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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

12/11/08  Virgin Mobile USA/Inc             PRE 14A     2/01/09    1:104                                    RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Statement                         HTML    719K 

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant x                                 Filed by a Party other than the Registrant ¨

Check the appropriate box:

Virgin Mobile USA, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on                     , 2009

Virgin Mobile USA, Inc.

10 Independence Boulevard

Warren, NJ 07059

To the Stockholders of Virgin Mobile USA, Inc.:

Notice Is Hereby Given that a special meeting (the “Special Meeting”) of Stockholders of Virgin Mobile USA, Inc., a Delaware corporation (the “Company”), will be held on                     , 2009 at 10:00 a.m. local time at                          for the following purpose:

1. To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) increase the number of authorized shares of Class B common stock from one share to two shares and (ii) add SK Telecom USA, Inc. (or an affiliate successor thereto) as a “Founding Stockholder” solely for purposes of Article XI (which addresses certain rights and obligations of the Founding Stockholders of the Company) therein.

2. To approve (i) the issuance of shares of Class A common stock upon conversion of the shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) issued to Corvina Holdings Limited (the “Virgin Group”) and SK Telecom USA, Inc. and (ii) the granting of voting rights to the Virgin Group and SK Telecom with respect to the Series A Preferred Stock.

3. To approve an amendment to the Company’s 2007 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) to increase the number of shares of common stock designated for issuance thereunder from 7,726,384 shares (including shares previously granted under the Omnibus Plan or its predecessor plans or subject to outstanding awards thereunder) to 12,726,384 shares.

4. To approve the adjournment of the meeting, if necessary or appropriate, to solicit additional proxies if there is an insufficient number of votes at the meeting to approve the proposals described above.

5. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

The foregoing items of business are more completely described in the proxy statement accompanying this Notice.

The Board of Directors of the Company has fixed the close of business on                     ,              as the record date for the determination of stockholders entitled to notice of and to vote at this Special Meeting and at any adjournment or postponement thereof.

Respectfully,

Peter Lurie

General Counsel and Corporate Secretary

                    ,

All Stockholders are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please vote your shares as promptly as possible by (1) accessing the Internet website specified below and on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for that purpose. Even if you have given your proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name.

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NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS

Important Notice Regarding the Availability of Proxy Materials for the

Stockholder Meeting to be Held on             ,                     , 2009

Pursuant to new rules promulgated by the Securities and Exchange Commission, the Company has elected to provide access to these proxy statement materials, the 2007 Annual Report, the Quarterly Report on Form 10-Q for the period ended September 30, 2008, the Current Report on Form 8-K/A filed on November 7, 2008, the Current Reports on Form 8-K filed on November 14, 2008, the Current Report on Form 8-K filed on November 17, 2008 and the Current Report on Form 8-K filed on November 19, 2008, both by sending you these filings and this full set of proxy statement materials, including a proxy card, and by notifying you of the availability of such materials on the Internet.

This proxy statement and the Company’s 2007 Annual Report are available at http://                                .

Have your proxy card in hand when you access the website and follow the instructions. You will need your 12 digit Control Number, which is located on your proxy card.

For (i) the date, time, location and information on how to obtain directions to attend the Special Meeting and (ii) an identification of the matters to be voted upon at the Special Meeting and the Board of Director’s recommendations regarding those matters, please see the information contained in the “Notice of Special Meeting of Stockholders” above and in the section entitled “Summary Term Sheet” below. For information on how to vote in person at the Special Meeting, please see the sections entitled “Summary Term Sheet” and “The Special Meeting” below.

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VIRGIN MOBILE USA, INC.

10 Independence Boulevard

Warren, NJ 07059

PROXY STATEMENT

FOR SPECIAL MEETING OF STOCKHOLDERS

To Be Held on                      , 2009

 INTRODUCTION

The enclosed proxy is solicited by Virgin Mobile USA, Inc., a Delaware corporation (the “Company”) on behalf of the Board of Directors of the Company (the “Board of Directors”), for use at its Special Meeting of Stockholders (the “Special Meeting”) to be held on                     , 2009, at 10:00 a.m. local time, or at any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice of Special Meeting. The Special Meeting will be held at                     . We intend to mail this proxy statement and accompanying proxy card on or about                     , 2009 to all stockholders entitled to vote at the Special Meeting.

 SUMMARY TERM SHEET

This summary describes the material terms of Proposals 1, 2 and 3 that you will be voting on at the Special Meeting. Proposal 1 relates to the amendment of our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Class B common stock from one share to two shares and add SK Telecom USA, Inc. (or an affiliate successor thereto, “SK Telecom”) as a “Founding Stockholder” of the Company. Proposal 2 relates to the issuance of shares of our Class A common stock, par value $0.01 (the “Class A common stock”) upon conversion of our Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and the granting of voting rights to the holders of the Series A Preferred Stock. Proposal 3 relates to the amendment of our 2007 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) to increase the number of shares designated for issuance thereunder from 7,726,384 shares to 12,726,384 shares. Each Proposal relates to our acquisition (the “Helio Acquisition”) of Helio LLC (“Helio”) and the contribution to us by each of Corvina Holdings Limited (the “Virgin Group”) and SK Telecom of $25 million for 50,000 shares of Series A Preferred Stock of the Company (the “Investments”). This summary also describes the material terms of the Helio Acquisition and the Investments. You will not be voting on the Helio Acquisition or the Investments, which have been completed. To better understand Proposals 1, 2 and 3 and the Helio Acquisition and the Investments, you should carefully read this entire document and the other documents to which we refer.

Why is the Helio Acquisition discussed in this proxy statement?

We are including a discussion of the material terms of the Helio Acquisition and the business and operations of the Helio businesses because the share of Class B common stock that is the subject of Proposal 1 is issuable in connection with the Helio Acquisition. Please see the section entitled “The Transaction” beginning on page 51 for information on the Helio Acquisition. Because the Helio Acquisition was completed on August 22, 2008, you are not voting on the Helio Acquisition and your vote will not limit, restrict or otherwise affect the consummation of the Helio Acquisition.

What are the Investments discussed in this proxy statement?

On August 22, 2008, we issued 25,000 shares of Series A Preferred Stock to each of the Virgin Group and SK Telecom for an aggregate investment amount of $50,000,000. Under the terms of the Certificate of Designations for the Series A Preferred Stock, the holders of the Series A Preferred Stock currently do not have voting rights in respect of their shares of Series A Preferred Stock and do not have the ability to convert any of their shares of Series A Preferred Stock into Class A common stock. If Proposal 2 is approved by our stockholders, the holders of Series A Preferred Stock will be granted voting rights and conversion rights as described in more detail in the section entitled “Series A Preferred Stock Rights and Preferences”.

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What is Helio?

Prior to August 22, 2008, Helio was a joint venture between SK Telecom, one of the world’s most advanced wireless carriers, and EarthLink, Inc. (“EarthLink”), an internet service provider. Helio is a wireless communications company which offers competitively-priced high-end handsets and advanced mobile services for use on the same Sprint network used by the Company.

When did we acquire Helio?

On August 22, 2008, we acquired all of the outstanding capital stock of Helio, and Helio became a wholly owned subsidiary of Virgin Mobile USA, L.P (the “Operating Partnership”).

What was the purchase price for Helio?

We acquired Helio for an aggregate purchase price of $41.3 million, including direct costs of the acquisition of $3.7 million. The cost of the acquisition was based on the average closing price of the shares of our Class A common stock two trading days before and ending two trading days after the date of the announcement of the acquisition. The aggregate purchase price included the issuance to unit holders of Helio of an aggregate 13,000,000 shares of our Class A common stock either directly or as partnership units of the Operating Partnership convertible into shares of our Class A common stock. SK Telecom received 10,999,373 partnership units of the Operating Partnership, and EarthLink received 1,807,259 partnership units. On December 2, 2008, SK Telecom converted all of its partnership units of the Operating Partnership into 10,999,373 shares of our Class A common stock. See “The Transaction” on page 51.

Do our stockholders have appraisal rights with respect to the Helio Acquisition and the Investments?

No. Our stockholders do not have any “dissenters’ rights” or rights to an appraisal of the value of their shares in connection with the Helio Acquisition and Investments. See “No Vote Required; No Appraisal Rights” on page 55.

What regulatory approvals were required in connection with the Helio Acquisition?

We were required to file notification and report forms for the Helio Acquisition and Investments with the Federal Communications Commission (“FCC”). On August 11, 2008, the FCC approved the Helio Acquisition and Investments.

In addition, the parties to the Helio Acquisition and Investments filed a voluntary notice with the Committee on Foreign Investment in the United States (“CFIUS”) pursuant to Section 721 of the Defense Production Act of 1950 (“Section 721”), as amended, in connection with these two transactions. By letter dated August 15, 2008, CFIUS advised that, after full consideration of all relevant national security factors, there are no unresolved national security concerns with respect to the Helio Acquisition, and therefore concluded action under Section 721 with respect to this transaction. With respect to the Investments, CFIUS informed the parties that it had concluded its review and determined that this transaction is not a “covered transaction” under Section 721.

See “Regulatory Approvals” on page 61.

What were the conditions to the Helio Acquisition and the Investments?

The transaction agreement with respect to the Helio Acquisition contained customary conditions to closing, including the following: receipt of regulatory approvals, absence of governmental litigation, and accuracy of certain representations and warranties. On August 15, 2008, all of the closing conditions set forth in the transaction agreement were satisfied or waived. See “Material Terms of the Transaction Agreement” on pages 55 through 61.

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What are stockholders being asked to vote on?

Stockholders are being asked to approve (i) an amendment to our Amended and Restated Certificate of Incorporation to provide voting rights to EarthLink in the Company commensurate with the rights of the Class A common stock into which EarthLink’s partnership units may be converted at any time and to add SK Telecom as a Founding Stockholder, thus establishing certain rights and obligations for SK Telecom in connection with its relationships with other Founding Stockholders and business dealings between Founding Stockholders and the Company, (ii) the issuance of shares of our Class A common stock upon conversion of the Series A Preferred Stock issued in connection with the Helio Acquisition, (iii) the grant of voting rights to the holders of Series A Preferred Stock, and (iv) the increase in the number of authorized shares of Class A common stock to be issued under our Omnibus Plan.

Why was stockholder approval not required for the Helio Acquisition or the Investments?

Under Delaware law, stockholder approval was not required in connection with the Helio Acquisition and the Investments. In addition, the rules of the NYSE did not require stockholder approval for the Helio Acquisition and the Investments because we issued less than 20% of our common stock at the closing of the transaction and, prior to the Helio Acquisition, none of the stockholders of Helio was a “substantial security holder” of Virgin Mobile.

Why do stockholders have to approve the increase in the authorized shares of our Class B common stock?

Currently there is one share of Class B common stock authorized under our Amended and Restated Certificate of Incorporation. Under the terms of the Helio Acquisition, the Company purchased all of the outstanding limited liability company units of Helio from SK Telecom, EarthLink, Inc. and Helio, Inc. in exchange for the issuance by the Operating Partnership of partnership units to SK Telecom and EarthLink, the issuance by us of Class A common stock to Helio, Inc. and, subject to the approval by our stockholders, the issuance by us of one share of Class B common stock to EarthLink, which would allow EarthLink to vote on matters on which holders of Class A common stock are entitled to vote, with the right to vote the number of shares into which their partnership units of the Operating Partnership are convertible. Based on the current number of issued and outstanding shares of our Class B common stock, it will be necessary to increase the authorized number of shares of our Class B common stock from one share to two shares. Following the Helio Acquisition but prior to the filing of this proxy statement, SK Telecom converted all of its partnership units of the Operating Partnership into shares of our Class A common stock.

Additionally, the amendment to our Amended and Restated Certificate of Incorporation will add SK Telecom as a “Founding Stockholder” solely for purposes of Article XI therein. Article XI sets forth certain rights and obligations of certain of our stockholders in connection with relationships between those stockholders and business dealings between those stockholders and the Company.

If Proposal 1 is approved and the Amended and Restated Certificate of Incorporation is amended to increase the number of authorized shares of Class B common stock, there will be immediate dilution to the voting rights of the existing holders of Class A common stock as a result of such amendment. Upon issuance of the new share of Class B common stock to EarthLink, the number of shares of Class A common stock into which the partnership units of the Operating Partnership owned by EarthLink are convertible will be counted in any vote of the Class A common stock. After giving effect to such amendment, the voting power of the existing holders of Class A common stock will be reduced by approximately 2.4%. In the event that the stockholders do not approve the amendment, EarthLink will be able to vote with the holders of Class A common stock only upon conversion of its partnership units into Class A common stock, which it may do at any time.

Why do stockholders have to approve the conversion rights for the Series A Preferred Stock and the granting of voting rights therein?

We are asking you, with regard to Proposal 2, to approve (i) the issuance of Class A common stock upon conversion of the Series A Preferred Stock, and (ii) the granting of voting rights to the holders of the Series A

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Preferred Stock. The New York Stock Exchange, or NYSE, rules require stockholder approval for the issuance of common stock in any transaction or series of transactions if the common stock to be issued has voting power equal to, or in excess of, 20% of the voting power outstanding before the issuance of such shares or if the number of shares of common stock to be issued will equal or exceed 20% of the number of shares of common stock outstanding before the issuance. In addition, the NYSE rules require stockholder approval for any issuance to a “substantial security holder” if the common stock to be issued exceeds 1% of the outstanding shares of common stock prior to issuance.

Upon granting of voting rights to holders of the Series A Preferred Stock, there will be dilution to the voting rights of the holders of Class A common stock because the holders of Series A Preferred Stock will be entitled to vote on certain matters on which the holders of Class A common stock are entitled to vote. After giving effect to the amendment, the voting power of the existing holders of Class A common stock will be reduced by approximately 7.7% on matters on which the holders or Series A Preferred Stock are entitled to vote.

The shares of common stock previously issued at the closing of the Helio Acquisition, together with the shares of Class A common stock issuable upon conversion of the Operating Partnership units and (if approved) of the Series A Preferred Stock, will exceed 20% of the voting power and 20% of the number of shares of Class A common stock outstanding before the issuance. Also, the Virgin Group and its affiliates may be deemed to beneficially own approximately 35.5% of our outstanding common stock without giving effect to the conversion of the Series A Preferred Stock, and any holder of aggregate interests representing 5% or more of the outstanding shares of a company’s common stock or other voting securities is generally considered by the NYSE to be a “substantial security holder.”

Why do stockholders have to approve the amendment to the Company’s Omnibus Plan?

Following the Helio Acquisition, the Company intends to continue its implementation of management and employee incentives to further align the interests of management’s and other employees’ interests with those of the Company’s other stockholders. The Compensation Committee of the Board of Directors of the Company (the “Committee”) and the Board of Directors believe that stock-based incentives are an effective compensation tool to help achieve this alignment as well as to promote management ownership of the Company’s common stock and further the Company’s emphasis on pay for performance. In order to increase the aggregate number of shares available for stock-based incentives, the Board of Directors is seeking stockholder approval under Section 312.03 of the NYSE Listed Company Manual for an increase in the shares available for issuance under the Company’s Omnibus Plan by 5,000,000 shares of Class A common stock, from 7,726,384 million shares to 12,726,384 million shares, or from approximately 8.5% to approximately 13.2%, of the Company’s outstanding shares on a fully diluted basis, including (if approved) the additional share of Class B common stock and Series A Preferred Stock.

What effects will the proposed issuances of common stock in Proposal 2 have on stockholders?

The proposed issuance of common stock upon conversion of the Series A Preferred Stock will result in dilution in the percentage ownership interest of our existing stockholders upon conversion of the Series A Preferred Stock. As of December 5, 2008, we had 64,709,645 shares of our Class A common stock outstanding. If our stockholders approve Proposal 2, each share of Series A Preferred Stock may be converted into 117.64706 shares of our Class A common stock, reflecting an effective conversion price of $8.50 per share of Class A common stock, no later than the fourth anniversary of the original issue date (August 22, 2012) or will be automatically converted into 117.64706 shares of our Class A common stock if the price of our Class A common stock exceeds the conversion price of the Series A Preferred Stock. Assuming no further increase to the number of Class A common shares and assuming full conversion of all outstanding Operating Partnership units into Class A common stock, if all of the Series A Preferred Stock were converted as of December 5, 2008, we would then have 84,457,883 shares of Class A common stock outstanding (including dividends accrued over the full four-year period), and the Class A common stock issued upon conversion of the Series A Preferred Stock would

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represent approximately 12.0% of the outstanding shares after giving effect to the conversion. On a pro forma combined basis, the diluted net income per common share as of the nine months ended September 30, 2008 would have been $0.21 and the diluted net income per common share as of the year ended December 31, 2007 would have been $0.07. See Annex B to this proxy statement for the complete Certificate of Designations of the Series A Preferred Stock. Please see the section entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 48 for further information on the effects of the conversion.

What will happen if Proposal 1 is not approved?

If our stockholders do not approve the amendment to our Amended and Restated Certificate of Incorporation, EarthLink will not receive voting rights with respect to the partnership units of the Operating Partnership which it holds and SK Telecom will not be added as a “Founding Stockholder” solely for purposes of Article XI therein. EarthLink will nonetheless be able to convert its partnership units into Class A common stock at any time, enabling it to vote on matters submitted for stockholder approval following conversion.

What will happen if Proposal 2 is not approved?

If our stockholders do not approve the conversion of the Series A Preferred Stock, the Series A Preferred Stock will not be convertible by either the Company or the holders thereof and such holders will not be granted rights to vote their Series A Preferred Stock. The shares of Series A Preferred Stock will continue to be redeemable in cash by the Company at the fourth anniversary of the original issue date (August 22, 2012). Please see the section entitled “Series A Convertible Preferred Stock Rights and Preferences,” beginning on page 15 for further information.

What will happen if Proposal 3 is not approved?

If our stockholders do not approve the amendment to the Company’s Omnibus Plan, then the proposed increase in the number of shares of common stock available for issuance under the Omnibus Plan will not be authorized, which may raise the risk that employee turnover will increase.

Who is entitled to vote on the Proposals?

Only the holders of shares of our Class A common stock, Class B common stock and Class C common stock as of                     ,         , the record date for the Special Meeting, are entitled to vote on the Proposals. The holders of the Series A Preferred Stock are not entitled to vote on the Proposals.

What vote is required to approve the Proposals?

Under our Amended and Restated Certificate of Incorporation, approval of Proposal 1 requires the affirmative vote of holders of at least 66 ²/3% of all outstanding securities entitled to vote on the proposal. Under the NYSE rules, approval of Proposals 2 and 3 requires the affirmative vote of the majority of the votes cast on the proposal, provided that the total votes cast on the proposal represent over 50% of all outstanding securities entitled to vote on the proposal. Abstentions are counted as “present” for purposes of determining who is entitled to vote on the Proposals and therefore will have the effect of a vote against the Proposals. Broker non-votes are not counted as “present” for purposes of determining who is entitled to vote on the Proposals and therefore will have no effect on the outcome of the vote on the Proposals.

What is the Board of Directors’ recommendation on how to vote?

Our Board of Directors recommends that you vote FOR the approval of all of the Proposals.

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How many votes do I have?

Each outstanding share of Class A common stock will be entitled to one vote on each matter to be voted upon. Each outstanding share of Class B common stock entitles its holder to a number of votes that is equal to the total number of shares of Class A common stock for which the partnership units that such holder holds in our Operating Partnership are exchangeable as of the record date. Each outstanding share of Class C common stock will be entitled to one vote on each matter to be voted upon.

What does it mean if I receive more than one set of materials?

This means you own shares of our Class A common stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards that you receive in order to vote all of the shares you own. Each proxy card you receive comes with its own prepaid return envelope. If you vote by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card.

What if I fail to instruct my broker?

Without instructions, your broker will not vote any of your shares held in “street name,” which will be considered to be a “broker non-vote.” Broker non-votes will be counted for purposes of determining the presence or absence of a quorum, but are not counted as “present” for purposes of determining who is entitled to vote on the Proposals, and therefore will have no effect on the outcome of the vote on the Proposals or, if applicable, any adjournment of the Special Meeting.

What happens if I do not return a proxy card?

Your failure to return your proxy card or to vote your shares through any alternative voting procedure will have the same effect as voting against adoption of the Proposals or the adjournment of the Special Meeting, if applicable.

May I vote in person?

Yes. You may attend the Special Meeting and vote your shares in person whether or not you sign and return your proxy card or vote your shares through any alternative voting procedure. If your shares are held of record by a broker, bank or other nominee and you wish to vote at the Special Meeting, you must obtain a proxy from such record holder.

What do I need to do now?

First, read this proxy statement carefully. Then, as soon as possible, you should submit your proxy by executing and returning the enclosed proxy card or by following the instructions for any alternative voting procedure on the proxy card. Your shares represented by proxy will be voted in accordance with your directions. If you submit a proxy, but have not specified any directions, your shares will be voted FOR approval of the Proposals.

Who can help answer questions I may have?

If you have any questions concerning the Proposals or the Special Meeting, if you would like additional copies of the proxy statement or if you will need special assistance at the meeting, please call Erica Bolton, Director of Investor Relations, at (908) 607-4000.

The information provided above is merely a brief description of material information contained in this proxy statement. You should read this proxy statement in its entirety.

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 FORWARD LOOKING STATEMENTS

This proxy statement contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. These statements include, but are not limited to, statements about our strategies, plans, objectives, expectations, intentions, expenditures, and assumptions and other statements contained in this document that are not historical facts. When used in this proxy statement, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project” and similar expressions, as they relate to us are intended to identify forward-looking statements. These statements reflect our current views with respect to future events, are not guarantees of future performance, and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate.

Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual results to differ from the forward-looking statements in this proxy statement include, among others, those risks and uncertainties discussed in this proxy statement and under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007 and our Quarterly Report on Form 10-Q for the period ended September 30, 2008. In addition, factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) risks that the Helio Acquisition and the Investments disrupt current plans and operations and the potential difficulties in employee retention as a result of the Helio Acquisition and the Investments, (2) the ability to recognize the results of the Helio Acquisition and the Investments, (3) the amount of the costs, fees, expenses and charges related to the Helio Acquisition and the Investments, and (4) risks that Helio or any other companies we may acquire could have undiscovered liabilities, may strain our management capabilities or may be difficult to integrate.

We neither intend nor assume any obligation to update these forward-looking statements, which speak only as of their dates.

This proxy statement incorporates by reference the financial performance metrics Adjusted EBITDA and free cash flow, which are not calculated in accordance with GAAP. We believe that these non-GAAP financial metrics are helpful in understanding our operating performance from period to period and, although not every wireless company defines these metrics in the same way, we believe that these metrics as used by us facilitate comparisons with other wireless communication providers. These metrics should not be considered a substitute for any performance metrics determined in accordance with GAAP. For definitions and a reconciliation of these metrics to the most directly comparable GAAP financial measures, please refer to the section entitled “Definition of Terms and Reconciliation of Non-GAAP Financial Measures” in our earnings release for the quarter ended September 30, 2008, which can be accessed on the homepage of our Investor Relations website at http://investorrelations.virginmobileusa.com.

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THE SPECIAL MEETING

General

The enclosed proxy is solicited on behalf of the Company’s Board of Directors for use at a Special Meeting of the Company’s stockholders to be held on                     , 2009, at 10:00 a.m. local time, or at any adjournments or postponements thereof, for the purposes set forth in this proxy statement and in the accompanying notice of special meeting. The Special Meeting will be held at                                                          .

At the Special Meeting, the Company’s stockholders are being asked to consider and vote upon (1) a proposal to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to (x) increase the number of authorized shares of Class B common stock from one share to two shares and (y) add SK Telecom as a “Founding Stockholder” solely for purposes of Article XI therein; (2) a proposal to approve (x) the issuance of shares of Class A common stock upon conversion of the shares of Series A Preferred Stock issued to the Virgin Group and SK Telecom in connection with the Helio Acquisition and (y) the granting of voting rights to the holders of Series A Preferred Stock; and (3) a proposal to approve an amendment to the Company’s Omnibus Plan to increase the number of shares of Class A common stock available for issuance thereunder by five million shares, from 7,726,384 (including shares previously granted under the Omnibus Plan or its predecessor plans or subject to outstanding awards thereunder) shares to 12,726,384 shares. The Company’s stockholders are also being asked to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt and approve the Proposals.

The Company does not expect a vote to be taken on any other matters at the Special Meeting. If any other matters are properly presented at the Special Meeting for consideration, however, the holders of the proxies, if properly authorized, will have discretion to vote on these matters in accordance with their best judgment.

 Voting Rights and Outstanding Shares

Only holders of Class A common stock, Class B common stock and Class C common stock at the close of business on                     ,          will be entitled to notice of, and to vote, at the Special Meeting.

Each outstanding share of Class A common stock will be entitled to one vote on each matter to be voted upon. On December 5, 2008 64,709,645 shares of Class A common stock were outstanding and are therefore eligible to be voted at the Special Meeting.

There is one share of Class B common stock outstanding, held by Sprint Ventures, Inc., an affiliate of Sprint Nextel Corporation (“Sprint Nextel”). The share of Class B common stock entitles its holder to a number of votes that is equal to the total number of shares of Class A common stock for which the partnership units that such holder holds in our Operating Partnership are exchangeable as of the record date. Based on the number of shares of Class A common stock for which the partnership units held by Sprint Nextel on December 5, 2008 are exchangeable, the share of Class B common stock is entitled to a vote equivalent to 12,058,626 shares of Class A common stock on each matter to be voted upon.

As of December 5, 2008, 115,062 shares of Class C common stock were outstanding, all of which were held by affiliates of the Virgin Group. Each outstanding share of Class C common stock will be entitled to one vote on each matter to be voted upon.

Under the Company’s Amended and Restated Certificate of Incorporation, all shares of common stock (including shares of Class A, Class B and Class C common stock) generally vote together as a single class on all matters, subject to certain specified exceptions.

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The holders of a majority of the voting power of the outstanding shares of common stock as of the close of business on the record date must be present, either in person or represented by proxy, to constitute a quorum necessary to conduct the Special Meeting. Shares represented by proxies received but marked as abstentions or as withholding voting authority will be counted as present at the meeting for purposes of establishing a quorum but will have the effect of voting against the proposals.

The total number of votes that could be cast at the meeting is the number of votes actually cast plus the number of abstentions. Abstentions are counted as “shares present” at the meeting for purposes of determining whether a quorum exists and have the effect of a vote “against” any matter as to which they are specified.

All votes will be tabulated by the inspector of elections appointed for the Special Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. If a stockholder’s shares are held of record by a broker, bank or other nominee and the stockholder wishes to vote at the Special Meeting, the stockholder must obtain from the record holder a proxy issued in the stockholder’s name. Brokers who hold shares in “street name” for clients typically have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. Absent specific instructions from the beneficial owner of the shares, however, brokers are not allowed to exercise their voting discretion with respect to the approval of non-routine matters, such as the approval of the Proposals. Proxies submitted without a vote by brokers on these matters are referred to as “broker non-votes.” Broker non-votes are not counted as “present” for purposes of determining whether a quorum exists at the Special Meeting and therefore will have no effect on the outcome of the vote on the Proposals.

Proxies received at any time before the Special Meeting and not revoked or superseded before being voted will be voted at the Special Meeting. If the proxy indicates a specification, it will be voted in accordance with the specification. If no specification is indicated, the proxy will be voted “FOR” adoption of the Proposals, “FOR” the approval of the Proposal to adjourn the Special Meeting if there are not sufficient votes to adopt the Proposals and in the discretion of the persons named in the proxy with respect to any other business that may properly come before the Special Meeting or any postponement or adjournment of the Special Meeting. You may also vote in person by ballot at the Special Meeting.

Under our Amended and Restated Certificate of Incorporation, approval of Proposal 1 requires the affirmative vote of holders of at least 66 ²/3% of all outstanding securities entitled to vote on the proposal. Under NYSE rules, approval of Proposals 2 and 3 requires the affirmative vote of the majority of the votes cast on the proposal, provided that the total votes cast on the proposal represent over 50% of all outstanding securities entitled to vote on the proposal. Because adoption of Proposal 1 requires the approval of stockholders representing at least 66 ²/3% of all of the outstanding shares of the Company’s common stock entitled to vote on the proposal, failure to vote your shares of the Company’s common stock (including if you hold through a broker, bank or other nominee) will have exactly the same effect as a vote against Proposal 1.

The approval of the proposal to adjourn the Special Meeting if there are not sufficient votes to approve and adopt the Proposals requires the affirmative vote of stockholders holding a majority of the shares present in person or by proxy at the Special Meeting. The persons named as proxies may propose and vote for one or more adjournments of the Special Meeting, including adjournments to permit further solicitations of proxies.

How You Can Vote

You may vote your shares in any of the following ways:

Voting by Mail. If you choose to vote by mail, simply mark your proxy card(s), date and sign it and return it in the postage-paid envelope provided.

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Voting by Telephone. You can vote your proxy by telephone by calling the toll-free number on the proxy card. You will then be prompted to enter the control number printed on your proxy card and to follow the subsequent instructions. Voting by telephone is available 24 hours a day. If you vote by telephone, do not return your proxy card(s).

Voting by Internet. You can also vote your proxy via the Internet by visiting the website named on your proxy card(s). Internet voting is available 24 hours per day. If you vote via the Internet, you should not return your proxy card(s). Instructions on how to vote via the Internet are located on the proxy card enclosed with this proxy statement. Have your proxy card(s) in hand when you access the web site and follow the instructions to obtain your records and create an electronic voting form.

Voting in Person. You can also vote by appearing and voting in person at the Special Meeting. If you vote your shares of the Company’s common stock by submitting a proxy, your shares will be voted at the Special Meeting as you indicate on your proxy card, or Internet or telephone proxy. If no instructions are indicated on your signed proxy card, all of your shares of the Company’s common stock will be voted “FOR” the adoption of the Proposals and the approval of the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to adopt the Proposals. You should return a proxy by mail, by telephone, or via the Internet even if you plan to attend the Special Meeting in person.

Proxies; Revocation

Any person giving a proxy pursuant to this proxy statement has the power to revoke it at any time before it is voted. Proxies may be revoked by any of the following actions:

If your shares of the Company are held in the name of a bank, broker, trustee or other holder of record, including the trustee or other fiduciary of an employee benefit plan, you must obtain a proxy, executed in your favor from the holder of record, to be able to vote at the Special Meeting.

Expenses of Proxy Solicitation

We will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and filing of this proxy statement, the proxy card and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies by mail may be supplemented by telephone, facsimile or personal solicitation by directors, officers or other regular employees of the Company.

Officers, directors and employees of the Company may solicit proxies by telephone, mail, the Internet or in person. However, they will not be paid for soliciting proxies. The Company will also request that individuals and entities holding shares in their names, or in the names of their nominees, that are beneficially owned by others, send proxy materials to and obtain proxies from, those beneficial owners, and will reimburse those holders for their reasonable expenses in performing those services.

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Adjournments

Although it is not expected, the Special Meeting may be adjourned for any reason by either the Chairman of the Special Meeting or the holders of a majority in voting power of the stock entitled to vote at the Special Meeting. When the Special Meeting is adjourned to another time or place, notice need not be provided of the place, date and time if the time and place thereof is announced at the Special Meeting. If, however, the date of the adjourned meeting is more than 30 days after the date for which the Special Meeting was originally called, or if a new record date is fixed, notice of place, date and time must be provided. Such notice will be mailed to you or transmitted electronically to you and will be provided not less than 10 days nor more than 60 days before the date of the adjourned meeting and will set forth the purpose of the meeting.

 Stockholder Proposals

The deadline for submitting a stockholder proposal for inclusion in our proxy statement and form of proxy for our 2009 annual meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange Commission is February 14, 2009. We advise you to review our bylaws, which contain additional requirements regarding stockholder proceedings and director elections.

 Presence of Auditors

Representatives of PricewaterhouseCoopers LLP are expected to be present at the Special Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Other Matters

The Company’s Board of Directors is not aware of any additional business to be brought before the Special Meeting other than that described in this proxy statement.

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 PROPOSAL 1

AMENDMENT TO THE

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 General

Our Board of Directors adopted a resolution declaring that the amendment to the Amended and Restated Certificate of Incorporation to (i) increase the number of authorized shares of Class B common stock from one share to two shares and (ii) add SK Telecom as a “Founding Stockholder” solely for purposes of Articles XI is advisable. The Board of Directors further directed that the proposed action be submitted for consideration by the Company’s stockholders at a Special Meeting to be called for that purpose.

If the stockholders approve the amendment, the Company will (i) amend Article IV of the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of all Class B common stock as described above and (ii) amend Article VIII of the Amended and Restated Certificate of Incorporation to make SK Telecom a Founding Stockholder solely for purposes of Article XI. If adopted by the stockholders, the changes will become effective on the filing of the amendment to the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. The only changes in the Company’s existing Amended and Restated Certificate of Incorporation would be those numeric changes required to reflect the increase of the number of authorized shares of Class B common stock and to add SK Telecom as a Founding Stockholder solely for purposes of Article XI as proposed in this proxy statement. The full text of the proposed Second Amended and Restated Certificate of Incorporation is set forth as Annex A to this proxy statement.

The primary purpose of Proposal 1 is to satisfy, in connection with the Helio Acquisition, the Company’s obligations under the transaction agreement. As of the record date, the Company is authorized to issue one share of Class B common stock and has one share of Class B common stock currently outstanding which is held by Sprint Nextel. The share of Class B common stock entitles its holder to a number of votes that is equal to the total number of shares of Class A common stock for which the partnership units that such holder holds in the Operating Partnership are exchangeable. The Company currently does not have a sufficient number of authorized shares of Class B common stock to effect the issuance of an additional share of Class B common stock to EarthLink as provided for under the transaction agreement. Accordingly, approval of Proposal 1 is required for the issuance of a share of Class B common stock to EarthLink as provided for under the transaction agreement.

If Proposal 1 is approved and the Amended and Restated Certificate of Incorporation is amended to increase the number of authorized shares of Class B common stock, there will be immediate dilution to the voting rights of the existing holders of common stock as a result of such amendment. Upon issuance of the share of Class B common stock to EarthLink, the number of shares of Class A common stock into which the partnership units of the Operating Partnership owned by EarthLink are convertible will be counted in any vote of the Class A common stock. After giving effect to such amendment, the voting power of the existing holders of Class A common stock will be reduced by approximately 2.4%. Regardless of whether the stockholders approve the amendment, EarthLink will be able to vote with the holders of Class A common stock upon conversion of its partnership units into Class A common stock.

Following the acquisition of Helio but prior to the filing of this proxy statement, SK Telecom converted its partnership units of the Operating Partnership received in the Helio Acquisition into shares of our Class A common stock.

 Voting Agreements

Each of the Virgin Group and Sprint Nextel has entered into a voting agreement with SK Telecom to vote its shares of our voting capital stock within their control in favor of Proposal 1, in the case of Sprint Nextel so long as the transaction continues to be recommended by the majority of independent directors of the Company at the

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time of the Special Meeting. These votes will be counted to satisfy the approval requirements of the NYSE. Without giving effect to the conversion of the Series A Preferred Stock, as of December 5, 2008, the Virgin Group and Sprint Nextel represented approximately 45.6% of the voting power of our capital stock.

 Required Vote

In accordance with the terms of our Amended and Restated Certificate of Incorporation, the affirmative vote of holders of at least 66 ²/3% of all outstanding shares of Class A common stock, Class B common stock and Class C common stock present in person or represented by proxy and entitled to vote on the proposal will be required to approve Proposal 1. Abstentions are counted as “present” for purposes of determining who is entitled to vote on the Proposals, and therefore will have the effect of a vote against the Proposals. Broker non-votes are not counted as “present” for purposes of determining who is entitled to vote on the Proposals, and therefore will have no effect on the outcome of the vote on the Proposals.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE

“FOR” PROPOSAL 1.

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 PROPOSAL 2

ISSUANCE OF COMMON STOCK UPON CONVERSION OF

SERIES A CONVERTIBLE PREFERRED STOCK

 General

On August 22, 2008, we issued 25,000 shares of Series A Preferred Stock to each of the Virgin Group and SK Telecom for an aggregate investment amount of $50,000,000. Under the terms of the Certificate of Designations for the Series A Preferred Stock, the holders of the Series A Preferred Stock currently do not have voting rights in respect of their shares of Series A Preferred Stock and do not have the ability to convert any of their shares of Series A Preferred Stock into common stock. If this Proposal 2 is approved by our stockholders, the holders of Series A Preferred Stock will be granted voting rights and conversion rights as described in more detail below in the section entitled “Series A Preferred Stock Rights and Preferences”.

 NYSE Requirements

The Board of Directors proposes to issue 5,882,353 shares of Class A common stock upon conversion of all outstanding shares of Series A Preferred Stock issued in connection with the Investments and asks for your approval for the issuance in accordance with the rules of the NYSE.

The NYSE rules require stockholder approval for the issuance of common stock in any transaction or series of transactions if the common stock has voting power equal to, or in excess of, 20% of the voting power outstanding before the issuance of such shares or if the number of shares of common stock to be issued will equal or exceed 20% of the number of shares of common stock outstanding before the issuance. In addition, the NYSE rules require stockholder approval for any issuance to a “substantial security holder” if the common stock to be issued exceeds 1% of the outstanding shares of common stock prior to issuance.

Our proposed issuance of shares of common stock to SK Telecom and the Virgin Group upon conversion of the Series A Preferred Stock falls under this rule because (i) the shares of common stock issued at the closing of the Helio Acquisition, together with the shares of common stock issuable upon conversion of the Series A Preferred Stock, will exceed 20% of the voting power and number of shares of Company common stock outstanding before the issuance of shares upon consummation of the Helio Acquisition and (ii) the Virgin Group may be deemed to beneficially own approximately 35.5% of our outstanding common stock without giving effect to the conversion of the Series A Preferred Stock, and any holder of aggregate interests which represent 5% or more of the outstanding shares of a company’s common stock or other voting securities is generally considered by the NYSE to be a “substantial security holder.”

 Interests of Certain Persons in Approval of Series A Preferred Stock Conversion

If this Proposal 2 is approved by our stockholders, the Virgin Group will beneficially own approximately 36.7% of our outstanding capital stock on a fully diluted basis. Pursuant to our amended and restated stockholders’ agreement among the Company, Sprint Nextel, the Virgin Group and SK Telecom, the Virgin Group has the right to designate up to three individuals to our Board of Directors. The Virgin Group has designated Messrs. Mark Poole, Robert Samuelson and Ms. Frances Brandon-Farrow to serve on our Board of Directors. Additionally, pursuant to our second amended and restated bylaws and subject to the Virgin Group continuing to hold certain minimum interests in the Company, the Virgin Group has consent rights over certain actions by the Company.

If this Proposal 2 is approved by our stockholders, SK Telecom will beneficially own approximately 16.5% of the voting power of our outstanding capital stock on a fully diluted basis. Pursuant to our amended and restated stockholders’ agreement with Sprint Nextel, the Virgin Group and SK Telecom, SK Telecom has the right to designate up to two individuals to our Board of Directors. SK Telecom has designated Richard Chin and

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Sung Won Suh to serve on our Board of Directors. Additionally, pursuant to our second amended and restated bylaws and subject to SK Telecom continuing to hold certain minimum interests in the Company, SK Telecom has consent rights over certain actions by the Company.

 Series A Preferred Stock Rights and Preferences

The following is a summary of the material terms and provisions of the preferences, limitations, voting powers and relative rights of the Series A Preferred Stock as contained in the Certificate of Designations of the Company relating to the Series A Preferred Stock, which is attached to this proxy statement as Annex B, which we incorporate by reference into this proxy statement. Stockholders are urged to read the Certificate of Designations relating to the Series A Preferred Stock in its entirety. While the Company believes this summary covers the material terms and provisions of the Certificate of Designations of the Company relating to the Series A Preferred Stock, it may not contain all of the information that is important to you and is qualified in its entirety by reference to Annex B.

Authorized Shares and Liquidation Preference

The number of authorized shares of the Series A Preferred Stock is 50,000, plus any shares necessary to pay any dividends thereon. The Series A Preferred Stock has a liquidation preference of $1,000.00 per share.

Ranking

The Series A Preferred Stock, with respect to dividend and distribution rights and rights on liquidation, winding-up and dissolution, ranks (i) senior to each class of common stock of the Company and each other class or series of capital stock of the Company created which expressly ranks junior to the Series A Preferred Stock with respect to the right to receive dividends and distributions and rights upon the Company’s liquidation, winding-up and dissolution, (ii) on parity with each other class or series of capital stock of the Company which does not expressly rank junior or senior to the Series A Preferred Stock with respect to the right to receive dividends and distributions and rights upon the Company’s liquidation, winding-up and dissolution and (iii) junior to all other series of preferred stock of the Company and each other class or series of capital stock of the Company which expressly ranks senior to the Series A Preferred Stock with respect to the right to receive dividends and distributions and rights upon the Company’s liquidation, winding-up and dissolution.

Liquidation

In the event that the Company voluntarily or involuntarily liquidates, dissolves or winds up, the holders of the Series A Preferred Stock will be entitled, for each share of the Series A Preferred Stock held, to the greater of (i) the sum of (A) $1,000.00 plus (B) all unpaid cumulated and accrued dividends on such share of Series A Preferred Stock, or (ii) an amount equal to the amount a holder of Series A Preferred Stock would have received upon a liquidation, winding-up or dissolution of the Company had such holder converted its shares of Series A Preferred Stock into shares of Class A common stock immediately prior to such liquidation, winding-up or dissolution.

In the event the assets of the Company available for distribution to stockholders upon any liquidation, dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, are insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series A Preferred Stock and the corresponding amounts payable on any parity securities, holders of Series A Preferred Stock and the holders of parity securities will share ratably in any distribution of assets of the Company in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.

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Dividends

Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors:

Dividends will be payable semi-annually in arrears on September 30th and March 31st of each year. The dividends will accrue and be cumulative, whether or not the Company has earnings or profits, whether or not there are funds legally available for the payment of such dividends and whether or not dividends on the Series A Preferred Stock are declared or paid. Accrued but unpaid dividends for any past dividend period may be declared by the Board of Directors and paid on any date fixed by the Board of Directors, whether or not a regular dividend payment date, to holders of record on the books of the Company on such record date as may be fixed by the Board of Directors.

All dividends in respect of the Series A Preferred Stock will be paid in additional shares of Series A Preferred Stock.

Subject to limited exceptions, if full cumulative dividends payable on all outstanding shares of the Series A Preferred Stock for any dividend period have not been declared and paid, the Company will not be permitted to declare or pay dividends with respect to, or redeem, purchase or acquire any of its junior securities during the next succeeding dividend period, including the Class A common stock. Additionally, no dividend may be declared or paid or set aside for payment or other distribution declared or made upon any common stock of the Company unless full participating dividends on all shares of Series A Preferred Stock have been or are contemporaneously declared and paid.

Voting

Generally, after obtaining the stockholder approval under this Proposal 2, each holder of the Series A Preferred Stock shall have the right to one vote for each share of the Class A common stock into which such share of Series A Preferred Stock would be convertible, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Class A common stock and shall be entitled to vote together as a single class with holders of Class A common stock.

Redemption

For as long as the Series A Preferred Stock is outstanding, the Company is prohibited from redeeming, repurchasing or acquiring any shares of common stock or other junior securities, subject to limited exceptions.

At the four-year anniversary of the original issue date of the Series A Preferred Stock (August 22, 2012), if any shares of Series A Preferred Stock remain outstanding due to a failure to obtain stockholder approval under this Proposal 2 prior to such time or, if the stockholders approve the proposal and the price of Class A common stock fails to reach $8.50 per share and the holders of Series A Preferred Stock do not elect to convert their shares into Class A common stock, the Company will redeem all of the outstanding shares of Series A Preferred Stock. The Company will redeem the Series A Preferred Stock by payment in cash, for each share of Series A Preferred Stock to be redeemed, in an amount equal to $1,000.00 plus all accrued and unpaid dividends calculated as of the redemption date.

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Conversion

Generally, at any time after obtaining the stockholder approval under this Proposal 2 and commencing on the eighteen-month anniversary of the original issue date of the Series A Preferred Stock, each share of Series A Preferred Stock may be converted at the option of the holder of such share of Series A Preferred Stock into 117.64706 shares of Class A common stock, reflecting an effective conversion price of $8.50 per share. Any optional conversion by a holder of Series A Preferred Stock will be for all of the shares of Series A Preferred Stock held by such holder.

Upon obtaining stockholder approval under this Proposal 2, each share of Series A Preferred Stock shall be converted automatically into 117.64706 shares of Class A common stock upon the earlier of (i) such time as the closing price on the NYSE of the Class A common stock exceeds $8.50 for ten trading days during any twenty consecutive trading day period and (ii) the four-year anniversary of the original issue date of the Series A Preferred Stock. The number of shares of Class A common stock into which each share of the Series A Preferred Stock will be convertible will be determined by dividing the amount the holder would be entitled to receive in a liquidation, dissolution or winding-up of the Company at the time of conversion by the conversion price in effect at the time of conversion. In addition, the holder will be entitled to receive additional shares of Class A common stock in an amount equal to all unpaid, cumulated and accrued dividends with respect to each share of Series A Preferred Stock converted at the time of the conversion.

 Voting Agreements

Each of the Virgin Group and Sprint Nextel have entered into a voting agreement with SK Telecom to vote its shares of our voting capital stock within their control in favor of Proposal 2, in the case of Sprint Nextel so long as the transaction continues to be approved by the majority of independent directors of the Company at the time of the Special Meeting and in the case of the Virgin Group so long as the transaction continues to be approved by the majority of the Board of Directors at the time of the Special Meeting. These votes will be counted to satisfy the approval requirements of the NYSE. Without giving effect to the conversion of the Series A Preferred Stock, as of December 5, 2008, Virgin Group and Sprint Nextel represent approximately 45.6% of the voting power of our capital stock on a fully diluted basis.

 Required Vote

Under the NYSE rules, approval of the issuance of the common stock upon conversion of the Series A Preferred Stock requires the affirmative vote of the majority of the votes cast on the proposal, provided that the total votes cast on the proposal represent over 50% of all outstanding securities entitled to vote on the proposal.

Abstentions are counted as “present” for purposes of determining who is entitled to vote on Proposal 2, and therefore will have the effect of a vote against Proposal 2. Broker non-votes are not counted as “present” for purposes of determining who is entitled to vote on Proposal 2, and therefore will have no effect on the outcome of the vote on Proposal 2.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE

“FOR” PROPOSAL 2

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 PROPOSAL 3

AMENDMENT TO THE 2007 OMNIBUS INCENTIVE COMPENSATION PLAN

 General

Stockholders are being asked to consider and approve an amendment to the Company’s Omnibus Plan to increase the number of shares of common stock available for issuance thereunder from 7,726,384 (including shares previously granted under the Omnibus Plan or its predecessor plans or subject to outstanding awards thereunder) to 12,726,384 shares, of which up to 8,590,618 shares may be granted as incentive stock options (the “Omnibus Plan Amendment”). Attached to this proxy statement as Annex C is a copy of the Omnibus Plan, as amended and approved by the Board of Directors, and as submitted to the stockholders for their approval. The Omnibus Plan was originally adopted by the sole holder of shares of the Company’s capital stock representing all of the Company’s then-outstanding voting power by written consent without a meeting on October 10, 2007.

Proposal 3 seeks approval of the Omnibus Plan Amendment to add 5,000,000 shares of Class A common stock to the 2,111,846 currently designated (98,268 of which are currently available) for future awards under the Omnibus Plan. If the Omnibus Plan Amendment is approved, the shares available for future awards under the Omnibus Plan would be approximately 6.0% of the Company’s outstanding Class A common stock, on a fully diluted basis. The other features of the Omnibus Plan remain the same as under the terms of the Omnibus Plan previously approved by the sole holder of shares of our capital stock representing all of our then-outstanding voting power. In order for the Omnibus Plan Amendment to take effect, it must be approved by the Company’s stockholders at the Special Meeting.

Material Features of the Omnibus Plan

The following is a brief summary of the material features of the Omnibus Plan. Because this is only a summary, it does not contain all the information about the Omnibus Plan that may be important to you and is qualified in its entirety to the full text of the Omnibus Plan Amendment, which is attached hereto as Annex C.

Purpose

The purpose of the Omnibus Plan is to aid the Company and its affiliates in recruiting and retaining key employees, directors or consultants and to motivate such employees, directors or consultants to exert their best efforts on behalf of the Company and its affiliates by providing incentives through the granting of “Awards”, which consist of restricted stock units, options, stock appreciation rights or other stock-based Awards (including performance-based Awards) granted pursuant to the Omnibus Plan. The Company expects that it will benefit from the added interest which such key employees, directors or consultants will have in the welfare of the Company as a result of their proprietary interest in the Company’s success. All employees, directors and consultants of the Company and its affiliates are eligible to participate in the Omnibus Plan if they are selected by the Compensation Committee of the Board of Directors (the “Committee”) to participate in the Omnibus Plan (any such individual, a “Participant”). For the fiscal year ended December 31, 2008, approximately 99 employees and one director were selected by the Committee to participate in the Omnibus Plan.

Administration

The Omnibus Plan is administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are intended to qualify as “non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (to the extent required to comply with Rule 16b-3), “independent directors” within the meaning of the NYSE’s listed company rules (to the extent required under such listed company rules) and, following the post-initial public offering period described in Section 1.162-27(f)(2) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), “outside directors” within the meaning of

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Section 162(m) of the Code. Additionally, the Committee may delegate the authority to grant Awards under the Omnibus Plan to the Chief Executive Officer of the Company; provided that such delegation and grants are consistent with applicable law and guidelines established by the Board of Directors from time to time. The Committee is authorized to interpret the Omnibus Plan, to establish, amend and rescind any rules and regulations relating to the Omnibus Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Omnibus Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Omnibus Plan in the manner and to the extent the Committee deems necessary or desirable. The Committee has the full power and authority to establish the terms and conditions of any Award consistent with the provisions of the Omnibus Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions).

Awards

Options. Options granted under the Omnibus Plan are, as determined by the Committee, non-qualified or incentive stock options for federal income tax purposes, as evidenced by the related Award agreements. The option price per share is determined by the Committee, but may not be less than 100% of the fair market value of a share of common stock on the date an option is granted (other than in the case of options granted in substitution of previously granted awards). Options granted under the Omnibus Plan become exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event may an option be exercisable more than ten years after the date it is granted. The purchase price for the shares as to which an option is exercised must be paid to the Company as designated by the Committee pursuant to one or more of the following methods: (i) in cash or its equivalent, (ii) in shares of common stock having a fair market value equal to the aggregate option price for the shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided that such shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee), (iii) partly in cash and partly in such shares of common stock; (iv) if there is a public market for the shares of common stock at such time, through the delivery of irrevocable instructions to a broker to sell shares of common stock obtained upon the exercise of the option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate option price for the shares of common stock being purchased or (v) through net settlement in shares of common stock. No Participant has any rights to dividends or other rights of a stockholder with respect to shares subject to an option until the Participant has given written notice of exercise of the option, paid in full for such shares of common stock (including by means of net exercise) and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Omnibus Plan.

The Committee may also grant options under the Omnibus Plan that are intended to be Incentive Stock Options (“ISOs”). Such ISOs shall comply with the requirements of Section 422 of the Code. No ISO may be granted to any Participant who at the time of such grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or of any subsidiary, unless (i) the option price for such ISO is at least 110% of the fair market value of a share of common stock on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of shares acquired upon the exercise of an ISO either (i) within two years after the date of grant of such ISO or (ii) within one year after the transfer of such shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition.

All options granted under the Omnibus Plan are intended to be nonqualified stock options unless the applicable Award agreement expressly states that the option is intended to be an ISO.

Stock Appreciation Rights. The Committee may grant stock appreciation rights independent of or in connection with an option. The exercise price per share of a stock appreciation right is determined by the Committee but in no event may such amount be less than the fair market value of a share on the date the stock appreciation right is granted (other than in the case of stock appreciation rights granted in substitution of previously granted awards); provided, however, that in the case of a stock appreciation right granted in

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conjunction with an option, or a portion thereof, the exercise price may not be less than the option price of the related option. Generally, each stock appreciation right entitles a participant upon exercise to an amount equal to the product of (1) the excess of (A) the fair market value on the exercise date of one share of common stock over (B) the exercise price per share, times (2) the number of shares of common stock covered by the stock appreciation right. Payment may be made in shares of common stock, in cash, or partly in shares of common stock and partly in cash, as may be determined by the Committee.

Other Stock-Based Awards. The Committee, in its sole discretion, may grant or sell Awards of shares of common stock, restricted stock, restricted stock units (RSUs) and Awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, shares of common stock in such form, and dependent on such conditions, as the Committee shall determine.

Performance-Based Awards. During any period when Section 162(m) of the Code is applicable to the Company and the Omnibus Plan, certain other stock-based awards may be granted in a manner to make them deductible by the Company under Section 162(m) of the Code (“Performance-Based Awards”). A Participant’s Performance-Based Award is determined based on the attainment of written performance goals approved by the Committee for a performance period established by the Committee (i) while the outcome for that performance period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance goal relates or, if less, the number of days which is equal to 25% of the relevant performance period. The performance goals, which must be objective, shall be based upon one or more of the following criteria: (1) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (2) net income; (3) operating income; (4) earnings per share; (5) book value per share; (6) return on stockholders’ equity; (7) expense management; (8) return on investment; (9) improvements in capital structure; (10) profitability of an identifiable business unit or product; (11) maintenance or improvement of profit margins; (12) stock price; (13) market share; (14) revenues or sales; (15) costs; (16) cash flow; (17) working capital; (18) return on assets and (19) total stockholder return. The maximum amount of a Performance-Based Award during a calendar year to any Participant is: (x) with respect to Performance-Based Awards that are denominated in shares, 1,000,000 shares of common stock and (y) with respect to Performance-Based Awards that are not denominated in shares, $10,000,000. The amount of the Performance-Based Award determined by the Committee for a performance period is paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance period; provided, however, that a Participant may, if and to the extent permitted by the Committee and consistent with the provisions of Section 162(m) of the Code, elect to defer payment of a Performance-Based Award.

Adjustments Upon Certain Events

Generally. In the event of any change in the outstanding shares of common stock by reason of any share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination, combination or transaction or exchange of shares or other corporate exchange, or any distribution to stockholders of shares of common stock other than regular cash dividends or any similar transaction, the Committee shall, in such manner as it may deem equitable in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Omnibus Plan, adjust or substitute (i) the number or kind of shares or other securities issued or reserved for issuance pursuant to the Omnibus Plan or pursuant to outstanding Awards, (ii) the maximum number or amount of Awards that may be granted during a calendar year to any Participant, (iii) the option price or exercise price and/or (v) any other affected terms of such Awards.

Change in Control. In the event of a change in control (as defined in the Omnibus Plan), the Committee shall do one or more of the following: (A) accelerate the vesting of, or waive any restrictions with respect to, any outstanding Award then held by a Participant; (B) provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Award previously granted under the Omnibus Plan as determined by the Committee in its sole discretion; and/or (C) if the Company is the surviving entity in any change in control, continue to administer the Omnibus Plan and have any existing Award remain

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outstanding in accordance with its terms following the change in control. In addition, in the event of a change in control, the Committee may, in its sole discretion, cancel any portion of an Award outstanding as of such change in control in exchange for the payment to the Participant for fair value (as determined in the sole discretion of the Committee). In the event that any change in control will result in the Company’s shares ceasing to be publicly traded on a national securities exchange or on NASDAQ, then, to the extent that any Awards or substitute Awards will remain outstanding following such change in control, the Committee shall accelerate the vesting and exercisability of such Awards prior to the occurrence of such change in control.

Nontransferability of Awards

Unless otherwise determined by the Committee, an Award is not transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution. An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant.

Amendment and Termination.

The Board of Directors may amend, alter or discontinue the Omnibus Plan, but no amendment, alteration or discontinuation shall be made, (a) without the approval of the stockholders of the Company, if such action would (except as is provided under the Omnibus Plan), increase the total number of shares reserved for the purposes of the Omnibus Plan or change the maximum number of shares for which Awards may be granted to any Participant or (b) without the consent of a Participant, if such action would diminish any of the rights of the Participant under any Award granted to such Participant under the Omnibus Plan; provided, however, that the Committee may amend the Omnibus Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws (including, without limitation, to avoid adverse tax consequences to the Company or to Participants).

Section 409A

Notwithstanding other provisions of the Omnibus Plan or any Award agreements thereunder, no Award shall be granted, deferred, accelerated, extended, paid out or modified under the Omnibus Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant. In the event that (i) it is reasonably determined by the Committee that, as a result of Section 409A of the Code, payments in respect of any Award under the Omnibus Plan may not be made at the time contemplated by the terms of the Omnibus Plan or the relevant Award agreement, as the case may be, without causing the Participant holding such Award to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code, and (ii) at the time of a Participant’s termination of employment with the Company such Participant is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable under the Omnibus Plan as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits under the Omnibus Plan (without any reduction in such payments or benefits ultimately paid or provided to the Participant) until the date that is six months following the Participant’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code).

 Voting Agreements

Each of the Virgin Group, Sprint Nextel and SK Telecom has entered into a voting agreement with us to vote its shares of our voting capital stock within their control in favor of Proposal 3, in the case of Sprint Nextel so long as the transaction continues to be approved by the majority of independent directors of the Company at the time of the Special Meeting and in the case of the Virgin Group so long as the transaction continues to be approved by the majority of the Board of Directors at the time of the Special Meeting. These votes will be counted to satisfy the approval requirements of the NYSE. Without giving effect to the conversion of the Series A Preferred Stock, as of December 5, 2008, Virgin Group, Sprint Nextel and SK Telecom represent approximately 59.9% of the voting power of our outstanding capital stock.

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Required Vot e

Under the NYSE rules, approval of the increase in the number of shares of common stock available for issuance under the Omnibus Plan requires the affirmative vote of the majority of the votes cast on the Proposal, provided that the total votes cast on the Proposal represent over 50% of all outstanding securities entitled to vote on the Proposal.

Abstentions are counted as “present” for purposes of determining who is entitled to vote on Proposal 3, and therefore will have the effect of a vote against Proposal 3. Broker non-votes are not counted as “present” for purposes of determining who is entitled to vote on Proposal 3, and therefore will have no effect on the outcome of the vote on Proposal 3.

 Equity Compensation Plan Information

The following table provides information as of October 31, 2008 with respect to the shares of common stock that may be issued under our equity compensation plans.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE

“FOR” PROPOSAL 3.

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 EXECUTIVE COMPENSATION

Compensation Discussion And Analysis

Executive Compensation Philosophy and Objectives

Our compensation programs aim to attract and retain talented and experienced executives of the Company and to offer performance-based incentives that promote stockholder value. The programs focus on short and long-term financial goals as well as our strategic objectives. The compensation philosophy is characterized by the following principal objectives.

We believe that the best way to motivate executives and sustain high levels of performance is by tying a substantial portion of their compensation to the achievement of corporate financial and strategic objectives, and reward executives to the extent these objectives are achieved. We believe that objectives should be clear and measurable, and focused on short and long-term goals aligned with stockholder expectations. Employees at higher levels in the organization will have more pay at risk.

We seek to establish compensation plans, levels and practices that are competitive with companies similar in financial size and performance to Virgin Mobile, and with companies that we compete with for executive talent. Consistent with market practices, our program includes a mix of compensation elements including; base pay, annual incentives and long-term incentives. This competitive pay structure enables us to attract and retain executives.

We believe that the interests of our stockholders and executives should be aligned by ensuring that a substantial portion of the executive officer’s compensation is directly determined by growth in our share price and earnings per share growth. To this end, we provide long-term incentives to executives to increase stockholder value and provide executives with an opportunity to share in the value they create. It is also important to maintain a level of unvested value in long-term incentives for each executive in order to retain and motivate our executives.

Market Data and Peer Group

Annually we benchmark each position, including those of our executive officers, to market data. In this exercise, we compare each component of compensation, including base salary, total cash (which is the sum of base salary and annual bonus target) and long-term incentives, to industry comparables. Given our business model as a Mobile Virtual Network Operator (MVNO), it is difficult to find a stable group of peer companies with comparable business models within the same industry to provide accurate benchmarks. Moreover, we compete for talented employees and executives across a number of industries, including the telecom, high-tech, entertainment and media sectors. We therefore have historically used two national surveys with companies of comparable annual revenue ($1-$3 billion) in related and general industries, and the resulting survey group comprised of approximately 200 plus companies.

Given the broad group of companies from these surveys, and our challenges in identifying an appropriate specific peer group, in November 2007, the Committee of our Board of Directors engaged the services of Towers Perrin to recommend an approach for selecting a peer group for our executive officers with the purpose of identifying companies with similar financial performance and companies from which we draw talent. The new peer group is designed to be comprised of companies with similar growth to our own and whose success is based on the leverage created by human capital rather than the management of financial assets. The resulting peer group for executive officers is based on a mix of general industry and high tech companies that meet the following criteria: (1) the company is public, (2) annual revenues are within the $1-$3 billion range, (3) EBITDA/employee ratio is greater than $25,000, (4) revenue/asset ratio is greater than 25%, and (5) 1, 3, and 5 year revenue growth (CAGR) is greater than 5%. The list of companies in the resulting peer group may change

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marginally from year to year depending on what companies are in the surveys we are using and which companies meet the criterion. For 2008, the peer group is comprised of sixty-five companies, with 31 general industry companies from a Towers Perrin survey and 34 high tech and telecommunications companies from a Radford survey as follows:

In December 2007, the Committee reviewed data from the resulting peer group when making compensation decisions with respect to our executive officers and directors. The Committee also considered the role and experience of each executive officer compared to the benchmark position in order to weigh each executive officer’s responsibilities against the market. If an executive officer was determined to be playing a lesser or greater role than implied by the benchmark, that officer’s compensation target was reduced or increased accordingly. The Committee also reviewed the individual performance of each executive officer against the prior year’s objectives and target leadership competencies. In its review, the Committee took into account position to market, relative weighing of role and individual performance before making any adjustment to an executive officer’s base salary or annual incentive target.

We generally target each executive’s base pay and total cash compensation at the peer group median, and total direct compensation (including all cash compensation and long-term incentive awards), within the third

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quartile of the market. The Committee then adjusts individual awards taking such factors as the expected role, experience, performance and leadership of the executive officer into account.

Role of the Compensation Committee

The Committee assists the Board of Directors by appropriately and effectively using compensation and benefits to align the Company’s executive officers’ financial interests with those of the stockholders, in order to achieve the Company’s vision and goals.

Upon completion of the Company’s initial public offering in October 2007, the Board of Directors appointed two independent directors to the Committee. The newly composed committee reviewed its role and charter at its first meeting.

The general responsibilities of the Committee are oversight of compensation for the CEO, firm compensation (including perquisites, benefits and retirement plans) philosophy, incentive compensation plans and pension plans. In addition, the Committee is responsible for review and approval of the evaluation process and compensation of the Company’s executive officers. The Committee also coordinates communication regarding these issues with the full Board of Directors and, as appropriate, with stockholders and regulators.

The following functions are the common recurring activities of the Committee in carrying out its responsibilities. These functions should serve as a guide with the understanding that the Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee also carries out other responsibilities and duties as may be delegated to it by the Board of Directors from time to time.

In discharging its oversight role, the Committee is empowered to study or investigate any matter of interest or concern that it deems appropriate and it has the sole authority to retain outside counsel or other experts for this purpose, including the authority to approve the fees payable to such counsel or experts and any other terms of retention. The functions of the Committee are as follows:

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In 2007, the Committee retained the services of Towers Perrin to provide guidance on incentive plan design, specifically on the Company’s annual, mid-term and long-term incentive plans. Towers Perrin also provided market survey data for our executive officers and other employees as requested. The Committee regularly reviews the consulting services it requires and the independence of the consultants, and retains the discretion to terminate the services of Towers Perrin.

From time to time, we also engage Towers Perrin to assist us with projects which are unrelated to executive compensation. Towers Perrin has advised us since 2004, and we intend to continue our relationship with Towers Perrin in 2008.

Elements of Compensation

We review base salaries and annual incentive targets for executive officers on an annual basis. The Committee primarily considers four factors when establishing or adjusting base salaries:

The Committee’s assessment of individual performance and value to the Company, including that of our executive officers, is based on:

The Committee applies such analysis in all instances in determining all facets of employee compensation (including that of key executive officers), whether salary or incentive-related.

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Each of the elements of compensation described in this section applies to all eligible employees, including our named executive officers.

Base Salary and Individual Annual Incentive Targets. Executive responsibilities, training, experience and market data from our peer companies along with market demand, determine the base salary and annual incentive targets for our executives. As with total compensation, we aim to pay our executives salaries that are competitive with those of their peers with similar responsibilities at companies as defined by our peer group. We believe that providing a competitive base salary and annual incentive target allows us to attract and retain talented executives. The Committee reviews the base salary and annual incentive targets for executives at least annually and adjusts them from time to time to reflect market levels as well as individual responsibilities, performance and experience.

Total target cash compensation levels for executive officers have historically been below market median levels due to the Company’s ability to attract and retain executives by offering a greater portion of pay at risk through long-term incentives. As the Company has increased in size and profitability, the jobs of executive officers have expanded in responsibility and scope; however, the base salary and annual incentive targets for these executive officers, particularly those with longer service, have historically not been adjusted to reflect changes in their roles. The Committee reviewed the market position of each executive officer and determined that in aggregate the Company was paying significantly below the market median for total target cash compensation, and further determined that this approach to compensation was placing the Company at risk of losing key talent at a critical time. In 2007, the Committee agreed that cash compensation levels for each executive officer would be carefully reviewed, and pay would be adjusted upward toward market median levels taking into account performance against objectives and changes in overall job responsibilities.

In February 2007, each executive officer was eligible for a performance-based salary increase consistent with the annual performance review process across the Company. To this end, each executive officer received a base salary adjustment effective February 1, 2007, and some executive officers received an annual incentive target adjustments effective January 1, 2007, as indicated below. Mr. Schulman’s cash compensation has historically been below the median market level due to the emphasis the Company has placed on long-term incentives. The Committee discussed the importance of bringing both the cash and long-term incentive pay components for Mr. Schulman in-line with market practice, and as a result they approved a 19% increase to Mr. Schulman’s base salary effective February 1, 2007. Similarly, Mr. Lurie’s cash compensation has been below the median market level, and the Committee approved a 15% increase to base salary and an annual incentive target change from 45% to 55%. This compensation change for Mr. Lurie also reflects an increase in his responsibilities over time as General Counsel. Mr. Feehan received a base salary adjustment of 27% and an annual incentive target change from 45% to 60%. This change reflects significant growth in his new role as Chief Financial Officer and his demonstrated performance and leadership. Mr. Messenger received a 4.2% increase to base salary and an annual incentive target change from 45% to 55%; these changes reflect his significant contributions in 2007 and performance against objectives. Mr. Handler and Mr. Marchbank each received a 4% increase to base salary reflecting their ongoing consistent and effective performance.

In December 2007, the Committee decided to review the cash compensation levels of executive officers using the updated market data from the Company’s new peer group. In general, the data showed that the current target total cash compensation levels for certain executive officers were still significantly below the market median of our peer companies. After concluding its review in January 2008, the Committee agreed that further action was necessary to retain certain executives, and although some of the increases would be significant, they were necessary to bring the compensation levels in line with the market. Specifically, the Committee approved a base salary increase for Mr. Schulman effective January 1, 2008, increasing Mr. Schulman’s base salary from $600,000 to $750,000 per year. However, Mr. Schulman declined this increase effective February 15, 2008 in recognition of the Company’s failure to achieve its 2007 performance targets and lowered expectations for 2008. The Committee also approved increases to base salary and annual incentive targets (as shown in the following chart) for Mr. Feehan, Mr. Lurie,Mr. Marchbank and Mr. Messenger effective January 1, 2008. These changes reflect each executive’s demonstrated performance in completing the initial public offering of the Company, and

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their added responsibilities in managing a public company. These changes bring the total target cash compensation levels for Mr. Feehan, Mr. Marchbank and Mr. Messenger close to market median levels at 99%, 92% and 99% of median respectively. Due to Mr. Lurie’s additional responsibilities in managing the tax department, Mr. Lurie’s total target compensation is above the market median level at 124% of median. Mr. Handler did not receive an adjustment to base salary or annual incentive target due to his scheduled departure from the company, effective March 31, 2008.

Cash Compensation

Variable Cash Compensation Plans

All employees are eligible to receive variable cash compensation through either our Annual Incentive Plan or our Sales Incentive Plan. These plans offer employees incentives to work toward specific corporate performance targets. As discussed below, we base individual annual incentive targets under both incentive plans on the scope of an employee’s responsibilities as well as prior background, training and experience. We also consider compensation paid to individuals employed in similar positions in the companies represented in the compensation data we review. We believe that all employees should be rewarded for their contributions to our success. Executive officers participate in the Annual Incentive Plan along with other employees. Executive officers do not participate in the Sales Incentive Plan.

2007 Annual Incentive Plan. The Annual Incentive Plan is linked to business performance. The size of the annual incentive pool depends on two metrics: (1) lifetime value, which is a measure of longer- term growth based on average revenue per user, cash cost per user, churn, gross additions, and cost per gross addition; and (2) EBITDA, as adjusted and defined in the Annual Incentive Plan, which reflects short-term financial performance. Under the 2007 Annual Incentive Plan, the Company used Consolidated Adjusted EBITDA (defined as earnings before interest, tax, depreciation, amortization and non-cash compensation expense), then applied certain adjustments for one-time variable costs as deemed by the Committee, in its discretion, to be applicable. The target, threshold and maximum levels for lifetime value and EBITDA are established annually based on the Board of Directors-approved business plan.

Each year the Committee reviews the applicable metrics and their relative weight in determining the size of the annual incentive pool. The weight the Committee affords the lifetime value and EBITDA metrics in our annual incentive plans has changed each year since our inception, based on the developing interests of our business and the overall interests of our stockholders. In earlier years, our primary focus was growing our business, including our customer base. Consequently, the lifetime-value metric (being a measure of longer-term growth, revenue and

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profits) constituted a greater percentage of our annual incentive plans. In the last several years, our corporate focus has shifted to balance growth with becoming profitable and sustained performance over the long-term. With this shift in focus, the Committee has placed greater emphasis on EBITDA, and in 2007, both lifetime value and EBITDA were weighted equally at 50%.

Under the 2007 Annual Incentive Plan, the Committee set average revenue per user, cash cost per user, churn, gross additions and cost per gross addition targets of $23.65, $14.41, 4.73%, 3,387,000 and $124.48, respectively, and these target levels result a lifetime value target of approximately $240 million. Our 2007 target for EBITDA (as adjusted for purposes of the Annual Incentive Plan) was $150.2 million.

In September 2007, the Committee amended the 2007 Annual Incentive Plan and 2005 Debt Bonus Plan to provide additional compensation to eligible employees, including executive officers, for performance during 2007. These amendments were made in recognition of their efforts in preparing for the initial public offering of the Company and the related transactions, and to recognize our year-on-year growth. Specifically, the Committee approved a one-time increase in payments under the 2007 Annual Incentive Plan and 2005 Debt Bonus Plan (described below) for performance during 2007 equal to 25% of the target payment amount under each plan. This one-time increase was applied after the payout has been calculated based on performance against lifetime value and EBITDA-related targets. The Committee also approved changes to the lifetime value and EBITDA threshold levels under the 2007 Annual Incentive Plan and 2005 Debt Bonus Plan, while the related target and maximum payout levels remain unchanged. Specifically, the threshold level for lifetime value was reduced by 1% and the threshold level for EBITDA was reduced by 15% as follows:

Actual 2007 results (as adjusted for purposes of the Annual Incentive Plan) for average revenue per user, cash cost per user, churn, gross additions and cost per gross addition were $21.14, $12.82, 4.9%, 3,384,000, $107.66 respectively, and these figures result in the lifetime value of $210.50 million. Adjusted EBITDA (as adjusted for purposes of the Annual Incentive Plan) in 2007 was $107.0 million. Based on these results, and applying the respective weighting of 50% for each component, and further applying the 25% adjustment, the resulting payout under the plan was at 94% of target.

All executive officers participate in the Annual Incentive Plan, and the payout for executive officers in respect of 2007 performance is entirely based on Company performance results relative to target, with no adjustment for individual performance. Therefore, the respective payouts under the 2007 Annual Incentive Plan and 2005 Debt Bonus Plan for each executive officer was at 94% of target as shown in the Summary Compensation Table that follows this section.

2008 Annual Incentive Plan

The key objectives for the 2008 Annual Incentive Plan are to align annual incentive metrics with stockholder expectations, improve “line of sight” so employees can see how their contributions impact business results and provide incentives for management to balance profitability and growth. Working with Towers Perrin, the Committee engaged in a comprehensive review of the annual incentive plan design, and based on this review and the objectives described above agreed to make the following changes for the 2008 Annual Incentive Plan:

Performance Cycles. To ensure that financial targets under the Annual Incentive Plan are aligned to stockholder expectations, the Committee established two performance cycles for 2008: (1) January through June 2008 performance with payout in September 2008 and (2) July through December 2008 performance with payout in February 2009.

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Company Metrics and Weighting. The Committee agreed that EBITDA (as adjusted and defined in the 2008 Annual Incentive Plan) is still a critical metric and measure of profitability, and accordingly decided to retain this metric with its current relative weighting of 50% under the plan. The 2008 maximum and threshold levels for EBITDA are set at plus or minus 25%, respectively, of the targeted level in the Board of Directors-approved business plan. The Committee decided to replace lifetime value with metrics that are more visible to stockholders, and therefore decided that Net Service Revenue and Net Customer Adds would be more appropriate metrics. Each of these metrics has a relative weighting of 25% under the Annual Incentive Plan. The maximum and threshold levels for Net Service Revenue will be set within a 15% variation of the targeted level, with levels for Net Adds are set at plus or minus 150,000 of the targeted level. The resulting individual payout range under the plan remains unchanged at 50% of target (threshold performance level) up to 150% of target (maximum performance level). For purposes of the 2008 Annual Incentive Plan, midpoint targets (upon realization of which 100% payout is achieved) for the year ended December 31, 2008 were set at $122.0 million for Adjusted EBITDA and $1.25 billion for Service Revenue. Operational targets under the plan, such as net customer adds and department goals, are also reviewed by the Committee on an annual basis. These targets are used by the Committee for compensation purposes only and should not be used for any other purpose. Based on our experience and assessment of current market conditions, we believe that such operational targets for our named executive officers are reasonable, although neither automatically nor easily achieved.

The 2008 annual incentive payout for executive officers will continue to be entirely based on Company performance against objectives as described above.

Individual Metrics and Weighting. To improve the pay for performance link, employees below the executive officer level have a department and individual component to their annual incentives. Each department and individual will be evaluated against specific measurable financial objectives that will tie to the Company’s overall financial targets.

Long-Term Incentives. We believe that in order to attract, motivate and retain executive officers and other key employees, we must provide a market-competitive level of long-term incentives and link those incentives to a regular review of performance. Therefore, the Company awards long-term incentive grants annually. This annual award process also helps the Company to retain these individuals by maintaining the right balance between vested and unvested long-term incentive grants. Grants to executive officers are generally in the form of restricted stock units and stock options and are targeted to be in the third quartile of the market for such incentives. The Committee considers position to market, relative weighting of role, vested and unvested value of existing grants and individual performance before making any long-term incentive grant. The actual value of any such grants upon exercise is solely based on the potential increase in value of our shares over time.

In order to align the interests of executive officers and stockholders, the Company uses two forms of performance-based long-term incentives: (1) performance-based cash incentives and (2) equity-based incentives (including awards such as non-qualified stock options, restricted stock units, restricted stock and performance based restricted stock units).

Performance-based Cash Incentives

2005 Debt Bonus Plan. In July 2005, we incurred debt, which was used to retire all preexisting debt and return all capital contributions to the members at that time. In connection with that transaction, we implemented a bonus compensation plan for certain employees to reward them for their efforts in growing the business to a level that enabled us to return all capital contributions to members, to provide incentives to reach future goals over the succeeding three years, to ensure we were able to retain these key employees over this period and to reward loyalty for employees who remained with the Company. The Debt Bonus Plan was offered to key employees as of July 2005, and we consider it an important part of our overall compensation objectives for the 2005-2008 period, as it complements our core compensation plans (base salary, annual bonus and long-term incentives) by providing targeted additional incentives for performance and by improving our ability to retain these key employees in an increasingly competitive labor market.

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Individual awards under the Debt Bonus Plan are cash awards based on the number of options outstanding at the time of the transaction, length of service, individual performance and contributions to us. Employees received the award in four parts: an initial payment in July 2005 and three additional annual payments subject to the same performance metrics and payment dates of the Annual Incentive Plan. Generally, longer-tenured employees received a greater portion of the bonus payable in 2005 than more recently hired employees. We have already paid three of the four payments: the initial payment was paid in 2005 and two payments for the performance periods of 2005 and 2006 were paid in 2006 and 2007. The final payment was also contingent on performance against the same metrics included in the Annual Incentive Plan in 2007, and was paid out at 94% of target in February 2008. Award amounts were not adjusted for individual performance and are listed in the Summary Compensation Table that follows this section.

Mid-Term Incentive Plan. In November 2007, the Committee reviewed each executive officer’s aggregate cumulative long-term incentives value and in particular the level of vested and unvested intrinsic value accrued to each executive. In aggregate, the current position of long-term incentives fell below typical levels compared to market and was lower than our compensation strategy targets. This is due in part to historical grant patterns whereby grants were not awarded on an annual, regular basis, and grants awarded to executive officers were on the lower end of the market range due to the limited number of Company shares available for grant. To address retention concerns as the result of limited historical long-term incentives, and to provide incentives for executives to meet short to mid-term financial goals, the Committee decided that a mid-term cash incentive plan would be appropriate to address these concerns. The Committee considered traditional long-term incentives such as restricted stock units or stock options, but given the limited pool of Company shares available for grant, decided that a cash-based plan would be appropriate.

The Committee engaged the services of Towers Perrin to help design the plan and determine the appropriate level of incentives. Towers Perrin suggested that award amounts similar to the annual bonus target on an annual basis would be appropriate to retain executives through the next three years until the value of equity-based long-term incentives reached the desired market level. The Committee reviewed a three-year total compensation summary for each executive showing the projected value of incentives from 2008-2010 and decided that the targeted level of incentives under the mid-term plan should be near 80% of the 2008 annual incentive target amount for all executives. To this end, the Committee established individual mid-term plan targets as follows:

Towers Perrin also suggested that the awards be based on Company performance metrics that provide incentives to balance growth and profitability, and the Committee determined that the two most appropriate metrics to meet this objective would be EBITDA and Service Revenue. The 2008 maximum and threshold levels for EBITDA are set within a 25% deviation of the targeted level in the Company’s Board of Directors-approved business plan. The maximum and threshold levels for Net Service Revenue are set within a 15% variation of the targeted level. For purposes of the Mid-Term Incentive Plan, midpoint targets for the year ended December 31,

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2008 were set at $122.0 million for Adjusted EBITDA and $1.25 billion for Service Revenue. These targets are used by the Committee for compensation purposes only and should not be used for any other purpose. Based on our experience and assessment of current market conditions, we believe that these targets for our named executive officers are reasonable, although neither automatically nor easily achieved. Each executive’s mid-term incentive target and corresponding payout are based on 2008 EBITDA and Service Revenue results, and an executive would be eligible to receive half of the payout in February 2009 and half in August 2009.

The Committee intends to renew this plan for the performance year 2009, with any payout under the plan in 2010; however, the Committee in its sole discretion reserves the right to terminate or amend any part of the mid-term plan.

Equity-Based Incentives

In 2007, the Company provided equity-based incentives in the form of restricted stock, restricted stock units and non-qualified stock options to executive officers. The Company relies on a mix of equity-based incentives to promote stockholder growth and to align the interests of stockholders and executive officers. The Committee considered individual performance, executive retention, market data targeting the 62.5 percentile of peer companies, the unvested and outstanding equity position of each executive and other factors to determine the size and types of awards for each executive officer.

Grants to the CEO. Effective February 14, 2007, in accordance with the then-terms of the Mr. Schulman’s employment contract, Mr. Schulman was granted 85,358 restricted shares (with 100% of such restricted shares vesting on August 1, 2009, subject to Mr. Schulman’s continued employment through such date). The restricted shares are subject to accelerated vesting in the event certain performance targets are met as follows:

In May 2007, the Committee engaged in a comprehensive review of the equity position for Mr. Schulman given the importance of retaining our chief executive officer and the position of his long-term incentive portfolio, at which time 90% of the value of his long-term incentives was vested. This position was due in part to the fact that after Mr. Schulman received an initial stock option grant to purchase 1,066,973 shares, he did not receive any equity awards from 2003 through 2006. Given this equity position and the desire to retain Mr. Schulman, on May 23, 2007, the Committee awarded Mr. Schulman a further long-term incentive grant taking into account the targeted annual market value of long-term incentives to CEOs in our peer group. Mr. Schulman was granted 266,743 restricted shares, with 50% vesting on the second anniversary of the grant date and 50% vesting on the third anniversary of the grant date (in either case, subject to Mr. Schulman’s continued employment through such date).

Grants to other Executive Officers. In May 2007, each executive officer received restricted stock awards with a targeted value equal to one-half of the annual long-term incentive market data at median. The Committee used restricted stock as the form of incentive to align the interests of executives with stockholders. Historically, all grants to executive officers have been in the form of non-qualified stock options or stock appreciation rights. Since these new grants were in the form of restricted stock, these grants would give them an ownership stake in the Company. These restricted stock grants were effective May 23, 2007 with vesting of 25% per year from the date of grant. A summary of awards made to executive officers is shown in the “Grants of Plan-Based Awards” table.

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2007 Omnibus Incentive Compensation Plan. In October 2007, the Committee established the 2007 Omnibus Incentive Plan (Omnibus Plan) to provide a variety of equity-based incentives that could be used as necessary to attract and retain executives. Under the plan, executive officers are eligible to receive stock options, restricted stock, performance shares, stock appreciation rights, common stock, performance units, or cash based awards as determined by the Committee. Following the initial public offering, the Omnibus Plan became the only plan under which long-term incentive awards could be granted. Grants made to executive officers prior to the initial public offering under prior plans (including the 2002 Unit Option Plan and Unit Option Agreements, the 2006 Stock Appreciation Rights Plan and 2007 Restricted Stock Unit Plan) were converted into grants under the Omnibus Plan. However, the original terms and conditions relating to these pre-IPO grants, including the provisions for vesting, termination of employment and expiration, did not change.

The second-half of the targeted long-term incentive value was granted upon the initial public offering of the Company. The Committee determined that non-qualified stock options would provide an appropriate balance to the prior grants of restricted stock in May 2007. These grants have a six-year term and will vest 25% annually based on an initial grant date of July 1, 2007. A summary of awards made to executive officers is shown in the “Grants of Plan-Based Awards” table.

In order to retain executive officers over the next two years, the Committee approved a special retention equity grant in recognition of their performance in continuing the Company’s growth in 2007 and in successfully completing the Company’s initial public offering and related transactions. The grants were made in October 2007 in restricted stock units and will vest in equal parts on the first and second anniversaries of the grant date. The target value of these awards was $450,000 for each executive officer and that value was divided by the IPO offering price of $15.00 to determine the number of restricted stock units (30,000) granted to each executive officer. A summary of awards made to executive officer is shown in the “Grants of Plan Based Awards” table.

2008-2012 Option Liquidity Facility. In the event the Company did not successfully complete an initial public offering in 2007, the Company had established a plan (“2008-2012 Option Liquidity Facility”) to provide liquidity for vested options in the event the Company met certain performance targets. Consequently, upon completion of our initial public offering in October 2007, the 2008-2012 Option Liquidity Facility was cancelled and was never utilized.

Stock Grant Policy. The Committee approves all grants for direct reports of the CEO or named executive officers, grants with a fair market value above $250,000, and grants with vesting periods of less than four years. The Committee delegates authority to the CEO to approve grants that do not meet the criteria described above, provided that (i) the maximum aggregate fair market value of grants approved by the CEO in any quarter will not exceed $1 million without review and approval by the Committee, and (ii) a summary of all grants approved by the CEO will be provided to the Committee on a quarterly basis.

The exercise price of all stock options will be equal to the fair market value of the Company’s stock on the date of the grant (determined based on the NYSE closing price of the Company’s stock on the date of the grant). Our general policy is to grant awards of stock options or restricted stock units (RSUs) annually either (i) during the trading windows established by the Company pursuant to the Policies and Procedures for Trading in Securities of the Company by Directors, Executive Officers and Access Employees or (ii) at Committee meetings held in connection with new hires or promotions. Grants made in connection with new hires or promotions will be effective on the first business day of the month directly succeeding the month of hire or promotion, with the exercise price being equal to the fair market value of the Company’s stock on the date of the grant as described above.

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Compensation and Employment Agreement of the CEO

In January 2008, Mr. Schulman and the Committee entered into discussions regarding Mr. Schulman’s employment agreement. The Committee agreed that given the critical stage of the business and his contributions, it was important to review the terms of Mr. Schulman’s employment agreement well in advance of the expiration of his agreement in August 2008. The Committee also discussed the value in retaining Mr. Schulman and in providing appropriate incentives for him to increase stockholder value. The Committee believes that Mr. Schulman’s knowledge of the business and high credibility internally and externally will enable him to guide the company in achieving its business plan. Any disruption to the business at this time would provide a significant risk to the company. The Committee therefore engaged in a comprehensive review of Mr. Schulman’s employment agreement, and asked Towers Perrin for guidance on specific elements of Mr. Schulman’s employment agreement in his role as the CEO.

Together with Towers Perrin, the Committee reviewed three main areas of Mr. Schulman’s employment agreement: (1) cash compensation, (2) long-term incentives, and (3) employment termination provisions. The Committee asked Towers Perrin to comment on the market practice for each area, including a comparison of Mr. Schulman’s current pay to the market levels from the new peer group for cash and long-term incentive components of pay.

Cash Compensation. As described above, the total target cash compensation levels for all executive officers, including Mr. Schulman, have been significantly below the market. The Committee reviewed the market data showing Mr. Schulman’s total target cash compensation position at 75% of the targeted market level, using the 50th percentile of the peer group data, and recommended increasing Mr. Schulman’s base salary from $600,000 to $750,000. This increase became effective January 1, 2008; however, Mr. Schulman waived this increase in salary for 2008 on February 15, 2008. The Committee agreed in relation to the terms of the new employment agreement that it would be appropriate to use the higher base salary of $750,000 for any benefits and payments under the agreement, including severance but excluding the 2008 annual bonus.

Long-term Incentives. The Committee continues to believe that Mr. Schulman’s compensation should be more heavily weighted towards driving stockholder value and long term performance, and therefore that more of his compensation should be placed at risk through long-term incentives. As described above, the Committee was increasingly concerned about the position of Mr. Schulman’s long term incentives. Given that Mr. Schulman received an initial stock option grant that is now completely vested, he did not receive any equity grants from 2003 through 2006, and his restricted stock grants from 2007 do not provide significant unvested value compared to market levels, the Committee decided that action was necessary in the area of long-term incentives for Mr. Schulman. The Committee stressed the importance of continuing to provide an annual long-term incentive grant to Mr. Schulman to increase the value of unvested equity. Together with Towers Perrin, the Committee reviewed the annual long-term incentive market data from the peer group showing the targeted annual grant value in the range of $2.8 million at the 50th percentile to $4.6 million at the 75th percentile. The Committee discussed delivering a grant with a targeted value slightly at the 50th percentile of the market, and agreed to a targeted value of $2.8 million. This value was then divided by the opening price ($7.00 per share) on February 13, 2008, the date of the Committee meeting, to determine the number of restricted stock units (400,000) subject to the long-term incentive award.

The Committee discussed the importance of aligning Mr. Schulman’s interests with those of our stockholders and decided to establish certain performance conditions for vesting. The Committee identified “Earnings Per Share” as the appropriate metric to measure stockholder value over time, and accordingly established the vesting at one-third of the restricted stock units per year from date of grant subject to the “Earnings Per Share Performance Criteria” described below:

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The Committee believes these goals to be aligned with the interests of stockholders and the interests of Mr. Schulman in attaining specific performance goals. Based on the Company’s experience, the Committee believes that these targets for our named executive officers are reasonable, although neither automatically nor easily achieved.

Termination of Employment. Upon reviewing the provisions for termination of employment, the Committee concluded that the terms in Mr. Schulman’s current agreement should be updated to reflect current market practice. In addition, prior provisions did not contemplate ongoing equity grants or cash incentives under the mid-term plan.

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The chart on the following page summarizes the compensation and benefits to be provided in the event Mr. Schulman’s employment is terminated under certain circumstances. The Committee believes this reflects an updated view of the current market practices of the applicable peer group. Mr. Schulman will be entitled to receive the following compensation and benefits upon termination of employment for the reasons set forth below, after determining that he has complied with the non-compete and confidentiality terms of his employment agreement.

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In addition to the termination provisions described in the table on the preceding page, the agreement provides for a scenario in which the Board of Directors and Mr. Schulman mutually agree upon a succession plan (a mutually agreed-upon plan being adopted in good faith by two-thirds of the Board of Directors, excluding any employee directors, and consented to in writing by Mr. Schulman). There would be mutual agreement on a specific date for succession and implementation of a transition plan to ensure the full readiness and preparation of any incoming chief executive officer prior to Mr. Schulman’s departure. The Committee agreed that it would be necessary to provide incentives for Mr. Schulman to remain with the company during any such transition period and approved (1) a one-time cash payment of one times base salary and bonus (using the greater of $750,000, or base salary in place at the time of termination), (2) 100% accelerated vesting of all outstanding unvested equity grants from May 2007 onward upon date of termination, and (3) 24 months to exercise vested options, subject to non-compete and claw-back provisions, each in the event Mr. Schulman’s employment with us terminates in keeping with the terms of the Board of Directors-approved succession plan.

Tax Treatment under Section 280G of the Internal Revenue Code. Pursuant to Mr. Schulman’s employment agreement, in the event that payments and/or benefits Mr. Schulman receives as compensation in the event of a change in control of the Company are subject to the excise tax imposed by Section 4999 of the Code or to any interest or penalties related to the excise tax, we will pay a “Gross-Up Payment” equal to the lesser of (1) $5,000,000 or (2) the amount necessary to ensure that, after payment by the Mr. Schulman of all federal, state and local taxes (including any interest or penalties imposed with respect to such taxes), he will retain payments equal to the excise tax imposed.

Other Executive Agreements

Effective July 3, 2007, Messrs. Marchbank, Feehan, Handler, Lurie and Messenger each entered into three-year employment agreements with Virgin Mobile USA, LLC, each of which have substantially the same terms and provisions (with variations related to each executive’s current base salary and position). Under these agreements, the current base salaries for these executives may not be reduced and the Committee will have full discretion over any future base salary increases.

In the event of termination of employment by the Company without cause or the executive’s resignation for good reason, the executive will be entitled to receive the following compensation and benefits (after determining that the executive has complied with the restrictive covenant terms of the employment agreement):

For the purposes of each employment agreement, “cause” for termination includes: (1) willful misconduct or gross negligence with regard to us; (2) failure to follow direction of the Board of Directors or the chief executive officer within five business days after written notice by the Board of Directors or the chief executive officer that failure to follow such direction shall be grounds for termination; (3) failure to attempt in good faith to perform the executive’s duties (other than a result of incapacity due to physical or mental illness) within ten days

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after delivery of written demand for substantial performance by the Board of Directors; (4) conviction of or plea of guilty or no contest to a misdemeanor involving fraud or theft or a felony; or (5) breach of the restrictive covenant provisions applicable to the executive which is not cured within fifteen business days after receipt of written notice.

Each of the employment agreements for Messrs. Marchbank, Feehan, Handler and Messenger defines “good reason” to include (1) any material adverse diminution in the executive’s duties or responsibilities such that they are materially inconsistent with the executive’s position; (2) failure of the company to pay compensation timely; and (3) the operating agreement being modified without the executive’s consent in a manner that materially adversely affects the executive’s duties, authority or other interests. In no case shall an event constitute “good reason” for resignation if we cure the event within 30 days after receipt of written notice of the event from the executive.

We will not provide tax “gross up” payments to these executives in the event the executive incurs a “golden parachute” excise tax under Section 280G of the Internal Revenue Code. However, the agreements provide that the payment of any potential “parachute payments” to the executive will be limited to 2.99 times the executive’s base amount as defined under Section 280G, unless the executive would otherwise be entitled to receive and retain, on a net after tax basis, a greater amount of total compensation without the imposition of the limitation on payments.

Additional Compensation Matters

Perquisites. Executive officers receive supplemental long-term disability insurance to cover up to 60% of base salary in the event of a disability that extends beyond six months. We pay disability policy premiums on executives’ behalf, and provide a gross-up to cover the tax associated with such premium payments. In 2007, we also offered a financial counseling benefit to executive officers.

401(k) Plan. We sponsor a defined contribution savings plan, or 401(k) Plan, whereby eligible employees may elect to contribute up to 100% of their compensation up to the annual limits established under Section 402(g) of the Internal Revenue Code (the “Code”) ($15,500 in 2007). We match 50% of employee contributions up to 6% of annual pay for employees who accrue 520 working hours within the plan year and who are employed by us on the last day of the plan year.

Tax Treatment under Section 409A of the Internal Revenue Code. Section 409A of the Code sets forth specific requirements pertaining to nonqualified deferred compensation arrangements. Deferred compensation arrangements that do not meet these requirements are generally taxable to the employee (or other service provider), and are also generally subject to a 20% penalty tax plus interest, payable by the employee. We have structured our executive compensation programs in a manner that is intended to meet the requirements of Code Section 409A.

Employee Responsibilities Agreement. All employees, including executive officers, are subject to an Employment Responsibilities Agreement regarding Confidentiality, Inventions, Competition, and Solicitation (Employment Responsibilities Agreement).

Pursuant to the Employment Responsibilities Agreement, all employees agree not to disclose or make use of any confidential information, knowledge, or data of ours, except for our benefit. Employees must agree that all intellectual property and inventions—broadly defined to include, among other things, ideas, software program codes, procedural diagrams, documentation manuals, techniques, discoveries, and innovations—with which they are involved belong exclusively to us.

Employees further agree that, for one year following the termination of their employment with us, they will not solicit then-current employees to leave their employment or otherwise diminish their relationships with us. In addition, employees agree that, for a period of one year following the termination of their employment, they will

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not engage in competition with us without the prior written consent of the chief executive officer. “Competition” is defined as participation, as an individual, a stockholder with an ownership interest in excess of 1%, employee, officer, director, investor, consultant, or otherwise, in any wireless phone business (which means any business that offers or enables a wireless mobile real-time voice service) that relates to (1) the United States youth market, or (2) the United States prepaid market. Violations of either of these provisions will result in the immediate expiration and forfeiture of any outstanding options or other equity-based awards, including stock appreciation rights, whether vested or not.

The Employment Responsibilities Agreement applies somewhat differently to employees who reside in California. Specifically, pursuant to California Labor Code § 2870, such employees retain certain rights to inventions they develop entirely on their own time, without use of our equipment, supplies, facilities, or trade secret information. With respect to post-termination competition, employees residing in California are prohibited only from engaging in competition that would call upon them to reveal or use our confidential information.

Summary of Compensation

The following tables set forth the compensation earned by the named executive officers for the services rendered to the Company for the years ended December 31, 2007 and December 31, 2006.

Summary Compensation Table

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The following table provides information on stock options, restricted stock and restricted stock units granted in the year ended December 31, 2007 to each of Virgin Mobile’s Executive Officers. The amounts of these awards that were expensed during the year ended December 31, 2007 are included in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table.

Grants of Plan-Based Awards

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The following table shows the number of Virgin Mobile common shares covered by exercisable and unexercisable stock options and the number of Virgin Mobile unvested restricted stock units and restricted shares held by Virgin Mobile’s Executive Officers as of December 31, 2007.

Outstanding Equity Awards at Fiscal Year-End