CHANGE OF CONTROL SEVERANCE
AGREEMENT
This Change of
Control Severance Agreement (the “ Agreement
”) is made and entered into effective as of October 10,
2008 (the “ Effective Date ”), by and
between
(the “ Employee ”) and Glu Mobile Inc.
(the “ Company ”).
A. It is
expected that the Company from time to time will consider the
possibility of a Change of Control (as defined below). The Board of
Directors of the Company (the “ Board ”)
recognizes that such consideration can be a distraction to the
Employee and can cause the Employee to consider alternative
employment opportunities.
B. The Board
believes that it is in the best interests of the Company and its
shareholders to provide the Employee with an incentive to continue
his or her employment and to maximize the value of the Company upon
a Change of Control for the benefit of its shareholders.
C. In order
to provide the Employee with enhanced financial security and
sufficient encouragement to remain with the Company notwithstanding
the possibility of a Change of Control, the Board believes that it
is important to provide the Employee with certain severance
benefits upon the Employee’s termination of employment
following a Change of Control.
In consideration
of the mutual covenants herein contained and the continued
employment of Employee by the Company, the parties agree as
follows:
1.
Definitions . Unless otherwise defined elsewhere herein, the
following terms referred to in this Agreement shall have the
following meanings:
(a)
“ Cause ” means (i) the
Employee’s committing of an act of gross negligence, gross
misconduct or dishonesty, or other willful act, including
misappropriation, embezzlement or fraud, that materially adversely
affects the Company or any of the Company’s customers,
suppliers or partners, (ii) his or her personal dishonesty,
willful misconduct in the performance of services for the Company,
or breach of fiduciary duty involving personal profit,
(iii) his or her being convicted of, or pleading no contest
to, any felony or misdemeanor involving fraud, breach of trust or
misappropriation or any other act that the Board reasonably
believes in good faith has materially adversely affected, or upon
disclosure will materially adversely affect, the Company, including
the Company’s public reputation, (iv) any material
breach of any agreement with the Company by him or her that remains
uncured for thirty (30) days after written notice by the
Company to him or her, unless that breach is incapable of cure, or
any other material unauthorized use or disclosure of the
Company’s confidential information or trade secrets involving
personal benefit or (v) his or her failure to follow the
lawful directions of the Board or, if he or she is not the chief
executive officer, the lawful directions of the chief executive
officer, in the scope of his or her employment unless he or she
reasonably believes in good faith that these directions are not
lawful and notifies the Board or chief executive officer, as the
case may be, of the reasons for his or her belief.
(b)
“ Change of Control ” means the closing
of (i) a merger or consolidation in one transaction or a
series of related transactions, in which the Company’s
securities held by the Company’s shareholders before the
merger or consolidation represent less than fifty percent (50%) of
the outstanding voting equity securities of the surviving
corporation after the transaction or series of related
transactions, (ii) a sale or other transfer of all or
substantially all of the Company’s assets as a going concern,
in one transaction or a series of related transactions, followed by
the distribution to the Company’s shareholders of any
proceeds remaining after payment of creditors or (iii) a
transfer of more than 50% of the Company’s outstanding voting
equity securities by the Company’s shareholders to one or
more related persons or entities other than the Company in one
transaction or a series of related transactions:
(c)
“ Code ” means the United States Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
(d)
“ Involuntary Termination ” means the
Employee’s resignation of employment from the Company
expressly based on the occurrence of any of the following
conditions, without the Employee’s informed written consent,
provided, however, that with respect to each of the following
conditions, the Employee must (a) within ninety (90) days
following its occurrence, deliver to the Company a written notice,
pursuant to Section 8(b) hereof, explaining the specific basis for
the Employee’s belief that the Employee is entitled to
terminate the Employee’s employment due to an Involuntary
Termination and (b) give the Company an opportunity to cure
any of the following within thirty (30) days following delivery of
such notice and explanation (i) a material reduction in his or
her duties, position or responsibilities, or his or her removal
from these duties, position and responsibilities, unless he or she
is provided with a position of substantially equal or greater
organizational level, duties, authority and compensation; provided,
however, that a change of title, in and of itself, or a reduction
of duties, position or responsibilities solely by virtue of the
Company’s being acquired and made part of a larger entity
will not constitute an “Involuntary Termination,”
(ii) a greater than fifteen percent (15%) reduction in his or
her then-current annual base compensation that is not applicable to
the Company’s other executive officers, or (iii) a
relocation to a facility or a location more than thirty
(30) miles from his or her then-current location of
employment. For the avoidance of doubt, Involuntary Termination
shall not include a termination of employment for death or
Permanent Disability.
(e)
“ Permanent Disability ” has the meaning
set forth in Section 22(e) of the Code.
(f)
“ Termination Date ” shall mean the
effective date of any notice of termination delivered by one party
to the other hereunder.
2. Term
of Agreement . This Agreement shall terminate upon the date
that all obligations of the parties hereto under this Agreement
have been satisfied or, if earlier, on the date, prior to a Change
of Control, Employee is no longer employed by the
Company.
3.
At-Will Employment . The Company and the Employee
acknowledge that the Employee’s employment is, and shall
continue to be, at-will.
(a)
Termination Following a Change of Control . If the
Employee’s employment with the Company is terminated without
Cause or is terminated as a result of an Involuntary Termination at
any time within twelve (12) months after a Change of Control
and the Employee delivers to the Company within sixty
(60) days following such termination a general release of
claims in favor of the Company (the release of which shall not
include any release of claims pursuant to which the Employee is
entitled to indemnification with respect to thereof) (the “
Release ”), then the Employee will be entitled
to
2
the following
severance benefits (which shall be payable not later than sixty
(60) days following receipt by the Company of the Release, and
subject to the time limitations set forth in
Section 5):
(i) six
(6) months of the Employee’s then-current annual base
salary, payable in a lump sum.
(ii) Employee’s
bonus actually earned, based on actual completion of the applicable
performance targets for the year, quarter or
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