GLU MOBILE INC.
TRANSITIONAL EMPLOYMENT AGREEMENT
This Transitional Employment
Agreement (“ Agreement ” ) is entered
into as of July 8, 2009, by and between L. Gregory Ballard
(“ Employee ”) and Glu Mobile Inc. (the
“ Company ”) (collectively referred to as
the “ Parties ”).
RECITALS
WHEREAS , Employee is
currently employed by the Company as its Chief Executive
Officer;
WHEREAS , the Parties wish to
provide for the transition of employment for Employee, and the
Parties wish to agree upon the terms and conditions applicable to
such transitional period of employment and upon Employee’s
termination of employment with the Company;
NOW THEREFORE , in
consideration of the promises made herein, the Parties hereby agree
as follows:
AGREEMENT
1. Transitional
Employment . Employee shall continue in active employment with
the Company for the “ Transitional Period
”, which shall commence as of the date of this Agreement (the
“ Transitional Date ”) and which shall
continue until the earlier to occur of (a) the date a new
Chief Executive Officer commences employment with the Company, or
(b) January 1, 2010 (such earlier date, the “
Termination Date ”). Notwithstanding the
foregoing, Employee’s employment with the Company during the
Transitional Period will be at-will and may be terminated by
Employee or by the Company at any time for any reason.
2. Resignation of Titles and
Positions . Unless otherwise requested by the board of
directors of the Company (the “ Board ”),
effective as of the Termination Date, Employee will resign from
employment with the Company and from the Board, and, if requested
earlier during the Transitional Period, relinquish all titles and
positions then held by Employee with the Company or any subsidiary
of the Company.
3. Compensation and Benefits
During Transitional Period . During the Transitional Period,
Employee will continue to receive payment of his salary, based on
his current annual base salary of $281,250.00, and will continue to
participate in applicable Company employee benefit plans, subject
to the terms and conditions of such plans. During the Transitional
Period, Employee’s options to purchase Company common stock
(“ Company Options ”) will continue to
vest in accordance with their terms. Employee shall continue to be
eligible for any bonuses during the Transitional Period, including
participation in the 2009 Executive Bonus Plan (the “
Bonus Plan ”).
4. Payments and Benefits
upon Termination .
(a) Accrued Payments and
Benefits . Upon the termination of employment of Employee for
any reason, the Company shall pay to Employee all amounts and
benefits that have accrued or were earned but remain unpaid through
the date of termination in respect of salary and unreimbursed
expenses, including any accrued vacation (the “ Accrued
Benefits ”). Employee’s health insurance
benefits will cease on the date of termination, subject to
Employee’s eligibility and timely election to continue group
health coverage under COBRA. Employee’s participation in all
other employee benefits plans will cease on the date of
termination, and Employee will cease accruing employee benefits,
including, but not limited to, paid time off, as of the date of
termination. Except as otherwise set forth herein, Employee shall
have the period of time following the date of termination specified
in the governing written stock option agreement to exercise any
Company Options that are then vested and outstanding. Any Company
Options that remain unvested as of the date of termination shall
expire effective as of the date of termination.
(b) Payments Upon
Termination .
(i) Termination Prior to
Termination Date . If the employment of Employee is terminated
by the Company other than for Cause (as defined in that certain
Change of Control Severance Agreement dated as of October 10,
2008 by and between Employee and the Company (the “ COC
Agreement ”)) or by Employee for any reason prior to
the Termination Date (the “ Separation Date
”), then in addition to the Accrued Benefits, subject to
Employee’s execution and delivery to the Company of a signed
general release of claims in favor of the Company, in substantially
the form attached hereto as Exhibit A (the “
Release ”), and subject to its nonrevocation by
Employee and it becoming effective, the Company will provide
Employee with $462,500.00 (an amount equal to 8 /
12 of Employee’s $375,000 base salary for purposes
of his COC Agreement, plus an amount equal to 8 /
12 of the maximum bonus for which he could be eligible
under the Bonus Plan, based on Employee’s $375,000 base
salary for purposes of his COC Agreement) payable in nine
(9) equal bi-weekly installments of $51,388.89 (collectively,
the “ Separation Payments ”), which will
begin with the Company’s next regular pay cycle at least two
weeks following the date the Release becomes effective, subject to
Section 17 below.
(ii) Termination On or After
Termination Date . If the employment of Employee is terminated
by the Company or by Employee for any reason on or after the
Termination Date, then Employee shall not be entitled to any
Separation Payments in Section 4(b)(i) above, and in
lieu thereof, subject to Employee’s execution and delivery of
the Release, and subject to its nonrevocation by Employee and it
becoming effective, in addition to the Accrued Benefits, the
Company will provide Employee with the following benefits
(collectively, the “ Termination Benefits
”):
(A) In the event that the
Termination Date is prior to January 1, 2010, continued
payment of Employee’s current base salary (at an annual rate
of $281,250) on each pay date of the Company’s regular pay
cycle through December 31, 2009 (including pro rata payment
for any partial pay period included therein);
(B) A lump sum payment of
$278,906.25 (an amount equal to 10.5 / 12 of
the maximum bonus for which he could be eligible under the Bonus
Plan, based on Employee’s $375,000 base salary for purposes
of his COC Agreement), payable on the later of (I) the
Company’s first regular pay cycle following January 1,
2010 and (II) the Company’s next regular pay cycle at
least two weeks following the date the Release becomes
effective;
(C) A lump sum payment of
$328,125.00 (an amount equal to 10.5 / 12 of
Employee’s $375,000 base salary for purposes of his COC
Agreement), the later of (I) the Company’s first regular
pay cycle following January 1, 2010 and (II) the
Company’s next regular pay cycle at least two weeks following
the date the Release becomes effective;
(D) Provided Employee timely
elects COBRA continuation coverage, the Company shall reimburse
Employee for applicable COBRA premiums for a period of nine
(9) months, or if earlier, until the date Employee becomes
covered under the group health plan of another employer;
(E) All outstanding Company
Options shall immediately vest with respect to an additional nine
(9) months of vesting, with the remaining unvested Company
Options (after giving effect to such additional nine
(9) months of vesting) expiring as of the Termination
Date;
(F) The post-termination
exercise period applicable to vested Company Options (including any
Company Options subject to acceleration pursuant to
Section 4(b)(ii)(C) ) held by Employee as of the
Termination Date shall be extended to September 30, 2010,
however options intended to be incentive stock options so held by
Employee shall become nonstatutory stock options as a result of
such extension; and
(G) Subject to a review by the
Company’s Information Technology department for Company
confidential proprietary information, Employee shall retain the
laptop computer and Blackberry device previously provided to
Employee by the Company; it being understood that any proprietary
information that may remain on such laptop computer and Blackberry
device shall remain confidential information of the Company and
remain subject to the Proprietary Information and Inventions
Agreement between Employee and the Company (the “
PIIA ”).
(iii) Termination Following
a Change of Control . If the Company is subject to a Change of
Control (as defined in the COC Agreement) during the Transitional
Period, and Employee’s employment with the Company is
terminated following such Change of Control, (a) the terms and
condition of the COC Agreement shall apply (based on a $375,000
base salary in accordance with the December 2008 arrangement
with the Company, (b) Employee shall be entitled to severance
benefits set forth in the COC Agreement, subject to the terms and
conditions of such COC Agreement, and (c) Employee shall not
be entitled to any other payments or benefits described in this
Agreement
5. No Mitigation
Required . Employee shall not be required to seek other
employment or to attempt in any way to reduce amounts payable to
him pursuant to this Agreement. Further, the amount of benefits
provided under this Agreement shall not be reduced by any
compensation earned by or other benefits provided to Employee as a
result of employment by another employer following the Separation
Date or Termination Date, as the case may be.
6. Confidential
Information . During the Transitional Period and following the
Separation Date or Termination Date, as the case may be, Employee
shall continue to maintain the confidentiality of all confidential
and proprietary information of the Company and shall continue to
comply with the terms and conditions of the PIIA. Employee shall
return all of the Company’s property (other than as set forth
in Section 4(b)(ii)(e) above) and confidential and
proprietary information in his possession to the Company on the
Separation Date or Termination Date, as the case may be.
7. Non-Solicitation .
Employee agrees that for a period of twelve (12) months
immediately following the Separation Date or Termination Date, as
the case may be, Employee shall not either directly or indirectly
solicit, induce, recruit or encourage any of the Company’s
employees to leave their employment, or take away such employees,
or attempt to solicit, induce, recruit, encourage, or take away
employees of the Company, either for himself or any other person or
entity. Employee further agrees not to otherwise interfere with the
relationship of the Company or any of its subsidiaries or
affiliates with any person who, to the knowledge of Employee, is
employed by or otherwise engaged to perform services for the
Company or its subsidiaries or affiliates (including, but not
limited to, any independent sales representatives or organizations)
or who is, or was within the then most recent prior twelve-month
period, a customer or client of the Company, or any of its
subsidiaries.
8. Costs . The Parties
shall each bear their own costs, expert fees, attorneys’ fees
and other fees incurred in connection with this Agreement.
9. Post-Termination
Assistance . Following the Separation Date or Termination Date,
as the case may be, and upon reasonable notice, Employee shall
provide such information and assistance to the Company as may
reasonably be requested by the Company until January 1, 2010.
Following January 1, 2010, and upon reasonable notice,
Employee shall provide such information and assistance to the
Company as may reasonably be requested by the Company in connection
with any audit, governmental investigation or litigation in which
it or any of its subsidiaries is or may become a party related to
the period of Employee’s service with the Company. If
Employee fails to provide information and assistance to the Company
pursuant to this Section 9 , then the Company shall no
longer have any obligation to make any further payments to Employee
subject to Section 4(b)(i) or
Section 4(b)(ii)(b) of this Agreement following the
date of notice of such failure, unless such failure is promptly
cured to the reasonable satisfaction of the Company.
10. Arbitration . The
Parties agree that any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be
submitted to the American Arbitration Association (“
AAA ”) and that a neutral arbitrator will be
selected in a manner consistent with its National Rules for the
Resolution of Employment Disputes. The arbitration proceedings will
allow for discovery according to the rules set forth in the
National Rules f
