UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

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LEAP WIRELESS INTERNATIONAL, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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     On July 22, 2011, Leap Wireless International, Inc, or Leap, mailed the attached letter to its stockholders.

     Leap is filing materials contained in this Schedule 14A with the Securities and Exchange Commission, or SEC, in connection with its solicitation of proxies for the election of director nominees to its Board of Directors and four other proposals at its 2011 Annual Meeting of Stockholders. In connection with the solicitation of proxies, Leap has filed a definitive proxy statement and other relevant documents with the SEC. You are urged to read the proxy statement and other information because they contain important information about Leap and the proposals to be presented at the 2011 Annual Meeting of Stockholders. These documents are available free of charge at the SEC’s website at www.sec.gov or from Leap at www.leapwireless.com. The contents of the websites referenced herein are not deemed to be incorporated by reference into the proxy statement.

     Leap and its directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from Leap’s stockholders in connection with the election of directors and other matters to be proposed at the 2011 Annual Meeting of Stockholders. Information regarding the interests, if any, of these directors, executive officers and specified employees is included in the proxy statement and other materials filed by Leap with the SEC.

 

  

 

July 22, 2011

 

Dear Fellow Stockholder:

 

The July 28th Annual Meeting of Stockholders is just days away, and it is critical that your shares are represented. You have an important opportunity to keep your Company on its current path to success by voting “FOR” all proposals on the enclosed WHITE proxy card.

 

We write to alert you to serious issues with the nominees proposed by Pentwater Capital Management, our serious concerns regarding Pentwater’s intentions and the risks we believe the election of Pentwater’s nominees would pose to Leap’s successful strategy — and therefore to the value of your Leap stock.

 

WHAT YOU NEED TO KNOW ABOUT MATTHEW HALBOWER

 

Pentwater CEO Matthew Halbower has absolutely no relevant telecommunications experience:

 

 

We believe Pentwater’s track record shows that Mr. Halbower’s motivation is to make himself a quick profit and that he ultimately does not care about Leap’s long-term prospects:

 

 

You have to take Mr. Halbower to court to get what he promises you:

 

  

 

 

WHAT YOU NEED TO KNOW ABOUT RICHARD ROSCITT

 

Mr. Roscitt presided over the destruction of 84% of the stockholder value of ADC Telecommunications during his tenure as Chairman and CEO:

 

 

Leaving ADC stockholders behind with little in their pockets, Mr. Roscitt was quick to line his own:

 

 

In our view, Mr. Roscitt has a track record of presiding over the destruction of stockholder value as a public company director:

 

 

WHAT YOU NEED TO KNOW ABOUT ROBERT SWITZ

 

ADC Telecommunications was sold for 16% less per share than the share price when Mr. Switz became CEO after succeeding Mr. Roscitt:

 

 

In our view, Mr. Switz has a similar track record of presiding over the destruction of stockholder value as a public company director:

 

 

Pentwater also failed to disclose in its notice of nominations Mr. Switz’s ties to Pentwater — in particular, that Mr. Switz is the father of a senior portfolio manager at Pentwater.

 

PENTWATER IS NOT CONCERNED ABOUT OTHER LEAP STOCKHOLDERS

 

We believe Pentwater’s trading history and track record clearly show that Pentwater only looks out for itself — to the detriment of its “fellow” investors. As a prime example, last year BPW Acquisition Corp. announced a proposed merger with Talbots, which was subject to a condition that 90% of BPW’s public warrant holders tender into an exchange offer. The merger was the final opportunity for BPW stock and warrant holders to maximize value or else face liquidation of BPW (with the public warrants expiring worthless).

 

After the announcement, Pentwater purchased approximately 9% of the outstanding BPW warrants and informed BPW that it intended to hold its warrants out from the exchange offer. Having created a classic “hold up” problem for BPW, and with time running short before the warrants would expire worthless, Pentwater filed for temporary injunctive relief to buy itself more time to pressure BPW for additional concessions. By doing so, Pentwater risked causing a total loss to its fellow warrant holders and jeopardized a deal that had been approved by BPW stockholders so that it could extract

  

 

additional value that would inure only to itself. The court denied Pentwater’s request for relief. Ask yourself whether you want to take the risk of electing directors selected by a stockholder who we believe blatantly disregards other investors’ interests in favor of its own.

 

PENTWATER’S CLAIMS ABOUT CURRENT LEAP DIRECTORS ARE UNFOUNDED
AND NOT SUPPORTED BY THE FACTS

 

In spite of its own misaligned interests, Pentwater has gone to great lengths to claim that the interests of Leap’s Chairman, Dr. Mark H. Rachesky, are not aligned with other Leap stockholders. We believe that these claims are unfounded and not supported by the facts. Dr. Rachesky’s MHR investment funds own 19.8% of Leap’s stock — and, unlike Pentwater, MHR is a long-term investor that has NEVER sold any Leap stock and NEVER bet against the Company by selling the stock short. Pentwater simply cannot make the same statement.

 

Pentwater has also tried to persuade you that the service of Leap nominees Dr. Rachesky, Michael Targoff and John Harkey as directors at Loral Space & Communications somehow suggests that they are unfit to serve as directors at Leap. What Pentwater fails to mention, however, is that since the date of the Loral decision in September 2008, Loral’s stock price has increased ~340% — all while Dr. Rachesky, Mr. Targoff and Mr. Harkey have served on Loral’s Board. By contrast, Pentwater has failed to provide any examples where its involvement in running a public company has produced such favorable results for stockholders.

 

PENTWATER IS USING THIS PROXY CONTEST TO MAKE A SHORT-TERM GAIN

 

In our view, the facts clearly show that Pentwater’s only intention in running this proxy contest is to make a short-term gain on its own recently acquired shares:

 

 

PENTWATER HAS PRESENTED NO NEW IDEAS FOR LEAP

 

We believe Pentwater’s alternate “plan” for Leap is vague, misinformed and does not contain a single idea that the Board hasn’t either implemented or initiated with significantly more depth. Pentwater has never asked to speak to our Board or management team to discuss its operational proposals — and we believe this is because they simply don’t have anything new to propose. This is not surprising to us, given Pentwater’s short-term approach to investing and inexperience with running a public company. In our view, electing Pentwater’s nominees to your Board puts your investment at risk.

 

Your Board has also demonstrated that it is willing to hold its management team accountable. In order to ensure that it had the right management team in place to execute Leap’s current operational strategy, the Company replaced ~30% of its vice presidents and other members of senior management last year.

 

 

* Please refer to Pentwater’s definitive proxy statement filed with the SEC on July 5, 2011 for a full description of Pentwater’s trading history in Leap stock.

  

 

GLASS LEWIS SHARES OUR CONCERNS AND RECOMMENDS
VOTING “FOR” ALL OF LEAP’S PROPOSALS

 

Respected independent proxy advisory service Glass Lewis & Co. agrees that now is not the time to change the Board, and has recommended that Leap’s stockholders vote “FOR” all of Leap’s proposals on the WHITE proxy card.

 

Glass Lewis agrees that Pentwater has failed to articulate any specific plan for Leap’s business and that Pentwater is not interested in the Company’s long-term success, indicating that:

 

“[Pentwater] appears to offer considerably less in the way of concrete plans relative to those presented by the board. More concerning still is the brief, small and oddly-structured nature of Pentwater’s investment. . . . We believe the nature of Pentwater’s investment pattern in Leap raises significant doubts about the extent to which it shares an interest in the long-term value of the Company.”

  Glass Lewis & Co. Proxy Paper dated July 15, 2011, pg. 10 (emphasis added).

 

In issuing its recommendation in favor of Pentwater’s proposals, we believe Institutional Shareholder Services failed to consider critical information, including:

 

 

 

* Please refer to Pentwater’s definitive proxy statement filed with the SEC on July 5, 2011 for a full description of Pentwater’s trading history in Leap stock.

  

 

 

SUPPORT THE VALUE OF YOUR INVESTMENT BY VOTING “FOR” LEAP’S PROPOSALS TODAY USING THE ENCLOSED WHITE PROXY CARD

 

We believe Pentwater is putting the Company’s success — and therefore the value of your stock — at risk by using this proxy contest to make a short-term gain on its position in Leap stock. We believe Pentwater has no long-term commitment to Leap, and in our view it is disingenuous for Pentwater to claim that its interests are aligned with yours.

 

Pentwater is attempting to nominate three candidates whose track records raise serious concerns — and who, if elected, would comprise over one-third of Leap’s Board. Pentwater has completely failed to articulate any strategy for the Company beyond what your Board is already executing. Under the leadership of your Board and management, we are confident that Leap is on the right track to deliver further improvements in stockholder value. Don’t let Pentwater’s attempt to profit from this proxy contest derail our positive momentum — we believe the election of the Pentwater nominees to the Board could have a disruptive effect on Leap and its management team.

 

The Leap Board recommends that you vote “FOR” the slate of qualified Leap nominees named on the enclosed WHITE proxy card. Remember, only your latest-dated proxy counts. If you have inadvertently submitted a gold proxy, you have every right to change your vote. Simply use the enclosed WHITE proxy card to vote TODAY — by telephone, by Internet or by signing, dating and returning the WHITE proxy card in the postage-paid envelope provided.

 

You may have received a gold proxy card from Pentwater. We strongly urge you to simply discard it. In addition to all of the troubling issues laid out above, it is our view that Pentwater did not comply with our bylaws, so its director nominations are therefore not valid. As such, shares voted for Pentwater nominees will not be counted at the Annual Meeting, absent a contrary judgment by Delaware courts.

 

We thank you for your continued support.

 

Very truly yours,

 

 

S. Douglas Hutcheson

President and Chief Executive Officer

 

  

 

Important Information

In connection with the solicitation of proxies, Leap Wireless International, Inc., or Leap, has filed with the Securities and Exchange Commission, or the SEC, a definitive proxy statement and other relevant documents concerning the proposals to be presented at Leap’s 2011 Annual Meeting of Stockholders, or the 2011 Annual Meeting. The proxy statement contains important information about Leap and the 2011 Annual Meeting. In connection with the 2011 Annual Meeting, Leap has mailed the definitive proxy statement to stockholders. In addition, Leap files annual, quarterly and special reports, proxy statements and other information with the SEC. You are urged to read the proxy statement and other information because they contain important information about Leap and the proposals to be presented at the 2011 Annual Meeting. These documents are available free of charge at the SEC’s website at www.sec.gov or from Leap at www.leapwireless.com. The contents of the websites referenced herein are not deemed to be incorporated by reference into the proxy statement.

 

Leap and its directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from Leap’s stockholders in connection with the election of directors and other matters to be proposed at the 2011 Annual Meeting. Information regarding the interests, if any, of these directors, executive officers and specified employees is included in the definitive proxy statement and other materials filed by Leap with the SEC.

 

Forward-Looking Statements

This letter contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current expectations based on currently available operating, financial and competitive 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. Our forward-looking statements include our discussions about our expected, future financial and operational performance, including as a result of our current and future product and service plan offerings, future plans to transition to LTE networks and expected contributions from management and from our proposed slate of nominees to Leap’s Board of Directors and are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may” and similar expressions. Risks, uncertainties and assumptions that could affect our forward-looking statements include, among other things:

 

 

All forward-looking statements included in this letter should be considered in the context of these risks. We undertake 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 our forward-looking statements.

 

Leap is a U.S. registered trademark and the Leap logo is a trademark of Leap. Cricket, Cricket Wireless, Cricket Clicks, Jump, Jump Mobile, Flex Bucket, Real Unlimited Unreal Savings and the Cricket “K” are U.S. registered trademarks of Cricket. In addition, the following are trademarks or service marks of Cricket: BridgePay, Cricket By Week, Cricket Choice, Cricket Connect, Cricket Nation, Cricket PAYGo, Muve, Muve Music, Muve Money, Cricket Crosswave, Seek Music, MyPerks, Cricket MyPerks and Cricket Wireless Internet Service. All other trademarks are the property of their respective owners.