GLU MOBILE INC. STOCK OPTION AWARD AGREEMENT 2007 EQUITY INCENTIVE PLAN (Immediately Exercisable)
EXHIBIT 10.05
Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity Incentive
Plan, as may be amended from time to time (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 is immediately exercisable and may be exercised, in whole or in part,
although the Shares issued upon exercise of this Option will be subject to restrictions on transfer
and to the Company’s (and its assignees’) repurchase option set forth Section 6 of the Stock Option
Exercise Agreement attached hereto. The Company’s repurchase option shall lapse in accordance with
the Vesting Schedule set forth in the Notice of Grant. Shares that are vested pursuant to the
Vesting Schedule are “Vested Shares.” Shares that are not vested pursuant to the Vesting Schedule
are “Unvested Shares.”
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 Participant’s 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 Participant’s 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 Participant’s employment by the Company for Cause,
the Option shall expire on such date of Participant’s 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.
If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this
Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule
of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).
4. Exercise of Option.
(a) Right to Exercise. This Option is immediately exercisable during its term in
accordance with the applicable provisions of the Plan and this Agreement. In the event of
Participant’s 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.
(i) Nonstatutory Stock Option. 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.
(ii) Incentive Stock Option. If this Option qualifies as an ISO, the Participant will
have no regular federal income tax liability upon its exercise, although the excess, if any, of the
aggregate Fair Market Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal
tax purposes and may subject the Participant to alternative minimum tax in the year of exercise.
(b) Disposition of Shares.
(i) NSO. 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.
(ii) ISO. If the Participant holds ISO Shares for at least one year after exercise
and two years after the grant date, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes. If the Participant disposes of Vested
ISO Shares within one year after exercise or two years after the grant date, any gain realized on
such disposition will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of
the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price. To the extent the Shares
were exercised prior to vesting coincident with the filing of an 83(b) Election, the amount taxed
because of a disqualifying disposition will be based upon the excess, if any, of the fair market
value on the date of vesting over the exercise price.
(c) Notice of Disqualifying Disposition of ISO Shares. If the Participant sells or
otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of
(i) two years after the grant date, or (ii) one year after the exercise date, the Participant shall
immediately notify the Company in writing of such disposition. The Participant agrees that he or
she may be subject to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to
the Participant.
(d) Section 83(b) Election for Unvested Shares. With respect to Unvested Shares,
which are subject to the Repurchase Option, unless an election is filed by the Participant with the
Internal Revenue Service (and, if necessary, the proper state taxing authorities), within 30 days
of the purchase of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and similar
state tax provisions, if applicable) to be taxed currently on any difference between the Exercise
Price of the Unvested Shares and their Fair Market Value on the date of purchase, there may be a
recognition of taxable income (including, where applicable, alternative minimum taxable income) to
the Participant, measured by the excess, if any, of the Fair Market Value of the Unvested Shares at
the time they cease to be Unvested Shares, over the Exercise Price of the Unvested Shares.
(e) 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 Participant’s 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, Director or Consultant. 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 Company’s 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.
No.
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
(Immediately Exercisable)
2007 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
(Immediately Exercisable)
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and entered into as of
, 20 (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 Company’s 2007 Equity Incentive
Plan, as may be amended from time to time (the “Plan”).
Purchaser: |
||
Social Security Number:
|
||
Address:
|
||
Total Number of Shares:
|
||
Exercise Price Per Share:
|
||
Type of Stock Option |
||
(Check one):
|
o Incentive Stock Option | |
| o Nonqualified Stock Option |
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 Company’s Common Stock, $0.0001 par value
per share, 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:
| o | Individual, as separate property | ||
| o | Husband and wife, as community property | ||
| o | Joint Tenants | ||
| o | Other; please specify: |
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):
| o | in cash (by check) in the amount of $ , receipt of which is acknowledged by the Company; | ||
| o | 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; | ||
| o | 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 | ||
| o | through a “margin” commitment from Purchaser or Authorized Transferee and an NASD Dealer meeting the requirements of the Company’s “margin” procedures and in accordance with law. |
2. Delivery.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement, (ii) two copies of a blank Stock Power and Assignment Separate from Stock
Certificate in the form of Exhibit 1 attached hereto (the “Stock Powers”), both executed by
Purchaser (and Purchaser’s spouse, if any) and (iii) 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 to be placed in escrow as provided
in Section 9 until expiration or termination of the Company’s Repurchase Option described in
Section 6.
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 has had ample opportunity to ask questions of the Company’s 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 Purchaser’s 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 months, and in certain cases one 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. Company’s Repurchase Option for Unvested Shares. The Company, or its assignee,
shall have the option to repurchase all or a portion of the Purchaser’s Unvested Shares (as defined
in the Stock Option Agreement) on the terms and conditions set forth in this Section 6 (the
“Repurchase Option”) if Purchaser is Terminated (as defined in the Plan) for any reason, or no
reason, including without limitation, Purchaser’s death, Disability (as defined in the Plan),
voluntary resignation or termination by the Company with or without Cause. Notwithstanding the
foregoing, the Company shall retain the Repurchase Option for Unvested Shares only as to that
number of Unvested Shares (whether or not exercised) that exceeds the number of Vested Shares which
remain unexercised.
6.1 Termination and Termination Date. In case of any dispute as to whether Purchaser
is Terminated, the Committee shall have discretion to determine whether Purchaser has been
Terminated and the effective date of such Termination (the “Termination Date”).
6.2 Exercise of Repurchase Option. At any time within 90 days after the Purchaser’s
Termination Date (or, in the case of securities issued upon exercise of an Option after the
Purchaser’s Termination Date, within 90 days after the date of such exercise), the Company, or its
assignee, may elect to repurchase any or all the Purchaser’s Unvested Shares by giving Purchaser
written notice of exercise of the Repurchase Option.
6.3 Calculation of Repurchase Price for Unvested Shares. The Company or its assignee
shall have the option to repurchase from Purchaser (or from Purchaser’s personal representative as
the case may be) the Unvested Shares at the Purchaser’s Exercise Price, proportionately adjusted
for any stock split or similar change in the capital structure of the Company as set forth in
Section 2.2 of the Plan (the “Repurchase Price”).
6.4 Payment of Repurchase Price. The Repurchase Price shall be payable, at the option
of the Company or its assignee, by check or by cancellation of all or a portion of any outstanding
purchase money indebtedness owed by Purchaser to the Company or such assignee, or by any
combination thereof. The Repurchase Price shall be paid without interest within the term of the
Repurchase Option as described in Section 6.2.
6.5 Right of Termination Unaffected. Nothing in this Exercise Agreement shall be
construed to limit or otherwise affect in any manner whatsoever the right or power of the Company
(or any Parent or Subsidiary of the Company) to terminate Purchaser’s employment or other
relationship with Company (or the Parent or Subsidiary of the Company) at any time, for any reason
or no reason, with or without Cause.
7. Encumbrances and Unvested Shares. Purchaser may not (i) xxxxx x xxxx or security
interest in, or pledge, hypothecate or encumber, any Unvested Shares or (ii) transfer to any third
party any Unvested Shares.
8. 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 or the Company and/or its assignee(s) exercise(s) the Repurchase Option.
Upon an exercise of the Repurchase Option, Purchaser will have no further rights as a holder of the
Shares so repurchased upon such exercise, other than the right to receive payment for the Shares so
purchased in accordance with the provisions of this Exercise Agreement, and Purchaser will promptly
surrender the stock certificate(s) evidencing the Shares so purchased to the Company for transfer
or cancellation.
9. Escrow. As security for Purchaser’s faithful performance of this Exercise
Agreement, Purchaser agrees, immediately upon receipt of the stock certificate(s) evidencing the
Shares, to deliver such certificate(s), together with the Stock Powers executed by Purchaser and by
Purchaser’s spouse, if any (with the date and number of Shares left blank), to the Secretary of the
Company or other designee of the Company (the “Escrow Holder”), who is hereby appointed to hold
such certificate(s) and Stock Powers in escrow and to take all such actions and to effectuate all
such transfers and/or releases of such Shares as are in accordance with the terms of this Exercise
Agreement. Purchaser and the Company agree that Escrow Holder will not be liable to any party to
this Exercise Agreement (or to any other party) for any actions or omissions unless Escrow Holder
is grossly negligent or intentionally fraudulent in carrying out the duties of Escrow Holder under
this Exercise Agreement. Escrow Holder may rely upon any letter, notice or other document executed
with any signature purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise Agreement. The Shares
will be released from escrow upon termination of the Repurchase Option.
10. Restrictive Legends and Stop-Transfer Orders.
10.1 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 Company’s Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company or any agreement
between Purchaser and any third party.
10.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance with the
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.
10.3 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.
11. Tax Consequences. PURCHASER UNDERSTANDS AND REPRESENTS (i) THAT PURCHASER HAS
REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND CONSULTED PURCHASER’S 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. IN PARTICULAR, IF UNVESTED SHARES ARE SUBJECT TO REPURCHASE BY THE
COMPANY, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH PURCHASER’S PERSONAL TAX ADVISER
CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE WHICH
MUST BE FILED WITHIN THIRTY (30) DAYS OF THE PURCHASE OF SHARES TO BE EFFECTIVE. 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 PURCHASER’S PERSONAL TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
11.1 Exercise of Incentive Stock Option. If the Option qualifies as an ISO, there
will be no regular U.S. Federal income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as a tax preference item for U.S. Federal alternative minimum tax purposes
and may subject Purchaser to the alternative minimum tax in the year of exercise.
11.2 Exercise of Nonqualified Stock Option. If the Option does not qualify as an ISO,
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 Purchaser’s 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.
11.3 Disposition of Shares. The following tax consequences may apply upon disposition
of the Shares.
(a) Incentive Stock Options. If the Shares are held for more than 12 months after the
date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two
years after the Date of Grant, any gain realized on disposition of the Shares will be treated as
long term capital gain for federal income tax purposes. If Vested Shares purchased under an ISO
are disposed of within the applicable one year or two year period, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates in the year of
the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the
date of exercise over the Exercise Price. To the extent the Shares were exercised prior to vesting
coincident with the filing of an 83(b) Election, the amount taxed because of a disqualifying
disposition will be based upon the excess, if any, of the fair market value on the date of
vesting over the exercise price.
(b) Nonqualified Stock Options. If the Shares are held for more than 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.
(c) Withholding. The Company may be required to withhold from the Purchaser’s
compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.
11.4 Section 83(b) Election for Unvested Shares. With respect to Unvested Shares,
which are subject to the Repurchase Option, unless an election is filed by the Purchaser with the
Internal Revenue Service (and, if necessary, the proper state taxing authorities), within 30
days of the purchase of the Unvested Shares, electing pursuant to Section 83(b) of the Code
(and similar state tax provisions, if applicable) to be taxed currently on any difference between
the Exercise Price of the Unvested Shares and their Fair Market Value on the date of purchase,
there may be a recognition of taxable income (including, where applicable, alternative minimum
taxable income) to the Purchaser, measured by the excess, if any, of the Fair Market Value of the
Unvested Shares at the time they cease to be Unvested Shares, over the
Exercise Price of the Unvested Shares. A form of Election under Section 83(b) is attached
hereto as Exhibit 2 for reference.
12. 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 Company’s Common Stock may be listed or quoted at the
time of such issuance or transfer.
13. Successors and Assigns. The Company may assign any of its rights and obligations
under this Exercise Agreement, including its rights to purchase Shares under the Repurchase Option.
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 Purchaser’s heirs, executors,
administrators, legal representatives, successors and assigns.
14. 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.
15. 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 business day
after deposit with an express overnight courier for United States deliveries, or two business days
after such deposit for deliveries outside of the United States, with proof of delivery from the
courier requested; or (iii) three 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”.
16. 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.
17. 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” and
“exhibits” will mean “sections” and “exhibits” to this Exercise Agreement.
18. Entire Agreement. The Plan, the Notice, the Stock Option Agreement and this
Exercise Agreement, together with all Exhibits thereto, 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.
19. 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.
20. 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.
21. Facsimile/PDF Signatures. This Exercise Agreement may be executed and delivered
by facsimile or .pdf (portable document format or similar format) and upon such delivery the
facsimile or .pdf signature, as the case may be, will be deemed to have the same effect as if the
original signature had been delivered to the other party.
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.
| GLU MOBILE INC. | PURCHASER | |||||
By: |
||||||
| (Signature) | ||||||
| (Please print name) | (Please print name) | |||||
| (Please print title) | ||||||
Address:
|
Address: | |||||
Fax No.:
|
Fax No. | |||||
Phone No.:
|
Phone No.: | |||||
List of Exhibits:
| Exhibit 1: | Stock Power and Assignment Separate from Stock Certificate |
| Exhibit 2: | Section 83(b) Election |
[Signature page to Glu Mobile Inc. Stock Option Exercise Agreement]
EXHIBIT 1
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
Stock Power and Assignment
Separate from Stock Certificate
Separate from Stock Certificate
FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise Agreement No.
dated as of , , (the “Agreement”), the undersigned hereby sells, assigns and
transfers unto
, shares of the Common Stock, $0.0001 par
value per share, of Glu Mobile Inc, a Delaware corporation (the “Company”), standing in the
undersigned’s name on the books of the Company represented by Certificate No(s). delivered
herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company as the
undersigned’s attorney-in-fact, with full power of substitution, to transfer said stock on the
books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY
EXHIBITS THERETO.
Dated: ,
| PURCHASER | ||
| (Signature) | ||
| (Please Print Name) | ||
| (Spouse’s Signature, if any) | ||
| (Please Print Spouse’s Name) |
Instructions to Purchaser: Please do not fill in any blanks other than the signature line.
The purpose of this Stock Power and Assignment is to enable the Company to acquire the shares and
to exercise its “Repurchase Option” set forth in the Exercise Agreement without requiring
additional signatures on the part of the Purchaser.
EXHIBIT 2
SECTION 83(b) ELECTION
SECTION 83(b) ELECTION
ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, to include the excess, if any, of the fair market value of the property described
below at the time of transfer over the amount paid for such property, as compensation for services
in the calculation of: (1) regular gross income; (2) alternative minimum taxable income or (3)
disqualifying disposition gross income, as the case may be.
| 1. | TAXPAYER’S NAME: |
| TAXPAYER’S ADDRESS: |
| SOCIAL SECURITY NUMBER: |
| 2. | The property with respect to which the election is made is described as follows: ___ shares of Common Stock, $0.0001 par value per share, of Glu Mobile Inc., a Delaware corporation (the “Company”) which were transferred upon exercise of an option by Company, which is Taxpayer’s employer or the corporation for whom the Taxpayer performs services. | |
| 3. | The date on which the shares were transferred pursuant to the exercise of the option was ___, ___and this election is made for calendar year ___. | |
| 4. | The shares received upon exercise of the option are subject to the following restrictions: The Company may repurchase all or a portion of the shares at the Taxpayer’s original purchase price under certain conditions at the time of Taxpayer’s termination of employment or services. | |
| 5. | The fair market value of the shares (without regard to restrictions other than restrictions which by their terms will never lapse) was $ per share at the time of exercise of the option. | |
| 6. | The amount paid for such shares upon exercise of the option was $ per share. | |
| 7. | The Taxpayer has submitted a copy of this statement to the Company. |
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE (“IRS”), AT THE OFFICE WHERE THE
TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER THE DATE OF TRANSFER OF THE
SHARES, AND MUST ALSO BE FILED WITH THE TAXPAYER’S INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE
ELECTION CANNOT BE REVOKED WITHOUT THE CONSENT OF THE IRS.
Dated: |
||||||
| Taxpayer’s Signature |
