Leap Wireless International Inc., a struggling phone carrier, on Tuesday said it has adopted a takeover defense plan to protect important tax benefits.

The plan is similar to so-called "poison pills" used to defend against acquisitions. If anyone buys 5 percent or more of Leap's shares, or adds to a stake that's already higher than 5 percent, the stake can be diluted by the issuance of preferred shares to existing shareholders.

The San Diego-based company, which provides service under the Cricket brand, said it had net operating loss carry-forwards of about $1.7 billion on June 30, which can be used to reduce future tax bills. If someone started buying up shares, that could be deemed an "ownership change" under tax rules, limiting the tax benefit.

Several other companies with large loss carry-forwards have instituted similar plans.

"Recent trading in the Company's stock has increased the risk of an ownership change under the tax rules," said Doug Hutcheson, Leap's president and CEO.

Leap shares closed Tuesday up 13 cents, or 1.2 percent, to $11.29.