Exhibit 10.2

699 Eighth StreetSan FranciscoCalifornia
94103company.zynga.com[gcuvcy0z5zzt000001.jpg]

 

 

 

 

 

 

 

 

 

 

VIA EMAIL

 

Bernard Kim

 

Re:Offer of Employment by Zynga Inc.

Dear Bernard:

I am very pleased to confirm our offer to you of employment with Zynga Inc., a
Delaware corporation (the “Company”), in the position of President of
Publishing, reporting to the Company’s Chief Executive Officer.  The terms of
our offer and the benefits currently provided by the Company are as follows:

1.Starting Salary and Location. Your starting base salary will be five hundred
thousand dollars ($500,000) per year, less deductions and withholdings required
by law, and will be subject to periodic review and adjustment for increases but
not decreases, in accordance with the Company’s then-current policies.  You are
currently approved to work remotely from your residence in Los Angeles,
California .

2.Annual Bonus. For the 2016 fiscal year, you will be eligible to participate in
the Company’s then-applicable bonus program, with a Target Bonus equal to one
hundred percent (100%) of your annual base salary and a maximum bonus equal to
two hundred percent (200%) of your annual base salary, subject to the terms,
conditions, and eligibility requirements of that program; provided, however that
for the 2016 fiscal year, you will be guaranteed to receive no less than the
Target Bonus, pro-rated for the number of days you are employed by the Company
in fiscal year 2016. For fiscal years after 2016, and conditioned upon your
continued employment, you will be eligible to participate in the Company’s
then-applicable bonus program, if any, subject to the terms, conditions, and
eligibility requirements of that program. Other than with respect to fiscal year
2016, whether you receive an annual bonus for any given bonus period, and the
amount of any such bonus, will be determined by the Company in its sole
discretion based upon the Company’s achievement of its performance benchmarks
and your individual performance during the applicable bonus period, as described
in more detail in its then-applicable bonus program.

3.Benefits.  You will be eligible to participate in the regular health insurance
and other employee benefit plans established by the Company for its employees,
as amended from time to time, subject to the terms and conditions of those plans
and programs. The Company reserves the right to change, cancel, or otherwise
modify, in its sole discretion, the terms and conditions of its benefit plans at
any time in the future, with or without notice.  

4.Business Travel.  The Company shall reimburse you for all reasonable business
expenses incurred or paid by you in the performance of your duties and
responsibilities hereunder, subject to the Company's Global Travel and Expense
Policy. This includes reimbursement for a monthly Surf Air subscription, to be
used by you for the Company’s business purposes and in furtherance of your
duties

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and responsibilities hereunder.  These travel expenses may be subject to
applicable tax withholdings and the Company will reimburse you for any increased
tax liability associated with such reimbursements. To the extent that these
travel or any other reimbursements payable to you are subject to the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended: (a) to be
eligible to obtain reimbursement for such expenses you must submit expense
reports within 60 days after the expense is incurred; (b) any such
reimbursements will be paid no later than December 31st of the year following
the year in which the expense was incurred;(c) the amount of expenses reimbursed
in one year will not affect the amount eligible for reimbursement in any
subsequent year; and (d) the right to reimbursement will not be subject to
liquidation or exchange for another benefit. 

5.Corporate Housing. The Company will provide corporate housing for you in San
Francisco through an approved Company vendor, subject to your continued
employment. These housing expenses will be subject to applicable tax
withholdings and the Company will reimburse you for any increased tax liability
associated with such housing reimbursements. To the extent that these housing
amounts or any other reimbursements payable to you are subject to the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended: (a) to be
eligible to obtain reimbursement for such expenses you must submit expense
reports within 60 days after the expense is incurred;(b) any such reimbursements
will be paid no later than December 31st of the year following the year in which
the expense was incurred; (c) the amount of expenses reimbursed in one year will
not affect the amount eligible for reimbursement in any subsequent year; and (d)
the right to reimbursement will not be subject to liquidation or exchange for
another benefit.

6.Confidentiality.  As an employee of the Company, you will have access to
certain confidential information of the Company and you may, during the course
of your employment, develop certain information or inventions that will be the
property of the Company.  To protect the interests of the Company, this offer of
employment is contingent upon your signing the Company’s standard Employee
Invention Assignment and Confidentiality Agreement.  We wish to impress upon you
that we do not want you to, and we hereby direct you not to, bring with you any
confidential or proprietary information of any former employer or other entity
or to violate any other obligations you may have to any former employer or other
entity.  You represent that your signing of this offer letter, any agreements
concerning ZSUs (as defined below) or stock options granted to you under the
Plan (as defined below), the Company’s Employee Invention Assignment and
Confidentiality Agreement, and your employment with the Company, will not
violate any agreement currently in place between you and current or past
employers or other entities.

7.Zynga Stock Units.

a.Subject to the terms and conditions of the Company’s applicable equity
incentive plan in effect at the time of grant (the “Plan”), you will receive an
award of restricted stock units (“ZSUs”) representing the opportunity to acquire
two-million, five-hundred thousand (2,500,000) shares of the Company’s Class A
common stock. The right to vesting and settlement of a ZSU award will be subject
to your continued service, the restrictions set forth in the Plan, the terms of
the ZSU agreement between you and the Company as approved by the Board of
Directors (the “Board”), or a committee appointed by the Board, compliance with
applicable securities and other laws, and satisfaction of the Vesting Criteria.
For purposes of the foregoing, the “Vesting Criteria” means a five (5) year
vesting term with the following conditions: (x) the vesting commencement date
will occur on the 15th day of the month immediately following your Start Date
(as defined below); (y) the award vests as to twenty percent (20%) of the ZSUs
(rounded down to the nearest whole ZSU) on the first anniversary of the vesting
commencement date, with the balance vesting as to as to five percent (5%) of the
ZSUs (rounded down to the nearest whole ZSU except for the last vesting
installment) each three (3) months thereafter; and (z) in each case subject to
your continued service. Each installment of the ZSUs that vests is a “separate
payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). Settlement
of any vested ZSUs will occur no later than the 15th day of the third calendar
month of the year following the year in which the installment of ZSUs is no
longer subject to a “substantial risk of forfeiture” (within the meaning of
Treasury Regulations Section

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1.409A-1(d)) or, if required for compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), by no later than December 31st of
the calendar year in which the installment of ZSUs are no longer subject to a
substantial risk of forfeiture (subject to any delay in payment required by a
Separation from Service). 

b.Subject to the terms and conditions of the Plan and subject to the terms and
conditions of the ZSU agreement relating to the Target ZSUs (as defined below)
(the “Target ZSU Agreement”) between you and the Company as approved by the
Board, you will receive an award of ZSUs representing the opportunity to acquire
up to five-hundred thousand (500,000) shares of the Company’s Class A common
stock (“Target ZSUs”) with the actual percentage of the Target ZSUs that you
will receive set forth in the Target ZSU Agreement based on the Company
achieving certain performance conditions (as more fully detailed in the Target
ZSU Agreement) related to 2017 Bookings (defined below) and (ii) 2017 Adjusted
EBITDA Margin (defined below).(the “Performance Conditions”)   

For purposes of this Section 7.b, “2017 Bookings” means bookings as described
under the heading “Key Financial Metrics” and as reported in the Company’s Form
10-K for the 2017 fiscal year and “2017 Adjusted EBITDA Margin” means  a/b where
“a” is the Company’s Adjusted EBITDA for the 2017 fiscal year as described under
the heading “Key Financial Metrics” and as reported in the Company’s Form 10-K
for the 2017 fiscal year and “b” is the Company’s 2017 Bookings.  The
Compensation Committee of the Board shall have sole discretion to determine and
certify that each Performance Condition has been met.

Notwithstanding anything to the contrary, if the Company does not achieve at
least one of the Performance Conditions, then on the Determination Date the
award will immediately be cancelled and no payment will be made with respect to
the award.

Subject to approval of the Board or a committee appointed by the Board, in the
event of a Change in Control as defined in the Severance Benefit Plan (as
defined in Section 9), 100% of the Target ZSUs shall be deemed outstanding and
subject to the acceleration provisions of the Severance Benefit Plan.

8.Stock Options.  Subject to approval of the Board (or a committee appointed by
the Board), you will receive an option to purchase five million (5,000,000)
shares of the Company’s Class A common stock in the aggregate (the “Options”).
If approved, the Options will be granted on the 15th day of the month following
your Start Date with the Company, and will have an exercise price equal to the
fair market value on the date of grant.  The Options will have a ten (10) year
term from their date of grant in which they can be exercised (subject to your
continued service and the vesting provisions described below) and will be
subject to the terms and conditions of the Plan, and option agreement(s) between
you and the Company in the form approved by the Board (or a committee appointed
by the Board).  The Options will have a five (5) year vesting schedule with the
following conditions: (x) their vesting commencement date will occur on the 15th
day of the month following your Start Date; (y) the Options will vest as to
twenty percent (20%) of the shares subject to the Options (rounded down to the
nearest whole share) on the first anniversary of the vesting commencement date,
with the balance vesting as to five percent (5%) of the shares subject to the
Options (rounded down to the nearest whole share except for the last vesting
installment) each three (3) months thereafter; and (z) in each case subject to
your continued service.

9.Executive Severance Plan. Subject to approval of the Board or a committee
appointed by the Board, you will be eligible to participate in the Zynga Inc.
Change in Control Severance Benefit Plan (or any successor thereto) (the
“Severance Benefit Plan”), subject to the terms and conditions thereof;
provided, however, that if the severance benefits you would receive under
Section 10 are greater than the severance benefits you would receive under the
Severance Benefit Plan, you will receive the severance benefits outlined Section
10 in lieu of any severance benefits under the Severance Benefit Plan.

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10.Severance for Non-Change in Control.  If you suffer a Separation from Service
(within the meaning of Treasury Regulation Section 1.409A-1(h)) due to: (i) the
Company terminating your employment without Cause, or (ii) your Constructive
Termination, then subject to your (A) continuing to comply with your obligations
under this letter and your Employee Invention Assignment and Confidentiality
Agreement, and (B) delivering to the Company an effective general release of
claims in favor of the Company, as to which the seven (7)-day revocation period
has expired (without your having revoked) within 60 days following your
Separation from Service (the date on which such revocation period expires, the
“Release Revocation Date”), then the Company will provide you with the following
severance benefits: 

a.The Company will pay you an amount equal to one times (1x) your annual base
salary at the time of your termination, plus a pro-rated bonus for the fiscal
year in which your termination occurs (based on your Target Bonus for the fiscal
year in which you have a Separation from Service) (collectively, the “Separation
Payments”).  The Separation Payments will be subject to applicable payroll
deductions and tax withholdings and paid in a lump sum on the first regular
payroll date which is (A) on or following the Release Revocation Date, if the
60th day following your Separation from Service falls in the same calendar year
as your Separation from Service, or (B) in the calendar year following your
Separation from Service, if the Release Revocation Date occurs in the same
calendar year as your Separation from Service and the 60th day following your
Separation from Service falls in the calendar year following your Separation
from Service, the Company will pay you in a lump sum the Separation Payments
that you would have received on or prior to such regular payroll date under the
original schedule but for the delay while waiting for such payment, with the
balance of the Separation Payments being paid as originally scheduled.

b.If you timely elect continued coverage under COBRA, the Company will pay the
COBRA premiums to continue your coverage (including coverage for your eligible
dependents, if applicable) for twelve (12) months following your Separation from
Service (with such payments to end if you become eligible for group health
insurance coverage through a new employer or you cease to be eligible for COBRA
continuation coverage for any reason), provided that the cost of such coverage
will be reported to the tax authorities as taxable income to you.

c.The Company will accelerate the vesting of the ZSUs and the Options such that
the shares that would have vested in the one (1) year period following your
Separation from Service had your employment not been terminated, if any, shall
be deemed fully vested on your termination date, and you shall have three months
following your Separation from Service to exercise your vested Options.

11.Definitions.  For purposes of this letter, the definitions of “Cause” and
“Constructive Termination” shall be as follows:

“Cause” means, with respect to you (i) any willful, material violation of any
law or regulation applicable to the business of the Company, conviction for, or
guilty plea to, a felony or a crime involving moral turpitude, or any willful
perpetration of a common law fraud; (ii) commission of an act of personal
dishonesty that involves material personal profit in connection with the Company
or any other entity having a business relationship with the Company; (iii) any
material breach of any provision of any agreement between the Company and you
regarding the terms of service as an employee, officer, director, or consultant
to the Company, including without limitation, the willful and continued failure
or refusal to perform the material duties required an employee, officer,
director or consultant of the Company, or a breach of any applicable invention
assignment and confidentiality agreement or similar agreement between the
Company and you; (iv) willful disregard of a material policy of the Company so
as to cause material loss, damage, or injury to the property, reputation, or
employees of the Company; or (v) any other misconduct that is materially
injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company.  An event, action, or omission by you will
not give the Company grounds to involuntarily terminate your employment for
Cause unless (A) the Company

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gives you written notice within 30 days after the initial existence of such
event, action, or omission that the event, action, or omission by you would give
the Company grounds to terminate your employment for Cause, and (B) if capable
of being reversed, remedied or cured, such event, action or omission is not
reversed, remedied or cured, as the case may be, by you within 30 days of
receiving such written notice from the Company.

“Constructive Termination” means the voluntary termination of employment with
the Company by you resulting in a Separation from Service after one of the
following is undertaken without your written consent: (i) the assignment to you
of any duties or responsibilities that results in a material diminution in your
employment role as the President of Publishing of the Company as in effect
immediately prior to the date of such actions; (ii) the Company changes its
Chief Executive Officer within the first two anniversary years immediately
following your Start Date; or (iii) a non-temporary relocation of your business
office to a location that increases your one way commute by more than 35 miles
from the primary location at which you perform duties as of immediately prior to
the date of such action. An event or action by the Company will not give you
grounds to voluntarily terminate employment as a Constructive Termination unless
(A) you give the Company written notice within 30 days after the initial
existence of such event or action that the event or action by the Company would
give you such grounds to so terminate employment, (B) such event or action is
not reversed, remedied or cured, as the case may be, by the Company as soon as
possible but in no event later than within 30 days of receiving such written
notice from you, and (C) you terminate employment within 90 days following the
end of the cure period.

12.Potential Code Section 280G Reductions.

a.Anything to the contrary herein notwithstanding, in the event that it shall be
determined that any payment, distribution, or other action by the Company or any
of its affiliates to or for your benefit (whether paid or payable or distributed
or distributable pursuant to the terms of this letter or otherwise) (a
“Payment”), would result in an “excess parachute payment” within the meaning of
Section 280G(b)(i) of the Code, and the value determined in accordance with
Section 280G(d)(4) of the Code of the Payments, net of all taxes imposed on you
(the “Net After-Tax Amount”) that you would receive would be increased if the
Payments were reduced, then the Payments shall be reduced by an amount (the
“Reduction Amount”) so that the Net After-Tax Amount after such reduction is
greatest.  For purposes of determining the Net After-Tax Amount, you shall be
deemed to (i) pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which the Payment is to be made, and
(ii) pay applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.

b.Subject to the provisions of this Section 12.b, all determinations required to
be made under this Section 12, including the Net After-Tax Amount and the
Reduction Amount pursuant to Section 12.a, and the assumptions to be utilized in
arriving at such determinations, shall be made by a nationally recognized
accounting firm selected by the Company prior to a “Change in Control” as
defined in the Severance Benefit Plan (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and you within
fifteen (15) business days of the receipt of notice from you that there has been
a Payment, or such earlier time as is requested by the Company.  Anything in
this letter to the contrary notwithstanding, the Reduction Amount shall not
exceed the amount of the Payments that the Accounting Firm determines reasonably
may be characterized as “parachute payments” under Section 280G of the
Code.  Payments with respect to ZSUs shall be reduced first, followed by Options
and then any cash payments (with the reduction occurring first with respect to
amounts that are not “deferred compensation” within the meaning of Section 409A
of the Code and then with respect to amounts that are). Any determination by the
Accounting Firm shall be binding upon the Company and you.

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13.409A.  It is intended that all of the benefits and payments under this letter
satisfy, to the greatest extent possible, the exemptions from the application of
Code Section 409A provided under Treasury Regulations 1.409A 1(b)(4), 1.409A
1(b)(5) and 1.409A 1(b)(9), and this letter will be construed to the greatest
extent possible as consistent with those provisions.  If not so exempt, this
letter (and any definitions hereunder) will be construed in a manner that
complies with Section 409A, and incorporates by reference all required
definitions and payment terms.  For purposes of Code Section 409A (including,
without limitation, for purposes of Treasury Regulation Section 1.409A
2(b)(2)(iii)), your right to receive any installment payments under this letter
(whether severance payments, reimbursements or otherwise) will be treated as a
right to receive a series of separate payments and, accordingly, each
installment payment hereunder will at all times be considered a separate and
distinct payment.  Notwithstanding any provision to the contrary in this letter,
if you are deemed by the Company at the time of your Separation from Service to
be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), and if
any of the payments upon Separation from Service set forth herein and/or under
any other agreement with the Company are deemed to be “deferred compensation”,
then if delayed commencement of any portion of such payments is required to
avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and the
related adverse taxation under Section 409A, the timing of the payments upon a
Separation from Service will be delayed as follows: on the earlier to occur of
(i) the date that is six months and one day after the effective date of your
Separation from Service, and (ii) the date of the your death (such earlier date,
the “Delayed Initial Payment Date”), the Company will (A) pay to you a lump sum
amount equal to the sum of the payments upon Separation from Service that you
would otherwise have received through the Delayed Initial Payment Date if the
commencement of the payments had not been delayed pursuant to this paragraph,
and (B) commence paying the balance of the payments in accordance with the
applicable payment schedules set forth above. No interest will be due on any
amounts so deferred. 

14.At Will Employment.  While we look forward to a long and profitable
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us for any reason, at any time, with or without prior
notice, and with or without cause.  In addition, the Company may change your
compensation, benefits, duties, assignments, reporting line, responsibilities,
location of your position, ability to work remotely, or any other terms and
conditions of your employment at any time, to adjust to the changing needs of
our dynamic company.  Any statements or representations to the contrary (and any
statements contradicting any provision in this letter) are
ineffective.  Further, your participation in any stock incentive or benefit
program is not to be regarded as assuring you of continued employment for any
particular period of time.  Any modification or change in your at-will
employment status may only occur by way of a written employment agreement signed
by you and the CEO of the Company.  

15.Conflict of Interest.  Prior to starting employment, you will disclose to the
Company, in writing, any other gainful employment, business or activity that you
are currently associated with or participate in that competes, directly or
indirectly, with the Company.  During your employment, you agree not to engage
in any employment, business or activity that is in any way competitive with the
business or proposed business of the Company, which materially interferes with
the performance of your job duties, or creates a conflict of interest.  You also
may not assist any other person or organization in competing with the Company or
in preparing to engage in competition with the business or proposed business of
the Company.  By your signature below, you represent that you have disclosed to
the Company any outside employment, business or activity in which you currently
engage and intend to continue to engage during your employment with the
Company.  Failure to make disclosures is considered a material representation
that you are not engaged or associated with any such outside activities at the
beginning of employment.  You will be responsible to comply with the Company’s
Conflict of Interest Policy, including updated disclosures of such outside
activities, at all times during employment.

16.Authorization to Work.  This offer is also contingent upon proof of identity
and work eligibility. Please note that because of employer regulations adopted
in the Immigration Reform and Control Act of 1986, within three (3) business
days of starting your new position you will need to present

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documentation demonstrating that you have authorization to work in the United
States.  If you have questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, you may contact our personnel office. 

17.Entire Agreement.  This offer letter and the documents referred to herein
constitute the entire agreement and understanding of the parties with respect to
the subject matter of this offer, and (1) supersede any and all prior
understandings and agreements, whether oral or written, between or among the
parties hereto with respect to the specific subject matter hereof and (2)
supersede and replace any and all prior offer letters for employment by the
Company and terms contained therein.  If any term herein is unenforceable in
whole or in part, the remainder shall remain enforceable to the extent permitted
by law.

18.Acceptance. The date on which you commence employment shall be your “Start
Date” for purposes of this offer letter.  If you decide to accept our offer, and
I hope you will, please sign the enclosed copy of this letter in the space
indicated and return it to me.  Your signature will acknowledge that you have
read and understood and agreed to the terms and conditions of this offer letter
and the attached documents, if any.    

Should you have anything else that you wish to discuss, please do not hesitate
to call me.  We look forward to the opportunity to welcome you to the Company.

 

Very truly yours,

ZYNGA INC.

 

 

By: /s/ Devang Shah

      Devang Shah

      Senior Vice President, General Counsel, and Secretary

 

Delivered contemporaneously/incorporated:  Employee Invention Assignment and
Confidentiality Agreement

 

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I have read and understood this offer letter and hereby acknowledge, accept and
agree to the terms as set forth above and further acknowledge that no other
commitments were made to me as part of my employment offer except as
specifically set forth herein.

 

 

/s/ Bernard Kim

Bernard Kim

 

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