Document:

Glu_Ex_10_02

		
			EXHIBIT 10.02
		

		
			GLU MOBILE INC. 
		

		
			Amended & Restated 2007 Equity Incentive Plan 
		

		
			(As Amended through June 8, 2017) 
		

		
			1.  PURPOSE.    The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, and any Parents and Subsidiaries that exist now or in the future, by offering them an opportunity to participate in the Company’s future performance through the grant of Awards.  Capitalized terms not defined elsewhere in the text are defined in Section 27. 
		

		
			2.  SHARES SUBJECT TO THE PLAN.
		

		
			2.1  Number of Shares Available.    Subject to Sections 2.5 and 22 and any other applicable provisions hereof, the total number of Shares reserved and available for grant and issuance pursuant to this Plan is Thirty-Six Million Nine Hundred Seventy-Three Thousand One Hundred Ninety-One (36,973,191) Shares plus (i) any reserved shares not issued or subject to outstanding grants under the Company’s 2001 Stock Option Plan (the “Prior Plan”) on the Effective Date (as defined below),  (ii) shares that are subject to stock options granted under the Prior Plan that cease to be subject to such stock options after the Effective Date and (iii) shares issued under the Prior Plan before or after the Effective Date pursuant to the exercise of stock options that are, after the Effective Date, forfeited or shares issued under the Prior Plan that are repurchased by the Company at the original issue price.   
		

		
			2.2  Lapsed, Returned Awards.    Shares subject to Awards, and Shares issued upon exercise of Awards, will again be available for grant and issuance in connection with subsequent Awards under this Plan to the extent such Shares:  (i) are subject to issuance upon exercise of an Option or SAR granted under this Plan but which cease to be subject to the Option or SAR for any reason other than exercise of the Option or SAR; (ii) are subject to Awards granted under this Plan that are forfeited or are repurchased by the Company at the original issue price; (iii) are surrendered pursuant to an Exchange Program; (iv) are subject to Awards granted under this Plan that otherwise terminate without such Shares being issued; or (v) are used to satisfy applicable tax withholding obligations with respect to all types of Awards, except for Options and SARs.  Any Award other than an Option or a SAR shall reduce the number of Shares available for issuance by 1.32 Shares.  With respect to SARs, the gross number of Shares subject to a SAR will cease to be available under the Plan.  Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Option or SAR will not become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.  To the extent that any Award other than an Option or a SAR is forfeited, repurchased or terminates without Shares being issued pursuant to this Section 2.2, Shares may again be available for issuance under this Plan at the rate of 1.32 Shares for every such Share returned to the Plan.
		

		
			2.3  Minimum Share Reserve.    At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding Awards granted under this Plan and all other outstanding but unvested Awards granted under this Plan.
		

		
			2.4  Limitations.    No more than Sixteen Million Six Hundred Sixty-Six Thousand Sixty-Six (16,666,666) Shares shall be issued pursuant to the exercise of ISOs. 
		

		
			2.5  Adjustment of Shares.    If the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company, without consideration, then (a) the number of Shares reserved for issuance and future grant under the Plan set forth in Section 2.1, (b) the Exercise Prices of and number of Shares subject to outstanding Options and SARs, (c) the number of Shares subject to other outstanding Awards, (d) the maximum number of shares that may be issued as ISOs set forth in Section 2.4, (e) the maximum number of Shares that may be issued to an individual or to a new Employee in any one calendar year set forth in Section 3 and (f) the number of Shares that are granted as Awards to Outside Directors as set forth in Section 12, shall be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and in compliance with applicable securities laws; provided that fractions of a Share will not be issued.
		

		
			
		

		
			

		 

 

		

		
			2.6.  Limitation on Outside Director Awards.    No Outside Director may be granted any Awards or Awards denominated in shares that exceed in the aggregate six hundred thousand dollars ($600,000) in value (such value computed as of the date of grant in accordance with applicable financial accounting rules) in any calendar year, plus an additional aggregate six hundred thousand dollars ($600,000) in value for one-time awards to a newly appointed or elected Outside Director. The foregoing limit shall not apply to any Award made pursuant to deferred compensation arrangements in lieu of all or a portion of cash retainers.
		

		
			2.7.  Vesting/Acceleration Restriction.    No portion of any Award shall vest prior to the first anniversary of the date of grant of the Award; provided, that vesting may accelerate in connection with death, Disability, or a Corporate Transaction. For purposes of Awards to Outside Directors, a vesting period will be deemed to be one year if it runs from the date of one annual meeting of the Company’s stockholders to the next annual meeting of the Company’s stockholders. Notwithstanding the foregoing, up to 5% of the Shares authorized for grant pursuant to Section 2.1may be granted with a minimum vesting schedule of less than one year.
		

		
			3.  ELIGIBILITY.    ISOs may be granted only to Employees.  All other Awards may be granted to Employees, Consultants, Directors and Outside Directors of the Company or any Parent or Subsidiary of the Company; provided such Consultants, Directors and Outside Directors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction.  No Participant will be eligible to receive more than One Million Five Hundred Thousand (1,500,000) Shares in any calendar year under this Plan pursuant to the grant of Awards except that new Employees of the Company or of a Parent or Subsidiary of the Company (including new Employees who are also officers and directors of the Company or any Parent or Subsidiary of the Company) are eligible to receive up to a maximum of One Million Five Hundred Thousand (1,500,000) Shares in the calendar year in which they commence their employment. 
		

		
			4.  ADMINISTRATION.  
		

		
			4.1  Committee Composition; Authority.    This Plan will be administered by the Committee or by the Board acting as the Committee.  Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan, except, however, the Board shall establish the terms for the grant of an Award to Outside Directors.  The Committee will have the authority to: 
		

		
			(a)  construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;  
		

		
			(b)  prescribe, amend and rescind rules and regulations relating to this Plan or any Award;  
		

		
			(c)  select persons to receive Awards; 
		

		
			(d)  determine the form and terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Committee will determine; 
		

		
			(e)  determine the number of Shares or other consideration subject to Awards; 
		

		
			(f)  determine the Fair Market Value in good faith, if necessary; 
		

		
			(g)  determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company; 
		

		
			(h)  grant waivers of Plan or Award conditions; 
		

		
			(i)  determine the vesting, exercisability and payment of Awards; 
		

		
			
		

		
			

		 

 

		

		
			(j)  correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;  
		

		
			(k)  determine whether an Award has been earned;  
		

		
			(l)  determine the terms and conditions of any, and to institute any Exchange Program;  
		

		
			(m)  reduce or waive any criteria with respect to Performance Factors; 
		

		
			(n)  adjust Performance Factors to take into account changes in law and accounting or tax rules as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships provided that such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code with respect to persons whose compensation is subject to Section 162(m) of the Code; and 
		

		
			(o)  make all other determinations necessary or advisable for the administration of this Plan. 
		

		
			4.2  Committee Interpretation and Discretion.    Any determination made by the Committee with respect to any Award shall be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in any Award under the Plan.  Any dispute regarding the interpretation of the Plan or any Award Agreement shall be submitted by the Participant or Company to the Committee for review.  The resolution of such a dispute by the Committee shall be final and binding on the Company and the Participant.  The Committee may delegate to one or more executive officers the authority to review and resolve disputes with respect to Awards held by Participants who are not Insiders, and such resolution shall be final and binding on the Company and the Participant. 
		

		
			4.3  Section 162(m) of the Code and Section 16 of the Exchange Act.    When necessary or desirable for an Award to qualify as “performance-based compensation” under Section 162(m) of the Code the Committee shall include at least two persons who are “outside directors” (as defined under Section 162(m) of the Code) and at least two (or a majority if more than two then serve on the Committee) such “outside directors” shall approve the grant of such Award and timely determine (as applicable) the Performance Period and any Performance Factors upon which vesting or settlement of any portion of such Award is to be subject. When required by Section 162(m) of the Code, prior to settlement of any such Award at least two (or a majority if more than two then serve on the Committee) such “outside directors” then serving on the Committee shall determine and certify in writing the extent to which such Performance Factors have been timely achieved and the extent to which the Shares subject to such Award have thereby been earned. Awards granted to Insiders must be approved by two or more “non-employee directors” (as defined in the regulations promulgated under Section 16 of the Exchange Act).
		

		
			4.4  Awards subject to Company Clawback or Recoupment Policy.    All Awards granted after the adoption of the Company's Compensation Recovery Policy (the "Policy") and subject to applicable law, shall be subject to clawback or recoupment pursuant to the Policy or any other compensation clawback or recoupment policy that may be adopted by the Board (or its Compensation Committee) from time to time thereafter or required by law during the term of Participant’s employment or other service with the Company that is applicable to executive officers, employees, directors or other service providers of the Company, and in addition to any other remedies available under such policy and applicable law, may require the cancellation of outstanding Awards and the recoupment of any gains realized with respect to Awards. 
		

		
			5.  OPTIONS.    The Committee may grant Options to Participants and will determine whether such Options will be Incentive Stock Options within the meaning of the Code (“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following:  
		

		
			5.1  Option Grant.    Each Option granted under this Plan will identify the Option as an ISO or an NQSO.  An Option may be, but need not be, awarded upon satisfaction of such Performance Factors during any Performance Period as are set out in advance in the Participant’s individual Award Agreement.  If the Option is being earned upon the satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length 
		

		
			
		

		
			

		 

 

		

		
			and starting date of any Performance Period for each Option; and (y) select from among the Performance Factors to be used to measure the performance, if any.  Performance Periods may overlap and Participants may participate simultaneously with respect to Options that are subject to different performance goals and other criteria. 
		

		
			5.2  Date of Grant.    The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, or a specified future date.  The Award Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option. 
		

		
			5.3  Exercise Period.    Options may be exercisable within the times or upon the conditions as set forth in the Award Agreement governing such Option; provided,  however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted; and provided further that no ISO granted to a person who, at the time the ISO is granted, directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent Shareholder”) will be exercisable after the expiration of five (5) years from the date the ISO is granted.  The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines. 
		

		
			5.4  Exercise Price.    The Exercise Price of an Option will be determined by the Committee when the Option is granted; provided that: (i) the Exercise Price of any Option (both ISOs and NQOs) will be not less than one hundred percent (100%) of the Fair Market Value of the Shares on the date of grant and (ii) the Exercise Price of any ISO granted to a Ten Percent Shareholder will not be less than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of grant.  Payment for the Shares purchased may be made in accordance with Section 11.  Notwithstanding the foregoing, NQSOs may be granted with an exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant solely pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. 
		

		
			5.5  Method of Exercise.    Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Committee and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.  An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Committee may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Committee and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 2.5 of the Plan. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
		

		
			5.6  Termination.    The exercise of an Option will be subject to the following (except as may be otherwise provided in an Award Agreement):  
		

		
			(a)  If the Participant is Terminated for any reason except for Cause or the Participant’s death or Disability, then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable by the Participant on the Termination Date no later than three (3) months after the Termination Date (or such shorter time period or longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO), but in any event no later than the expiration date of the Options. 
		

		
			(b)  If the Participant is Terminated because of the Participant’s death (or the Participant dies within three (3) months after a Termination other than for Cause or because of the Participant’s Disability), then the Participant’s Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the Participant’s legal representative, or authorized assignee, no later than twelve (12) months after the Termination Date (or such shorter time period not less than six (6) months or longer time period not exceeding five (5) years as may be determined by the Committee, with any 
		

		
			
		

		
			

		 

 

		

		
			exercise beyond (a) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’s death, or (b) twelve (12) months after the Termination Date when the Termination is for the Participant’s death, deemed to be an NQSO), but in any event no later than the expiration date of the Options.  
		

		
			(c)  If the Participant is Terminated because of the Participant’s Disability, then the Participant’s Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the Participant (or the Participant’s legal representative or authorized assignee) no later than twelve (12) months after the Termination Date (with any exercise beyond (a) three (3) months after the Termination Date when the Termination is for a Disability that is not a “permanent and total disability” as defined in Section 22(e)(3) of the Code, or (b) twelve (12) months after the Termination Date when the Termination is for a Disability that is  a “permanent and total disability” as defined in Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but in any event no later than the expiration date of the Options.  
		

		
			(d)  If the Participant is terminated for Cause, then Participant’s Options shall expire on such Participant’s Termination Date, or at such later time and on such conditions as are determined by the Committee, but in any no event later than the expiration date of the Options. 
		

		
			5.7  Limitations on Exercise.    The Committee may specify a minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent any Participant from exercising the Option for the full number of Shares for which it is then exercisable. 
		

		
			5.8  Limitations on ISOs.    With respect to Awards granted as ISOs, to the extent that the aggregate Fair Market Value of the Shares with respect to which such ISOs are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as NQSOs. For purposes of this Section 5.8, ISOs will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.  In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment. 
		

		
			5.9  Modification, Extension or Renewal.    The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted.  Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code.  Subject to Section 18 of this Plan, by written notice to affected Participants, the Committee may reduce the Exercise Price of outstanding Options without the consent of such Participants; provided,  however, that the Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce the Exercise Price. 
		

		
			5.10  No Disqualification.    Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code. 
		

		
			6.  RESTRICTED STOCK AWARDS.  
		

		
			6.1  Awards of Restricted Stock.    A Restricted Stock Award is an offer by the Company to sell to a Participant Shares that are subject to restrictions (“Restricted Stock”).  The Committee will determine to whom an offer will be made, the number of Shares the Participant may purchase, the Purchase Price, the restrictions under which the Shares will be subject and all other terms and conditions of the Restricted Stock Award, subject to the Plan.   
		

		
			6.2  Restricted Stock Purchase Agreement.    All purchases under a Restricted Stock Award will be evidenced by an Award Agreement.  A Participant accepts a Restricted Stock Award by signing and delivering to the Company an Award Agreement with full payment of the Purchase Price, within thirty (30) days from the date the Award Agreement was delivered to the Participant.  If the Participant does not accept such Award within thirty 
		

		
			
		

		
			

		 

 

		

		
			(30) days, then the offer of such Restricted Stock Award will terminate, unless the Committee determines otherwise.   
		

		
			6.3  Purchase Price.    The Purchase Price for a Restricted Stock Award will be determined by the Committee and may be less than Fair Market Value on the date the Restricted Stock Award is granted.  Payment of the Purchase Price must be made in accordance with Section 11 of the Plan, and the Award Agreement. 
		

		
			6.4  Terms of Restricted Stock Awards.    Restricted Stock Awards will be subject to such restrictions as the Committee may impose or are required by law.  These restrictions may be based on completion of a specified number of years of service with the Company or upon completion of Performance Factors, if any, during any Performance Period as set out in advance in the Participant’s Award Agreement.  Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine the nature, length and starting date of any Performance Period for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant.  Performance Periods may overlap and a Participant may participate simultaneously with respect to Restricted Stock Awards that are subject to different Performance Periods and having different performance goals and other criteria. 
		

		
			6.5  Termination of Participant.    Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee).  
		

		
			7.  STOCK BONUS AWARDS.  
		

		
			7.1  Awards of Stock Bonuses.    A Stock Bonus Award is an award to an eligible person of Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to be rendered or for past services already rendered to the Company or any Parent or Subsidiary.  All Stock Bonus Awards shall be made pursuant to an Award Agreement.  No payment from Participant will be required for Shares awarded pursuant to a Stock Bonus Award.   
		

		
			7.2  Terms of Stock Bonus Awards.    The Committee will determine the number of Shares to be awarded to the Participant under a Stock Bonus Award and any restrictions thereon.  These restrictions may be based upon completion of a specified number of years of service with the Company or upon satisfaction of performance goals based on Performance Factors during any Performance Period as set out in advance in the Participant’s Stock Bonus Agreement.  Prior to the grant of any Stock Bonus Award the Committee shall: (a) determine the nature, length and starting date of any Performance Period for the Stock Bonus Award; (b) select from among the Performance Factors to be used to measure performance goals; and (c) determine the number of Shares that may be awarded to the Participant.  Performance Periods may overlap and a Participant may participate simultaneously with respect to Stock Bonus Awards that are subject to different Performance Periods and different performance goals and other criteria.   
		

		
			7.3  Form of Payment to Participant.    Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair Market Value of the Shares earned under a Stock Bonus Award on the date of payment.   
		

		
			7.4  Termination of Participation.    Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee).  
		

		
			8.  STOCK APPRECIATION RIGHTS.  
		

		
			8.1  Awards of SARs.    A Stock Appreciation Right (“SAR”) is an award to a Participant that may be settled in cash, or Shares (which may consist of Restricted Stock), having a value equal to (a) the difference between the Fair Market Value on the date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect to which the SAR is being settled (subject to any maximum number of Shares that may be issuable as specified in an Award Agreement).  All SARs shall be made pursuant to an Award Agreement.  
		

		
			8.2  Terms of SARs.    The Committee will determine the terms of each SAR including, without limitation: (a) the number of Shares subject to the SAR; (b) the Exercise Price and the time or times during which the SAR may be settled; (c) the consideration to be distributed on settlement of the SAR; and (d) the effect of the Participant’s Termination on each SAR.  The Exercise Price of the SAR will be determined by the Committee when the SAR is granted, and may not be less than Fair Market Value.  A SAR may be awarded upon satisfaction of 
		

		
			
		

		
			

		 

 

		

		
			Performance Factors, if any, during any Performance Period as are set out in advance in the Participant’s individual Award Agreement.  If the SAR is being earned upon the satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length and starting date of any Performance Period for each SAR; and (y) select from among the Performance Factors to be used to measure the performance, if any.  Performance Periods may overlap and Participants may participate simultaneously with respect to SARs that are subject to different Performance Factors and other criteria. 
		

		
			8.3  Exercise Period and Expiration Date.    A SAR will be exercisable within the times or upon the occurrence of events determined by the Committee and set forth in the Award Agreement governing such SAR.  The SAR Agreement shall set forth the expiration date; provided that no SAR will be exercisable after the expiration of ten (10) years from the date the SAR is granted.  The Committee may also provide for SARs to become exercisable at one time or from time to time, periodically or otherwise (including, without limitation, upon the attainment during a Performance Period of performance goals based on Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as the Committee determines.  Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee).  Notwithstanding the foregoing, the rules of Section 5.6 also will apply to SARs. 
		

		
			8.4  Form of Settlement.    Upon exercise of a SAR, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying (i) the difference between the Fair Market Value of a Share on the date of exercise over the Exercise Price; times (ii) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment from the Company for the SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.   
		

		
			9.  RESTRICTED STOCK UNITS.  
		

		
			9.1  Awards of Restricted Stock Units.    A Restricted Stock Unit (“RSU”) is an award to a Participant covering a number of Shares that may be settled in cash, or by issuance of those Shares (which may consist of Restricted Stock).  All RSUs shall be made pursuant to an Award Agreement. 
		

		
			9.2  Terms of RSUs.    The Committee will determine the terms of an RSU including, without limitation: (a) the number of Shares subject to the RSU; (b) the time or times during which the RSU may be settled; and (c) the consideration to be distributed on settlement, and the effect of the Participant’s Termination on each RSU.  An RSU may be awarded upon satisfaction of such Performance Factors (if any) during any Performance Period as are set out in advance in the Participant’s Award Agreement.  If the RSU is being earned upon satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length and starting date of any Performance Period for the RSU; (y) select from among the Performance Factors to be used to measure the performance, if any; and (z) determine the number of Shares deemed subject to the RSU.  Performance Periods may overlap and participants may participate simultaneously with respect to RSUs that are subject to different Performance Periods and different performance goals and other criteria.   
		

		
			9.3  Form and Timing of Settlement.    Payment of earned RSUs shall be made as soon as practicable after the date(s) determined by the Committee and set forth in the Award Agreement. The Committee, in its sole discretion, may settle earned RSUs in cash, Shares, or a combination of both.   
		

		
			9.4  Termination of Participant.    Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee). 
		

		
			10.  PERFORMANCE SHARES.  
		

		
			10.1  Awards of Performance Shares.    A Performance Share Award is an award to a Participant denominated in Shares that may be settled in cash, or by issuance of those Shares (which may consist of Restricted Stock).  Grants of Performance Shares shall be made pursuant to an Award Agreement. 
		

		
			10.2  Terms of Performance Shares.    The Committee will determine, and each Award Agreement shall set forth, the terms of each award of Performance Shares including, without limitation: (a) the number of Shares deemed subject to such Award; (b) the Performance Factors and Performance Period that shall determine the time and extent to which each award of Performance Shares shall be settled; (c) the consideration to be distributed on settlement, and the effect of the Participant’s Termination on each award of Performance Shares.  In establishing 
		

		
			
		

		
			

		 

 

		

		
			Performance Factors and the Performance Period the Committee will: (x) determine the nature, length and starting date of any Performance Period; (y) select from among the Performance Factors to be used; and (z) determine the number of Shares deemed subject to the award of Performance Shares.  Prior to settlement the Committee shall determine the extent to which Performance Shares have been earned.  Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Shares that are subject to different Performance Periods and different performance goals and other criteria. 
		

		
			10.3  Value, Earning and Timing of Performance Shares.    Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.  After the applicable Performance Period has ended, the holder of Performance Shares will be entitled to receive a payout of the number of Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Factors or other vesting provisions have been achieved. The Committee, in its sole discretion, may pay earned Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Shares at the close of the applicable Performance Period) or in a combination thereof. 
		

		
			10.4  Termination of Participant.    Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such Participant’s Termination Date (unless determined otherwise by the Committee). 
		

		
			11.  PAYMENT FOR SHARE PURCHASES.  
		

		
			Payment from Participant for Shares purchased pursuant to this Plan may be made in cash or by check or, where expressly approved for the Participant by the Committee and where permitted by law (and to the extent not otherwise set forth in the applicable Award Agreement):  
		

		
			(a)  by cancellation of indebtedness of the Company to the Participant; 
		

		
			(b)  by surrender of shares of the Company held by the Participant that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Award will be exercised or settled; 
		

		
			(c)  by waiver of compensation due or accrued to the Participant for services rendered or to be rendered to the Company or a Parent or Subsidiary of the Company; 
		

		
			(d)  by consideration received by the Company pursuant to a broker-assisted and/or same day sale (or other) cashless exercise program implemented by the Company in connection with the Plan;  
		

		
			(e)  by any combination of the foregoing; or 
		

		
			(f)  by any other method of payment as is permitted by applicable law. 
		

		
			12.  GRANTS TO OUTSIDE DIRECTORS.  
		

		
			12.1  Types of Awards.    Outside Directors are eligible to receive any type of Award offered under this Plan except ISOs.  Awards pursuant to this Section 12 may be automatically made pursuant to policy adopted by the Board, or made from time to time as determined in the discretion of the Board.  
		

		
			12.2  Eligibility.    Awards pursuant to this Section 12 shall be granted only to Outside Directors.  An Outside Director who is elected or re-elected as a member of the Board will be eligible to receive an Award under this Section 12. 
		

		
			12.3  Vesting, Exercisability and Settlement.    Except as set forth in Section 21, Awards shall vest, become exercisable and be settled as determined by the Board.  With respect to Options and SARs, the exercise price granted to Outside Directors shall not be less than the Fair Market Value of the Shares at the time that such Option or SAR is granted. 
		

		
			13.  WITHHOLDING TAXES.  
		

		
			
		

		
			

		 

 

		

		
			13.1  Withholding Generally.    Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy applicable federal, state, local and international withholding tax requirements prior to the delivery of Shares pursuant to exercise or settlement of any Award.  Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such payment will be net of an amount sufficient to satisfy applicable federal, state, local and international withholding tax requirements. 
		

		
			13.2  Stock Withholding.    The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may require or permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to up to the maximum statutory amount, or (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to up to the maximum statutory amount. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.  
		

		
			14.  TRANSFERABILITY.    Unless determined otherwise by the Committee, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution.  If the Committee makes an Award transferable, such Award will contain such additional terms and conditions as the Committee deems appropriate.  All Awards shall be exercisable: (i) during the Participant’s lifetime only by (A) the Participant, or (B) the Participant’s guardian or legal representative; and (ii) after the Participant’s death, by the legal representative of the Participant’s heirs or legatees 
		

		
			15.  PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.  
		

		
			15.1  Voting and Dividends.    No Participant will have any of the rights of a shareholder with respect to any Shares until the Shares are issued to the Participant.  After Shares are issued to the Participant, the Participant will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Stock; provided,  further, that the Participant will have no right to retain such stock dividends or stock distributions with respect to Shares that are repurchased at the Participant’s Purchase Price or Exercise Price, as the case may be, pursuant to Section 15.2. 
		

		
			15.2  Restrictions on Shares.    At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) a right to repurchase (a “Right of Repurchase”) a portion of any or all Unvested Shares held by a Participant following such Participant’s Termination at any time within ninety (90) days after the later of the Participant’s Termination Date and the date the Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Purchase Price or Exercise Price, as the case may be. 
		

		
			16.  CERTIFICATES.    All certificates for Shares or other securities delivered under this Plan will be subject to such stock transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted. 
		

		
			17.  ESCROW; PLEDGE OF SHARES.    To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.  Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of the Participant’s obligation to the Company under the promissory note; provided,  however, that the Committee may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant under the promissory 
		

		
			
		

		
			

		 

 

		

		
			note notwithstanding any pledge of the Participant’s Shares or other collateral.  In connection with any pledge of the Shares, the Participant will be required to execute and deliver a written pledge agreement in such form as the Committee will from time to time approve.  The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid. 
		

		
			18.  REPRICING; EXCHANGE AND BUYOUT OF AWARDS.    Provided that stockholder approval is first obtained, the Committee (a) may reprice (i.e., reduce the Exercise Price) of) Options or SARs; (b) may, at any time or from time to time, implement an Exchange Program; or (c) may reduce the Exercise Price of outstanding Options or SARs without the consent of affected Participants by a written notice to them. 
		

		
			19.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.    An Award will not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance.  Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable.  The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so. 
		

		
			20.  NO OBLIGATION TO EMPLOY.    Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant’s employment or other relationship at any time. 
		

		
			21.  CORPORATE TRANSACTIONS.  
		

		
			21.1  Assumption or Replacement of Awards by Successor.    In the event of a Corporate Transaction any or all outstanding Awards may be assumed or replaced by the successor corporation, which assumption or replacement shall be binding on all Participants.  In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to stockholders (after taking into account the existing provisions of the Awards).  The successor corporation may also issue, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to repurchase restrictions no less favorable to the Participant.  In the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any other provision in this Plan to the contrary, such Awards will expire on such transaction at such time and on such conditions as the Board will determine; the Board (or, the Committee, if so designated by the Board) may, in its sole discretion, accelerate the vesting of such Awards in connection with such a Corporate Transaction in which the successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards.  In addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the Committee will notify the Participant in writing or electronically that such Award will be exercisable for a period of time determined by the Committee in its sole discretion, and such Award will terminate upon the expiration of such period.  Awards need not be treated similarly in a Corporate Transaction. 
		

		
			Notwithstanding anything to the contrary in this Section 21.1, the Committee, in its sole discretion, may grant Awards that provide for acceleration upon a Corporate Transaction or in other events in the specific Award Agreements. 
		

		
			21.2  Assumption of Awards by the Company.    The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan.  Such substitution or assumption will be permissible if 
		

		
			
		

		
			

		 

 

		

		
			the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant.  In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the Purchase Price or the Exercise Price, as the case may be, and the number and nature of Shares issuable upon exercise or settlement of any such Award will be adjusted appropriately pursuant to Section 424(a) of the Code).
		

		
			21.3  Outside Directors’ Awards.    Notwithstanding any provision to the contrary herein, in the event of a Corporate Transaction, the vesting of all Awards granted to Outside Directors shall accelerate and such Awards shall become exercisable (as applicable) in full prior to the consummation of such event at such times and on such conditions as the Committee determines. 
		

		
			22.  ADOPTION AND SHAREHOLDER APPROVAL.    This Plan shall be submitted for the approval of the Company’s shareholders, consistent with applicable laws, within twelve (12) months before or after the date this Plan is adopted by the Board.   
		

		
			23.  TERM OF PLAN.    Unless earlier terminated as provided herein, this Plan will become effective on the Effective Date and will terminate on June 4, 2025.  This Plan and all Awards granted hereunder shall be governed by and construed in accordance with the laws of the State of Delaware.
		

		
			24.  AMENDMENT OR TERMINATION OF PLAN.    The Board may at any time terminate or amend this Plan in any respect, including, without limitation, amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided,  however, that the Board will not, without the approval of the shareholders of the Company, amend this Plan in any manner that requires such shareholder approval; provided further, that a Participant’s Award shall be governed by the version of this Plan then in effect at the time such Award was granted.
		

		
			25.  NONEXCLUSIVITY OF THE PLAN.    Neither the adoption of this Plan by the Board, the submission of this Plan to the shareholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock awards and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 
		

		
			26.  INSIDER TRADING POLICY.    Each Participant who receives an Award shall comply with any policy adopted by the Company from time to time covering transactions in the Company’s securities by Employees, officers and/or directors of the Company. 
		

		
			27.  DEFINITIONS.    As used in this Plan, and except as elsewhere defined herein, the following terms will have the following meanings: 
		

		
			“Award” means any award under the Plan, including any Option, Restricted Stock, Stock Bonus, Stock Appreciation Right, Restricted Stock Unit or award of Performance Shares. 
		

		
			“Award Agreement” means, with respect to each Award, the written or electronic agreement between the Company and the Participant setting forth the terms and conditions of the Award, which shall be in substantially a form (which need not be the same for each Participant) that the Committee has from time to time approved, and will comply with and be subject to the terms and conditions of this Plan. 
		

		
			“Board” means the Board of Directors of the Company. 
		

		
			“Cause” means (a) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a breach of fiduciary duty to the Company or a Parent or Subsidiary, or (c) a failure to materially perform the customary duties of Employee’s employment. 
		

		
			“Code” means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. 
		

		
			
		

		
			

		 

 

		

		
			“Committee” means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the Plan, has been delegated as permitted by law.   
		

		
			“Company” means Glu Mobile Inc., or any successor corporation. 
		

		
			“Consultant” means any person, including an advisor or independent contractor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 
		

		
			“Corporate Transaction” means the occurrence of any of the following events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then-outstanding voting securities; (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
		

		
			“Director” means a member of the Board.  
		

		
			“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided, however, that except with respect to Awards granted as ISOs, the Committee in its discretion may determine whether a total and permanent disability exists in accordance with non-discriminatory and uniform standards adopted by the Committee from time to time, whether temporary or permanent, partial or total, as determined by the Committee.   
		

		
			“Effective Date” means the date of the underwritten initial public offering of the Company’s Common Stock pursuant to a registration statement is declared effective by the SEC. 
		

		
			“Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company. 
		

		
			“Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 
		

		
			“Exercise Price” means the price at which a holder of an Option or SAR may purchase the Shares issuable upon exercise of an Option or SAR. 
		

		
			“Exchange Program” means a program pursuant to which outstanding Awards are surrendered, cancelled or exchanged for cash, the same type of Award or a different Award (or combination thereof). 
		

		
			“Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock determined as follows: 
		

		
			(a)  if such Common Stock is then quoted on the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (collectively, the “Nasdaq Market”), its closing price on the Nasdaq Market on the date of determination, or if there are no sales for such date, then the last preceding business day on which there were sales, as reported in The Wall Street Journal or such other source as the Board or the Committee deems reliable; 
		

		
			(b)  if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal or such other source as the Board or the Committee deems reliable; 
		

		
			(c)  if such Common Stock is publicly traded but is neither quoted on the Nasdaq Market 
		

		
			
		

		
			

		 

 

		

		
			nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source as the Board or the Committee deems reliable; 
		

		
			(d)  in the case of an Option or SAR made on the Effective Date, the price per share at which shares of the Company’s Common Stock are initially offered for sale to the public by the Company’s underwriters in the initial public offering of the Company’s Common Stock pursuant to a registration statement filed with the SEC under the Securities Act; or 
		

		
			(e)  if none of the foregoing is applicable, by the Board or the Committee in good faith. 
		

		
			“Insider” means an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act. 
		

		
			“Option” means an award of an option to purchase Shares pursuant to Section 5. 
		

		
			“Outside Director” means a Director who is not an Employee of the Company or any Parent or Subsidiary. 
		

		
			“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
		

		
			“Participant” means an Employee, Consultant or Director (including Outside Directors) who receives an Award under this Plan.   
		

		
			“Performance Factors” means the factors selected by the Committee, which may include, but are not limited to the, the following measures (whether or not in comparison to other peer companies) to determine whether the performance goals established by the Committee and applicable to Awards have been satisfied:  
		

		
			  Net revenue and/or net revenue growth; 
		

		
			  Earnings per share and/or earnings per share growth; 
		

		
			  Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth; 
		

		
			  Operating income and/or operating income growth; 
		

		
			  Net income and/or net income growth; 
		

		
			  Total stockholder return and/or total stockholder return growth; 
		

		
			  Return on equity; 
		

		
			  Operating cash flow return on income; 
		

		
			  Adjusted operating cash flow return on income; 
		

		
			  Economic value added;  
		

		
			  Individual business objectives; and 
		

		
			  Company specific operational metrics.  
		

		
			“Performance Period” means the period of service determined by the Committee, not to exceed five (5) years, during which years of service or performance is to be measured for the Award. 
		

		
			
		

		
			

		 

 

		

		
			“Performance Share” means an Award granted pursuant to Section 10 of the Plan.  
		

		
			“Plan” means this Glu Mobile Inc. 2007 Equity Incentive Plan.
		

		
			“Purchase Price” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon exercise of an Option or SAR.  
		

		
			“Restricted Stock Award” means an award of Shares pursuant to Section 6 of the Plan, or issued pursuant to the early exercise of an Option.  
		

		
			“Restricted Stock Unit” means an Award granted pursuant to Section 9 of the Plan.  
		

		
			“SEC” means the United States Securities and Exchange Commission. 
		

		
			“Securities Act” means the United States Securities Act of 1933, as amended. 
		

		
			“Shares” means shares of the Company’s Common Stock, as adjusted pursuant to Sections 2 and 21, and any successor security. 
		

		
			“Stock Appreciation Right” means an Award granted pursuant to Section 8 of the Plan.   
		

		
			“Stock Bonus” means an Award granted pursuant to Section 7 of the Plan.  
		

		
			“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
		

		
			“Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to provide services as an employee, officer, director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary of the Company.  An employee will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee; provided, that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant to formal policy adopted from time to time by the Company and issued and promulgated to employees in writing.  In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the employ of the Company or a Parent or Subsidiary of the Company as it may deem appropriate, except that in no event may an Award be exercised after the expiration of the term set forth in the applicable Award Agreement.  The Committee will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the “Termination Date”). 
		

		
			“Unvested Shares” means Shares that have not yet vested or are subject to a right of repurchase in favor of the Company (or any successor thereto).Exhibit

Grantee Name:        ###PARTICIPANT_NAME### (“Grantee”)
Grant Name:         ###GRANT_NAME###
Grant Date:         ###GRANT_DATE### (“Grant Date”)
Grant Price:         ###GRANT_PRICE###
Total ###DICTIONARY_AWARD_NAME###:         ###TOTAL_AWARDS### (subject to adjustment)

FLAGSTAR BANCORP, INC.
2016 STOCK AWARD AND INCENTIVE PLAN
RESTRICTED STOCK UNIT AND PERFORMANCE SHARE UNIT 
SENIOR EXECUTIVE OFFICER AWARD AGREEMENT
This Award Agreement (this “Agreement”) is made effective at the Grant Date set forth above by and between Flagstar Bancorp, Inc., a Michigan corporation (the “Company”), and  the Grantee named above.  
WHEREAS, the Company sponsors and maintains the Flagstar Bancorp, Inc. 2016 Stock Award and Incentive Plan (the “Plan”); and
WHEREAS, the Grantee has been selected by the Board to receive a grant of Restricted Stock Units and Performance Share Units (collectively, the “Units”) under the Plan.
NOW, THEREFORE, the Company and the Grantee hereby agree as follows:
Section 1.Grant of Restricted Stock Units.  The Company hereby grants to the Grantee, as of the Grant Date, an award of Restricted Stock Units (the “Restricted Stock Units”) on the terms and conditions set forth in this Agreement and the Plan. Each Restricted Stock Unit is granted under Section 6(e) of the Plan and represents the right to receive one share of Common Stock at the times and subject to the conditions set forth herein.  Capitalized terms that are used but not defined herein have the meaning given to them in the Plan.

(a)Vesting.  The Restricted Stock Units granted by the Company hereunder shall vest in three (3) installments in accordance with the following schedule: (a) twenty-five percent (25%) shall vest on the first anniversary of the Grant Date, (b) twenty-five percent (25%) shall vest on the second anniversary of the Grant Date, and (c) the remaining fifty percent (50%) shall vest on the third anniversary of the Grant Date (each such date, an “RSU Vesting Date”), in each case, subject to the Grantee’s continued employment through the applicable RSU Vesting Date.  Vesting of the Restricted Stock Units is additionally subject to the requirement that, at each RSU Vesting Date, the Company has a Tier 1 Leverage Ratio that is at least five percent (5%), consistent with the definition of a “well-capitalized” institution. The Tier 1 Leverage Ratio will be calculated in accordance with the requirements of the Federal Reserve, as described in FR Y-9C on Schedule HC-R, line 44 (or the replacement thereof). If the Company is not “well-capitalized” at an RSU Vesting Date, all RSUs that are then scheduled to vest are forfeited.  

(b)Change in Control. In the event of a Change in Control, any unforfeited Restricted Stock Units will be governed by the provisions of Section 9 of the Plan, which describes the conditions for accelerated vesting of the Restricted Stock Units. Vesting of the Restricted Stock Units in these circumstances will occur only 

if the Company had remained well-capitalized (as defined above) at the close of the last full quarter preceding the Change in Control. 

(a)    Termination due to Retirement. If Grantee’s employment with the Company is terminated due to Retirement prior to an applicable RSU Vesting Date, then the Restricted Stock Units shall vest on a pro-rata basis on the Grantee’s termination of employment.  The pro rata calculation will be determined by multiplying (x) the number of unvested Restricted Stock Units, by (y) a fraction, with the numerator equal to the number of full months from the Grant Date through the date of the Grantee’s  termination of employment, and denominator equal to 36 months.  Such vested Restricted Stock Units to be settled in accordance with Section 4.  For purposes of this Agreement, Retirement shall mean the Grantee’s separation from service at or after attainment of both age 60 and 10 years of completed service with the Company or its affiliates.

(b)    Termination for Death or Disability.  Any unforfeited Restricted Stock Units shall vest immediately and fully upon the Grantee’s termination of employment due to death or Disability and be settled in accordance with Section 4. Vesting of the Restricted Stock Units in these circumstances will occur only if the Company had remained well-capitalized (as defined above) at the close of the last full quarter preceding the event of death or Disability. 

(c)Termination for other reason than for Retirement, Death or Disability. If the Grantee’s employment is voluntarily or involuntarily terminated (other than due to Retirement, death or Disability) prior to the vesting of any Restricted Stock Units, any such unvested Restricted Stock Unit shall be forfeited.

(d)Account.  The Restricted Stock Units shall be credited to a separate account maintained for the Grantee on the books and records of the Company.  All amounts credited to this account shall continue for all purposes to be part of the general assets of the Company.

Section 2.Grant of Performance Share Units.  The Company hereby grants to the Grantee, as of the Grant Date, an award of ###TOTAL_AWARDS### Performance Share Units (the “Performance Share Units”) on the terms and conditions set forth in this Agreement and the Plan.  Each Performance Share Unit is granted under Sections 6(e), 6(i) and 7 of the Plan and represents the right to receive one share of Common Stock upon the attainment of performance goals established by the Committee and described in Exhibit A, and subject to the conditions set forth herein. 

(a)Vesting.  The Performance Share Units granted by the Company hereunder shall vest one year following the end of the full Performance Period (as defined in Exhibit A) (the “PSU Vesting Date”), subject to and contingent upon (i) the Grantee’s continued employment through the PSU Vesting Date, and (ii) the Committee’s certification of the performance level attained for the Performance Period.

(b)Change in Control. In the event of a Change in Control, the provisions of Section 9 of the Plan will apply to the Performance Share Units regarding acceleration of vesting, except that, if a Change in Control occurs prior to the end of the Performance Period any PSUs awarded will fully vest and be paid out at target performance levels. If such event occurs between the end of the Performance Period and the Vesting Date, any PSU awards will be paid at the actual performance levels certified by the Committee.  Payment will be made as soon as practicable following each such event. Awards may not fully vest in the event of a Change in Control if, in connection with the transactions resulting in the Change in Control, the Company agrees to the assumption of the PSUs or the substitution for the PSUs (or as otherwise described in the Plan).

(c)Termination due to Retirement.  If Grantee’s employment with the Company is terminated due to Retirement prior to the applicable PSU Vesting Date, the Grantee’s Performance Share Units shall vest on a 

pro-rata basis subject to the actual performance levels certified by the Committee for the Performance Period and shall be settled at the same time as Performance Share Units are settled for grantees generally.  The pro rata calculation will be determined by multiplying (x) the number of unvested Performance Share Units, by (y) a fraction, with the numerator equal to the number of full months from the Grant Date through the date of the Grantee’s  termination of employment, and denominator equal to 33 months.  For purposes of this Agreement, Retirement shall mean the Grantee’s separation from service at or after attainment of both age 60 and 10 years of completed service with the Company or its affiliates.

(d)Termination for Death or Disability.  In the event of Grantee’s termination of employment due to death or Disability:

		
	i.
	if such event occurs before the end of the applicable Performance Period the Grantee’s Performance Share Units will fully vest and be paid out at the target performance level; or

		
	ii.
	if such event occurs at or after the end of the applicable Performance Period, the Performance Share Units will be deemed to be earned at the actual performance levels certified by the Committee and such earned Units will be fully vested immediately upon termination (or, if later, upon the certification by the Committee which must occur within the applicable short-term deferral period under Section 409A of the Internal Revenue Code) and will be settled in accordance with Section 4 below. 

(e)Termination other than for Retirement, Death and Disability. If the Grantee’s employment is voluntarily or involuntarily terminated (other than due to Retirement, death or Disability) prior to the vesting of a Performance Share Unit, any such unvested Performance Share Unit shall be forfeited.  

(f)Account.  The Performance Share Units shall be credited to a separate account maintained for the Grantee on the books and records of the Company.  All amounts credited to this account shall continue for all purposes to be part of the general assets of the Company.

Section 3.Transfer Restrictions.  Until such time as the Units vest and the shares of Common Stock underlying the vested Units have been issued, the Grantee may not assign or otherwise transfer the Units or the rights relating thereto except as provided in the Plan.  Any attempt to sell, pledge, assign or otherwise transfer the Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Units or the rights relating thereto will be forfeited by the Grantee and all of the Grantee's rights to such units or related shares of Common Stock shall immediately terminate without any payment or consideration by the Company.  Once the Units vest and the shares of Common Stock underlying the Units have been issued, the Grantee may not be able to sell immediately the shares of Common Stock depending on securities laws and under applicable insider trading policies of the Company.  Any inability to sell or transfer the shares of Common Stock underlying the Units will not relieve the Grantee of the obligation to pay any required withholding taxes at the time of vesting (see discussion below under “Tax Withholding”). 

Section 4.Settlement of Vested Units.  

(a)Within thirty (30) calendar days following the vesting of any Unit, the Company shall distribute to the Grantee the number of shares of Common Stock (either in book-entry form or in any other commercially reasonable manner implemented by the Company) equal to the number of vested Units.  

(b)All distributions in shares of Common Stock shall be in the form of whole shares of Common Stock, and any fractional share shall be distributed in cash in an amount equal to the value of such fractional share determined based on the Fair Market Value of a share of Common Stock on the applicable vesting date. 

(c)This Agreement is subject to compliance with applicable laws, statutes, rules, regulations and policies of, and any agreements with, any regulatory authority, body or agency having jurisdiction over the Company or any of its subsidiaries, including, but not limited to, compliance with any notice, non-objection or approvals requirements set forth in any of the foregoing.

Section 5.Tax Withholding.  The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the minimum amount required to be withheld for federal, state and local taxes, domestic or foreign, including payroll taxes, in respect of the Units and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes.  The Company shall determine the amount of such withholding.  The Committee, in its sole discretion, may require or permit the Grantee to satisfy any such tax withholding obligation by any one or a combination of the following means: 

(a)the Grantee tendering a cash payment or check payable to the Company; and/or

(b)the Company withholding shares of Common Stock from the shares of Common Stock otherwise issuable to the Grantee as a result of the vesting of the Restricted Stock Units; provided, however, that shares of Common Stock may be withheld with a value exceeding the minimum statutory amount of tax required to be withheld by law only in accordance with a procedure or policy adopted by the Committee and in effect at the time of vesting.  

Section 6.Rights as Stockholder.  Except as otherwise provided in the Agreement, the Grantee shall not have any of the rights or privileges of a stockholder with respect to the shares of Common Stock underlying the Units, including but not limited to rights to vote the shares of Common Stock or to receive dividends on the shares of Common Stock, unless and until the Units vest and certificates or other evidence of ownership representing such shares of Common Stock (which may be in book-entry form) have been issued and recorded on the records of the Company, and delivered to the Grantee.  After such issuance, recordation and delivery, Grantee will have the rights of a stockholder of the Company with respect to such shares of Common Stock, subject to any restrictions on the shares of Common Stock and the terms and conditions of the Stockholder’s Agreement.

Section 7.No Right to Continued Service.  Neither the Plan nor this Agreement shall confer upon the Grantee any right to continue as an employee of the Company.  Further, nothing in the Plan or this Agreement shall be construed to limit the right of the Company to terminate Grantee’s employment at any time, with or without cause. 

Section 8.Adjustments.  The number of Units subject to this Award and related terms will be subject to adjustment in accordance with Section 11(c) of the Plan under a variety of circumstances, including but not limited to splits or other corporate events. Any adjustment made by the Committee shall be conclusive, final and binding.  For clarity, no dividend equivalents will be paid or credited on the Units relating to ordinary dividends paid by the Company.

Section 9.Restrictive Covenants.  The Grantee acknowledges and agrees that the services provided by the Grantee to the Company and its Affiliates including, but not limited to, Flagstar Bank, FSB (the “Bank”), are of a special, unique and extraordinary nature, and that the restrictions contained in this Section are 

necessary to prevent the use and disclosure of Confidential Information and to protect other legitimate business interests of the Company and its Affiliates.  The Grantee acknowledges that all of the restrictions in this Section are reasonable in all respects, including duration, territory and scope of activity.  In the event a court of competent jurisdiction determines as a matter of law that any of the terms of this Section are unreasonable or overbroad, the Company and the Grantee expressly allow such court to reform this Agreement to the extent necessary to make it reasonable as a matter of law and to enforce it as so reformed.  The Grantee agrees that the restrictions contained in this Section shall be construed as separate agreements independent of any other provision of this Agreement or any other agreement between the Grantee and the Company or its Affiliates. 

(a)Confidentiality.  In the course of the Grantee’s performing Grantee’s duties for the Company and its Affiliates, the Company expects to provide Grantee with various proprietary, confidential and trade secret information of the Company and its Affiliates.  Such proprietary, confidential and trade secret information may include, but not be limited to, any database of customer accounts; any customer, supplier and distributor list; customer profiles; information regarding sales and marketing activities and strategies; trade secrets; data regarding technology, products and services; information regarding pricing, pricing techniques and procurement; financial data and forecasts regarding the Company and customers, suppliers and distributors of the Company; software programs and intellectual property (collectively, “Confidential Information”).  All Confidential Information shall be and remain the sole property of the Company and its assigns, and the Company shall be and remain the sole owner of all patents, copyrights, trademarks, names and other rights in connection therewith and without regard to whether the Company is at any particular time developing or marketing the same.  The Grantee acknowledges that the Confidential Information is a valuable, special and unique asset of the Company and its Affiliates and that Grantee’s access to and knowledge of the Confidential Information is essential to the performance of Grantee’s duties as an employee of the Company and its Affiliates.  In light of the competitive nature of the business in which the Company and its Affiliates are engaged, the Grantee agrees that Grantee will, both during Grantee’s employment or service with the Company and its Affiliates and thereafter, maintain the strict confidentiality of all Confidential Information known or obtained by him or to which Grantee has access in connection with Grantee’s employment by or service with the Company and that Grantee will not, without prior written consent of the Board, for and on behalf of the Company, (i) disclose any Confidential Information to any person or entity (other than in proper performance of Grantee’s duties hereunder) or (ii) make any use of any Confidential Information for Grantee’s own purposes or for the direct or indirect benefit of any person or entity other than the Company or its Affiliates.  Confidential Information shall not be deemed to include information that (w) becomes generally available to the public through no fault of Grantee, (x) is previously known by the Grantee prior to Grantee’s receipt of such information from the Company, (y) becomes available to Grantee on a non-confidential basis from a source which, to Grantee’s knowledge, is not prohibited from disclosing such information by legal, contractual or fiduciary obligation to the Company or (z) is required to be disclosed in order to comply with any applicable law or court order. Immediately upon termination of the Grantee’s employment or at any other time upon the Company’s request, the Grantee will return to the Company all memoranda, notes and data, computer software and hardware, records or other documents compiled by Grantee or made available to the Grantee during the Grantee’s employment with the Company concerning the Business of the Company, including without limitation, all files, records, documents, lists, equipment, supplies, promotional materials, keys, phone or credit cards and similar items and all copies thereof or extracts therefrom. Notwithstanding the foregoing, in certain limited circumstances described in the Company’s Confidentiality Guidelines, Grantee may disclose Confidential Information that consists of materials that would otherwise be subject to trade secret protection.

(b)No Competition.  For a period of one (1) year following the Grantee’s voluntary termination of employment with the Company or its Affiliates, but only if the Grantee has vested in some portion of the Units, the Grantee agrees that the Grantee shall not, on behalf of the Grantee or for others, directly or indirectly (whether as employee, consultant, investor, partner, sole proprietor or otherwise), be employed by, have an 

ownership interest in, or perform any services for a financial institution engaged in the same lines of business as the Company or its Affiliates (“Business of the Company”) in any state of the United States where the Company is doing business. The parties agree that this provision shall not prohibit the ownership by the Grantee, solely as an investment, of securities of a person engaged in the Business of the Company if (i) the Grantee is not an “affiliate” (as such term is defined in Rule 12b-2 of the regulations promulgated under the Exchange Act) of the issuer of such securities, (ii) such securities are publicly traded on a national securities exchange and (iii) the Grantee does not, directly or indirectly, beneficially own more than two percent (2%) of the class of which such securities are a part.  

(c)No Solicitation of Employees.  The Grantee agrees that, both during the Grantee’s employment with the Company and for a period of one (1) year following termination of the Grantee’s employment with the Company or its Affiliates for any reason, the Grantee will not, directly or indirectly, on behalf of the Grantee or any other person or entity, hire, engage or solicit to hire for employment or consulting or other provision of services, any person who is actively employed (or in the six (6) months preceding the Grantee’s termination of employment with the Company was actively employed) by the Company or its Affiliates, except for rehire by the Company or its Affiliates. This includes, but is not limited to, inducing or attempting to induce, or influence or attempting to influence, any person employed by the Company to terminate his or her employment with the Company.

(d)No Solicitation of Customers.  The Grantee agrees that, both during the Grantee’s employment with the Company and for a period of one (1) year following termination of the Grantee’s employment with the Company and its Affiliates for any reason, the Grantee will not directly, on behalf of any competitor of the Company or its Affiliates in the Business of the Company, solicit the business of any entity within the United States who is known by the Grantee to be a customer of the Company or its Affiliates.

(e)Survival.  The obligations and provisions contained in this Section shall survive the Grantee’s separation from service and this Agreement and shall be fully enforceable thereafter.

Section 10.Company Policies; Forfeiture.

(a)The Grantee agrees that the grant of Restricted Stock Units and Performance Share Units  and the shares of Common Stock issued upon vesting of the Units will be subject to any applicable clawback or recoupment policies, insider trading policies, policies related to confidential information and assignment of intellectual property, stock ownership guidelines and other policies that may be implemented or updated by the Company, from time to time. 

(b)Notwithstanding anything to the contrary in this Agreement or the Plan, the Grantee agrees that if either (i) Grantee is terminated by the Company with Cause or (ii), during the Grantee’s employment or other service with the Company or an Affiliate and thereafter, Grantee violates any of the restrictive covenants under Section 9 above, irrespective of whether the restrictive covenant is enforceable under applicable law, then immediately upon demand by the Company made within 90 days of the Company’s receipt of actual notice of the violation, any unvested Units shall be cancelled and the Grantee shall return to the Company all shares of Common Stock delivered in settlement of the Units, or the cash value received by the Grantee upon the sale of such shares, to the extent the foregoing were realized or received in the twenty-four months prior to Grantee’s termination. 

Section 11.Notices.  Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery, upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit with a reputable overnight courier.  

Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address most recently provided by the Grantee to the Company.

Section 12.Incorporation of Plan Terms.  The provisions of the Plan are incorporated by reference into these terms and conditions.  To the extent any provision of this Agreement conflicts with the Plan, the terms of the Plan shall govern.  The Grantee acknowledges receipt of a copy of the Plan and represents that the Grantee has reviewed the Plan and is familiar with the terms and provisions thereof.  The Grantee hereby accepts this Agreement and the terms of the Plan.

Section 13.Successors and Assigns.  This Agreement is personal to the Grantee and shall not be assignable by the Grantee other than by will or the laws of descent and distribution, without the written consent of the Company.  This Agreement shall inure to the benefit of and be enforceable by the Grantee’s legal representatives.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors.  It shall not be assignable by the Company except in connection with the sale or other disposition of all or substantially all the assets or business of the Company.

Section 14.No Impact on Other Benefits.  The value of the Grantee's Units is not part of the Grantee’s compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

Section 15.Discretionary Nature of Plan.  The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion.  The grant of the Units in this Agreement does not create any contractual right or other right to receive any Units or other awards or grants in the future.  Future awards, if any, will be at the sole discretion of the Committee.  Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee's employment with the Company or its Affiliates.

Section 16.Amendment.  The Committee shall have authority, subject to the express provisions of the Plan, to interpret this Agreement and the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to modify the terms and provisions of this Agreement, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in this Agreement in the manner and to the extent it shall deem necessary or desirable to carry it into effect.  All action by the Committee under the provisions of this Section shall be final, conclusive and binding for all purposes.  Any amendment to this Agreement shall be in writing signed by the Company and, if the amendment materially impairs the rights of the Grantee, by the Grantee.

Section 17.Code Section 409A.   This Agreement and the award of Units hereunder are intended to comply with the requirements of Code Section 409A, and shall at all times be interpreted, operated and administered in accordance with such intent.   If payment of any amount subject to Code Section 409A is triggered by a separation from service that occurs while the Grantee is a “specified employee” (as defined by Code Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of the Grantee’s estate following the Grantee’s death.  “Termination of employment,” “resignation,” “retirement” or words of similar import, as used in this Agreement shall mean, with respect to any payments subject to Code Section 409A, the Grantee’s “separation from service” as defined by Code Section 409A.  Notwithstanding anything in the Plan or this Agreement to the contrary, the Grantee shall be solely responsible for the tax consequences of the Units, and in no event shall the Company 

have any responsibility or liability if an award under the Plan is subject to and/or fails to comply with the requirements of Code Section 409A.

Section 18.Code Section 280G.  If a Change in Control occurs and payments are made under this Agreement, and the aggregate of the RSUs and PSUs awarded to Grantee that vest under this Agreement, and all payments under any other agreement, plan, program or policy of the Company in connection with such Change in Control (“Total Payments”) will be subject to an excise tax under the provisions of Code Section 4999 (“Excise Tax”), the Total Payments shall be reduced so that the maximum amount of the Total Payments (after reduction) will be one dollar ($1.00) less than the amount that would cause the Total Payments to be subject to the Excise Tax; provided, however, that the Total Payments shall only be reduced to the extent the after-tax value of amounts received by Grantee after application of the above reduction would exceed the after-tax value of the Total Payments received by Grantee without application of such reduction.  In making any determination as to whether the Total Payments would be subject to an Excise Tax, consideration shall be given to whether any portion of the Total Payments could reasonably be considered, based on the relevant facts and circumstances, to be reasonable compensation for services rendered (whether before or after the consummation of the applicable Change in Control).

Section 19.Entire Agreement.  This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof.  This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.  

Section 20.Severability.  If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining provision or portion hereof, which remaining provision or portion hereof shall remain in full force and effect as if this Agreement had been adopted with the invalid, illegal or unenforceable provision or portion hereof eliminated.

Section 21.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan, as such laws are applied to contracts entered into and performed in such State, without giving effect to the choice of law provisions thereof.  The jurisdiction and venue for any disputes arising under, or any action brought to enforce the terms of, this Agreement shall be resolved exclusively in the courts of the State of Michigan, including the Federal Courts located therein (should Federal jurisdiction exist). 

Section 22.Counterparts.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

Section 23.Acceptance.  As a condition of receiving this Award, the Grantee agrees that the Committee, and to the extent that authority is afforded to the Board, the Board, shall have full and final authority to construe and interpret the Plan and this Agreement, and to make all other decisions and determinations as may be required under the Plan or this Agreement as they may deem necessary or advisable for administration of the Plan or this Agreement, and that all such interpretations, decisions and determinations shall be final and binding on the Grantee, the Company and all other interested persons.  Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review.  The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.  

This Agreement is executed by the Company and the Grantee as of the date and year first written above.
	
			
	GRANTEE
	FLAGSTAR BANCORP, INC.

	______________________________________
	By:
	Christine M. Reid

	 
	Its:
	Corporate Secretary

	 
	 
	 

ACKNOWLEDGEMENT OF INSIDER TRADING LAWS AND POLICY
NOTE:  OUR INSIDER TRADING POLICY ADDRESSES VERY SERIOUS MATTERS.  IF YOU HAVE ANY QUESTION OR DOUBT ABOUT THE APPLICABILITY OR INTERPRETATION OF THIS POLICY, PLEASE SEEK CLARIFICATION FROM OUR GENERAL COUNSEL. 

The undersigned acknowledges that he/she has reviewed the Company’s Insider Trading Policy (the “Policy”), and will review any amendments to the Policy.  The current Policy and any amendments will be maintained and available on the My Flagstar intranet.  The undersigned agrees to comply with the restrictions and procedures contained in the Policy, as it may be amended from time to time.

	
		
	_________________________________________
	 

	Signature
	 

	_________________________________________
	 

	Name
	 

	_________________________________________
	 

	Date
	 

EXHIBIT A
Vesting of the Performance Share Units (“PSUs”) on the Vesting Date is contingent upon the Board’s certification of achievement of the Performance Goal described below: 
PSU Performance Goals and Award Opportunity.  The initial number of PSUs that a Participant may earn will be determined based upon the level of attainment of the performance goal, which is the amount of the Company’s earnings per share of Common Stock (“EPS”) for the performance period beginning on April 1, 2017 and ending on December 31, 2018 (“Performance Period”).  The Committee will establish and approve levels of performance for EPS indicating threshold performance, target performance and maximum performance and the percentage of a Participant’s target award that will be earned at each level.  EPS performance will be calculated for each quarter utilizing “Adjusted Net Income” divided by “number of weighted-average diluted shares,” and each quarter’s result will be independently measured and then aggregated at the end of the Performance Period for a total EPS result for the Performance Period.  Adjusted Net Income is defined as the U.S. GAAP net income for the quarter then ended, excluding any liability recorded in that quarter (other than any adjustments made to ALLL and R&W reserves) in excess of $2 million, which liability arises from events and activities in periods prior to January 1, 2013, and any impact on the deferred tax assets caused by the enactment of federal or state statutory tax changes.
The Board will certify the achievement of the performance goals and the number of PSUs earned following the end of the Performance Period.  If the Company attains its target goal for EPS performance, a Participant will earn one hundred percent (100%) of his or her target PSU opportunity.  The maximum amount of PSUs that may be earned based upon the attainment of threshold EPS performance is fifty percent (50%) of a Participant’s target PSU award. The maximum amount of PSUs that may be earned based upon the attainment of maximum EPS performance is one hundred fifty percent (150%) of a Participant’s target award.  If threshold EPS performance of eighty percent (80%) is not achieved, no PSUs will be earned. Levels of performance between threshold, target and maximum performance will be paid using the scale shown below for purposes of determining the number of PSUs that a Participant may earn for the Performance Period. PSUs earned will be calculated in steps, in that EPS performance must achieve the next level performance goal for the number of PSUs to increase, and such awards will be made at the numbers stated in the scale.  
PERFORMANCE - Vesting Determination of PSUs (55% of overall LTIP award)
	
											
	Earnings per Share
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	Goal
	 
	 
	 
	 
	 

	7-Quarter Aggregated
	Actual Aggregated EPS      
	 
	$3.86
	$4.35
	$4.83
	$5.31
	$5.80
	$6.28
	$6.76
	 

	Earnings per Share
	% of EPS Goal Achieved *
	< 80%
	80%
	90%
	100%
	110%
	120%
	130%
	140%
	CAP

	(Q2 2017 - Q4 2018)
	Portion of Award to Vest
	  0%
	50% of Award Vests
	Additional 25% Vests
	Additional 25% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Aggregate Vesting
	 
	50%
	75%
	100%
	112.5%
	125%
	137.5%
	150%
	 

*Each % of EPS Goal Achieved as shown serves as a threshold, with no interpolation of awards between points. Each threshold must achieved in order to vest the additional portion of the award. Each indicated Aggregated EPS Award target is considered a separate award. The percentage of each award is based upon the single number (in dollars) communicated to the individual employee.
    

Grantee Name:        ###PARTICIPANT_NAME### (“Grantee”)
Grant Name:         ###GRANT_NAME###
Grant Date:         ###GRANT_DATE### (“Grant Date”)
Grant Price:         ###GRANT_PRICE###
Total ###DICTIONARY_AWARD_NAME###:         ###TOTAL_AWARDS### (subject to adjustment)

FLAGSTAR BANCORP, INC.
2016 STOCK AWARD AND INCENTIVE PLAN
RESTRICTED STOCK UNIT AND PERFORMANCE SHARE UNIT 
SENIOR EXECUTIVE OFFICER AWARD AGREEMENT
This Award Agreement (this “Agreement”) is made effective at the Grant Date set forth above by and between Flagstar Bancorp, Inc., a Michigan corporation (the “Company”), and  the Grantee named above.  
WHEREAS, the Company sponsors and maintains the Flagstar Bancorp, Inc. 2016 Stock Award and Incentive Plan (the “Plan”); and
WHEREAS, the Grantee has been selected by the Board to receive a grant of Restricted Stock Units and Performance Share Units (collectively, the “Units”) under the Plan.
NOW, THEREFORE, the Company and the Grantee hereby agree as follows:
Section 1.Grant of Restricted Stock Units.  The Company hereby grants to the Grantee, as of the Grant Date, an award of ###TOTAL_AWARDS### Restricted Stock Units (the “Restricted Stock Units”) on the terms and conditions set forth in this Agreement and the Plan. Each Restricted Stock Unit is granted under Section 6(e) of the Plan and represents the right to receive one share of Common Stock at the times and subject to the conditions set forth herein.  Capitalized terms that are used but not defined herein have the meaning given to them in the Plan.

(a)Vesting.  The Restricted Stock Units granted by the Company hereunder shall vest in three (3) installments in accordance with the following schedule: (a) twenty-five percent (25%) shall vest on the first anniversary of the Grant Date, (b) twenty-five percent (25%) shall vest on the second anniversary of the Grant Date, and (c) the remaining fifty percent (50%) shall vest on the third anniversary of the Grant Date (each such date, an “RSU Vesting Date”), in each case, subject to the Grantee’s continued employment through the applicable RSU Vesting Date.  Vesting of the Restricted Stock Units is additionally subject to the requirement that, at each RSU Vesting Date, the Company has a Tier 1 Leverage Ratio that is at least five percent (5%), consistent with the definition of a “well-capitalized” institution. The Tier 1 Leverage Ratio will be calculated in accordance with the requirements of the Federal Reserve, as described in FR Y-9C on Schedule HC-R, line 44 (or the replacement thereof). If the Company is not “well-capitalized” at an RSU Vesting Date, all RSUs that are then scheduled to vest are forfeited.  

(b)Change in Control. In the event of a Change in Control, any unforfeited Restricted Stock Units will be governed by the provisions of Section 9 of the Plan, which describes the conditions for accelerated vesting 

of the Restricted Stock Units. Vesting of the Restricted Stock Units in these circumstances will occur only if the Company had remained well-capitalized (as defined above) at the close of the last full quarter preceding the Change in Control. 

(a)    Termination due to Retirement.  If Grantee’s employment with the Company is terminated due to Retirement prior to an applicable RSU Vesting Date, then the Restricted Stock Units shall vest on a pro-rata basis on the Grantee’s termination of employment.  The pro rata calculation will be determined by multiplying (x) the number of unvested Restricted Stock Units, by (y) a fraction, with the numerator equal to the number of full months from the Grant Date through the date of the Grantee’s  termination of employment, and denominator equal to 36 months.  Such vested Restricted Stock Units to be settled in accordance with Section 4.  For purposes of this Agreement, Retirement shall mean the Grantee’s separation from service at or after attainment of both age 60 and 10 years of completed service with the Company or its affiliates.

(b)    Termination for Death or Disability.  Any unforfeited Restricted Stock Units shall vest immediately and fully upon the Grantee’s termination of employment due to death or Disability and be settled in accordance with Section 4. Vesting of the Restricted Stock Units in these circumstances will occur only if the Company had remained well-capitalized (as defined above) at the close of the last full quarter preceding the event of death or Disability. 

(c)Termination for other reason than for Retirement, Death or Disability. If the Grantee’s employment is voluntarily or involuntarily terminated (other than due to Retirement, death or Disability) prior to the vesting of any Restricted Stock Units, any such unvested Restricted Stock Unit shall be forfeited.
(d)Account.  The Restricted Stock Units shall be credited to a separate account maintained for the Grantee on the books and records of the Company.  All amounts credited to this account shall continue for all purposes to be part of the general assets of the Company.

Section 2.Grant of Performance Share Units.  The Company hereby grants to the Grantee, as of the Grant Date, an award of Performance Share Units (the “Performance Share Units”) on the terms and conditions set forth in this Agreement and the Plan.  Each Performance Share Unit is granted under Sections 6(e), 6(i) and 7 of the Plan and represents the right to receive one share of Common Stock upon the attainment of performance goals established by the Committee and described in Exhibit A, and subject to the conditions set forth herein. 

(a)Vesting.  The Performance Share Units granted by the Company hereunder shall vest one year following the end of the full Performance Period (as defined in Exhibit A) (the “PSU Vesting Date”), subject to and contingent upon (i) the Grantee’s continued employment through the PSU Vesting Date, and (ii) the Committee’s certification of the performance level attained for the Performance Period.

(b)Change in Control. In the event of a Change in Control, the provisions of Section 9 of the Plan will apply to the Performance Share Units regarding acceleration of vesting, except that, if a Change in Control occurs prior to the end of the Performance Period any PSUs awarded will fully vest and be paid out at target performance levels. If such event occurs between the end of the Performance Period and the Vesting Date, any PSU awards will be paid at the actual performance levels certified by the Committee.  Payment will be made as soon as practicable following each such event. Awards may not fully vest in the event of a Change in Control if, in connection with the transactions resulting in the Change in Control, the Company agrees to the assumption of the PSUs or the substitution for the PSUs (or as otherwise described in the Plan).

(c)Termination due to Retirement. If Grantee’s employment with the Company is terminated due to Retirement prior to the applicable PSU Vesting Date, the Grantee’s Performance Share Units shall vest on a 

pro-rata basis subject to the actual performance levels certified by the Committee for the Performance Period and shall be settled at the same time as Performance Share Units are settled for grantees generally.  The pro rata calculation will be determined by multiplying (x) the number of unvested Performance Share Units, by (y) a fraction, with the numerator equal to the number of full months from the Grant Date through the date of the Grantee’s  termination of employment, and denominator equal to 33 months.  For purposes of this Agreement, Retirement shall mean the Grantee’s separation from service at or after attainment of both age 60 and 10 years of completed service with the Company or its affiliates.

(d)Termination for Death or Disability.  In the event of Grantee’s termination of employment due to death or Disability:

		
	i.
	if such event occurs before the end of the applicable Performance Period the Grantee’s Performance Share Units will fully vest and be paid out at the target performance level; or

		
	i.
	if such event occurs at or after the end of the applicable Performance Period, the Performance Share Units will be deemed to be earned at the actual performance levels certified by the Committee and such earned Units will be fully vested immediately upon termination (or, if later, upon the certification by the Committee which must occur within the applicable short-term deferral period under Section 409A of the Internal Revenue Code) and will be settled in accordance with Section 4 below. 

 
(e)Termination other than for Retirement, Death and Disability. If the Grantee’s employment is voluntarily or involuntarily terminated (other than due to Retirement, death or Disability) prior to the vesting of a Performance Share Unit, any such unvested Performance Share Unit shall be forfeited.  

(f)Account.  The Performance Share Units shall be credited to a separate account maintained for the Grantee on the books and records of the Company.  All amounts credited to this account shall continue for all purposes to be part of the general assets of the Company.

		
	Section 3.
	Transfer Restrictions.  Until such time as the Units vest and the shares of Common Stock

underlying the vested Units have been issued, the Grantee may not assign or otherwise transfer the Units or the rights relating thereto except as provided in the Plan.  Any attempt to sell, pledge, assign or otherwise transfer the Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Units or the rights relating thereto will be forfeited by the Grantee and all of the Grantee's rights to such units or related shares of Common Stock shall immediately terminate without any payment or consideration by the Company.  Once the Units vest and the shares of Common Stock underlying the Units have been issued, the Grantee may not be able to sell immediately the shares of Common Stock depending on securities laws and under applicable insider trading policies of the Company.  Any inability to sell or transfer the shares of Common Stock underlying the Units will not relieve the Grantee of the obligation to pay any required withholding taxes at the time of vesting (see discussion below under “Tax Withholding”). 

Section 4.Settlement of Vested Units.  

(a)Within thirty (30) calendar days following the vesting of any Unit, the Company shall distribute to the Grantee the number of shares of Common Stock (either in book-entry form or in any other commercially reasonable manner implemented by the Company) equal to the number of vested Units.  

(b)All distributions in shares of Common Stock shall be in the form of whole shares of Common Stock, and any fractional share shall be distributed in cash in an amount equal to the value of such fractional share determined based on the Fair Market Value of a share of Common Stock on the applicable vesting date. 

(c)This Agreement is subject to compliance with applicable laws, statutes, rules, regulations and policies of, and any agreements with, any regulatory authority, body or agency having jurisdiction over the Company or any of its subsidiaries, including, but not limited to, compliance with any notice, non-objection or approvals requirements set forth in any of the foregoing.

Section 5.Tax Withholding.  The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the minimum amount required to be withheld for federal, state and local taxes, domestic or foreign, including payroll taxes, in respect of the Units and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes.  The Company shall determine the amount of such withholding.  The Committee, in its sole discretion, may require or permit the Grantee to satisfy any such tax withholding obligation by any one or a combination of the following means: 

(a)the Grantee tendering a cash payment or check payable to the Company; and/or

(b)the Company withholding shares of Common Stock from the shares of Common Stock otherwise issuable to the Grantee as a result of the vesting of the Restricted Stock Units; provided, however, that shares of Common Stock may be withheld with a value exceeding the minimum statutory amount of tax required to be withheld by law only in accordance with a procedure or policy adopted by the Committee and in effect at the time of vesting.  

Section 6.Rights as Stockholder.  Except as otherwise provided in the Agreement, the Grantee shall not have any of the rights or privileges of a stockholder with respect to the shares of Common Stock underlying the Units, including but not limited to rights to vote the shares of Common Stock or to receive dividends on the shares of Common Stock, unless and until the Units vest and certificates or other evidence of ownership representing such shares of Common Stock (which may be in book-entry form) have been issued and recorded on the records of the Company, and delivered to the Grantee.  After such issuance, recordation and delivery, Grantee will have the rights of a stockholder of the Company with respect to such shares of Common Stock, subject to any restrictions on the shares of Common Stock and the terms and conditions of the Stockholder’s Agreement.

Section 7.No Right to Continued Service.  Neither the Plan nor this Agreement shall confer upon the Grantee any right to continue as an employee of the Company.  Further, nothing in the Plan or this Agreement shall be construed to limit the right of the Company to terminate Grantee’s employment at any time, with or without cause. 

Section 8.Adjustments.  The number of Units subject to this Award and related terms will be subject to adjustment in accordance with Section 11(c) of the Plan under a variety of circumstances, including but not limited to splits or other corporate events. Any adjustment made by the Committee shall be conclusive, final and binding.  For clarity, no dividend equivalents will be paid or credited on the Units relating to ordinary dividends paid by the Company.

Section 9.Restrictive Covenants.  The Grantee acknowledges and agrees that the services provided by the Grantee to the Company and its Affiliates including, but not limited to, Flagstar Bank, FSB (the “Bank”), 

are of a special, unique and extraordinary nature, and that the restrictions contained in this Section are necessary to prevent the use and disclosure of Confidential Information and to protect other legitimate business interests of the Company and its Affiliates.  The Grantee acknowledges that all of the restrictions in this Section are reasonable in all respects, including duration, territory and scope of activity.  In the event a court of competent jurisdiction determines as a matter of law that any of the terms of this Section are unreasonable or overbroad, the Company and the Grantee expressly allow such court to reform this Agreement to the extent necessary to make it reasonable as a matter of law and to enforce it as so reformed.  The Grantee agrees that the restrictions contained in this Section shall be construed as separate agreements independent of any other provision of this Agreement or any other agreement between the Grantee and the Company or its Affiliates. 

(a)Confidentiality.  In the course of the Grantee’s performing Grantee’s duties for the Company and its Affiliates, the Company expects to provide Grantee with various proprietary, confidential and trade secret information of the Company and its Affiliates.  Such proprietary, confidential and trade secret information may include, but not be limited to, any database of customer accounts; any customer, supplier and distributor list; customer profiles; information regarding sales and marketing activities and strategies; trade secrets; data regarding technology, products and services; information regarding pricing, pricing techniques and procurement; financial data and forecasts regarding the Company and customers, suppliers and distributors of the Company; software programs and intellectual property (collectively, “Confidential Information”).  All Confidential Information shall be and remain the sole property of the Company and its assigns, and the Company shall be and remain the sole owner of all patents, copyrights, trademarks, names and other rights in connection therewith and without regard to whether the Company is at any particular time developing or marketing the same.  The Grantee acknowledges that the Confidential Information is a valuable, special and unique asset of the Company and its Affiliates and that Grantee’s access to and knowledge of the Confidential Information is essential to the performance of Grantee’s duties as an employee of the Company and its Affiliates.  In light of the competitive nature of the business in which the Company and its Affiliates are engaged, the Grantee agrees that Grantee will, both during Grantee’s employment or service with the Company and its Affiliates and thereafter, maintain the strict confidentiality of all Confidential Information known or obtained by him or to which Grantee has access in connection with Grantee’s employment by or service with the Company and that Grantee will not, without prior written consent of the Board, for and on behalf of the Company, (i) disclose any Confidential Information to any person or entity (other than in proper performance of Grantee’s duties hereunder) or (ii) make any use of any Confidential Information for Grantee’s own purposes or for the direct or indirect benefit of any person or entity other than the Company or its Affiliates.  Confidential Information shall not be deemed to include information that (w) becomes generally available to the public through no fault of Grantee, (x) is previously known by the Grantee prior to Grantee’s receipt of such information from the Company, (y) becomes available to Grantee on a non-confidential basis from a source which, to Grantee’s knowledge, is not prohibited from disclosing such information by legal, contractual or fiduciary obligation to the Company or (z) is required to be disclosed in order to comply with any applicable law or court order. Immediately upon termination of the Grantee’s employment or at any other time upon the Company’s request, the Grantee will return to the Company all memoranda, notes and data, computer software and hardware, records or other documents compiled by Grantee or made available to the Grantee during the Grantee’s employment with the Company concerning the Business of the Company, including without limitation, all files, records, documents, lists, equipment, supplies, promotional materials, keys, phone or credit cards and similar items and all copies thereof or extracts therefrom. Notwithstanding the foregoing, in certain limited circumstances described in the Company’s Confidentiality Guidelines, Grantee may disclose Confidential Information that consists of materials that would otherwise be subject to trade secret protection.

(b)No Competition.  For a period of one (1) year following the Grantee’s voluntary termination of employment with the Company or its Affiliates, but only if the Grantee has vested in some portion of the Units, the Grantee agrees that the Grantee shall not, on behalf of the Grantee or for others, directly or indirectly 

(whether as employee, consultant, investor, partner, sole proprietor or otherwise), be employed by, have an ownership interest in, or perform any services for a financial institution engaged in the same lines of business as the Company or its Affiliates (“Business of the Company”) in any state of the United States where the Company is doing business. The parties agree that this provision shall not prohibit the ownership by the Grantee, solely as an investment, of securities of a person engaged in the Business of the Company if (i) the Grantee is not an “affiliate” (as such term is defined in Rule 12b-2 of the regulations promulgated under the Exchange Act) of the issuer of such securities, (ii) such securities are publicly traded on a national securities exchange and (iii) the Grantee does not, directly or indirectly, beneficially own more than two percent (2%) of the class of which such securities are a part.  

(c)No Solicitation of Employees.  The Grantee agrees that, both during the Grantee’s employment with the Company and for a period of one (1) year following termination of the Grantee’s employment with the Company or its Affiliates for any reason, the Grantee will not, directly or indirectly, on behalf of the Grantee or any other person or entity, hire, engage or solicit to hire for employment or consulting or other provision of services, any person who is actively employed (or in the six (6) months preceding the Grantee’s termination of employment with the Company was actively employed) by the Company or its Affiliates, except for rehire by the Company or its Affiliates. This includes, but is not limited to, inducing or attempting to induce, or influence or attempting to influence, any person employed by the Company to terminate his or her employment with the Company.

(d)No Solicitation of Customers.  The Grantee agrees that, both during the Grantee’s employment with the Company and for a period of one (1) year following termination of the Grantee’s employment with the Company and its Affiliates for any reason, the Grantee will not directly, on behalf of any competitor of the Company or its Affiliates in the Business of the Company, solicit the business of any entity within the United States who is known by the Grantee to be a customer of the Company or its Affiliates.

(e)Survival.  The obligations and provisions contained in this Section shall survive the Grantee’s separation from service and this Agreement and shall be fully enforceable thereafter.

Section 10.Company Policies; Forfeiture.

(a)The Grantee agrees that the grant of Restricted Stock Units and Performance Share Units  and the shares of Common Stock issued upon vesting of the Units will be subject to any applicable clawback or recoupment policies, insider trading policies, policies related to confidential information and assignment of intellectual property, stock ownership guidelines and other policies that may be implemented or updated by the Company, from time to time. 

(b)Notwithstanding anything to the contrary in this Agreement or the Plan, the Grantee agrees that if either (i) Grantee is terminated by the Company with Cause or (ii), during the Grantee’s employment or other service with the Company or an Affiliate and thereafter, Grantee violates any of the restrictive covenants under Section 9 above, irrespective of whether the restrictive covenant is enforceable under applicable law, then immediately upon demand by the Company made within 90 days of the Company’s receipt of actual notice of the violation, any unvested Units shall be cancelled and the Grantee shall return to the Company all shares of Common Stock delivered in settlement of the Units, or the cash value received by the Grantee upon the sale of such shares, to the extent the foregoing were realized or received in the twenty-four months prior to Grantee’s termination. 

Section 11.Notices.  Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery, upon deposit with the United States Postal Service, by 

registered or certified mail, with postage and fees prepaid or upon deposit with a reputable overnight courier.  Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address most recently provided by the Grantee to the Company.

Section 12.Incorporation of Plan Terms.  The provisions of the Plan are incorporated by reference into these terms and conditions.  To the extent any provision of this Agreement conflicts with the Plan, the terms of the Plan shall govern.  The Grantee acknowledges receipt of a copy of the Plan and represents that the Grantee has reviewed the Plan and is familiar with the terms and provisions thereof.  The Grantee hereby accepts this Agreement and the terms of the Plan.

Section 13.Successors and Assigns.  This Agreement is personal to the Grantee and shall not be assignable by the Grantee other than by will or the laws of descent and distribution, without the written consent of the Company.  This Agreement shall inure to the benefit of and be enforceable by the Grantee’s legal representatives.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors.  It shall not be assignable by the Company except in connection with the sale or other disposition of all or substantially all the assets or business of the Company.

Section 14.No Impact on Other Benefits.  The value of the Grantee's Units is not part of the Grantee’s compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

Section 15.Discretionary Nature of Plan.  The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion.  The grant of the Units in this Agreement does not create any contractual right or other right to receive any Units or other awards or grants in the future.  Future awards, if any, will be at the sole discretion of the Committee.  Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee's employment with the Company or its Affiliates.

Section 16.Amendment.  The Committee shall have authority, subject to the express provisions of the Plan, to interpret this Agreement and the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to modify the terms and provisions of this Agreement, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in this Agreement in the manner and to the extent it shall deem necessary or desirable to carry it into effect.  All action by the Committee under the provisions of this Section shall be final, conclusive and binding for all purposes.  Any amendment to this Agreement shall be in writing signed by the Company and, if the amendment materially impairs the rights of the Grantee, by the Grantee.

Section 17.Code Section 409A.  This Agreement and the award of Units hereunder are intended to comply with the requirements of Code Section 409A, and shall at all times be interpreted, operated and administered in accordance with such intent.   If payment of any amount subject to Code Section 409A is triggered by a separation from service that occurs while the Grantee is a “specified employee” (as defined by Code Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of the Grantee’s estate following the Grantee’s death.  “Termination of employment,” “resignation,” “retirement” or words of similar import, as used in this Agreement shall mean, with respect to any payments subject to Code Section 409A, the Grantee’s “separation from service” as defined by Code Section 409A.  Notwithstanding anything in the Plan or this Agreement to the contrary, the Grantee shall be solely responsible 

for the tax consequences of the Units, and in no event shall the Company have any responsibility or liability if an award under the Plan is subject to and/or fails to comply with the requirements of Code Section 409A.

Section 18.Code Section 280G.  If a Change in Control occurs and payments are made under this Agreement, and the aggregate of the RSUs and PSUs awarded to Grantee that vest under this Agreement, and all payments under any other agreement, plan, program or policy of the Company in connection with such Change in Control (“Total Payments”) will be subject to an excise tax under the provisions of Code Section 4999 (“Excise Tax”), the Total Payments shall be reduced so that the maximum amount of the Total Payments (after reduction) will be one dollar ($1.00) less than the amount that would cause the Total Payments to be subject to the Excise Tax; provided, however, that the Total Payments shall only be reduced to the extent the after-tax value of amounts received by Grantee after application of the above reduction would exceed the after-tax value of the Total Payments received by Grantee without application of such reduction.  In making any determination as to whether the Total Payments would be subject to an Excise Tax, consideration shall be given to whether any portion of the Total Payments could reasonably be considered, based on the relevant facts and circumstances, to be reasonable compensation for services rendered (whether before or after the consummation of the applicable Change in Control).

Section 19.Entire Agreement.  This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof.  This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.  

Section 20.Severability.  If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining provision or portion hereof, which remaining provision or portion hereof shall remain in full force and effect as if this Agreement had been adopted with the invalid, illegal or unenforceable provision or portion hereof eliminated.

Section 21.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan, as such laws are applied to contracts entered into and performed in such State, without giving effect to the choice of law provisions thereof.  The jurisdiction and venue for any disputes arising under, or any action brought to enforce the terms of, this Agreement shall be resolved exclusively in the courts of the State of Michigan, including the Federal Courts located therein (should Federal jurisdiction exist). 

Section 22.Counterparts.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

Section 23.Acceptance.  As a condition of receiving this Award, the Grantee agrees that the Committee, and to the extent that authority is afforded to the Board, the Board, shall have full and final authority to construe and interpret the Plan and this Agreement, and to make all other decisions and determinations as may be required under the Plan or this Agreement as they may deem necessary or advisable for administration of the Plan or this Agreement, and that all such interpretations, decisions and determinations shall be final and binding on the Grantee, the Company and all other interested persons.  Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review.  The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.  

This Agreement is executed by the Company and the Grantee as of the date and year first written above.
	
			
	GRANTEE
	FLAGSTAR BANCORP, INC.

	______________________________________
	By:
	Christine M. Reid

	 
	Its:
	Corporate Secretary

	 
	 
	 

ACKNOWLEDGEMENT OF INSIDER TRADING LAWS AND POLICY
NOTE:  OUR INSIDER TRADING POLICY ADDRESSES VERY SERIOUS MATTERS.  IF YOU HAVE ANY QUESTION OR DOUBT ABOUT THE APPLICABILITY OR INTERPRETATION OF THIS POLICY, PLEASE SEEK CLARIFICATION FROM OUR GENERAL COUNSEL. 

The undersigned acknowledges that he/she has reviewed the Company’s Insider Trading Policy (the “Policy”), and will review any amendments to the Policy.  The current Policy and any amendments will be maintained and available on the My Flagstar intranet.  The undersigned agrees to comply with the restrictions and procedures contained in the Policy, as it may be amended from time to time.

	
		
	_________________________________________
	 

	Signature
	 

	_________________________________________
	 

	Name
	 

	_________________________________________
	 

	Date
	 

EXHIBIT A
Vesting of the Performance Share Units (“PSUs”) on the Vesting Date is contingent upon the Board’s certification of achievement of the Performance Goal described below: 
PSU Performance Goals and Award Opportunity.  The initial number of PSUs that a Participant may earn will be determined based upon the level of attainment of the performance goal, which is the amount of the Company’s earnings per share of Common Stock (“EPS”) for the performance period beginning on April 1, 2017 and ending on December 31, 2018 (“Performance Period”).  The Committee will establish and approve levels of performance for EPS indicating threshold performance, target performance and maximum performance and the percentage of a Participant’s target award that will be earned at each level.  EPS performance will be calculated for each quarter utilizing “Adjusted Net Income” divided by “number of weighted-average diluted shares,” and each quarter’s result will be independently measured and then aggregated at the end of the Performance Period for a total EPS result for the Performance Period. Adjusted Net Income is defined as the U.S. GAAP net income for the quarter then ended, excluding any liability recorded in that quarter (other than any adjustments made to ALLL and R&W reserves) in excess of $2 million, which liability arises from events and activities in periods prior to January 1, 2013, and any impact on the deferred tax assets caused by the enactment of federal or state statutory tax changes.
The Board will certify the achievement of the performance goals and the number of PSUs earned following the end of the Performance Period.  If the Company attains its target goal for EPS performance, a Participant will earn one hundred percent (100%) of his or her target PSU opportunity.  The maximum amount of PSUs that may be earned based upon the attainment of threshold EPS performance is fifty percent (50%) of a Participant’s target PSU award. The maximum amount of PSUs that may be earned based upon the attainment of maximum EPS performance is one hundred fifty percent (150%) of a Participant’s target award.  If threshold EPS performance of eighty percent (80%) is not achieved, no PSUs will be earned. Levels of performance between threshold, target and maximum performance will be paid using the scale shown below for purposes of determining the number of PSUs that a Participant may earn for the Performance Period. PSUs earned will be calculated in steps, in that EPS performance must achieve the next level performance goal for the number of PSUs to increase, and such awards will be made at the numbers stated in the scale.  
PERFORMANCE - Vesting Determination of PSUs (55% of overall LTIP award)
	
											
	Earnings per Share
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	Goal
	 
	 
	 
	 
	 

	7-Quarter Aggregated
	Actual Aggregated EPS      
	 
	$3.86
	$4.35
	$4.83
	$5.31
	$5.80
	$6.28
	$6.76
	 

	Earnings per Share
	% of EPS Goal Achieved *
	< 80%
	80%
	90%
	100%
	110%
	120%
	130%
	140%
	CAP

	(Q2 2017 - Q4 2018)
	Portion of Award to Vest
	  0%
	50% of Award Vests
	Additional 25% Vests
	Additional 25% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	Additional 12.5% Vests
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Aggregate Vesting
	 
	50%
	75%
	100%
	112.5%
	125%
	137.5%
	150%
	 

*Each % of EPS Goal Achieved as shown serves as a threshold, with no interpolation of awards between points. Each threshold must achieved in order to vest the additional portion of the award. Each indicated Aggregated EPS Award target is considered a separate award. The percentage of each award is based upon the single number (in dollars) communicated to the individual employee.

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