Document:

exv10w4

 

Exhibit 10.4

RETAINED SHARE ESCROW AGREEMENT

     THIS ESCROW AGREEMENT, dated as of March 24, 2005 (this “Escrow Agreement”), is by and among
NOGA CONFINO of 1 Drake Road, Bockley Road, London (the “First Seller”), SPRINGREEL LIMITED
(company number 538794), whose registered office is at Union Court, 1 Cook Street, Liverpool,
Merseyside L2 4SJ (the “Second Seller,” together with the First Seller, the “Sellers”), ACE*COMM
CORPORATION, a Maryland Corporation (“ACE*COMM”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association, as escrow agent hereunder (“Escrow Agent”).

BACKGROUND

     A. Sellers and ACE*COMM have entered into a Purchase Agreement (as amended, the “Underlying
Agreement”), dated as of March 24, 2005, pursuant to which ACE*COMM is purchasing from Sellers the
entire issued share capital of Double Helix Solutions Limited, a company incorporated and
registered in England and Wales with company number 3522680 whose registered office is at 157
Newland Street, Witham, Essex (the “Transaction”). The Underlying Agreement provides that
ACE*COMM shall place the number of shares of the common shares of ACE*COMM set forth on
Schedule A (the “ACE*COMM Stock”) with a value for purposes of the Escrow Agreement as set
forth on Schedule A (the “Escrow Shares”) in a segregated escrow account to be held by
Escrow Agent to fund indemnity obligations of Sellers set forth in the Underlying Agreement.

     B. Escrow Agent has agreed to accept, hold, and disburse the Escrow Shares deposited with it
and the earnings and dividends thereon in accordance with the terms of this Escrow Agreement.

     C. Pursuant to this Escrow Agreement, Sellers and ACE*COMM have each appointed the
Representatives (as defined below) to represent them for all purposes in connection with the Escrow
Shares to be deposited with Escrow Agent, the indemnification provisions of Sections 9 and 10 of
the Underlying Agreement and this Escrow Agreement.

     D. In order to establish the escrow of Escrow Shares and to effect the
indemnification provisions of the Underlying Agreement, the parties hereto have entered into this
Escrow Agreement.

STATEMENT OF AGREEMENT

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby
agree as follows:

     1. Definitions. The following terms shall have the following meanings when used
herein.

 

 

     “ACE*COMM Representative” shall mean any person so designated on Schedule A hereto or
any other person designated in a writing signed by ACE*COMM and delivered to Escrow Agent and the
Sellers Representatives in accordance with the notice provisions of this Escrow Agreement, to act
as its representative under this Escrow Agreement.

     “Claim” shall mean a claim for indemnification by ACE*COMM pursuant to Section 9 of the
Underlying Agreement.

     “Claim Notice” shall mean a written notification, signed by an ACE*COMM Representative, which
shall specify the obligation, representation or agreement in the Underlying Agreement with respect
to which a Claim is being made, the facts giving rise to and the alleged basis for such Claim, the
Estimated Claim Amount of such Claim, the sequential number of such Claim in relation to all Claim
Notices previously delivered hereunder, the date of such Claim Notice, and the aggregate Estimated
Claim Amounts of all Claims as to which Claim Notices have been delivered. Each Claim Notice also
shall include a certification by an ACE*COMM Representative that the Claim is being made pursuant
to the Underlying Agreement and this Escrow Agreement.

     “Claim Response” shall mean a written notification, signed by a Sellers Representative, which
shall set forth whether or not Seller disputes any matter with respect to a Claim Notice or the
Claim described therein.

     “Court Order” shall mean a written order of a court of competent jurisdiction.

     “Escrow Period” shall mean the period commencing on the date hereof and ending on the
applicable date set forth on Schedule A hereto.

     “Escrow Shares” shall mean the Escrow Shares deposited with Escrow Agent pursuant to
Section 3 of this Escrow Agreement, together with any interest, dividends and other
distributions and/or income thereon.

     “Estimated Claim Amount” shall mean the amount designated by the ACE*COMM Representative to
be the amount of any Claim (and the number of shares that represent that amount) for which a Claim
Notice has been delivered. For purposes of determining the number of Escrow Shares to be paid in
any payment of an Estimated Claim Amount, the Escrow Shares shall be valued for purposes of this
Escrow Agreement at the per share price set forth in Schedule A.

     “Joint Written Direction” shall mean a written direction executed by the Representatives and
directing Escrow Agent to disburse all or a portion of the Escrow Shares or to take or refrain
from taking an action pursuant to this Escrow Agreement.

     “Representatives” shall mean one Sellers Representative and one ACE*COMM Representative.

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     “Sellers Representative” shall mean any person so designated on Schedule A hereto or
any other person designated in a writing signed by Sellers and delivered to Escrow Agent and the
ACE*COMM Representatives in accordance with the notice provisions of this Escrow Agreement, to act
as their representative under this Escrow Agreement.

     2. Appointment of and Acceptance by Escrow Agent. Sellers, ACE*COMM and the
Representatives hereby appoint Escrow Agent to serve as escrow agent hereunder. Escrow Agent
hereby accepts such appointment and, upon receipt by delivery of the ACE*COMM Stock representing
the Escrow Shares in accordance with Section 3 below, agrees to hold, invest and disburse
the Escrow Shares in accordance with this Escrow Agreement.

     3. Deposit of Escrow Shares. Simultaneously with the execution and delivery of this
Escrow Agreement, ACE*COMM will transfer the number of shares of ACE*COMM Stock set forth on
Schedule A hereto to Escrow Agent, by delivery of such Escrow Shares to the Escrow Agent at
the address set forth on Schedule A hereto. The ACE*COMM Stock held as the Escrow Shares
shall be valued for all purposes under this Escrow Agreement at the per share price set forth on
Schedule A. The ACE*COMM Stock held as the Escrow Shares shall be registered one-half in
the name of Noga Confino and one-half in the name of Springreel Limited, provided, however, that
each of Noga Confino and Springreel Limited shall execute and deliver to the Escrow Agent stock
powers, with the name of the transferee left blank and the date of transfer left blank, in respect
of the shares of ACE*COMM Stock held in escrow as part of the Escrow Shares to which they have
rights. So long as such shares remain deposited with the Escrow Agent, the Sellers shall have the
right to vote all shares of ACE*COMM held by the Escrow Agent on behalf of Sellers in the
proportions set forth above.

     4. Disbursements of Escrow Shares.

     a. Failure to Respond to Claim. In the event that Sellers Representative does
not notify the Escrow Agent and ACE*COMM with a Claim Response within ninety (90) days of
the receipt by Sellers Representative of a Claim Notice, the Escrow Agent
shall return from the Escrow Shares the Estimated Claim Amount for the Claim to
ACE*COMM. Upon receipt of such Escrow Shares so returned, ACE*COMM shall retire such
Escrow Shares.

     b. Joint Written Direction or Court Order. In the event a Claim Response is
received by the Escrow Agent, then the Escrow Agent shall disburse Escrow Shares, at any
time and from time to time, only upon receipt of and in accordance with a Joint Written
Direction or a Court Order.

     c. Expiration of Escrow Period. Upon the expiration of the Escrow Period,
Escrow Agent shall: (a) retain in the Escrow Shares a sufficient number of shares of
ACE*COMM or funds to pay in full all Estimated Claim Amounts, if any, that have not been
resolved at such time by the delivery to Escrow Agent of a Joint Written Direction; and
(b) distribute, as promptly as practicable, the balance of the Escrow Shares, one-half to
each Seller, without any further instruction or direction from the Representatives.

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     If upon the expiration of the Escrow Period, Escrow Agent has retained any Escrow Shares
with respect to Estimated Claim Amounts pursuant to this Section 4, then the Escrow Agent
may, in its sole discretion, either (i) retain all such remaining Escrow Shares, to be held and
invested in accordance with the provisions of this Escrow Agreement, until receipt by Escrow Agent
of a Joint Written Direction with respect to the disposition of such amounts, or (ii) pay over all
remaining Escrow Shares to a court of competent jurisdiction in the manner described in
Section 6 below.

     All disbursements of Escrow Shares shall be made in the manner specified in this Section
4 and in Schedule A and shall be subject to the claims and fees of Escrow Agent and
the Indemnified Parties (as defined below) pursuant to Section 10 and Section 11
below.

     5. Indemnification Claims. An ACE*COMM Representative shall deliver each
Claim Notice to the Sellers Representatives and Escrow Agent, such delivery to be in
accordance with the notice provisions of this Escrow Agreement.

     Upon receipt of any Claim Notice, Escrow Agent shall promptly make entries or notations in the
account records relating to the Escrow Shares, indicating that shares of ACE*COMM Stock in the
amount of the Estimated Claim Amount are reserved to satisfy such Claim, and identifying the date
and number of such Claim Notice.

     Within ninety (90) days of receipt by at least one Seller Representative of any Claim Notice,
a Sellers Representative shall deliver a Claim Response to an ACE*COMM Representative and Escrow
Agent, such delivery to be in accordance with the notice provisions of this Escrow Agreement.

     Failure to provide such Claim Response to the Escrow Agent shall result in payment of the
Estimated Claim Amount to ACE*COMM by the Escrow Agent. Escrow Agent shall have no responsibility
to determine whether any Claim Notice or Claim Response has been received by Sellers or ACE*COMM,
as applicable, or to provide any Claim Notice or Claim Response to Sellers or ACE*COMM.

     6. Suspension
of Performance; Disbursement Into Court. If, at any time, (i) there
shall exist any dispute between Sellers, ACE*COMM or the Representatives with respect to the
holding or disposition of any portion of the Escrow Shares or any other obligations of Escrow
Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow Agent’s sole
satisfaction, the proper disposition of any portion of the Escrow Shares or Escrow Agent’s proper actions
with respect to its obligations hereunder, or (iii) the Representatives have not within 30
days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 8
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take
either or both of the following actions:

     a. suspend the performance of any of its obligations under this Escrow Agreement until
such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or
until a successor Escrow Agent shall have been appointed (as the case may be).

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     b. petition (by means of an interpleader action or any other appropriate method) any
court of competent jurisdiction in any venue convenient to Escrow Agent, for instructions
with respect to such dispute or uncertainty, and to the extent required or permitted by
law, pay into such court, for holding and disposition in accordance with the instructions
of such court, all Escrow Shares, after deduction and payment to Escrow Agent of all fees
and expenses (including court costs and attorneys’ fees) payable to, incurred by, or
expected to be incurred by Escrow Agent in connection with the performance of its duties
and the exercise of its rights hereunder.

     Escrow Agent shall have no liability to Sellers, ACE*COMM, their respective shareholders or
members or any other person with respect to any suspension of performance or disbursement into
court (including, without limitation, the disbursement authorized in Section 4 hereof),
specifically including any liability or claimed liability that may arise, or be alleged to have
arisen, out of or as a result of any delay in the disbursement of ACE*COMM Stock held in the Escrow
Shares or any delay in or with respect to any other action required or requested of Escrow Agent.

     7. Investment of Funds. Escrow Agent is herein directed and instructed to hold the
Escrow Shares at its offices. With respect to any interest, dividends or other funds related to
the Escrow Shares (“Escrow Funds”), the Escrow Agent is herein directed and instructed to
initially invest and reinvest the such funds in the investment indicated on Schedule A
hereto. With the execution of this document, the parties hereto acknowledge receipt of
prospectuses and/or disclosure materials associated with the investment vehicle, either through
means of hardcopy or via access to the website associated with the investment selected by the
parties to this Escrow Agreement. The parties hereto acknowledge that they have discussed the
investment and are in agreement as to the selected investment. The Sellers and ACE*COMM may
provide instructions changing the investment of the Escrow Funds (subject to applicable minimum
investment requirements) by the furnishing of a Joint Written Direction to Escrow Agent; provided,
however, that no investment or reinvestment may be made except in the following:

     a. direct obligations of the United States of America or obligations the
principal of and the interest on which are unconditionally guaranteed by the United
States of America;

     b. certificates of deposit issued by any bank, bank and trust company, or
national banking association (including Escrow Agent and its affiliates),
which certificates of deposit are insured by the Federal Deposit Insurance Corporation or a
similar governmental agency;

     c. repurchase agreements with any bank, trust company, or national banking
association (including Escrow Agent and its affiliates); or

     d. any institutional money market fund offered by Escrow Agent, including
any institutional money market fund managed by Escrow Agent or any of its affiliates.

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     If Escrow Agent has not received a Joint Written Direction at any time that an investment
decision must be made, Escrow Agent shall invest the Escrow Funds, or such portion thereof as to
which no Joint Written Direction has been received, in investments described in clause (d) above.
Each of the foregoing investments shall be made in the name of Escrow Agent. No investment shall
be made in any instrument or security that has a maturity of greater than six (6) months.
Notwithstanding anything to the contrary contained herein, Escrow Agent may, without notice to the
Representatives, sell or liquidate any of the foregoing investments at any time if the proceeds
thereof are required for any disbursement of Escrow Funds permitted or required hereunder. All
investment earnings shall become part of the Escrow Shares and investment losses shall be charged
against the Escrow Shares. Escrow Agent shall not be liable or responsible for loss in the value
of any investment made pursuant to this Escrow Agreement, or for any loss, cost or penalty
resulting from any sale or liquidation of the Escrow Shares. With respect to any Escrow Funds
received by Escrow Agent after ten o’clock, a.m., Charlotte, North Carolina time, Escrow Agent
shall not be required to invest such funds or to effect any investment instruction until the next
day upon which banks in Charlotte, North Carolina are open for business.

     8. Resignation of Escrow Agent. Escrow Agent may resign and be discharged from
the performance of its duties hereunder at any time by giving ten (10) days prior written
notice to the Sellers and ACE*COMM specifying a date when such resignation shall take effect. Upon
any such notice of resignation, the Representatives jointly shall appoint a successor Escrow
Agent hereunder prior to the effective date of such resignation. The retiring Escrow Agent
shall transmit all records pertaining to the Escrow Shares and shall pay all Escrow Shares to the
successor Escrow Agent, after making copies of such records as the retiring Escrow Agent
deems advisable and after deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys’ fees) payable to, incurred by, or expected to
be incurred by the retiring Escrow Agent in connection with the performance of its duties and the
exercise of its rights hereunder. After any retiring Escrow Agent’s resignation, the
provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Escrow Agent under this Escrow Agreement. Any corporation or association into
which Escrow Agent may be merged or converted or with which it may be consolidated, or any
corporation or association to which all or substantially all of the escrow business of Escrow
Agent’s corporate trust line of business may be transferred, shall be Escrow Agent under this
Escrow Agreement without further act.

     9. Liability of Escrow Agent. Escrow Agent undertakes to perform only such duties
as are expressly set forth herein and no duties shall be implied. Escrow Agent shall have no
liability under and no duty to inquire as to the provisions of any agreement other than this
Escrow Agreement. Escrow Agent shall not be liable for any action taken or omitted by it in
good faith except to the extent that a court of competent jurisdiction determines that Escrow
Agent’s gross negligence or willful misconduct was the primary cause of any loss to the
Sellers or ACE*COMM. Escrow Agent’s sole responsibility shall be for the safekeeping and
disbursement of the Escrow Shares in accordance with the terms of this Escrow Agreement.
Escrow Agent shall have no implied duties or obligations and shall not be charged with
knowledge or notice of any fact or circumstance not specifically set forth herein. Escrow
Agent may rely upon any notice, instruction, request or other instrument, not only as to its due

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execution, validity and effectiveness, but also as to the truth and accuracy of any information
contained therein, which Escrow Agent shall believe to be genuine and to have been signed or
presented by the person or parties purporting to sign the same. In no event shall Escrow Agent be
liable for incidental, indirect, special, consequential or punitive damages (including, but not
limited to lost profits), even if Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. Escrow Agent shall not be obligated to take any legal
action or commence any proceeding in connection with the Escrow Shares, any account in which Escrow
Shares are deposited, this Escrow Agreement or the Underlying Agreement, or to appear in, prosecute
or defend any such legal action or proceeding. Escrow Agent may consult legal counsel selected by
it in the event of any dispute or question as to the construction of any of the provisions hereof
or of any other agreement or of its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instruction of such counsel. Sellers and
ACE*COMM, jointly and severally, shall promptly pay, upon demand, the reasonable fees and expenses
of any such counsel. Escrow Agent shall have no liability or responsibility to question or
determine the accuracy or reasonableness of any Estimated Claim Amount.

     Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process
entered by any court with respect to the Escrow Shares, without determination by Escrow Agent of
such court’s jurisdiction in the matter. If any portion of the Escrow Shares is at any time
attached, garnished or levied upon under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court
order, or in case any order, judgment or decree shall be made or entered by any court affecting
such property or any part thereof, then and in any such event, Escrow Agent is authorized, in its
sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is
advised by legal counsel selected by it is binding upon it without the need for appeal or other
action; and if Escrow Agent complies with any such order, writ, judgment or decree, it shall not
be liable to any of the parties hereto or to any other person or entity by reason of such
compliance even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.

     10. Indemnification of Escrow Agent. From and at all times after the date of this
Escrow Agreement, Sellers and ACE*COMM, jointly and severally, shall, to the fullest extent
permitted by law, defend, indemnify and hold harmless Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the “Indemnified Parties”)
against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs
and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’
fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and
after the date hereof, whether direct, indirect or consequential, as a result of or arising from
or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation Sellers or ACE*COMM, whether threatened
or initiated, asserting a claim for any legal or equitable remedy against any person under any
statute or regulation, including, but not limited to, any federal or state securities laws, or
under any common law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of this Escrow

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Agreement or any transactions contemplated herein, whether or not any such Indemnified Party
is a party to any such action, proceeding, suit or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for
any liability finally determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful misconduct of such Indemnified
Party. Each Indemnified Party shall, in its sole discretion, have the right to select and employ
separate counsel with respect to any action or claim brought or asserted against it, and the
reasonable fees of such counsel shall be paid upon demand by the Sellers and ACE*COMM jointly and
severally. The obligations of Sellers and ACE*COMM under this Section 10 shall survive any
termination of this Escrow Agreement and the resignation or removal of Escrow Agent.

     The parties agree that neither the payment by Sellers or ACE*COMM of any claim by Escrow
Agent for indemnification hereunder nor the disbursement of any amounts to Escrow Agent from the
Escrow Shares in respect of a claim by Escrow Agent for indemnification shall impair, limit,
modify, or affect, as between Sellers and ACE*COMM, the respective rights and obligations of
Sellers, on the one hand, and ACE*COMM, on the other hand, under the Underlying Agreement.

     11. Fees and Expenses of Escrow Agent. ACE*COMM shall compensate Escrow Agent for its
services hereunder in accordance with Schedule A attached hereto and, in addition, shall
reimburse Escrow Agent for all of its reasonable out-of-pocket expenses, including attorneys’
fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail
and overnight delivery charges), copying charges and the like. The additional provisions and
information set forth on Schedule A are hereby incorporated by this reference, and form a
part of this Escrow Agreement. All of the compensation and reimbursement obligations set forth in
this Section 11 shall be payable by ACE*COMM upon demand by Escrow Agent. The obligations
of ACE*COMM under this Section 11 shall survive any termination of this Escrow Agreement
and the resignation or removal of Escrow Agent. Escrow Agent is authorized to, and may, disburse
to itself from the Escrow Shares, from time to time, the amount of any compensation and
reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which
Escrow Agent or any Indemnified Party is entitled to seek indemnification pursuant to Section
10 hereof). Escrow Agent shall notify the Representatives of any disbursement from the Escrow
Shares to itself or any Indemnified Party in respect of any compensation or reimbursement
hereunder and shall furnish to the Representatives copies of all related invoices and other
statements. ACE*COMM, Sellers and the Representatives hereby grant to Escrow Agent and the
Indemnified Parties a security interest in and lien upon the Escrow Shares to secure all
obligations with respect to the right to offset the amount of any compensation or reimbursement
due any of them hereunder (including any claim for indemnification pursuant to Section 10
hereof) against the Escrow Shares, which security interest and lien shall automatically be
released upon the first to occur of termination of this Escrow Agreement or disbursement of the
Escrow Shares.

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     12. Representations and Warranties. Each of Sellers and ACE*COMM respectively makes
the following representations and warranties to Escrow Agent:

     (i) It is duly organized, validly existing, and in good standing under the laws of the
state of its incorporation or organization (if an entity), and has full power and authority
to execute and deliver this Escrow Agreement and to perform its obligations hereunder.

     (ii) This Escrow Agreement has been duly approved by all necessary action, including
any necessary shareholder or membership approval, has been executed by its duly authorized
officers, and constitutes its valid and binding agreement, enforceable in accordance with
its terms.

     (iii) The execution, delivery, and performance of this Escrow Agreement is in
accordance with the Underlying Agreement and will not violate, conflict with, or cause a
default under its articles of incorporation, articles of organization, bylaws, management
agreement or other organizational document, as applicable, any applicable law or
regulation, any court order or administrative ruling or decree to which it is a party or
any of its property is subject, or any agreement, contract, indenture, or other binding
arrangement, including without limitation the Underlying Agreement, to which it is a party
or any of its property is subject.

     (iv) The applicable persons designated on Schedule A hereto have been duly
appointed to act as representatives hereunder and have full power and authority to execute
and deliver any Joint Written Direction, to amend, modify or waive any provision of this
Escrow Agreement and to take any and all other actions as the Representatives under this
Escrow Agreement, all without further consent or direction from, or notice to, it or any
other party.

     (v) No party other than the parties hereto has, or shall have, any lien, claim or
security interest in the Escrow Shares or any part thereof. No financing statement under
the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in
or describing (whether specifically or generally) the Escrow Shares or any part thereof.

     (vi) All of its representations and warranties contained herein are true and complete
as of the date hereof and will be true and complete at the time of any disbursement of the
Escrow Shares.

     13. Identifying Information. Sellers and ACE*COMM acknowledge that a portion of the
identifying information set forth on Schedule A is being requested by Escrow Agent in
connection with the USA Patriot Act, Pub.L. 107-56 (the “Act”), and Sellers and ACE*COMM agree to
provide any additional information requested by Escrow Agent in connection with the Act or any
similar legislation or regulation to which Escrow Agent is subject, in a timely manner. The Sellers
and ACE*COMM each represent that all identifying information set
forth on Schedule A,
including without limitation, its Taxpayer Identification Number assigned by the

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Internal Revenue Service or any other taxing authority, is true and complete on the date hereof and
will be true and complete at the time of any disbursement of the Escrow Shares.

     14. Consent to Jurisdiction and Venue. In the event that any party hereto commences a
lawsuit or other proceeding relating to or arising from this Escrow Agreement, the parties hereto
agree that the federal courts of the State of Maryland shall have the sole and exclusive
jurisdiction. If such court lacks federal subject matter jurisdiction, the parties agree that the
state courts of the State of Maryland shall have sole and exclusive jurisdiction. Any of these
courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto
waive any objection to such venue. The parties hereto consent to and agree to submit to the
jurisdiction of any of the courts specified herein and agree to accept service of process to vest
personal jurisdiction over them in any of these courts.

     15. Notice. All notices, approvals, consents, requests, and other communications
hereunder shall be in writing and shall be deemed to have been given when the writing is delivered
if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed
receipt) to the address or facsimile number set forth on Schedule A hereto, or to such
other address as each party may designate for itself by like notice, and shall be deemed to have
been given on the date deposited in the mail, if mailed, by first-class, registered or certified
mail, postage prepaid, addressed as set forth on Schedule A hereto, or to such other
address as each party may designate for itself by like notice.

     16. Amendment or Waiver. This Escrow Agreement may be changed, waived, discharged
or terminated only by a writing signed by the Representatives and Escrow Agent. No delay or
omission by any party in exercising any right with respect hereto shall operate as a waiver. A
waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion.

     17. Severability. To the extent any provision of this Escrow Agreement is prohibited
by or invalid under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Escrow Agreement.

     18. Governing Law. This Escrow Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Maryland without giving effect to the conflict of
laws principles thereof.

     19. Entire Agreement. This Escrow Agreement constitutes the entire agreement
between the parties relating to the holding, investment and disbursement of the Escrow Shares and
sets forth in their entirety the obligations and duties of Escrow Agent with respect to the Escrow
Shares.

     20. Binding Effect. All of the terms of this Escrow Agreement, as amended from time
to time, shall be binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of Sellers, ACE*COMM and Escrow Agent.

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     21. Execution in Counterparts; Facsimile. This Escrow Agreement and any Joint
Written Direction may be executed in two or more counterparts, which when so executed shall
constitute one and the same agreement or direction. This Escrow Agreement and any Joint Written
Direction can be executed by facsimile.

     22. Termination. Upon the first to occur of (i) the expiration of the Escrow Period
(provided there is no outstanding Claim Notice on such date), (ii) the disbursement of all Escrow
Shares pursuant to Joint Written Directions or (iii) the disbursement of all Escrow Shares into
court pursuant to Section 4, Section 6 or Section 9 hereof, this Escrow
Agreement shall terminate, Escrow Agent shall be released from its obligations hereunder and Escrow
Agent shall have no further liability with respect to the Escrow Shares, this Escrow Agreement, or
any action or refusal to take action hereunder, to Sellers, ACE*COMM, their respective shareholders
or members, the Representatives, or any other person.

     23. Dealings. Escrow Agent and any stockholder, director, officer or employee of
Escrow Agent may buy, sell, and deal in any of the securities of the Sellers or ACE*COMM and become
pecuniarily interested in any transaction in which the Sellers or ACE*COMM may be interested, and
contract and lend money to the Sellers or ACE*COMM and otherwise act as fully and freely as though
it were not Escrow Agent under this Escrow Agreement. Nothing herein shall preclude Escrow Agent
from acting in any other capacity for the Sellers or ACE*COMM or for any other entity.

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     IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed
under seal as of the date first above written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	SPRINGREEL LIMITED	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: NOGA CONFINO	 	 
	 	 	 	 	Title: DIRECTOR	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Noga Confino	 	 
	 

	 	 	 	 
NOGA CONFINO

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	Title: 	 
	 	 
	 

	 	 	 	 	 	 
	 	 
	 	 	 	 	ACE*COMM CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	/s/ Steven R. Delmar	 	 
	 

	 	 	 	 	Title:	SR. VP & CFO 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	 	 	 	 	as Escrow Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	/s/
Monique L. Green	 	 
	 	 	 	 	 	Title: 	Vice President 	 	 

12

 

SCHEDULE A

	1.	 	Escrow Shares.

	 	 	 	 	 
	 

	 	Escrow Shares amount:
	 	264,044 shares of the common stock of ACE*COMM Corporation valued for purposes of this Escrow
Agreement at $3.16480 per share or $835,648.00 in the aggregate.

	2.	 	Escrow Agent Fees.

	 	 	 	 	 
	 
	 	Acceptance Fee:	 	Waived
	 
	 	Annual Escrow Fee:	 	$1,500
	 
	 	Other Fees:	 	$250 per tax recording occurrence
	 
	 	 	 	$25 per 1099
	 
	 	 	 	$25 per stock exchange

The Acceptance Fee and the Annual Escrow Fee are payable upon execution of the
escrow documents. In the event the escrow is not funded, the Acceptance Fee and all related
expenses, including attorneys’ fees, remain due and payable, and if paid, will not be
refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not
pro-rated in the year of termination.

The fees quoted in this schedule apply to services ordinarily rendered in the
administration of an Escrow Account and are subject to reasonable adjustment based on final
review of documents, or when Escrow Agent is called upon to undertake unusual duties or
responsibilities, or as changes in law, procedures, or the cost of doing business demand.
Services in addition to and not contemplated in this Escrow Agreement, including, but not
limited to, document amendments and revisions, non-standard cash and/or investment
transactions, calculations, notices and reports, and legal fees, will be billed as
extraordinary expenses.

Unless otherwise indicated, the above fees relate to the establishment of one escrow
account. Additional sub-accounts governed by the same Escrow Agreement may incur an
additional charge. Transaction costs include charges for wire transfers, checks, internal
transfers and securities transactions.

A-1

 

	3.	 	Taxpayer Identification Numbers.

	 	 	 	 	 
	 
	 	First Seller:	 	NS357713D
	 
	 
	 	ACE*COMM:	 	52-1283030

	4.	 	Termination and Disbursement. Unless earlier terminated by the provisions of the
Escrow Agreement, the Escrow Period will terminate on December 24, 2006. Any
Escrow Shares remaining on such date and not subject to a Claim Notice shall be
distributed 100% to Sellers pursuant to Section 4 of the Escrow Agreement.

	5.	 	Investment Instructions

Escrow Shares will be held by the Escrow Agent. Any dividends or interest on such shares
will be invested in the Evergreen Institutional Treasury Money Market Fund #697. The fee for
investing in the fund is 0.25% and is deducted from the interest earned before it is posted
to the account.

	6.	 	Representatives.

Each of the following persons is hereby designated and appointed as a Sellers
Representative under the Escrow Agreement:

	 	 	 	 	 	 	 	 	 
	 

	 	Thomas Ferns
	 	 	 	/s/ Thomas Ferns	 	 
	 

	 	 	 	 	 	 

Specimen signature
	 	 

Each of the following persons is hereby designated and appointed as an ACE*COMM
Representative under the Escrow Agreement:

	 	 	 	 	 	 	 	 	 
	 

	 	Loretta L. Rivers
	 	 	 	/s/ Loretta L. Rivers	 	 
	 

	 	 

Name
	 	 
	 	 

Specimen signature
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Steven R. Delmar
	 	 	 	/s/ Steven R. Delmar	 	 
	 

	 	 

Name
	 	 
	 	 

Specimen signature
	 	 

A-2

 

	7.	 	Representative Information. The following information should be provided to
Escrow Agent separately by each Representative and any future Representative.

1. Date of Birth

2. Address

3. Mailing Address, if different

4. Social Security Number

	8.	 	Notice Addresses.

     If to Sellers at:

	 	 	 	 	 	 	 
	 

	 	(a)
	 	Address:
	 	1 Avenue General Foy
	 

	 	 	 	 	 	Maison-Laffitte
	 

	 	 	 	 	 	Paris
	 

	 	 	 	 	 	France 78600
	 
	 	 	 	 	 	 
	 

	 	 	 	Phone number:
	 	+44 7 7736 548540
	 

	 	 	 	Fax number:
	 	+33 1 34 93 01 25
	 
	 	 	 	 	 	 
	 

	 	 	 	ATTENTION:
	 	Jean-Francois Joudouin
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	Address:
	 	1 Drake Road
	 

	 	 	 	 	 	Bockley
	 

	 	 	 	 	 	London
	 
	 	 	 	 	 	 
	 

	 	 	 	Phone number:
	 	+44 (20) 8691 5688
	 

	 	 	 	Fax number:
	 	+44(20)8692 8114
	 
	 	 	 	 	 	 
	 

	 	 	 	ATTENTION:
	 	Noga Confino

     with a copy for information purposes only to:

     Hill Dickinson

     50 Fountain Street

     Manchester M2 2AS

     Phone number: +44 (161) 817 7200

     Fax number: +44 (161) 817 7201

     ATTENTION: Tom Ferns, Esq.

A-3

 

     If to ACE*COMM at:

ACE*COMM CORPORATION

704 Quince Orchard Road

Suite 100

Gaithersburg, MD 20878

     Phone number: (301) 721-3000

     Fax number: (301) 208-3759

     ATTENTION: Steven R. Delmar

     with a copy for information purposes only to:

     Hogan & Hartson L.L.P.

     Columbia Square

     555 Thirteenth Street, N.W.

     Washington, DC 20004-1109

     Phone number: (202) 637-5600

     Fax number: (202) 637-5910

     ATTENTION: Steven Kaufman, Esq.

     and

     Hogan & Hartson

     One Angel Court

     London EC2R 7HJ

     ENGLAND

     Phone number: +44 (207) 3670200

     Fax number: +44 (207) 367 0220

     ATTENTION: Sean P. Harrison, Esq.

	 	 	 
	If to the Escrow
	 	 
	Agent at:

	 	Wachovia Bank, National Association, as Escrow Agent
	 

	 	Corporate Trust Bond Administration
	 

	 	1021 East Cary Street, 3rd Floor
	 

	 	Richmond, VA 23219
	 

	 	ATTENTION: Corporate Trust — VA9646
	 

	 	Fax Number: (804) 697-7140

A-4exv10w03

 

Exhibit 10.03

GLU MOBILE INC.

2007 Equity Incentive Plan

(adopted
by the Board on January 25, 2007)

     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 2.6 and 22 and any
other applicable provisions hereof, the total number of Shares reserved and available for grant and
issuance pursuant to this Plan as of the date of adoption of the Plan
by the Board, is Five Million Three Hundred Thousand (5,300,000) 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; or (iv) are subject to Awards granted under
this Plan that otherwise terminate without such Shares being issued. With respect to SARs, only
Shares actually issued pursuant to a SAR will cease to be available under the Plan; all remaining
Shares under SARs will remain available for future grant or sale under the Plan. Shares used to
pay the exercise price of an Award or to satisfy the tax withholding obligations related to an
Award will 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.

          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 Automatic Share Reserve Increase. The number of Shares available for
grant and issuance under the Plan shall be increased on January 1, of each of 2008 through 2011, by
the lesser of (i) three percent (3%) of the number of Shares issued and
outstanding on each December 31 immediately prior to the date of increase or (ii) such number of
Shares determined by the Board.

 

 

          2.5
Limitations. No more than Fifty Million (50,000,000)
Shares shall be issued pursuant to the exercise of ISOs.

          2.6 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 2.5, (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.

     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
(1,000,000) 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 two million (2,000,000) 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;

2

 

               (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).

     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:

3

 

          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 an ISO 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. The Exercise Price of
a NQSO may be less than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant in the Committee’s discretion.

          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 2.6 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.

4

 

          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

 

          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).

6

 

     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 the 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 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.

7

 

          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.

8

 

          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 a 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

9

 

               (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 the minimum statutory amount required to be withheld, or (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld. 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,

10

 

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. The Committee may reprice
Options or SARS without prior stockholder approval. The Committee may, at any
time or from time to time authorize the Company, in the case of an Option or SAR exchange, and with
the consent of the respective Participants (unless not required pursuant to Section 5.9 of the
Plan), to pay cash or issue new Awards in exchange for the surrender and cancellation of any, or
all, outstanding Awards. The Committee 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

11

 

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
a Corporate Transaction. 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

12

 

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 ten (10) years from the date this
Plan is adopted by the Board. 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.

13

 

     “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; or (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

14

 

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 grant 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;

15

 

	 	•	 	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)

16

 

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).

17

 

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

     You (the “Participant”) have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of this Notice of Stock Option Grant (the “Notice”), the 2007
Equity Incentive Plan, as amended from time to time (the “Plan”) and the Stock Option Award
Agreement (the “Option Agreement”) attached hereto, as follows. The terms defined in the Plan
shall have the same meanings in this Notice.

	 	 	 	 	 	 	 
	 

	 	Grant Number	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Date of Grant	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Vesting Commencement Date	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Exercise Price per Share	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Total Number of Shares	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Total Exercise Price	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Type of Option	 	                     Non-Qualified Stock Option
	 
	 	 	 	 	 	 
	 	 	 	 	                     Incentive Stock Option
	 
	 	 	 	 	 	 
	 

	 	Expiration Date	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Post-Termination Exercise Period:	 	Termination for Cause = None

Voluntary Termination = 3 Months

Termination without Cause = 3 Months

Disability = 12 Months

Death = 12 Months

Vesting Schedule:

     Subject to the limitations set forth in this Notice, the Plan and the Option Agreement, the
Option will vest and may be exercised, in whole or in part, in accordance with the following
schedule:

     [INSERT VESTING SCHEDULE]

     You acknowledge receipt of a copy of the Plan and the Option Agreement, and represent that you
are familiar with the terms and provisions thereof, and hereby accept the Option subject to all of
the terms and provisions hereof. You understand that your employment or consulting relationship,
or service with the Company is for an unspecified duration and can be terminated at any time (i.e.,
is “at-will”), and that

 

 

nothing in this Notice, the Stock Option Award Agreement or the Plan
changes the at-will nature of that relationship. You acknowledge that the vesting of shares
pursuant to this Notice is earned only by your continuing service as an Employee or Consultant of
the Company.

	 	 	 	 	 	 	 	 	 	 	 
	PARTICIPANT:	 	 	 	GLU MOBILE INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

 

GLU MOBILE INC.

STOCK OPTION AWARD AGREEMENT

2007 EQUITY INCENTIVE PLAN

     Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity Incentive
Plan (the “Plan”) shall have the same defined meanings in this Award Agreement (the
“Agreement”).

     Participant has been granted an option to purchase Shares (the “Option”), subject to the
terms and conditions of the Plan, the Notice of Stock Option Grant (“Notice of Grant”) and
this Agreement.

     1. Vesting Rights. Subject to the applicable provisions of the Plan and this
Agreement, this Option may be exercised, in whole or in part, in accordance with the schedule set
forth in the Notice of Grant.

     2. Termination Period.

          (a) General Rule. Except as provided below, and subject to the Plan, this Option may
be exercised for 3 months after termination of Participant’s employment with the Company. In no
event shall this Option be exercised later than the Term/Expiration Date set forth in the Notice of
Grant.

          (b) Death; Disability. Upon the termination of Participant’s employment with the
Company by reason of his or her Disability or death, or if a Participant dies within three months
of the Termination Date, this Option may be exercised for twelve months in the case of death, and
six months in the case of Disability, after the Termination Date, provided that in no event shall
this Option be exercised later than the Term/Expiration Date set forth in the Notice of Grant.

          (c) Cause. Upon the termination of Participant’s employment by the Company for Cause,
the Option shall expire on such date of Participant’s Termination Date.

     3. Grant of Option. The Participant named in the Notice of Grant has been granted an
Option for the number of Shares set forth in the Notice of Grant at the exercise price per Share
set forth in the Notice of Grant (the “Exercise Price”). In the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and
conditions of the Plan shall prevail.

          If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this
Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule
of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).

     4. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set forth in the Notice of Grant and the applicable provisions of the Plan and
this Agreement. In the event of Participant’s death, Disability, Termination for Cause or other
Termination, the exercisability of the Option is governed by the applicable provisions of the Plan,
the Notice of Stock Option Grant and this Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice
(the “Exercise Notice”), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the provisions of the
Plan. The Exercise Notice shall be delivered in person, by mail, via electronic mail or facsimile
or by other authorized method to the Secretary of the Company or other person designated by the
Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This

 

 

Option shall be deemed to be exercised upon receipt by the Company of
such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

          (c) No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with all relevant provisions of law and the requirements of any stock exchange or
quotation service upon which the Shares are then listed. Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Participant on the date the
Option is exercised with respect to such Exercised Shares.

     5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Participant:

          (a) cash; or

          (b) check; or

          (c) a “broker-assisted” or “same day sale” (as described in Section 11(d) of the Plan); or

          (d) other method authorized by the Company.

     6. Non-Transferability of Option. This Option may not be transferred in any manner
other than by will or by the laws of descent or distribution or court order and may be exercised
during the lifetime of Participant only by the Participant. The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the
Participant.

     7. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the Notice of Grant,
the Plan and the terms of this Agreement.

     8. U.S. Tax Consequences. For Participants subject to U.S. income tax, some of the
federal tax consequences relating to this Option, as of the date of this Option, are set forth
below. All other Participants should consult a tax advisor for tax consequences relating to this
Option in their respective jurisdiction. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS
AND REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

               (i) Nonstatutory Stock Option. The Participant may incur regular federal income tax
liability upon exercise of a NSO. The Participant will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Participant is an Employee or a former Employee, the Company will be required to withhold from his
or her compensation or collect from Participant and pay to the applicable taxing authorities an amount
in cash equal to a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.

               (ii) Incentive Stock Option. If this Option qualifies as an ISO, the Participant will
have no regular federal income tax liability upon its exercise, although the excess, if any, of the
aggregate Fair Market Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal
tax purposes and may subject the Participant to alternative minimum tax in the year of exercise.

 

 

          (b) Disposition of Shares.

               (i) NSO. If the Participant holds NSO Shares for at least one year, any gain realized
on disposition of the Shares will be treated as long-term capital gain for federal income tax
purposes.

               (ii) ISO. If the Participant holds ISO Shares for at least one year after exercise
and two years after the grant date, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes. If the Participant disposes of ISO
Shares within one year after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the
Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price.

          (c) Notice of Disqualifying Disposition of ISO Shares. If the Participant sells or
otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i)
two years after the grant date, or (ii) one year after the exercise date, the Participant shall
immediately notify the Company in writing of such disposition. The Participant agrees that he or
she may be subject to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to
the Participant.

          (d) Possible Effect of Section 409A of the Code. Section 409A of the Code applies to
arrangements that provide for the deferral of compensation. Generally, a stock option granted with
an exercise price per share of not less than the “fair market value” (determined in a manner
consistent with Section 409A of the Code and the regulations and other guidance promulgated
thereunder) per share on the date of grant of the stock option and with no other feature providing
for the deferral of compensation will not be subject to Section 409A of the Code. However, if the
exercise price of the stock option is less than such “fair market value” or the stock option has
another feature for the deferral of compensation, then if the stock option is not administered
within the parameters established under Section 409A the optionholder will be subject to additional
taxes. Also, the amount deemed to be deferred compensation under Section 409A of the Code will be
subject to ordinary income and employment taxes (in this respect the IRS has not yet indicated how
it will calculate the amount of deferred compensation subject to tax and the timing and frequency
of taxation, but it seems likely that the income will be measured and taxes imposed at least on the
vesting dates of the stock option). If Section 409A of the Code does apply to this Option, then
special rules apply to the timing of making and effecting certain amendments of this Option with
respect to distribution of any deferred compensation.

     9. Entire Agreement; Governing Law. The Plan is incorporated herein by reference.
The Plan, the Notice of Grant, and this Agreement constitute the entire agreement of the parties
with respect to
the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company and Participant with respect to the subject matter hereof, and may not be modified
adversely to the Participant’s interest except by means of a writing signed by the Company and
Participant. This agreement is governed by Delaware law except for that body of law pertaining to
conflict of laws.

     10. No Rights as Employee, Director or Consultant. Nothing in this Agreement shall
affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Participant’s employment, for any reason, with or without cause.

     By your signature and the signature of the Company’s representative on the Notice of Grant,
you and the Company agree that this Option is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant, and this Agreement. Participant has reviewed the
Plan, the Notice of Grant, and this Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing the Notice of Grant, and fully understands all provisions
of the Plan, the Notice of Grant, and this Agreement. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee upon any questions
relating to the Plan, the Notice of Grant, and the Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated on the Notice of Grant.

 

 

No.                    

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

STOCK OPTION EXERCISE AGREEMENT

     This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and entered into as of
                                        ,                      (the “Effective Date”) by and between Glu Mobile Inc., a Delaware
corporation (the “Company”), and the purchaser named below (the “Purchaser”). Capitalized terms
not defined herein shall have the meanings ascribed to them in the Company’s 2006 Equity Incentive
Plan (the “Plan”).

	 	 	 
	Purchaser:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security Number:
	 	 
	 

	 	 
	 
	 	 
	Address:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Total Number of Shares:
	 	 
	 

	 	 
	 
	Exercise Price Per Share:
	 	 
	 

	 	 
	 
	 	 
	Type of Stock Option
	 	 
	 
	 	 
	(Check one):

	 	o Incentive Stock Option
	 

	 	o Nonqualified Stock Option

1. EXERCISE OF OPTION.

          1.1 Exercise. Pursuant to exercise of that certain option (the “Option”) granted to
Purchaser under the Plan and subject to the terms and conditions of this Exercise Agreement,
Purchaser hereby purchases from the Company, and the Company hereby sells to Purchaser, the Total
Number of Shares set forth above (the “Shares”) of the Company’s Common Stock, at the Exercise
Price Per Share set forth above (the “Exercise Price”). As used in this Exercise Agreement, the
term “Shares” refers to the Shares purchased under this Exercise Agreement and includes all
securities received (i) in replacement of the Shares, (ii) as a result of stock dividends or stock
splits with respect to the Shares, and (iii) all securities received in replacement of the Shares
in a merger, recapitalization, reorganization or similar corporate transaction.

          1.2 Title to Shares. The exact spelling of the name(s) under which Purchaser will
take title to the Shares is:

 

 

 

 

 

 

          Purchaser desires to take title to the Shares as follows:

	 	o	 	Individual, as separate property

	 	o	 	Husband and wife, as community property
	 
	 	o	 	Joint Tenants
	 
	 	o	 	Other; please specify:                                                            

          1.3 Payment. Purchaser hereby delivers payment of the Exercise Price in the manner
permitted in the Stock Option Agreement as follows (check and complete as appropriate):

	 	o	 	in cash (by check) in the amount of $                    , receipt of which
is acknowledged by the Company;
	 
	 	o	 	by delivery of                      fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser which have been
paid for within the meaning of SEC Rule 144, (if purchased by use of a
promissory note, such note has been fully paid with respect to such
vested shares), or obtained by Purchaser in the open public market, and
owned free and clear of all liens, claims, encumbrances or security
interests, valued at the current fair market value of $                     per
share;
	 
	 	o	 	through a “broker-assisted” or “same day sale” program, commitment
from the Purchaser or Authorized Transferee and an NASD Dealer meeting
the requirements set forth by the Company; or
	 
	 	o	 	through a “margin” commitment from Purchaser or Authorized
Transferee and an NASD Dealer meeting the requirements of the Company’s
“margin” procedures and in accordance with law.

     2. DELIVERY.

          2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement and (ii) the Exercise Price and payment or other provision for any applicable
tax obligations.

          2.2 Deliveries by the Company. Upon its receipt of the Exercise Price, payment or
other provision for any applicable tax obligations and all the documents to be executed and
delivered by Purchaser to the Company under Section 2.1, the Company will issue a duly executed
stock certificate evidencing the Shares in the name of Purchaser.

     3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and warrants to
the Company that:

          3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the Plan and the
Stock Option Agreement, has read and understands the terms of the Plan, the Stock Option Agreement
and this Exercise Agreement, and agrees to be bound by their terms and conditions. Purchaser
acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares, and that Purchaser should consult a tax adviser prior to such exercise or
disposition.

          3.2 Access to Information. Purchaser has had access to all information regarding the
Company and its present and prospective business, assets, liabilities and financial condition that
Purchaser reasonably considers important in making the decision to purchase the Shares, and
Purchaser has had ample opportunity to ask questions of the Company’s representatives concerning
such matters and this investment.

 

 

          3.3 Understanding of Risks. Purchaser has received and reviewed the Form S-8
prospectus for the Plan and Shares and is fully aware of: (i) the highly speculative nature of the
investment in the Shares; (ii) the financial hazards involved; (iii) the qualifications and
backgrounds of the management of the Company; and (iv) the tax consequences of investment in the
Shares. Purchaser is capable of evaluating the merits and risks of this investment, has the
ability to protect Purchaser’s own interests in this transaction and is financially capable of
bearing a total loss of this investment.

     4. COMPLIANCE WITH SECURITIES LAWS. Purchaser understands and acknowledges that the
exercise of any rights to purchase any Shares is expressly conditioned upon compliance with the
Securities Act and all applicable state securities laws. Purchaser agrees to cooperate with the
Company to ensure compliance with such laws.

5. RESTRICTED SECURITIES.

          5.1 No Transfer Unless Registered or Exempt. Purchaser understands that Purchaser may
not transfer any Shares except when such Shares are registered under the Securities Act or
qualified under applicable state securities laws or unless, in the opinion of counsel to the
Company, exemptions from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC and that the
Company is under no obligation to do so with respect to the Shares, and may withdraw any such
registration statement at any time after filing. Purchaser has also been advised that exemptions
from registration and qualification may not be available or may not permit Purchaser to transfer
all or any of the Shares in the amounts or at the times proposed by Purchaser.

          5.2 SEC Rule 144. If Purchaser is an “affiliate” for purposes of Rule 144 promulgated
under the Securities Act, then in addition, Purchaser has been advised that Rule 144 requires that
the Shares be held for a minimum of one (1) year, and in certain cases two (2) years, after they
have been purchased and paid for (within the meaning of Rule 144). Purchaser understands
that Rule 144 may indefinitely restrict transfer of the Shares so long as Purchaser remains an
“affiliate” of the Company or if “current public information” about the Company (as defined in Rule
144) is not publicly available.

     6. RIGHTS AS A STOCKHOLDER. Subject to the terms and conditions of this Exercise
Agreement, Purchaser will have all of the rights of a stockholder of the Company with respect to
the Shares from and after the date that Shares are issued to Purchaser until such time as Purchaser
disposes of the Shares.

     7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          7.1 Legends. Purchaser understands and agrees that the Company will place any legends
that may be required by state or U.S. Federal securities laws, the Company’s Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company or, subject to the
assent of the Company, any agreement between Purchaser and any third party.

          7.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance with any
restrictions imposed by this Exercise Agreement, the Company may issue appropriate “stop-transfer”
instructions to its transfer agent, if any, and if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.

          7.3 Refusal to Transfer. The Company will not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Exercise Agreement or (ii) to treat as owner of such Shares, or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.

     8. TAX CONSEQUENCES. PURCHASER UNDERSTANDS AND REPRESENTS: (i) THAT PURCHASER HAS
REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND

 

 

CONSULTED PURCHASER’S PERSONAL TAX ADVISER IN
CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON
THE COMPANY FOR ANY TAX ADVICE. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE THE PLAN WAS
ADOPTED BY THE BOARD OF SOME OF THE U.S. FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE OPTION AND
DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT THE PROSPECTUS AND PURCHASER’S
PERSONAL TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          8.1 Exercise of Incentive Stock Option. If the Option qualifies as an ISO, there will
be no regular U.S. Federal income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as a tax preference item for U.S. Federal alternative minimum tax purposes
and may subject Purchaser to the alternative minimum tax in the year of exercise.

          8.2 Exercise of Nonqualified Stock Option. If the Option does not qualify as an ISO,
there may be a regular U.S. Federal income tax liability upon the exercise of the Option.
Purchaser will be treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Purchaser is or was an employee of the Company, the Company may be
required to withhold from Purchaser’s compensation or collect from Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this compensation income at the
time of exercise.

          8.3 Disposition of Shares. The following tax consequences may apply upon disposition
of the Shares.

               (a) Incentive Stock Options. If the Shares are held for more than twelve (12) months
after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of
more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares
will be treated as long term capital gain for federal income tax purposes. If Shares purchased
under an ISO are disposed of within the applicable one (1) year or two (2) year period, any gain
realized on such disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.

               (b) Nonqualified Stock Options. If the Shares are held for more than twelve (12)
months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain
realized on disposition of the Shares will be treated as long-term capital gain.

               (c) Withholding. The Company may be required to withhold from the Purchaser’s
compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.

     9. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of the Shares will
be subject to and conditioned upon compliance by the Company and Purchaser with all applicable
state and federal laws and regulations and with all applicable requirements of any stock exchange
or automated quotation system on which the Company’s Common Stock may be listed or quoted at the
time of such issuance or transfer.

     10. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Exercise Agreement. No other party to this Exercise Agreement may assign, whether voluntarily or
by operation of law, any of its rights and obligations under this Exercise Agreement, except with
the prior written consent of the Company. This Exercise Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this

 

 

Exercise Agreement will be binding upon Purchaser and Purchaser’s heirs, executors,
administrators, legal representatives, successors and assigns.

     11. GOVERNING LAW. This Exercise Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to that body of laws
pertaining to conflict of laws.

     12. NOTICES. Any and all notices required or permitted to be given to a party
pursuant to the provisions of this Exercise Agreement will be in writing and will be effective and
deemed to provide such party sufficient notice under this Exercise Agreement on the earliest of the
following: (i) at the time of personal delivery, if delivery is in person; (ii) one (1) business
day after deposit with an express overnight courier for United States deliveries, or two (2)
business days after such deposit for deliveries outside of the United States, with proof of
delivery from the courier requested; or (iii) three (3) business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. All notices
for delivery outside the United States will be sent by express courier. All notices not delivered
personally will be sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the address set forth below the signature lines of this Exercise Agreement,
or at such other address as such other party may designate by one of the indicated means of notice
herein to the other parties hereto. Notices to the Company will be marked “Attention: Stock Plan
Administration”.

     13. FURTHER ASSURANCES. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Exercise Agreement.

     14. TITLES AND HEADINGS. The titles, captions and headings of this Exercise Agreement
are included for ease of reference only and will be disregarded in interpreting or construing this
Exercise Agreement. Unless otherwise specifically stated, all references herein to “sections” will
mean “sections” to this Exercise Agreement.

     15. ENTIRE AGREEMENT. The Plan, the Notice, the Stock Option Agreement and this
Exercise Agreement constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Exercise Agreement, and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.

     16. COUNTERPARTS. This Exercise Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an original, and all of
which together shall constitute one and the same agreement.

     17. SEVERABILITY. If any provision of this Exercise Agreement is determined by any
court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such provision will be enforced to the maximum extent possible given the intent of the
parties hereto. If such clause or provision cannot be so enforced, such provision shall be
stricken from this Exercise Agreement and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Exercise Agreement. Notwithstanding the forgoing, if the
value of this Exercise Agreement based upon the substantial benefit of the bargain for any party is
materially impaired, which determination as made by the presiding court or arbitrator of competent
jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good
faith negotiations.

 

     IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be executed in
triplicate by its duly authorized representative and Purchaser has executed this Exercise Agreement
as of the Effective Date, indicated above.

	 	 	 	 	 	 	 	 	 
	GLU MOBILE INC.	 	 	 	PURCHASER
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(Please print name)	 	 	 	(Please print name)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax No.:

	 	 	 	 	 	Fax No.	 	 
	 

	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	Phone No.:

	 	 	 	 	 	Phone No.:	 	 
	 

	 	 
	 	 	 	 	 	 

[Signature page to Glu Mobile Inc. Stock Option Exercise Agreement]

 

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK AWARD

GRANT NUMBER:                    

     You have been granted an award of Restricted Shares of Common Stock of Glu Mobile Inc. (the
“Company”) under the Company’s 2007 Equity Incentive Plan (the “Plan”) on the following terms:

	 	 	 	 	 	 	 	 	 	 	 
	1.

	 	Name of Grantee:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.

	 	Total Number of Restricted Shares Awarded:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	3.

	 	Fair Market Value per Restricted Share:
	 	 	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.

	 	Total Fair Market Value of Award:
	 	 	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	5.

	 	Purchase Price per Restricted Share:
	 	 	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.

	 	Total Purchase Price for all Restricted Shares:
	 	 	 	 	$	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	7.

	 	Date of Grant:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	8.

	 	Vesting Commencement Date.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

9.      Vesting Schedule: [Subject to your continued service as an employee, director or consultant of the Company,                                               
              .]

     By your signature and the signature of the Company’s representative below, you and the Company
agree that the Award of Restricted Shares is governed by the terms and conditions of the Plan and
the Restricted Share Agreement (together with this notice the “Restricted Stock Purchase
Agreement”), which is attached hereto. If the Restricted Stock Purchase Agreement is not executed
by you within thirty (30) days of the Date of Grant above, then this grant shall be void.

	 	 	 	 	 	 	 	 	 	 	 
	GLU MOBILE INC.	 	 	 	RECIPIENT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Signature	 	 	 	 
	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 	 	 
	Its:	 	 	 	 	 	Please Print Name	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

1

 

GLU MOBILE INC.

2007 Equity Incentive Plan

RESTRICTED SHARE AGREEMENT

     THIS
RESTRICTED SHARE AGREEMENT (this “Agreement”)
is made as of
                                        , 20___ by
and between Glu Mobile Inc., a Delaware corporation (the “Company”), and
                                         (“Participant”) pursuant to the Company’s 2007 Equity Incentive
Plan (the “Plan”). To the extent any capitalized terms used in this Agreement are not defined, they
shall have the meaning ascribed to them in the Plan.

     1. Sale of Stock. Subject to the terms and conditions of this Agreement, on
the Purchase Date (as defined below) the Company will issue and sell to Participant, and
Participant agrees to purchase from the Company the number of Shares shown on the Notice of
Restricted Stock Award at a purchase price of $                     per Share. The per Share purchase price of
the Shares shall be not less than the par value of the Shares as of the date of the offer of such
Shares to the Participant. The term “Shares” refers to the purchased Shares and all securities
received in replacement of or in connection with the Shares pursuant to stock dividends or splits,
all securities received in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other properties to
which Participant is entitled by reason of Participant’s ownership of the Shares.

     2. Time and Place of Exercise. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously with the execution
of this Agreement by the parties, or on such other date as the Company and Participant shall agree
(the “Purchase Date”). On the Purchase Date, the Company will issue in Participant’s name a stock
certificate representing the Shares to be purchased by Participant against payment of the purchase
price therefor by Participant by (a) check made payable to the Company, (b) cancellation of
indebtedness of the Company to Participant, (c) Participant’s personal services that the Committee
has determined have already been rendered to the Company and have a value not less than aggregate
par value of the Shares to be issued Participant, or (d) a combination of the foregoing.

     3. Restrictions on Resale. By signing this Agreement, Participant agrees
not to sell any Shares acquired pursuant to the Plan and this Agreement at a time when applicable
laws, regulations or Company or underwriter trading policies prohibit exercise or sale. This
restriction will apply as long as Participant is providing Service to the Company or a Subsidiary
of the Company.

          3.1 Repurchase Right on Termination Other Than for Cause. For the purposes
of this Agreement, a “Repurchase Event” shall mean an occurrence of one of:

               (i) termination of Participant’s service, whether voluntary or involuntary and with
or without cause;

               (ii) resignation, retirement or death of Participant; or

               (iii) any attempted transfer by Participant of the Shares, or any interest therein,
in violation of this Agreement.

1

 

Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation)
to purchase the Shares of Participant at a price equal to the Price (the “Repurchase Right”). The
Repurchase Right shall lapse in accordance with the vesting schedule set forth in the Notice of
Restricted Stock Award. For purposes of this Agreement, “Unvested Shares” means Stock pursuant to
which the Company’s Repurchase Right has not lapsed.

          3.2 Exercise of Repurchase Right. Unless the Company provides written
notice to Participant within 90 days from the date of termination of Participant’s employment or
consulting relationship that the Company does not intend to exercise its Repurchase Right with
respect to some or all of the Unvested Shares, the Repurchase Right shall be deemed automatically
exercised by the Company as of the 90th day following such termination, provided that the Company
may notify Participant that it is exercising its Repurchase Right as of a date prior to such 90th
day. Unless Participant is otherwise notified by the Company pursuant to the preceding sentence
that the Company does not intend to exercise its Repurchase Right as to some or all of the Unvested
Shares, execution of this Agreement by Participant constitutes written notice to Participant of the
Company’s intention to exercise its Repurchase Right with respect to all Unvested Shares to which
such Repurchase Right applies at the time of Termination of Participant. The Company, at its
choice, may satisfy its payment obligation to Participant with respect to exercise of the
Repurchase Right by either (A) delivering a check to Participant in the amount of the purchase
price for the Unvested Shares being repurchased, or (B) in the event Participant is indebted to the
Company, canceling an amount of such indebtedness equal to the purchase price for the Unvested
Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment and
cancellation of indebtedness equals such purchase price. In the event of any deemed automatic
exercise of the Repurchase Right by canceling an amount of such indebtedness equal to the purchase
price for the Unvested Shares being repurchased, such cancellation of indebtedness shall be deemed
automatically to occur as of the 90th day following termination of Participant’s employment or
consulting relationship unless the Company otherwise satisfies its payment obligations. As a
result of any repurchase of Unvested Shares pursuant to the Repurchase Right, the Company shall
become the legal and beneficial owner of the Unvested Shares being repurchased and shall have all
rights and interest therein or related thereto, and the Company shall have the right to transfer to
its own name the number of Unvested Shares being repurchased by the Company, without further action
by Participant.

          3.3 Acceptance of Restrictions. Acceptance of the Shares shall constitute
Participant’s agreement to such restrictions and the legending of his or her certificates with
respect thereto. Notwithstanding such restrictions, however, so long as Participant is the holder
of the Shares, or any portion thereof, he or she shall be entitled to receive all dividends
declared on and to vote the Shares and to all other rights of a stockholder with respect thereto.

          3.4 Non-Transferability of Unvested Shares. In addition to any other
limitation on transfer created by applicable securities laws or any other agreement between the
Company and Participant, Participant may not transfer any Unvested Shares, or any interest therein,
unless consented to in writing by a duly authorized representative of the Company. Any purported
transfer is void and of no effect, and no purported transferee thereof will be recognized as a
holder of the Unvested Shares for any purpose whatsoever. Should such a transfer purport to occur,
the Company may refuse to carry out the transfer on its books, set aside the transfer, or exercise
any other legal or equitable remedy. In the event the Company consents to a transfer of Unvested
Shares, all transferees of Shares or any interest therein will receive and hold such Shares or
interest subject to the provisions of this Agreement, including, insofar as applicable, the
Repurchase Right. In the event of any purchase by the Company hereunder where the Shares or
interest are held by a transferee, the transferee shall be obligated, if requested by the Company,
to transfer the Shares or interest to the Participant for consideration equal to the amount to be
paid by the Company hereunder. In the event the Repurchase Right is deemed exercised by the
Company, the Company may deem any transferee to have transferred the Shares or interest to
Participant

2

 

prior to their purchase by the Company, and payment of the purchase price by the Company to
such transferee shall be deemed to satisfy Participant’s obligation to pay such transferee for such
Shares or interest, and also to satisfy the Company’s obligation to pay Participant for such Shares
or interest.

          3.5 Assignment. The Repurchase Right may be assigned by the Company in
whole or in part to any persons or organization.

     4. Restrictive Legends and Stop Transfer Orders.

          4.1 Legends. The certificate or certificates representing the Shares shall
bear the following legend (as well as any legends required by applicable state and federal
corporate and securities laws):

               THE SHARE REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.

          4.2 Stop-Transfer Notices. Participant agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own
securities, it may make appropriate notations to the same effect in its own records.

          4.3 Refusal to Transfer. The Company shall not be required (i) to transfer
on its books any Shares that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (ii) to treat as the owner or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

     5. No Rights as Employee, Director or Consultant. Nothing in this Agreement
shall affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Participant’s employment, for any reason, with or without
cause.

     6. Miscellaneous.

          6.1 Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of California, without giving effect to
principles of conflicts of law.

          6.2 The Plan and Other Agreements; Enforcement of Rights. The text of the
Plan and the Notice of Restricted Stock Award to which this Agreement is attached are incorporated
into this Agreement by reference. This Agreement, the Plan and the Notice of Restricted Stock Award
to which this Agreement is attached constitute the entire agreement and understanding of the
parties relating to the subject matter herein and supersede all prior discussions between them. Any
prior agreements, commitments or negotiations concerning the purchase of the Restricted Shares
hereunder are superseded. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing and signed by the parties to this
Agreement. The failure by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

          6.3 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the

3

 

event that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i)such provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this
Agreement shall be enforceable in accordance with its terms.

          6.4 Construction. This Agreement is the result of negotiations between and
has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly,
this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity
shall be construed in favor of or against any one of the parties hereto.

          6.5 Notices. Any notice to be given under the terms of the Plan shall be
addressed to the Company in care or its principal office, and any notice to be given to the
Participant shall be addressed to such Participant at the address maintained by the Company for
such person or at such other address as the Participant may specify in writing to the Company.

          6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall he deemed an original and all of which together shall constitute
one instrument.

          6.7 Successors and Assigns. The rights and benefits of this Agreement shall
inure to the benefit of., and be enforceable by, the Company’s successors and assigns.
The rights and obligations of Participant under this Agreement may only be assigned with the prior
written consent of the Company.

          6.8 U.S. Tax Consequences. Upon vesting of Shares, Participant will include
in taxable income the difference between the fair market value of the vesting Shares, as determined
on the date of their vesting, and the price paid for the Shares. This will be treated as ordinary
income by Participant and will be subject to withholding by the Company when required by applicable
law. In the absence of an Election (defined below) the Company shall withhold a number of vesting
Shares with a fair market value (determined on the date of their vesting) equal to the amount the
Company is required to withhold for income and employment taxes. If Participant makes an Election,
then Participant must, prior to making the Election, pay in cash (or check) to the Company an
amount equal to the amount the Company is required to withhold for income and employment taxes.

     7. Section 83(b) Election. Participant hereby acknowledges that he or she
has been informed that, with respect to the purchase of the Shares, an election may be filed by the
Participant with the Internal Revenue Service, within 30 days of the purchase of the Shares,
electing pursuant to Section 83(b) of the Code to be taxed currently on any difference between the
purchase price of the Shares and their Fair Market Value on the date of purchase (the “Election”).
Making the Election will result in recognition of taxable income to the Participant on the date of
purchase, measured by the excess, if any, of the Fair Market Value of the Shares over the purchase
price for the Shares. Absent such an Election, taxable income will be measured and recognized by
Participant at the time or times on which the Company’s Repurchase Right lapses. Participant is
strongly encouraged to seek the advice of his or her own tax consultants in connection with the
purchase of the Shares and the advisability of filing of the Election. PARTICIPANT ACKNOWLEDGES
THAT IT IS SOLELY PARTICIPANT’S RESPONSIBILITY, AND NOT THE COMPANY’S RESPONSIBILITY, TO TIMELY
FILE THE

4

 

ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF PARTICIPANT REQUESTS THE COMPANY, OR ITS
REPRESENTATIVE, TO MAKE THIS FILING ON PARTICIPANT’S BEHALF.

     The parties have executed this Agreement as of the date first set forth above.

	 	 	 	 	 	 	 	 	 
	 	 	GLU MOBILE INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	RECIPIENT:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Signature	 	 	 	 
	 	 	 

	 
	 	 	 	 	 	 	 	 
	 	 	Please Print Name	 	 
	 

	 	 	 

5

 

RECEIPT

     Glu Mobile Inc. hereby acknowledges receipt of (check as applicable):

o
A check in the amount of $_______________

o
The cancellation of indebtedness in the amount of $_______________

given by
                                        as consideration for Certificate No. -                     for
                    shares of Common Stock of Glu Mobile Inc.

Dated: _____________________

	 	 	 	 	 	 	 	 	 
	 	 	GLU MOBILE INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 	 	 
	 	 	 	 	 

 

 

RECEIPT AND CONSENT

     The undersigned Participant hereby acknowledges receipt of a photocopy of Certificate No.-                     for

                    
shares of Common Stock of Glu Mobile Inc. (the “Company”)

     The undersigned further acknowledges that the Secretary of the Company, or his or her
designee, is acting as escrow holder pursuant to the Restricted Shares Agreement that Participant
has previously entered into with the Company. As escrow holder, the Secretary of the Company, or
his or her designee, holds the original of the aforementioned certificate issued in the
undersigned’s name. To facilitate any transfer of Shares to the Company pursuant to the Restricted
Shares Agreement, Participant has executed the attached Assignment Separate from Certificate.

Dated: _____________________, 20____

	 	 	 	 	 	 	 
	Signature   
	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Please Print Name	 	 	 	 
	 

	 	 

	 	 

 

 

STOCK POWER AND ASSIGNMENT

SEPARATE FROM STOCK CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Restricted Share Agreement dated as of
                    , ___, [COMPLETE AT THE TIME OF PURCHASE] (the “Agreement”), the undersigned
Participant hereby sells, assigns and transfers unto

                                        ,                      shares
of the Common Stock $0.001, par value per share, of Glu Mobile Inc., a Delaware corporation (the
“Company”), standing in the undersigned’s name on the books of the Company represented by
Certificate No(s).                      [COMPLETE AT THE TIME OF PURCHASE] delivered herewith, and does hereby
irrevocably constitute and appoint the Secretary of the Company as the undersigned’s
attorney-in-fact, with full power of substitution, to transfer said stock on the books of the
Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.

Dated: _________________, ___

	 	 	 
	 

	 	PARTICIPANT
	 
	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	 
	 

	 	(Please Print Name)

Instructions to Participant: Please do not fill in any blanks other than the signature
line. The purpose of this document is to enable the Company and/or its assignee(s) to acquire the
shares upon exercise of its “Repurchase Right” set forth in the Agreement without requiring
additional action by the Participant.

 

 

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF STOCK APPRECIATION RIGHT AWARD

GRANT NUMBER:                    

     The terms defined in the Company’s 2007 Equity Incentive Plan (the “Plan”) shall have the same
meanings in this Notice of Stock Appreciation Right Award (“Notice of Grant”).

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 

You (“Participant”) have been granted an award of Stock Appreciation Rights (“SARs”), subject to
the terms and conditions of the Plan and the attached Stock Appreciation Right Award Agreement
(hereinafter “SAR Agreement”) to the Plan (available in hard copy by request), as follows:

	 	 	 	 	 
	 

	 	Number of SARs:
	 	                                        
	 
	 	 	 	 
	 

	 	Maximum Number of Shares Issuable:
	 	                                        
	 
	 	 	 	 
	 

	 	Date of Grant:
	 	                                        
	 
	 	 	 	 
	 

	 	Fair Market Value of a Share on Date of Grant:
	 	                                        
	 
	 	 	 	 
	 

	 	First Vesting Date:
	 	[                                        ]
	 
	 	 	 	 
	 	 	Expiration Date: The date on which settlement of all SARs granted hereunder occurs, with earlier expiration upon the Termination Date
	 
	 	 	 	 
	 	 	[Vesting Schedule: The SARs will vest as follows:                                                             ,
subject to your continued service as an employee, director or consultant of the Company.]

Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is “at-will”), and that nothing
in this Notice of Grant, the SAR Agreement or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the SARs pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the SAR Agreement and the Plan, both of which are incorporated herein by reference.
Participant has read both the SAR Agreement and the Plan.

	 	 	 	 	 	 	 	 	 	 	 
	PARTICIPANT	 	 	 	GLU MOBILE INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

1

 

GLU MOBILE INC.

STOCK APPRECIATION RIGHT AWARD AGREEMENT TO THE

GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN

Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity Incentive Plan (the
“Plan”) shall have the same defined meanings in this Stock Appreciation Right Award Agreement (the
“Agreement”).

You have been granted Stock Appreciation Rights (“SARs”) subject to the terms and conditions of the
Plan, the Notice of Stock Appreciation Rights Award (“Notice of Grant”) and this Agreement.

1. Settlement. Settlement of SARs shall be made within 30 days following the
applicable date of vesting under the vesting schedule set forth in the Notice of Grant. Settlement
of SARs shall be in Shares, except no fractional shares will be issued in settlement of SARs. Any
amounts attributable to a fractional share will be settled in cash.

2. No Stockholder Rights. Unless and until such time as Shares are issued in
settlement of SARs, Participant shall have no ownership of the Shares allocated to the SARs and
shall have no right to vote such Shares, subject to the terms, conditions and restrictions
described in the Plan and herein.

3. Dividend Equivalents. Dividends, if any (whether in cash or Shares), shall
not be credited to Participant.

4. No Transfer. The SARs and any interest therein shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of.

5. Termination. If Participant’s continuous employment with the Company or any
of its subsidiaries shall terminate for any reason, all unvested SARs shall be forfeited to the
Company forthwith, and all rights of Participant to such SARs shall immediately terminate. Vested
SARs shall be treated in accordance with Section 5 of the plan regarding exercisability of vested
options. In case of any dispute as to whether Termination has occurred, the Committee shall have
sole discretion to determine whether such Termination has occurred and the effective date of such
Termination.

6. Acknowledgement. The Company and Participant agree that the SARs are granted
under and governed by the Notice of Grant, this Agreement and by the provisions of the Plan
(incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan
and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with
their provisions, and (iii) hereby accepts the SARs subject to all of the terms and conditions set
forth herein and those set forth in the Plan and the Notice of Grant.

7. Tax Consequences. Participant acknowledges that there will be tax
consequences upon settlement of the SARs or disposition of the Shares, if any, received in
connection therewith, and Participant should consult a tax adviser prior to such settlement or
disposition. Applicable withholding taxes shall be satisfied by the Company by withholding the
applicable number of Shares otherwise deliverable upon settlement of the SAR in accordance with
rules and procedures established by the Committee. There is no tax event upon granting of an SAR.
Upon settlement of the SAR, Participant will include in income the fair market value of the Shares
subject to the Shares payable in accordance with settlement of the SAR. The included amount will
be treated as ordinary income by Participant and will be subject to withholding by the Company.
Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as
short-term or long-term capital gain or loss, depending on whether the Shares are held greater than
one year from the date of settlement.

8. Compliance with Laws and Regulations. The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.

1

 

9. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
will be binding upon Participant and Participant’s heirs, executors, administrators, legal
representatives, successors and assigns.

10. Governing Law; Severability. The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.

11. No Rights as Employee, Director or Consultant. Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Purchaser’s employment, for any reason, with or without cause.

By your signature and the signature of the Company’s representative on the Notice of Grant,
Participant and the Company agree that this SAR is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed the Plan,
the Notice of Grant and this Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement, and fully understands all provisions of the
Plan, the Notice of Grant and this Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any questions relating
to the Plan, the Notice of Grant and this Agreement. Participant further agrees to notify the
Company upon any change in Participant’s residence address.

2

 

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:                    

          The terms defined in the Company’s 2007 Equity Incentive Plan (the “Plan”) shall have the same
meanings in this Notice of Restricted Stock Unit Award (“Notice of Grant”).

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 

You (“Participant”) have been granted an award of Restricted Stock Units (“RSUs”), subject to the
terms and conditions of the Plan and the attached Award Agreement (Restricted Stock Units)
(hereinafter “RSU Agreement”) to the Plan (available in hard copy by request), as follows:

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Number of RSUs:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Date of Grant:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	First Vesting Date:
	 	 	[
	 	]	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Expiration Date:
	 	 	The date on which settlement of all RSUs granted hereunder occurs, with
earlier expiration upon the Termination Date

Vesting Schedule: The RSUs will vest as follows: [Subject to your continued service
as an employee, director or consultant of the Company,
                                                            .]

Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is “at-will”), and that nothing
in this Notice of Grant, the Award Agreement (Restricted Stock Units) or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the RSUs pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the Award Agreement (Restricted Stock Units) and the Plan, both of which are incorporated herein by reference.
Participant has read both the Award Agreement (Restricted Stock Units) and the Plan.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	PARTICIPANT	 	 	 	 	 	GLU MOBILE INC.
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

GLU MOBILE INC.

AWARD AGREEMENT (RESTRICTED STOCK UNITS) TO THE

GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN

Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity Incentive Plan (the
“Plan”) shall have the same defined meanings in this Award Agreement (Restricted Stock Units) (the
“Agreement”).

You have been granted Restricted Stock Units (“RSUs”) subject to the terms, restrictions and
conditions of the Plan, the Notice of Restricted Stock Unit Grant (“Notice of Grant”) and this
Agreement.

1. Settlement. Settlement of RSUs shall be made within 30 days following the
applicable date of vesting under the vesting schedule set forth in the Notice of Grant. Settlement
of RSUs shall be in Shares.

2. No Stockholder Rights. Unless and until such time as Shares are issued in
settlement of vested RSUs, Participant shall have no ownership of the Shares allocated to the RSUs
and shall have no right dividends or to vote such Shares.

3. Dividend Equivalents. Dividends, if any (whether in cash or Shares), shall
not be credited to Participant.

4. No Transfer. The RSUs and any interest therein shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of.

5. Termination. If Participant’s service Terminates for any reason, all unvested
RSUs shall be forfeited to the Company forthwith, and all rights of Participant to such RSUs shall
immediately terminate. In case of any dispute as to whether Termination has occurred, the
Committee shall have sole discretion to determine whether such Termination has occurred and the
effective date of such Termination.

6. Acknowledgement. The Company and Participant agree that the RSUs are granted
under and governed by the Notice of Grant, this Agreement and by the provisions of the Plan
(incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan
and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with
their provisions, and (iii) hereby accepts the RSUs subject to all of the terms and conditions set
forth herein and those set forth in the Plan and the Notice of Grant.

7. U.S. Tax Consequences. Participant acknowledges that there will be tax
consequences upon settlement of the RSUs or disposition of the Shares, if any, received in
connection therewith, and Participant should consult a tax adviser regarding Participant’s tax
obligations prior to such settlement or disposition. Upon vesting of the RSU, Participant will
include in income the fair market value of the Shares subject to the RSU. The included amount will
be treated as ordinary income by Participant and will be subject to withholding by the Company when
required by applicable law. Before any Shares subject to this Agreement are issued the Company
shall withhold a number of Shares with a fair market value (determined on the date the Shares are
issued) equal to the minimum amount the Company is required to withhold for income and employment taxes.
Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as
short-term or long-term capital gain or loss, depending on whether the Shares are held for more
than one year from the date of settlement. Further, a RSU is considered a deferral of compensation
that is subject to Section 409A of the Code. Section 409A of the Code imposes special rules to the
timing of making and effecting certain amendments of this RSU with respect to distribution of any
deferred compensation. You should consult your personal tax advisor for more information on the
actual and potential tax consequences of this RSU.

8. Compliance with Laws and Regulations. The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and

 

 

with all applicable requirements of any stock exchange or automated quotation system on which the
Company’s Common Stock may be listed or quoted at the time of such issuance or transfer.

9. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
will be binding upon Participant and Participant’s heirs, executors, administrators, legal
representatives, successors and assigns.

10. Governing Law; Severability. The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.

11. No Rights as Employee, Director or Consultant. Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Participant’s employment, for any reason, with or without cause.

     By your signature and the signature of the Company’s representative on the Notice of Grant,
Participant and the Company agree that this RSU is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed the Plan,
the Notice of Grant and this Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement, and fully understands all provisions of the
Plan, the Notice of Grant and this Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any questions relating
to the Plan, the Notice of Grant and this Agreement. Participant further agrees to notify the
Company upon any change in Participant’s residence address.

 

 

GLU MOBILE INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF STOCK BONUS AWARD

GRANT NUMBER:                    

     The terms defined in the Company’s 2007 Equity Incentive Plan (the “Plan”) shall have the same
meanings in this Notice of Stock Bonus Award (“Notice of Grant”).

	 	 	 	 	 
	 

	 	Name:
	 	                                        
	 
	 	 	 	 
	 

	 	Address:
	 	                                        

You (“Participant”) have been granted an award of Shares, subject to the terms and conditions of
the Plan and the attached Stock Bonus Award Agreement to the Plan (available in hard copy by
request), as follows:

	 	 	 	 	 
	 

	 	Number of Shares:
	 	                                        
	 
	 	 	 	 
	 

	 	Date of Grant:
	 	                                        
	 
	 	 	 	 
	 

	 	First Vesting Date:
	 	[                                        ]
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	The date on which all the Shares granted hereunder become vested, with

earlier expiration upon the Termination Date
	 
	 	 	 	 
	 	 	[Vesting Schedule: The Shares will vest as follows: Subject to your continued
service as an employee, director or consultant of the Company, on
                                        .]

Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is “at-will”), and that nothing
in this Notice of Grant, the Stock Bonus Agreement or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the Stock Bonus Shares pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the Stock Bonus Agreement and the Plan, both of which are incorporated herein by reference.
Participant has read both the Stock Bonus Agreement and the Plan.

	 	 	 	 	 	 	 	 	 	 	 
	PARTICIPANT	 	 	 	GLU MOBILE INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

GLU MOBILE INC.

STOCK BONUS AGREEMENT TO THE

GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN

Unless otherwise defined herein, the terms defined in the Company’s 2007 Equity Incentive Plan (the
"Plan”) shall have the same defined meanings in this Stock Bonus Agreement (the “Agreement”).

You have been granted a Stock Bonus Award (“Stock Bonus Award”) subject to the terms, restrictions
and conditions of the Plan, the Notice of Stock Bonus Award (“Notice of Grant”) and this Agreement.

1. Settlement. Stock Bonus Awards shall be settled in Shares and the Company’s
transfer agent shall record ownership of such Shares in Participant’s name as soon as reasonably
practicable.

2. Stockholder Rights. Participant shall have no right to dividends or to vote
such Shares other than as provided under an applicable section of the Plan and applicable law.

3. Non-Transferable. Unvested Shares, and unvested Stock Bonus Awards, and any
interest in either shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise
disposed of by Participant or any person whose interest derives from Participant’s interest.
“Unvested Shares” are Shares that have not yet vested pursuant to the terms of the vesting schedule
set forth in the Notice of Grant.

4. Termination. If Participant’s continuous employment with the Company or any
of its subsidiaries shall terminate for any reason, all Unvested Shares shall be forfeited to the
Company forthwith, and all rights of Participant to such Unvested Shares shall immediately
terminate. In case of any dispute as to whether Termination has occurred, the Committee shall have
sole discretion to determine whether such Termination has occurred and the effective date of such
Termination.

5. Acknowledgement. The Company and Participant agree that the Stock Bonus Award
is granted under and governed by the Notice of Grant, this Agreement and by the
provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt
of a copy of the Plan and the Plan prospectus, (ii) represents that Participant has carefully read
and is familiar with their provisions, and (iii) hereby accepts the Stock Bonus Award subject to
all of the terms and conditions set forth herein and those set forth in the Plan, this Agreement
and the Notice of Grant.

6. Tax Consequences. Participant acknowledges that there will be tax
consequences upon vesting of the Stock Bonus Awards or disposition of the Shares, if any, received
in connection therewith, and Participant should consult a tax adviser regarding Participant’s tax
obligations prior to such vesting or disposition. The included amount will be treated as
ordinary income by Participant and will be subject to withholding by the Company. Before any
shares subject to this Agreement are issued, the Participant must provide funds to the Company
equal to the amount of the Company’s tax withholding obligations(s). Information on possible
arrangements can be obtained from the Company. Upon disposition of the Shares, any subsequent
increase or decrease in value will be treated as short-term or long-term capital gain or loss,
depending on whether the Shares are held for more than one year from the date of settlement.

7. Compliance with Laws and Regulations. The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.

8. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject

 

 

to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant
and Participant’s heirs, executors, administrators, legal representatives, successors and assigns.

9. Governing Law; Severability. The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.

10. No Rights as Employee, Director or Consultant. Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Purchaser’s employment, for any reason, with or without cause.

     By your signature and the signature of the Company’s representative on the Notice of Grant,
Participant and the Company agree that this Stock Bonus Award is granted under and governed by the
terms and conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed
the Plan, the Notice of Grant and this Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement, and fully understands all
provisions of the Plan, the Notice of Grant and this Agreement. Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan, the Notice of Grant and this Agreement. Participant further agrees
to notify the Company upon any change in Participant’s residence address.

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