Document:

exv10w23

 

EXHIBIT 10.23

[Glu Letterhead]

May 22, 2006

L. Gregory Ballard

Glu Mobile Inc.

1800 Gateway Dr

San Mateo, CA 94404

			
	     Re:	 	Severance Arrangement: Continuation of Compensation and Acceleration of Vesting of Stock
Options

     Reference is hereby made to the Glu Mobile Inc. (the “Company”) 2001 Stock Option Plan, as
amended (the “Plan”), and to all Stock Option Agreements entered into between you and the Company,
pursuant to which the Company granted to you at various times options to purchase shares of the
Company’s common stock (the “Option Agreements”).

     The purpose of this letter is to notify you that the Board of Directors (the “Board”) has
determined that if your employment is terminated by the Company (or a successor or acquirer of the
Company) after a Change in Control Transaction (as defined herein below) other than for Cause (as
defined herein below) or for disability, or if you terminate your employment after a Change in
Control Transaction for Good Reason (as defined herein below), each within twelve (12) months
following the Change in Control Transaction, your severance shall be comprised of a 6-month
extension (from the respective date of termination) of your base salary and benefits then in effect
(but such benefits shall not include any bonus which you may be eligible to receive), plus full
(100%) acceleration of the vesting of any and all unvested options or shares of common stock
(subject to a right of repurchase by the Company), in each case outstanding as of March 9, 2006
(collectively, the “Severance Arrangement”).

     The terms of your Option Agreements entered into prior to March 9, 2006 have been amended by
the Board as necessary to effectuate the Severance Arrangement as described above.

     The Option Agreements, as supplemented and modified by this letter, together with the other
writings referred to in such Option Agreements or delivered pursuant thereto which form a part
thereof, respectively contain the entire agreement between the parties with respect to the subject
matter thereof and amend, restate and supersede all prior and contemporaneous arrangements or
understandings with respect thereto.

     The definitions of Change in Control Transaction, Cause and Good Reason as defined in this
letter shall supersede any comparable definitions in the Plan or Option Agreements, together

 

 

L. Gregory Ballard

May 22, 2006

Page 2

with the other writings referred to in such Option Agreements or delivered pursuant thereto
which form a part thereof.

     After the date hereof, each reference in the Option Agreement to “hereunder,” “hereof,”
“herein” or words of like import, and each reference in the other documents entered into in
connection with such Option Agreement shall mean and be a reference to such Option Agreement as
amended hereby. Except as specifically amended above, the Option Agreement shall remain in full
force and effect.

     The Company hereby agrees to consider in good faith amending the Option Agreements further to
the extent that the modifications set forth in this letter result in adverse tax consequences to
you as a result of interpretations of, or changes to, Section 409A of the Internal Revenue Code.

     “Change in Control Transaction” means: the closing of (a) a merger, or consolidation, in one
transaction or series of related transactions, in which the shareholders of the Company before such
merger or consolidation own less than 50% of the outstanding voting equity securities of the
surviving corporation after such transaction or series of related transactions, (b) a sale or other
transfer of all or substantially all of the assets of the Company as a going concern, in one
transaction or series of related transactions, followed by the distribution to the Company’s
shareholders of the proceeds remaining, if any, after payment of creditors, or (c) a transfer of
more than 50% of the outstanding voting equity securities of the Company by the shareholders of the
Company to one or more related persons or entities other than the Company in one transaction or a
series of related transactions.

     “Cause” means: (i) you committing an act of gross negligence, gross misconduct or dishonesty
or other willful act that materially adversely affects the Company or any of the Company’s
customers, suppliers or partners (including, without limitation, misappropriation, embezzlement or
fraud); (ii) your personal dishonesty, or willful misconduct in the performance of services for the
Company, or breach of fiduciary duty (which breach of fiduciary duty involves personal profit);
(iii) you being convicted of, or pleading no contest to, (A) any felony or (B) any misdemeanor
involving (I) fraud, (II) breach of trust or misappropriation, or (III) any other act that the
Board reasonably believes in good faith has, or upon disclosure will, materially adversely affect
the Company (including its public reputation); (iv) any material breach of any agreement by you
(which remains uncured for a period of thirty (30) days after written notice by the Company to you,
unless such breach is incapable of cure) with the Company or any other material unauthorized use or
disclosure of the Company’s confidential information or trade secrets involving personal benefit;
or (v) your failure to follow the lawful directions of the Board or, when you are not the Chief
Executive Officer, the lawful directions of the Chief Executive Officer, in the scope of your
employment unless you reasonably believe in good faith that such directions are not lawful and
notify the Board or the Chief Executive Officer, as the case may be, of the reasons for such
belief.

     “Good Reason” means (i) without your express written consent, a significant reduction of your
duties, position or responsibilities, or your removal from such duties, position and

 

 

L. Gregory Ballard

May 22, 2006

Page 3

responsibilities, unless you are provided with a substantially comparable position (i.e., a
position of substantially equal or greater organizational level, duties, authority and
compensation); provided, however, that a change in title, in and of itself, or a reduction in
duties, position or responsibilities solely by virtue of the Company being acquired and made part
of a larger entity (as, for example, when the Chief Executive Officer of the Company remains as
such following a change of control but is not made the Chief Executive Officer of the acquiring
corporation) shall not constitute “Good Reason”); (ii) a material reduction by the Company in your
annual base compensation as in effect immediately prior to such reduction that is not applicable to
other executive officers of the Company, and for purposes of this romanette (iii) “material” shall
mean a reduction of greater than 15%; (iv) without your express written consent, your relocation to
a facility or a location more than 50 miles from your then present location of employment; or (v)
any purported termination of you by the Company which is not effected for disability or for Cause.

     The Company very much appreciates your contribution to the Company. Please sign and date
where indicated below and return this letter to the Company if you want to accept the terms of this
letter.

	 	 	 	 	 
	 	Very truly yours,

GLU MOBILE INC.

 	 
	 	By:  	/s/ Albert A. Pimentel	 
	 	 	Name:  	Albert A. Pimentel 	 
	 	 	Title:  	Executive Vice President and CFO 	 
	 

ACKNOWLEDGED AND AGREED:

/s/ L. Gregory Ballard

 

L. Gregory Ballardexv10w24

 

EXHIBIT 10.24

Glu Mobile Inc.

Summary of Executive Bonus Plan

This is a summary of the executive (bonus plan that was created in 2004 and approved by Glu’s board
of directors at a special meeting dated February 11, 2004.

			
	Eligibility:	 	All V.P. and above level executives, not including the CEO.

			
	Bonus Level:	 	Target bonus levels are specified to be a fixed percentage of the
executive’s yearly base salary at the time the bonus is awarded. The exact
percentage is specified in the executive’s employment offer letter, or as
subsequently modified by the CEO.

			
	Frequency:	 	Awarded on a quarterly basis, for any quarter in which the company
achieves at least 90% of its quarterly corporate objectives. Pro-rated for
each quarter (e.g., an executive with a target bonus of 20% would be eligible
for a bonus up to 5% of his/her yearly base salary assuming the company
achieved its corporate objectives).

			
	Components of Bonus:	 	An executive’s total bonus is composed of three parts:

	 	1.	 	40% of the bonus is awarded based on the company’s achieving
at least 90% of its quarterly Revenue Plan
	 
	 	2.	 	40% of the bonus is awarded based on the company’s achieving
at least 90% of its quarterly Net Income Plan
	 
	 	3.	 	20% of the bonus is awarded based on the executive’s
achieving his/her individual quarterly objectives

Attainment of Corporate Objectives. There are “cliffs” associated with the attainment of
the company’s quarterly corporate objectives. For components #1 and #2, the executive receives:

	 	•	 	40% of that component if the company achieves at least 90% of its plan
	 
	 	•	 	70% of that component if the company achieves at least 95% of its plan
	 
	 	•	 	100%+ of that component if the company achieves at least 100% of its plan

Attainment of Individual Quarterly Objectives. Independently of the company’s quarterly
objective, the executive may receive up to 100% of component #3 based on the executive’s
achievement of his/her quarterly individual objectives. The executive’s manager is responsible for
determining the percentage of this component (0% — 100%+) to be awarded.

			
	Example:	 	Executive A has an annual salary of $150K with a target bonus of 20% ($30,000).
His quarterly target bonus is thus $7,500.

In Q2 2006, the company achieves 101% of its Revenue plan, and 93% of its Net Income
plan. The executive’s manager also concludes that executive A has achieved 80% of his
individual objectives. The executive would receive the following amount:

(100% x 40% x $7,500) + (40% x 40% x $7,500) + (80% x 20% x $7,500) = $5,400

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