Exhibit 4.07
GLU MOBILE INC.
2008 Equity Inducement Plan
(adopted by the Committee on March 13, 2008)
1.
PURPOSE
. The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose potential contributions are important to the success of the
Company, and any Parents and Subsidiaries that exist now or in the future, by offering them an
opportunity to participate in the Companys future performance through the grant of Awards.
Capitalized terms not defined elsewhere in the text are defined in Section 19.
2.
SHARES SUBJECT TO THE PLAN
.
2.1
Number of Shares Available
. Subject to Section 2.3 and any other applicable
provisions hereof, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan as of the Effective Date of the Plan, is 600,000 Shares, plus Shares subject
to Awards, and Shares issued upon exercise of Awards, will again be available for grant and
issuance in connection with subsequent Awards under this Plan to the extent such Shares: (i) are
subject to issuance upon exercise of an Option granted under this Plan but which cease to be
subject to the Option for any reason other than exercise of the Option; (ii) are subject to Awards
granted under this Plan that are forfeited or are repurchased by the Company at the original issue
price; (iii) are surrendered pursuant to an Exchange Program; or (iv) are subject to Awards granted
under this Plan that otherwise terminate without such Shares being issued. Shares used to pay the
exercise price of an Award or to satisfy the tax withholding obligations related to an Award will
become available for future grant or sale under the Plan. To the extent an Award under the Plan is
paid out in cash rather than Shares, such cash payment will not result in reducing the number of
Shares available for issuance under the Plan.
2.2
Minimum Share Reserve
. At all times the Company shall reserve and keep available
a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding
Awards granted under this Plan and all other outstanding but unvested Awards granted under this
Plan.
2.3
Adjustment of Shares
. If the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company, without consideration,
then (a) the number of Shares reserved for issuance and future grant under the Plan set forth in
Section 2.1 and (b) the Exercise Prices of and number of Shares subject to outstanding Awards,
shall be proportionately adjusted, subject to any required action by the Board or the stockholders
of the Company and in compliance with applicable securities laws; provided that fractions of a
Share will not be issued.
3.
ELIGIBILITY
. Awards may be granted only to persons who (a) were not previously an
employee or director of the Company or any Parent or Subsidiary of the Company or (b) have
completed a period of bona fide non-employment by the Company, and any Parent or Subsidiary of the
Company; and then only as an incentive material to such persons entering into employment with the
Company or any Parent or Subsidiary of the Company. A person eligible for an Award under this Plan
may be granted more than one Award under this Plan.
4.
ADMINISTRATION
.
4.1
Committee Composition; Authority
. This Plan will be administered by the Committee
or by the Board acting as the Committee. Subject to the general purposes, terms and conditions of
this Plan, and to the direction of the Board, the Committee will have full power to
implement and
carry out this Plan. Notwithstanding the foregoing, the grant of any Award shall not be effective
unless: (i) if the grant is made by the Board, then it must be approved by a majority of the
Outside Directors on the Board; and (ii) if the grant is made by the Committee, then the Committee
must be comprised solely of Outside Directors (except as otherwise permitted under the rules of the
NASD). The Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Award or the Shares relating thereto, based in each case on such factors
as the Committee will determine;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine the Fair Market Value in good faith, if necessary;
(g) determine whether Awards will be granted singly, in combination with, in tandem with, or
as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(h) grant waivers of Plan or Award conditions;
(i) determine the vesting, exercisability and payment of Awards;
(j) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any
Award or any Award Agreement;
(k) determine whether an Award has been earned;
(l) determine the terms and conditions of any, and to institute any Exchange Program;
(m) reduce or waive any criteria with respect to Performance Factors;
(n) adjust Performance Factors to take into account changes in law and accounting or tax rules
as the Committee deems necessary or appropriate; and
(o) make all other determinations necessary or advisable for the administration of this Plan.
4.2
Committee Interpretation and Discretion
. Any determination made by the Committee
with respect to any Award shall be made in its sole discretion at the time of grant of the Award
or, unless in contravention of any express term of the Plan or Award, at any later time, and such
determination shall be final and binding on the Company and all persons having an interest in any
Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement
shall be submitted by the Participant or Company to the Committee for review. The resolution of
such a dispute by
the Committee shall be final and binding on the Company and the Participant. The
Committee may delegate to one or more executive officers the authority to review and resolve
disputes with respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.
4.3
Section 16 of the Exchange Act
. Awards granted to Insiders must be approved by
two or more non-employee directors (as defined in the regulations promulgated under Section 16 of
the Exchange Act).
5.
OPTIONS
. The Committee may grant Options to Participants, which will be
Nonqualified Stock Options (
NQSOs
) and will determine the number of Shares subject to the Option,
the Exercise Price of the Option, the period during which the Option may be exercised, and all
other terms and conditions of the Option, subject to the following:
5.1
Option Grant
. Each Option granted under this Plan will be an NQSO. An Option may
be, but need not be, awarded upon satisfaction of such Performance Factors during any Performance
Period as are set out in advance in the Participants individual Award Agreement. If the Option is
being earned upon the satisfaction of Performance Factors, then the Committee will: (x) determine
the nature, length and starting date of any Performance Period for each Option; and (y) select from
among the Performance Factors to be used to measure the performance, if any. Performance Periods
may overlap and Participants may participate simultaneously with respect to Options that are
subject to different performance goals and other criteria.
5.2
Date of Grant
. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, or a specified future date. The Award
Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time
after the granting of the Option.
5.3
Exercise Period
. Options may be exercisable within the times or upon the
conditions as set forth in the Award Agreement governing such Option;
provided
,
however
, that no Option will be exercisable after the expiration of six (6) years from the
date the Option is granted. The Committee also may provide for Options to become exercisable at
one time or from time to time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.
5.4
Exercise Price
. The Exercise Price of an Option will be determined by the
Committee when the Option is granted. Payment for the Shares purchased may be made in accordance with Section 6. The Exercise Price of a NQSO may be less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant in the Committees discretion.
5.5
Method of Exercise
. Any Option granted hereunder will be exercisable according to
the terms of the Plan and at such times and under such conditions as determined by the Committee
and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. An
Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as
the Committee may specify from time to time) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is exercised (together with
applicable withholding taxes). Full payment may consist of any consideration and method of payment
authorized by the Committee and permitted by the Award Agreement and the Plan. Shares issued upon
exercise of an Option will be issued in the name of the Participant. Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder
will exist with respect to the Shares, notwithstanding the exercise of the Option. The Company will
issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 2.3 of the Plan. Exercising an Option in any
manner will decrease the number of Shares thereafter
available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is exercised.
5.6
Termination
. The exercise of an Option will be subject to the following (except
as may be otherwise provided in an Award Agreement):
(a) If the Participant is Terminated for any reason except for Cause or the Participants
death or Disability, then the Participant may exercise such Participants Options only to the
extent that such Options would have been exercisable by the Participant on the Termination Date no
later than three (3) months after the Termination Date (or such shorter time period or longer time
period not exceeding five (5) years as may be determined by the Committee), but in any event no
later than the expiration date of the Options.
(b) If the Participant is Terminated because of the Participants death (or the Participant
dies within three (3) months after a Termination other than for Cause or because of the
Participants Disability), then the Participants Options may be exercised only to the extent that
such Options would have been exercisable by the Participant on the Termination Date and must be
exercised by the Participants legal representative, or authorized assignee, no later than twelve
(12) months after the Termination Date (or such shorter time period not less than six (6) months or
longer time period not exceeding five (5) years as may be determined by the Committee), but in any
event no later than the expiration date of the Options.
(c) If the Participant is Terminated because of the Participants Disability, then the
Participants Options may be exercised only to the extent that such Options would have been
exercisable by the Participant on the Termination Date and must be exercised by the Participant (or
the Participants legal representative or authorized assignee) no later than twelve (12) months
after the Termination Date, but in any event no later than the expiration date of the Options.
(d) If the Participant is Terminated for Cause, then Participants Options shall expire on
such Participants Termination Date, or at such later time and on such conditions as are determined by the Committee, but in any event no later than the expiration
date of the Options.
5.7
Limitations on Exercise
. The Committee may specify a minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum number will not
prevent any Participant from exercising the Option for the full number of Shares for which it is
then exercisable.
5.8
Modification, Extension or Renewal
. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participants rights under any Option previously granted.
6.
PAYMENT FOR SHARE PURCHASES
.
Payment from a Participant for Shares purchased pursuant to this Plan may be made in cash or
by check or, where expressly approved for the Participant by the Committee and where permitted by
law (and to the extent not otherwise set forth in the applicable Award Agreement):
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company held by the Participant that have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said
Award will be exercised or settled;
(c) by waiver of compensation due or accrued to the Participant for services rendered or to be
rendered to the Company or a Parent or Subsidiary of the Company;
(d) by consideration received by the Company pursuant to a broker-assisted and/or same day
sale (or other) cashless exercise program implemented by the Company in connection with the Plan;
(e) by any combination of the foregoing; or
(f) by any other method of payment as is permitted by applicable law.
7.
WITHHOLDING TAXES
.
7.1
Withholding Generally
. Whenever Shares are to be issued in satisfaction of Awards
granted under this Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy applicable federal, state, local and international withholding tax
requirements prior to the delivery of Shares pursuant to exercise of any Award. Whenever payments
in satisfaction of Awards granted under this Plan are to be made in cash, such payment will be net
of an amount sufficient to satisfy applicable federal, state, local and international withholding
tax requirements.
7.2
Stock Withholding
. The Committee, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may require or permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i)
paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having
a Fair Market Value equal to the minimum statutory amount required to be withheld, or (iii)
delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld. The Fair Market Value of the Shares to be withheld or
delivered will be determined as of the date that the taxes are required to be withheld.
8.
TRANSFERABILITY
. Unless determined otherwise by the Committee, an Award may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will
or by the laws of descent or distribution. If the Committee makes an Award transferable, such
Award will contain such additional terms and conditions as the Committee deems appropriate. All
Awards shall be exercisable: (i) during the Participants lifetime only by (A) the Participant, or
(B) the Participants guardian or legal representative; and (ii) after the Participants death, by
the legal representative of the Participants heirs or legatees
9.
PRIVILEGES OF STOCK OWNERSHIP; VOTING AND DIVIDENDS
. No Participant will have any
of the rights of a shareholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be a shareholder and
have all the rights of a shareholder with respect to such Shares, including the right to vote and
receive all dividends or other distributions made or paid with respect to such Shares.
10.
CERTIFICATES
. All certificates for Shares or other securities delivered under
this Plan will be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed or quoted.
11.
ESCROW; PLEDGE OF SHARES
. To enforce any restrictions on a Participants Shares,
the Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased
as collateral to secure the payment of the Participants obligation to the Company under the
promissory note;
provided
,
however
, that the Committee may require or accept other
or additional forms of collateral to secure the payment of such obligation and, in
any event, the
Company will have full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participants Shares or other collateral. In connection with any pledge of the
Shares, the Participant will be required to execute and deliver a written pledge agreement in such
form as the Committee will from time to time approve. The Shares purchased with the promissory
note may be released from the pledge on a pro rata basis as the promissory note is paid.
12.
SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
. An Award will not be effective
unless such Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be necessary or advisable.
The Company will be under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability for any inability or
failure to do so. This Plan shall not take effect until the fifteen (15) day period provided
pursuant to Nasdaq rule 4310(c)(17) has expired.
13.
NO OBLIGATION TO EMPLOY
. Nothing in this Plan or any Award granted under this
Plan will confer or be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company
or limit in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participants employment or other relationship at any time.
14.
CORPORATE TRANSACTIONS
.
14.1
Assumption or Replacement of Awards by Successor
. In the event of a Corporate
Transaction any or all outstanding Awards may be assumed or replaced by the successor corporation,
which assumption or replacement shall be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Participant. In the event
such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute
Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any other
provision in this Plan to the contrary, such Awards will expire on such transaction at such time
and on such conditions as the Board (or, the Committee, if so designated by the Board) will
determine; the Board (or, the Committee, if so designated by the Board) may, in its sole
discretion, accelerate the vesting of such Awards in connection with a Corporate Transaction. In
addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert,
replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the Committee
will notify the Participant in writing or electronically that such Award will be exercisable for a
period of time determined by the Committee in its sole discretion, and such Award will terminate
upon the expiration of such period. Awards need not be treated similarly in a Corporate
Transaction.
Notwithstanding anything to the contrary in this Section 14.1, the Committee, in its sole
discretion, may grant Awards that provide for acceleration upon a Corporate Transaction or in other
events in the specific Award Agreements.
14.2
Assumption of Awards by the Company
. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other companys award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan.
15.
TERM OF PLAN
. Unless earlier terminated as provided herein, this Plan will become
effective on the Effective Date and will terminate ten (10) years from the date this Plan is
adopted by the Committee. This Plan and all Awards granted hereunder shall be governed by and
construed in accordance with the laws of the State of Delaware.
16.
AMENDMENT OR TERMINATION OF PLAN
. The Board or Committee may at any time
terminate or amend this Plan in any respect, including, without limitation, amendment of any form
of Award Agreement or instrument to be executed pursuant to this Plan;
provided
,
however
, that the Board or Committee will not, without the approval of the shareholders of
the Company, amend this Plan in any manner that requires such shareholder approval;
provided
further
, that a Participants Award shall be governed by the version of this Plan then in
effect at the time such Award was granted.
17.
NONEXCLUSIVITY OF THE PLAN
. Neither the adoption of this Plan by the Committee,
nor any provision of this Plan, will be construed as creating any limitations on the power of the
Board or Committee to adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock awards and bonuses otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable only in specific
cases.
18.
INSIDER TRADING POLICY
. Each Participant who receives an Award shall comply with
any policy adopted by the Company from time to time covering transactions in the Companys
securities by Employees, officers and/or directors of the Company.
19.
DEFINITIONS
.
As used in this Plan, and except as elsewhere defined herein, the
following terms will have the following meanings:
Award
means an Option awarded under the Plan.
Award Agreement
means, with respect to each Award, the written or electronic agreement
between the Company and the Participant setting forth the terms and conditions of the Award, which
shall be in substantially a form (which need not be the same for each Participant) that the
Committee has from time to time approved, and will comply with and be subject to the terms and
conditions of this Plan.
Board
means the Board of Directors of the Company.
Cause
means (a) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a
breach of fiduciary duty to the Company or a Parent or Subsidiary, or (c) a failure to materially
perform the customary duties of Employees employment.
Code
means the United States Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
Committee
means the Compensation Committee of the Board or those persons to whom
administration of the Plan, or part of the Plan, has been delegated as permitted by law, or an
independent compensation committee (as such term is defined for purposes of the rules of the
National Association of Securities Dealers, Inc.).
Company
means Glu Mobile Inc., or any successor corporation.
Corporate Transaction
means the occurrence of any of the following events: (i) any person (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power represented by the
Companys then-outstanding voting securities; (ii) the consummation of the sale or disposition by
the Company of all or
substantially all of the Companys assets; or (iii) the consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation.
Director
means a member of the Board.
Disability
means total and permanent disability as defined in Section 22(e)(3) of the Code,
provided, however, that the Committee in its discretion may determine whether a total and permanent
disability exists in accordance with non-discriminatory and uniform standards adopted by the
Committee from time to time, whether temporary or permanent, partial or total, as determined by the
Committee.
Effective Date
means the expiration of the fifteen (15) day waiting period following the
adoption of the Plan by the Committee, as set forth in Section 12.
Employee
means any person, including Officers, employed by the Company or any Parent or
Subsidiary of the Company and who meets the eligibility requirements as set forth in Section 3.
Exchange Act
means the United States Securities Exchange Act of 1934, as amended.
Exercise Price
means the price at which a holder of an Award may purchase the Shares
issuable upon exercise of an Award.
Exchange Program
means a program pursuant to which outstanding Awards are surrendered,
cancelled or exchanged for cash, the same type of Award or a different Award (or combination
thereof).
Fair Market Value
means, as of any date, the value of a share of the Companys Common Stock
determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported in
The Wall Street
Journal
or such other source as the Board or the Committee deems reliable;
(b) if such Common Stock is publicly traded but is neither listed nor admitted to trading on a
national securities exchange, the average of the closing bid and asked prices on the date of
determination as reported in
The Wall Street Journal
or such other source as the Board or the
Committee deems reliable; or
(c) if none of the foregoing is applicable, by the Board or the Committee in good faith.
Insider
means an officer or director of the Company or any other person whose transactions
in the Companys Common Stock are subject to Section 16 of the Exchange Act.
Option
means an award of an option to purchase Shares pursuant to Section 5.
Outside Director
means a Director who is not an Employee of the Company or any Parent or
Subsidiary and who is an independent director under the rules of the Nasdaq Stock Market, as may
be amended from time to time.
Parent
means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other
corporations in such chain.
Participant
means a newly hired Employee who receives an Award under this Plan at the time
of his or her employment. The term Participant shall include individuals who were previously
employed by the Company, or any Parent or Subsidiary of the Company, who have undergone a bona fide
period of non-employment by the Company. The term Participant shall also include individuals who
become Employees of the Company, or any Parent or Subsidiary of the Company, as the result of a
merger or acquisition.
Performance Factors
means the factors selected by the Committee, which may include, but are
not limited to the, the following measures (whether or not in comparison to other peer companies)
to determine whether the performance goals established by the Committee and applicable to Awards
have been satisfied:
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Net revenue and/or net revenue growth;
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Earnings per share and/or earnings per share growth;
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Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;
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Operating income and/or operating income growth;
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Net income and/or net income growth;
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Total stockholder return and/or total stockholder return growth;
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Return on equity;
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Operating cash flow return on income;
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Adjusted operating cash flow return on income;
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Economic value added;
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Individual business objectives; and
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Company specific operational metrics.
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Performance Period
means the period of service determined by the Committee, not to exceed
five (5) years, during which years of service or performance is to be measured for the Award.
Plan
means this Glu Mobile Inc. 2008 Equity Inducement Plan.
SEC
means the United States Securities and Exchange Commission.
Securities Act
means the United States Securities Act of 1933, as amended.
Shares
means shares of the Companys Common Stock, as adjusted pursuant to Sections 2 and
14, and any successor security.
Subsidiary
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain.
Termination
or
Terminated
means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee of the Company or
a Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to provide
services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Committee;
provided
, that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute or
unless provided otherwise pursuant to formal policy adopted from time to time by the Company and
issued and promulgated to employees in writing. In the case of any employee on an approved leave
of absence, the Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the employ of the Company or a Parent or Subsidiary of the Company as it may
deem appropriate, except that in no event may an Award be exercised after the expiration of the
term set forth in the applicable Award Agreement. The Committee will have sole discretion to
determine whether a Participant has ceased to be employed and the effective date on which the
Participant ceased to be so employed (the
Termination Date
).
GLU MOBILE INC.
2008 EQUITY INDUCEMENT PLAN
NOTICE OF STOCK OPTION GRANT
You (the
Participant
) have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of this Notice of Stock Option Grant (the
Notice
), the 2008
Equity Inducement Plan, as amended from time to time (the
Plan
) and the Stock Option Award
Agreement (the
Option Agreement
) attached hereto, as follows. The terms defined in the Plan
shall have the same meanings in this Notice.
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Grant Number
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Date of Grant
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Vesting Commencement Date
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Exercise Price per Share
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Total Number of Shares
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Total Exercise Price
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Type of Option
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Non-Qualified Stock Option
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Expiration Date
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Post-Termination Exercise Period:
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Termination for Cause = None
Voluntary Termination = 3 Months
Termination without Cause = 3 Months
Disability = 12 Months
Death = 12 Months
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Vesting Schedule:
Subject to the limitations set forth in this Notice, the Plan and the Option Agreement, the
Option will vest and may be exercised, in whole or in part, in accordance with the following
schedule:
[INSERT VESTING SCHEDULE]
You acknowledge receipt of a copy of the Plan and the Option Agreement, and represent that you
are familiar with the terms and provisions thereof, and hereby accept the Option subject to all of
the terms and provisions hereof. You understand that your employment with the Company is for an
unspecified duration and can be terminated at any time (i.e., is at-will), and that nothing in
this Notice, the Stock Option Award Agreement or the Plan changes the at-will nature of that
relationship. You acknowledge that the vesting of shares pursuant to this Notice is earned only by
your continuing service as an Employee of the Company.
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PARTICIPANT:
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GLU MOBILE INC.
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Signature:
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By:
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Print Name:
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Its:
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Date:
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Date:
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GLU MOBILE INC.
STOCK OPTION AWARD AGREEMENT
2008 EQUITY INDUCEMENT PLAN
Unless
otherwise defined herein, the terms defined in the Companys
2008 Equity Inducement Plan (the Plan) shall have the same defined meanings in this Award Agreement (the Agreement).
Participant
has been granted an option to purchase Shares (the
Option), subject to the terms and conditions of the Plan, the Notice of Stock Option Grant (Notice of Grant) and this Agreement.
1.
Vesting Rights
.
Subject to the applicable provisions of the Plan and this
Agreement, this Option may be exercised, in whole or in part, in accordance with the schedule set
forth in the Notice of Grant.
2.
Termination Period
.
(a)
General Rule
. Except as provided below, and subject to the Plan, this Option may
be exercised for 3 months after termination of Participants employment with the Company. In no
event shall this Option be exercised later than the Term/Expiration Date set forth in the Notice of
Grant.
(b)
Death; Disability
. Upon the termination of Participants employment with the
Company by reason of his or her Disability or death, or if a Participant dies within three months
of the Termination Date, this Option may be exercised for twelve months in the case of death, and
six months in the case of Disability, after the Termination Date, provided that in no event shall
this Option be exercised later than the Term/Expiration Date set forth in the Notice of Grant.
(c)
Cause
. Upon the termination of Participants employment by the Company for Cause,
the Option shall expire on such date of Participants Termination Date.
3.
Grant of Option
.
The Participant named in the Notice of Grant has been granted an
Option for the number of Shares set forth in the Notice of Grant at the exercise price per Share
set forth in the Notice of Grant (the Exercise Price). In the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and
conditions of the Plan shall prevail.
4.
Exercise of Option
.
(a)
Right to Exercise
. This Option is exercisable during its term in accordance with
the Vesting Schedule set forth in the Notice of Grant and the applicable provisions of the Plan and
this Agreement. In the event of Participants death, Disability, Termination for Cause or other
Termination, the exercisability of the Option is governed by the applicable provisions of the Plan,
the Notice of Stock Option Grant and this Agreement.
(b)
Method of Exercise
. This Option is exercisable by delivery of an exercise notice
(the Exercise Notice), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the Exercised Shares), and such other
representations and agreements as may be required by the Company pursuant to the provisions of the
Plan. The Exercise
Notice shall be delivered in person, by mail, via electronic mail or facsimile or by other
authorized method to the Secretary of the Company or other person designated by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
(c) No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with all relevant provisions of law and the requirements of any stock exchange or
quotation service upon which the Shares are then listed. Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Participant on the date the
Option is exercised with respect to such Exercised Shares.
5.
Method of Payment
.
Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Participant:
(a) cash; or
(b) check; or
(c) a broker-assisted or same day sale (as described in Section 11(d) of the Plan); or
(d) other method authorized by the Company.
6.
Non-Transferability of Option
.
This Option may not be transferred in any manner
other than by will or by the laws of descent or distribution or court order and may be exercised
during the lifetime of Participant only by the Participant. The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the
Participant.
7.
Term of Option
.
This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the Notice of Grant,
the Plan and the terms of this Agreement.
8.
U.S. Tax Consequences
.
For Participants subject to U.S. income tax, some of the
federal tax consequences relating to this Option, as of the date of this Option, are set forth
below. All other Participants should consult a tax advisor for tax consequences relating to this
Option in their respective jurisdiction. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS
AND REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a)
Exercising the Option
. Each Option granted hereunder is intended to be a
Nonqualified Stock Option (NSO). The Participant may incur regular federal income tax liability
upon exercise of a NSO. The Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Participant
is an Employee or a former Employee, the Company will be required to withhold from his or her
compensation or collect from Participant and pay to the applicable taxing authorities an amount in
cash equal to a percentage of this compensation income at the time of exercise, and may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.
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(b)
Disposition of Shares
. If the Participant holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.
(c)
Possible Effect of Section 409A of the Code
. Section 409A of the Code applies to
arrangements that provide for the deferral of compensation. Generally, a stock option granted with
an exercise price per share of not less than the fair market value (determined in a manner
consistent with Section 409A of the Code and the regulations and other guidance promulgated
thereunder) per share on the date of grant of the stock option and with no other feature providing
for the deferral of compensation will not be subject to Section 409A of the Code. However, if the
exercise price of the stock option is less than such fair market value or the stock option has
another feature for the deferral of compensation, then if the stock option is not administered
within the parameters established under Section 409A the optionholder will be subject to additional
taxes. Also, the amount deemed to be deferred compensation under Section 409A of the Code will be
subject to ordinary income and employment taxes (in this respect the IRS has not yet indicated how
it will calculate the amount of deferred compensation subject to tax and the timing and frequency
of taxation, but it seems likely that the income will be measured and taxes imposed at least on the
vesting dates of the stock option). If Section 409A of the Code does apply to this Option, then
special rules apply to the timing of making and effecting certain amendments of this Option with
respect to distribution of any deferred compensation.
9.
Entire Agreement; Governing Law
.
The Plan is incorporated herein by reference.
The Plan, the Notice of Grant, and this Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Participant with respect to the subject matter hereof, and may
not be modified adversely to the Participants interest except by means of a writing signed by the
Company and Participant. This agreement is governed by Delaware law except for that body of law
pertaining to conflict of laws.
10.
No Rights as Employee
.
Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to
terminate Participant
s employment, for any reason, with or without cause.
By your signature and the signature of the Companys representative on the Notice of Grant,
you and the Company agree that this Option is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant, and this Agreement. Participant has reviewed the
Plan, the Notice of Grant, and this Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing the Notice of Grant, and fully understands all provisions
of the Plan, the Notice of Grant, and this Agreement. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee upon any questions
relating to the Plan, the Notice of Grant, and the Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated on the Notice of Grant.
3
No.
GLU MOBILE INC.
2008 EQUITY INDUCEMENT PLAN
STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the
Exercise Agreement
) is made and entered into as of
______________, _______(the
Effective Date
) by and between Glu Mobile Inc., a Delaware
corporation (the
Company
), and the purchaser named below (the
Purchaser
). Capitalized terms
not defined herein shall have the meanings ascribed to them in the Companys 2008 Equity Inducement
Plan (the
Plan
).
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Purchaser:
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Social Security Number:
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Address:
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Total Number of Shares:
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Exercise Price Per Share:
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Type of Stock Option:
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Nonqualified Stock Option
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1.
EXERCISE OF OPTION
.
1.1
Exercise
.
Pursuant to exercise of that certain option (the
Option
) granted to
Purchaser under the Plan and subject to the terms and conditions of this Exercise Agreement,
Purchaser hereby purchases from the Company, and the Company hereby sells to Purchaser, the Total
Number of Shares set forth above (the
Shares
) of the Companys Common Stock, at the Exercise
Price Per Share set forth above (the
Exercise Price
). As used in this Exercise Agreement, the
term
Shares
refers to the Shares purchased under this Exercise Agreement and includes all
securities received (i) in replacement of the Shares, (ii) as a result of stock dividends or stock
splits with respect to the Shares, and (iii) all securities received in replacement of the Shares
in a merger, recapitalization, reorganization or similar corporate transaction.
1.2
Title to Shares
.
The exact spelling of the name(s) under which Purchaser will
take title to the Shares is:
Purchaser desires to take title to the Shares as follows:
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Individual, as separate property
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Husband and wife, as community property
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Joint Tenants
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Other; please specify:
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1.3
Payment
.
Purchaser hereby delivers payment of the Exercise Price in the manner
permitted in the Stock Option Agreement as follows (check and complete as appropriate):
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in cash (by check) in the amount of $___________, receipt of
which is acknowledged by the Company;
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by delivery of ________ fully-paid, nonassessable and vested shares of the Common Stock of the Company owned by Purchaser which
have been paid for within the meaning of SEC Rule 144, (if purchased
by use of a promissory note, such note has been fully paid with
respect to such vested shares), or obtained by Purchaser in the open
public market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current fair market
value of
$__________ per share;
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through a broker-assisted or same day sale program, commitment
from the Purchaser or Authorized Transferee and an NASD Dealer
meeting the requirements set forth by the Company; or
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through a margin commitment from Purchaser or Authorized
Transferee and an NASD Dealer meeting the requirements of the
Companys margin procedures and in accordance with law.
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2.
DELIVERY
.
2.1
Deliveries by Purchaser
.
Purchaser hereby delivers to the Company (i) this
Exercise Agreement and (ii) the Exercise Price and payment or other provision for any applicable
tax obligations.
2.2
Deliveries by the Company
.
Upon its receipt of the Exercise Price, payment or
other provision for any applicable tax obligations and all the documents to be executed and
delivered by Purchaser to the Company under Section 2.1, the Company will issue a duly executed
stock certificate evidencing the Shares in the name of Purchaser.
3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
.
Purchaser represents and warrants to
the Company that:
3.1
Agrees to Terms of the Plan
.
Purchaser has received a copy of the Plan and the
Stock Option Agreement, has read and understands the terms of the Plan, the Stock Option Agreement
and this Exercise Agreement, and agrees to be bound by their terms and conditions. Purchaser
acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the Shares,
and that Purchaser should consult a tax adviser
prior to such exercise or disposition.
3.2
Access to Information
.
Purchaser has had access to all information regarding the
Company and its present and prospective business, assets, liabilities and financial condition that
Purchaser reasonably considers important in making the decision to purchase the Shares, and
Purchaser
5
has had ample opportunity to ask questions of the Companys representatives concerning
such matters and this investment.
3.3
Understanding of Risks
.
Purchaser has received and reviewed the Form S-8
prospectus for the Plan and Shares and is fully aware of: (i) the highly speculative nature of the
investment in the Shares; (ii) the financial hazards involved; (iii) the qualifications and
backgrounds of the management of the Company; and (iv) the tax consequences of investment in the
Shares. Purchaser is capable of evaluating the merits and risks of this investment, has the
ability to protect Purchasers own interests in this transaction and is financially capable of
bearing a total loss of this investment.
4.
COMPLIANCE WITH SECURITIES LAWS
.
Purchaser understands and acknowledges that the
exercise of any rights to purchase any Shares is expressly conditioned upon compliance with the
Securities Act and all applicable state securities laws. Purchaser agrees to cooperate with the
Company to ensure compliance with such laws.
5.
RESTRICTED SECURITIES
.
5.1
No Transfer Unless Registered or Exempt
.
Purchaser understands that Purchaser may
not transfer any Shares except when such Shares are registered under the Securities Act or
qualified under applicable state securities laws or unless, in the opinion of counsel to the
Company, exemptions from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC and that the
Company is under no obligation to do so with respect to the Shares, and may withdraw any such
registration statement at any time after filing. Purchaser has also been advised that exemptions
from registration and qualification may not be available or may not permit Purchaser to transfer
all or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2
SEC Rule 144
.
If Purchaser is an affiliate for purposes of Rule 144 promulgated
under the Securities Act, then in addition, Purchaser has been advised that Rule 144 requires that
the Shares be held for a minimum of six (6) months, and in certain cases one (1) year, after they
have been purchased
and paid for
(within the meaning of Rule 144). Purchaser understands
that Rule 144 may impose limitations on the volume of shares that can be sold, and may indefinitely
restrict transfer of the Shares so long as Purchaser remains an affiliate of the Company or if
current public information about the Company (as defined in Rule 144) is not publicly available.
6.
RIGHTS AS A STOCKHOLDER
.
Subject to the terms and conditions of this Exercise
Agreement, Purchaser will have all of the rights of a stockholder of the Company with respect to
the Shares from and after the date that Shares are issued to Purchaser until such time as Purchaser
disposes of the Shares.
7.
RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS
.
7.1
Legends
.
Purchaser understands and agrees that the Company will place any legends
that may be required by state or U.S. Federal securities laws, the Companys Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company or, subject to the
assent of the Company, any agreement between Purchaser and any third party.
7.2
Stop-Transfer Instructions
.
Purchaser agrees that, to ensure compliance with any
restrictions imposed by this Exercise Agreement, the Company may issue appropriate stop-transfer
instructions to its transfer agent, if any, and if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.
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7.3
Refusal to Transfer
.
The Company will not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Exercise Agreement or (ii) to treat as owner of such Shares, or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.
8.
TAX CONSEQUENCES
.
PURCHASER UNDERSTANDS AND REPRESENTS: (i) THAT PURCHASER HAS
REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND CONSULTED PURCHASERS PERSONAL TAX ADVISER IN
CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON
THE COMPANY FOR ANY TAX ADVICE. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE THE PLAN WAS
ADOPTED BY THE BOARD OF SOME OF THE U.S. FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE OPTION AND
DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT THE PROSPECTUS AND PURCHASERS
PERSONAL TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
8.1
Exercise of Nonqualified Stock Option
.
There may be a regular U.S. Federal income
tax liability upon the exercise of the Option. Purchaser will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If Purchaser is or was
an employee of the Company, the Company may be required to withhold from Purchasers compensation
or collect from Purchaser and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.
8.2
Disposition of Shares
.
The following tax consequences may apply upon disposition
of the Shares.
(a)
Nonqualified Stock Options
. If the Shares are held for more than twelve (12)
months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain
realized on disposition of the Shares will be treated as long-term capital gain.
(b)
Withholding
. The Company may be required to withhold from the Purchasers
compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.
9.
COMPLIANCE WITH LAWS AND REGULATIONS
.
The issuance and transfer of the Shares will
be subject to and conditioned upon compliance by the Company and Purchaser with all applicable
state and federal laws and regulations and with all applicable requirements of any stock exchange
or automated quotation system on which the Companys Common Stock may be listed or quoted at the
time of such issuance or transfer.
10.
SUCCESSORS AND ASSIGNS
.
The Company may assign any of its rights under this
Exercise Agreement. No other party to this Exercise Agreement may assign, whether voluntarily or
by operation of law, any of its rights and obligations under this Exercise Agreement, except with
the prior written consent of the Company. This Exercise Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Exercise Agreement will be binding upon Purchaser and Purchasers heirs, executors, administrators, legal representatives,
successors and assigns.
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11.
GOVERNING LAW
.
This Exercise Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to that body of laws
pertaining to conflict of laws.
12.
NOTICES
.
Any and all notices required or permitted to be given to a party
pursuant to the provisions of this Exercise Agreement will be in writing and will be effective and
deemed to provide such party sufficient notice under this Exercise Agreement on the earliest of the
following: (i) at the time of personal delivery, if delivery is in person; (ii) one (1) business
day after deposit with an express overnight courier for United States deliveries, or two (2)
business days after such deposit for deliveries outside of the United States, with proof of
delivery from the courier requested; or (iii) three (3) business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. All notices
for delivery outside the United States will be sent by express courier. All notices not delivered
personally will be sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the address set forth below the signature lines of this Exercise Agreement,
or at such other address as such other party may designate by one of the indicated means of notice
herein to the other parties hereto. Notices to the Company will be marked Attention: Stock Plan
Administration.
13.
FURTHER ASSURANCES
.
The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Exercise Agreement.
14.
TITLES AND HEADINGS
.
The titles, captions and headings of this Exercise Agreement
are included for ease of reference only and will be disregarded in interpreting or construing this
Exercise Agreement. Unless otherwise specifically stated, all references herein to sections will
mean sections to this Exercise Agreement.
15.
ENTIRE AGREEMENT
.
The Plan, the Notice, the Stock Option Agreement and this
Exercise Agreement constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Exercise Agreement, and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.
16.
COUNTERPARTS
.
This Exercise Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an original, and all of
which together shall constitute one and the same agreement.
17.
SEVERABILITY
.
If any provision of this Exercise Agreement is determined by any
court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such provision will be enforced to the maximum extent possible given the intent of the
parties hereto. If such clause or provision cannot be so enforced, such provision shall be
stricken from this Exercise Agreement and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Exercise Agreement. Notwithstanding the forgoing, if the
value of this Exercise Agreement based upon the substantial benefit of the bargain for any party is
materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to substitute such
provision(s) through good faith negotiations.
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IN WITNESS WHEREOF
, the Company has caused this Exercise Agreement to be executed in
triplicate by its duly authorized representative and Purchaser has executed this Exercise Agreement
as of the Effective Date, indicated above.
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GLU MOBILE INC.
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PURCHASER
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By:
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(Signature)
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(Please print name)
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(Please print name)
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(Please print title)
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Address:
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Address:
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Fax No.:
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Fax No.
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Phone
No.:
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Phone
No.:
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[Signature page to Glu Mobile Inc. Stock Option Exercise Agreement]
9