Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

The Company accounts for share-based awards exchanged for employee services in accordance with the authoritative guidance for share-based payments. Under the guidance, share-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense, net of estimated forfeitures, over the employee's requisite service period.

Total share-based compensation expense related to all of the Company's share-based awards for the three and nine months ended September 30, 2011 and 2010 was allocated in the condensed consolidated statements of operations as follows (in thousands, except per share data):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011		2010
Cost of service	$	727		$	852	$	1,930	$	2,315
Selling and marketing expense	760			1,577		1,068		4,514
General and administrative expense	(457		)	6,553		8,557		20,034
Share-based compensation expense	$	1,030		$	8,982	$	11,555	$	26,863
Share-based compensation expense per share:
Basic	$	0.01		$	0.12	$	0.15	$	0.35
Diluted	$	0.01		$	0.12	$	0.15	$	0.35

On August 10, 2011, the Company launched a stock option exchange program pursuant to which the Company offered to exchange eligible outstanding stock options previously granted under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan, as amended (the “2004 Stock Plan”) and the Company's 2009 Employment Inducement Equity Incentive Plan, as amended, issued to eligible Cricket employees for a lesser number of replacement options to be granted under the 2004 Stock Plan, with an exercise price equal to the closing price of Leap common stock on the date of the replacement grant (the “Exchange Offer”). The Company completed the Exchange Offer on September 23, 2011. Options for an aggregate of approximately 1.6 million shares of Leap common stock, representing approximately 93% of the total number of eligible options, were exchanged in the Exchange Offer for replacement options for an aggregate of 256,202 shares of Leap common stock, with an exercise price of $7.09 per share. The exchange ratios used to determine how many replacement options were granted were determined on a grant-by-grant basis and were intended to result in the fair value, for accounting purposes, of the replacement options being approximately 50% of the fair value of the surrendered options using the Black-Scholes stock option pricing model. The Exchange Offer did not result in any additional share-based compensation expense. Executive officers and members of the Company's board of directors were not permitted to participate in the Exchange Offer.