amended to
accelerate the date that these rights expire from September 30, 2020 to June 21, 2011.
Accordingly, effective as of the close of business on June 21, 2011, there are no longer any such
rights associated with the outstanding shares of Leaps common stock.
Leaps Board will continue to monitor and evaluate cumulative changes in the Companys ownership
for purposes of Section 382 and may consider taking future protective actions to protect its NOLs,
which could include adoption of a new Tax Benefit Preservation Plan.
About Leap
Leap provides innovative, high-value wireless services to a young and ethnically diverse customer
base. With the value of unlimited wireless services as the foundation of its business, Leap
pioneered its Cricket® service. The Company and its joint ventures operate in 35 states and hold
licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket
offers customers a choice of unlimited voice, text, data and mobile Web services. Headquartered in
San Diego, Calif., Leap is traded on the NASDAQ Global Select Market under the ticker symbol
LEAP. For more information, please visit www.leapwireless.com.
Leap is a registered service mark of Leap Wireless International, Inc. Cricket is a registered
trademark of Cricket Communications, Inc.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements reflect managements current expectations
based on currently available operational, financial and other information but are subject to risks,
uncertainties and assumptions that could cause actual results to differ materially from those
anticipated in or implied by the forward-looking statements. These statements include the Companys
estimation and judgment that its Tax Benefit Preservation Plan is no longer required to protect
against potential cumulative changes in ownership for purposes of Section 382 of the Internal
Revenue Code of 1986, as amended (the Code). Section 382 of the Code and its associated
regulations are complex. As a result, there are numerous risks, uncertainties and assumptions
associated with the Companys calculation of its cumulative
ownership percentage under Section 382 of the Code, and its projections regarding the impact of
future stockholder actions on the Companys Section 382 ownership calculations, that could affect
these and other forward-looking statements. Other risks, uncertainties and assumptions that could
affect the Company are detailed in the section entitled Risk Factors included in the Companys
periodic reports filed with the SEC, including its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2011, filed with the SEC on May 6, 2011.
All forward-looking statements included in this news release should be considered in the context of
these risks. The Company undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. Investors and
prospective investors are cautioned not to place undue reliance on the Companys forward-looking
statements.
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