GLU MOBILE INC. STOCK OPTION AWARD AGREEMENT 2007 EQUITY INCENTIVE PLAN
Exhibit 99.1
Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity
Incentive 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 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 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 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 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.
(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) 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.
