def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o |
|
Preliminary Proxy Statement |
|
o |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
þ |
|
Definitive Proxy Statement |
|
o |
|
Definitive Additional Materials |
|
o |
|
Soliciting Material Pursuant to §240.14a-12 |
GLU MOBILE INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ |
|
No fee required. |
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(1)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
|
|
|
|
|
|
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
|
(1) |
|
Amount Previously Paid: |
|
|
|
|
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
|
(3) |
|
Filing Party: |
|
|
|
|
|
|
|
(4) |
|
Date Filed: |
|
|
|
|
|
GLU
MOBILE INC.
2207
Bridgepointe Parkway, Suite 300
San Mateo, California 94404
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of
Glu Mobile Inc., a Delaware corporation (Glu or the
Company), will be held on Thursday, June 3,
2010, at 10:00 a.m. Pacific Time, at 2207 Bridgepointe
Parkway, San Mateo, California (the Annual
Meeting). At the Annual Meeting, our stockholders will be
asked to consider and vote upon:
1. The election of three Class III directors to serve
on our Board, each to serve until the Companys annual
meeting of stockholders to be held in 2013 and until his
successor is elected and qualified, or until his death,
resignation or removal.
2. Approval of an amendment to our 2007 Equity Incentive
Plan to increase the aggregate number of shares of common stock
authorized for issuance under the plan by 3,000,000 shares.
3. Ratification of the appointment of
PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm for the fiscal year ending
December 31, 2010.
4. Transaction of such other business as may properly come
before the Annual Meeting or before any adjournments or
postponements thereof.
Items 1, 2 and 3 are more fully described in the attached
proxy statement. We have not received notice of other matters
that may be properly presented at the Annual Meeting.
Only stockholders of record of our common stock at the close of
business on April 8, 2010 are entitled to notice of, and to
vote at, the Annual Meeting or any adjournments or postponements
thereof.
Your vote is important. Whether or not you plan to attend the
Annual Meeting, please cast your vote, as instructed in the
enclosed proxy statement as promptly as possible. You are
encouraged to vote via the Internet or by telephone. It is
convenient and saves the Company significant postage and
processing costs.
By Order of the Board,
Kevin S. Chou
Vice President, General Counsel and Secretary
San Mateo, California
April 30, 2010
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY
MATERIALS:
The Companys combined Proxy Statement for the 2010
Annual Meeting of Stockholders and the Annual Report to
Stockholders for the fiscal year ended December 31, 2009
are also available online at www.glu.com/investors.
GLU
MOBILE INC.
PROXY
STATEMENT FOR THE 2010 ANNUAL MEETING OF STOCKHOLDERS
Table of
Contents
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
26
|
|
|
|
|
27
|
|
|
|
|
27
|
|
|
|
|
28
|
|
|
|
|
30
|
|
|
|
|
31
|
|
|
|
|
32
|
|
|
|
|
32
|
|
|
|
|
34
|
|
|
|
|
34
|
|
|
|
|
34
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
36
|
|
|
|
|
37
|
|
|
|
|
38
|
|
|
|
|
46
|
|
i
The information contained in the Compensation Committee
Report and the Audit Committee Report of this proxy statement
shall not be deemed to be soliciting material, to be
filed with the Securities and Exchange Commission,
or to be subject to Regulation 14A or Regulation 14C
(other than as provided in Item 407 of
Regulation S-K)
or to the liabilities of Section 18 of the Securities
Exchange Act of 1934, and shall not be deemed to be incorporated
by reference in future filings with the Securities and Exchange
Commission except to the extent that the Company specifically
incorporates it by reference into a document filed under the
Securities Act of 1933 or the Securities Exchange Act of
1934.
ii
GLU
MOBILE INC.
2207 Bridgepointe Parkway,
Suite 300
San Mateo, California 94404
PROXY
STATEMENT FOR THE
2010 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION
ABOUT THE MEETING, MEETING MATERIALS, VOTING AND
PROXIES
Date,
Time and Place of Meeting
The Board of Glu Mobile Inc., a Delaware corporation
(Glu, the Company, we,
our and similar terms), is asking for your proxy for
use at the 2010 Annual Meeting of Stockholders (the Annual
Meeting) and at any adjournments or postponements thereof.
We are holding the meeting on Thursday, June 3, 2010, at
10:00 a.m. Pacific Time, at our offices at 2207
Bridgepointe Parkway, San Mateo, California. This proxy
statement and the accompanying proxy card are first being mailed
to stockholders on or about May 4, 2010. The address of our
principal executive offices is 2207 Bridgepointe Parkway,
Suite 300, San Mateo, California 94404.
Internet
Availability of Proxy Materials
As we did last year, we are mailing printed proxy materials to
our stockholders. In addition, you may access the proxy
materials online at www.glu.com/investors.
Record
Date; Outstanding Shares; Quorum
Only holders of record of our common stock at the close of
business on April 8, 2010 (the Record Date)
will be entitled to notice of and to vote at the Annual Meeting.
As of the close of business on the Record Date, there were
30,575,219 shares of our common stock outstanding and
entitled to vote, held of record by 123 stockholders and held
beneficially by approximately 2,067 stockholders.
Pursuant to our Bylaws, a majority of the outstanding shares of
common stock, present in person or by proxy, will constitute a
quorum for the transaction of business. We must have a quorum to
transact business at the Annual Meeting. Each of our
stockholders is entitled to one vote for each share of common
stock held as of the Record Date. For ten days before the Annual
Meeting, a complete list of stockholders entitled to vote at the
Annual Meeting will be available for examination by any
stockholder, for any purpose germane to the meeting, during
ordinary business hours at our principal executive office at
2207 Bridgepointe Parkway, Suite 300, San Mateo,
California 94404.
Voting of
Proxies; Revocation of Proxies; Votes Required
Stockholders are requested to complete, date, sign and return
the accompanying proxy card in the enclosed postage-paid
envelope. All properly executed, returned and unrevoked proxies
will be voted in accordance with the instructions indicated
thereon. Signed but unmarked proxies will be voted FOR each
director nominee listed on the proxy card, FOR the approval of
the amendment to our 2007 Equity Incentive Plan and FOR the
ratification of our independent registered public accounting
firm for the fiscal year ending December 31, 2010. The
Board does not know of, and does not intend to bring, any
business before the Annual Meeting other than that referred to
in this proxy statement and specified in the Notice of Annual
Meeting. As to any other business that may properly come before
the Annual Meeting, including any motion made for adjournment of
the Annual Meeting (including for purposes of soliciting
additional votes), signing and returning the proxy card will
confer discretionary authority on the proxies (Niccolo M. de
Masi and Eric R. Ludwig, who have been designated by the Board)
to vote all shares covered by the proxy card in their
discretion. Any stockholder who has given a proxy may revoke it
at any time before it is exercised at the Annual Meeting by
(1) filing a written notice of revocation with, or
delivering a duly executed proxy bearing a later date to, the
Corporate Secretary of Glu, 2207 Bridgepointe Parkway,
Suite 300, San Mateo, California 94404 or
(2) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not, by itself,
revoke a proxy).
Director elections are determined by a plurality of shares of
common stock represented in person or by proxy and voting at the
Annual Meeting (Proposal No. 1). Approval of both the
proposal to approve an amendment to our
1
2007 Equity Incentive Plan to increase the aggregate number of
shares of common stock authorized for issuance under the plan by
3,000,000 shares (Proposal No. 2) and to
ratify the selection of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2010
(Proposal No. 3) requires the affirmative vote of
a majority of the shares of common stock represented in person
or by proxy at the Annual Meeting and entitled to vote on the
matter.
Effect of
Abstentions
If an executed proxy is returned and the stockholder has
specifically abstained from voting on any matter, the shares
represented by such proxy will be considered present at the
Annual Meeting for purposes of determining a quorum and for
purposes of calculating the vote, but will not be considered to
have been voted in favor of such matter. As such, an abstention
will have the effect of a vote against both approval of the
amendment to our 2007 Equity Incentive Plan
(Proposal No. 2) and ratification of our
independent registered public accounting firm
(Proposal No. 3), but will have no effect on the
election of the three Class III directors to our Board of
Directors (Proposal No. 1).
Effect of
Broker Non-Votes
If an executed proxy is returned by a broker, bank or other
agent holding shares in street name that indicates that the
broker does not have discretionary authority as to certain
shares to vote on a proposal (broker non-votes),
such shares will be considered present at the Annual Meeting for
purposes of determining a quorum on all proposals, but will not
be considered to be entitled to vote on and thus will have no
effect on the outcome of such proposal.
Voting
Electronically via the Internet or by Telephone
General
Information for All Shares Voted via the Internet or by
Telephone
Stockholders whose shares are registered in their own name may
choose to grant a proxy to vote their shares either via the
Internet or by telephone. The laws of Delaware, under which Glu
is incorporated, specifically permits electronically transmitted
proxies, provided that each such proxy contains or is submitted
with information from which the inspector of elections can
determine that such proxy was authorized by the stockholder.
The Internet and telephone voting procedures set forth below, as
well as on the enclosed proxy card, are designed to authenticate
stockholders identities, to allow stockholders to grant a
proxy to vote their shares and to confirm that
stockholders voting instructions have been properly
recorded. Stockholders granting a proxy to vote via the Internet
should understand that there may be costs associated with
electronic access, such as usage charges from Internet access
providers and telephone companies, which must be borne by the
stockholder.
For
Shares Registered in Your Name
Stockholders of record may go to
http://www.voteproxy.com
to grant a proxy to vote their shares via the Internet. They
will be required to provide the control number contained on
their proxy cards. The voter will then be asked to complete an
electronic proxy card. Any stockholder using a touch-tone
telephone may also grant a proxy to vote shares by calling
1-800-776-9437
from within the United States (1-718-921-8500 from outside of
the United States) and following the recorded instructions.
You may use the Internet or your touch-tone telephone to vote
your proxy 24 hours a day, seven days a week, until
11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on
June 2, 2010. Submitting your proxy via the Internet or by
telephone will not affect your right to vote in person should
you decide to attend the Annual Meeting.
For
Shares Registered in the Name of a Broker or
Bank
Most beneficial owners whose shares are held in street name
receive voting instruction forms from their banks, brokers or
other agents, rather than Glus proxy card.
2
If on the record date, your shares were held, not in your name,
but rather in an account at a brokerage firm, bank or other
agent, then you are the beneficial owner of shares held in
street name and these proxy materials have been
forwarded to you by your broker, bank or other agent. The
broker, bank or other agent holding your account is considered
the stockholder of record for purposes of voting at the Annual
Meeting.
As a beneficial owner, you have the right to direct your broker,
bank or other agent on how to vote the shares in your account.
You are also invited to attend the Annual Meeting. However,
since you are not the stockholder of record, you may not vote
your shares in person at the meeting unless you request and
obtain a valid proxy issued in your name from your broker, bank
or other agent.
Solicitation
of Proxies and Expenses
We will bear the cost of the solicitation of proxies from our
stockholders in the enclosed form. Our directors, officers and
employees, without additional compensation, may solicit proxies
by mail, telephone, letter, facsimile, electronically or in
person. Following the original mailing of the proxies and other
soliciting materials, we will request that brokers, custodians,
nominees and other record holders forward copies of the proxy
and other soliciting materials to persons for whom they hold
shares of common stock and request authority for the exercise of
proxies. In such cases, we will reimburse such record holders
for their reasonable expenses incurred for forwarding such
materials.
Voting
Results
The preliminary voting results will be announced at the Annual
Meeting. The final voting results will be tallied by our
Inspector of Elections and published in a Current Report on
Form 8-K
to be filed with the U.S. Securities and Exchange
Commission (the SEC) within four business days of
the Annual Meeting.
Delivery
of Voting Materials to Stockholders Sharing an Address
To reduce the expense of delivering duplicate materials to
stockholders sharing the same address, we have adopted a
procedure approved by the SEC called householding.
Under this procedure, certain stockholders of record who have
the same address and last name will receive only one copy of the
proxy materials sent to stockholders until such time as one or
more of these stockholders notifies us that they wish to
continue receiving individual copies. This procedure will reduce
duplicate mailings and save printing costs and postage fees, as
well as natural resources.
Stockholders who currently receive multiple copies of the proxy
statement at their address and would like to request
householding of their communications should contact
their broker.
How to
Obtain a Separate Set of Voting Materials
If you received a householded mailing this year, and you would
like to have additional copies of the proxy materials mailed to
you, please submit your request to Investor Relations, Glu
Mobile Inc., 2207 Bridgepointe Parkway, Suite 300,
San Mateo, California 94404, or call
(650) 532-2400.
You may also contact us at the address or phone number above if
you received multiple copies of the Annual Meeting materials and
would prefer to receive a single copy in the future. If you
would like to opt out of householding for future mailings, call
(800) 542-1061
or send a written request to Investor Relations at the above
address.
Annual
Report on
Form 10-K
A copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, including the
financial statements, list of exhibits and any exhibit
specifically requested, filed with the SEC is available without
charge upon written request to: Corporate Secretary, Glu Mobile
Inc., 2207 Bridgepointe Parkway, Suite 300, San Mateo,
California 94404.
3
PROPOSAL NO. 1
ELECTION
OF CLASS III DIRECTORS
Our Board currently consists of eight directors. Our Amended and
Restated Certificate of Incorporation and Amended and Restated
Bylaws provide for a classified Board, divided into three
classes. At each annual meeting of stockholders, successors to
the class of directors whose term expires at that annual meeting
will be elected for a term to expire at the third succeeding
annual meeting. The individuals so elected will serve until
their successors are elected and qualified.
This year the terms of our Class III directors, consisting
of Niccolo M. de Masi, William J. Miller and A. Brooke
Seawell, will expire at the Annual Meeting. At the Annual
Meeting, holders of common stock will be asked to vote on the
election of three directors as Class III directors.
The Board has nominated Niccolo M. de Masi, William J. Miller
and A. Brooke Seawell to serve as Class III directors for a
three-year term that is expected to expire at Glus annual
meeting in 2013, or until their earlier resignation or removal
(the Boards Nominees). You can find the
principal occupation and other information about the
Boards Nominees, as well as other Board members, below.
Three of our continuing directors are Class I directors,
whose terms will expire at our 2011 annual meeting, and two of
our continuing directors are Class II directors, whose
terms will expire at our 2012 annual meeting.
The election of our Class III directors will be determined
by the three nominees receiving the greatest number of votes
from shares eligible to vote. Unless a stockholder signing a
proxy withholds authority to vote for one or more of the
Boards Nominees in the manner described on the proxy card,
each proxy received will be voted for the election of each of
the Boards Nominees. In the event that any nominee is
unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for the nominee or
nominees who shall be designated by the present Board to fill
the vacancy. We are not aware that any of the nominees will be
unable or will decline to serve as a director.
There are no family relationships between any of our directors,
nominees or executive officers. There are also no arrangements
or understandings between any director, nominee or executive
officer and any other person pursuant to which he or she has
been or will be selected as a director
and/or
executive officer.
The Board
recommends that stockholders vote FOR the election
of
Niccolo M. de Masi, William J. Miller and A. Brooke Seawell as
Class III Directors.
Information
Regarding Our Nominees and Directors
Nominees
for Class III Directors (whose terms expire at the Annual
Meeting)
Niccolo
M. de Masi (Age 29)
President, Chief Executive Officer and Director, Glu Mobile
Inc.
Mr. de Masi has served as our President and Chief Executive
Officer and as one of our directors since January 2010. Prior to
joining Glu, Mr. de Masi was the Chief Executive Officer and
President of Hands-On Mobile, a mobile technology company and
developer and publisher of mobile entertainment, from October
2009 to December 2009, and previously served as the President of
Hands-On Mobile from March 2008 to October 2009. Prior to
joining Hands-On Mobile, Mr. de Masi was the Chief Executive
Officer of Monstermob Group PLC, a mobile entertainment company,
from June 2006 to February 2007. Mr. de Masi joined Monstermob
in 2004 and, prior to becoming its Chief Executive Officer, held
positions as its Managing Director and as its Chief Operating
Officer where he was responsible for formulating and
implementing Monstermobs growth and product strategy.
Prior to joining Monstermob, Mr. de Masi worked in a variety of
corporate finance and operational roles within the technology,
media and telecommunications (TMT) sector, beginning his career
with JP Morgan on both the TMT debt capital markets and mergers
and acquisitions teams in London. He has also worked as a
physicist with Siemens Solar and within the Strategic Planning
and Development divisions of Technicolor. Mr. de Masi holds an
M.A. degree in Physics and an MSci. degree in Electronic
Engineering each from Cambridge University.
4
Mr. de Masis experience as our President and Chief
Executive Officer, which gives him unique insights into our
challenges, opportunities and operations, and his strong
background of senior management and executive experience in the
mobile gaming and content sectors led the Board of Directors to
conclude that he should serve as a director.
William
J. Miller (Age 64)
Independent Director of and Advisor to Technology
Companies
Mr. Miller has served on our Board since January 2007,
served as co-Chairman of our Board from July 2009 to January
2010 and has served as sole Chairman of our Board since January
2010. Mr. Miller also served as our interim President and
Chief Executive Officer from December 2009 until Mr. de Masi
assumed this position in January 2010. Mr. Miller has acted
as an independent director and adviser to a number of technology
companies since November 1999. From April 1996 until November
1999, Mr. Miller served as Chairman of the Board and Chief
Executive Officer of Avid Corporation, a provider of digital
tools for multimedia companies, where he also served as
President from September 1996 to January 1999. Prior to then, he
served as Chief Executive Officer and Chairman of the Board of
Quantum Corporation, a data storage manufacturer. He previously
held various positions in the data storage, information services
and financial services businesses of Control Data Corporation, a
computer and data services company. Mr. Miller serves as a
director of NVIDIA Corporation, Waters Corporation and Digimarc
Corporation, and during the past five years has also served as a
director of Overland Storage, Inc. and ViewSonic Corporation.
Mr. Miller holds a B.A. in speech communications and a J.D.
from the University of Minnesota.
Mr. Millers experience as the Chief Executive Officer
of two publicly traded high technology companies and as a
business consultant to technology companies, his experience as a
director of high technology companies, and the insights into our
business that he gained as our interim President and Chief
Executive Officer and as both our co-Chairman and sole Chairman,
led the Board of Directors to conclude that he should serve as a
director.
A. Brooke
Seawell (Age 62)
Venture Partner, New Enterprise Associates
Mr. Seawell has served on our Board since June 2006. Since
January 2005, Mr. Seawell has served as a Venture Partner
at New Enterprise Associates, focusing on software and
semiconductor investments. From February 2000 to December 2004,
he served as a Partner at Technology Crossover Ventures. Prior
to joining TCV, Mr. Seawell worked in senior executive
positions with NetDynamics, Inc., an application server software
company, and Synopsys Inc., an electronic design automation
software company. Mr. Seawell also serves on the boards of
directors of NVIDIA Corporation, Informatica Corporation,
SiliconBlue Technologies Corporation, SiTime Corporation and
Telegent Systems. In addition, Mr. Seawell is an observer
on the board of directors of Tabula Inc. Mr. Seawell also
serves on the Management Board of the Stanford Graduate School
of Business. Mr. Seawell holds a B.A. in economics from
Stanford University and an M.B.A. from the Stanford Graduate
School of Business.
Mr. Seawells more than 30 years of experience in
technology finance and operations, including having served as
Chief Financial Officer of two public companies, his experience
in the venture capital industry and his experience as a director
of high technology companies led the Board of Directors to
conclude that he should serve as a director. In addition, our
Board of Directors determination, in light of his
experience as a principal financial officer and director
overseeing or assessing the performance of companies and public
accountants as described above, that Mr. Seawell is an
audit committee financial expert lends further
support to his financial acumen and qualifications for serving
on our Board of Directors.
Continuing
Class I Directors (whose terms expire at the 2011 annual
meeting)
Richard
A. Moran (Age 59)
Executive in Residence, Venrock
Mr. Moran has served on our Board since May 2002. He has
served as an executive in residence at Venrock since January
2009 and served as a Partner of Venrock Associates from January
2007 to January 2009. He served as Chairman of the Board of
Portal Software, Inc. from February 2003 until Portal was sold
to Oracle Corporation in
5
July 2006. Also, since January 2002, he has served as Chief
Executive Officer of Moran Manor and Vineyards LLC. From April
1996 to May 2002, Mr. Moran served as a Partner at
Accenture Inc. (formerly Anderson Consulting LLP), focusing on
media and entertainment. He also serves on the boards of
directors of CrossLoop, Inc., Mechanics Bank, PerfectForms,
TurnHere Inc. and the National Association of Corporate
Directors, Northern California Chapter. Mr. Moran is the
author of several books on business and management.
Mr. Moran holds a B.A. in English from Rutgers College, an
M.A. in personnel administration from Indiana University and a
Ph.D. in organizational behavior/higher education from Miami
University (Ohio).
Mr. Morans expertise in business management and
organizational effectiveness, the insights he gained in the
technology, entertainment and media sectors as a Partner at
Accenture, his experience in the venture capital industry, his
experience as a director of high technology and the insights he
has gained into our business during his eight years on our Board
led the Board of Directors to conclude that he should serve as a
director.
Hany M.
Nada (Age 41)
Managing Director, GGV Capital
Mr. Nada has served on our Board since April 2005.
Mr. Nada co-founded GGV Capital (formerly Granite Global
Ventures) in 2000 and has served as a Managing Director since
its inception. He has also served as Managing Director and
Senior Research Analyst at Piper Jaffray & Co.,
specializing in Internet software and
e-infrastructure.
Mr. Nada also serves on the boards of directors of Blue
Casa Communications, OneWave Technologies, Inc., Turbine, Inc.,
Vocera Communications, Inc. and WildTangent, Inc. Mr. Nada
holds a B.S. in economics and a B.A. in political science from
the University of Minnesota.
Mr. Nadas experience in the venture capital industry,
which includes a focus on software, wireless applications, and
multimedia, his knowledge of the China market, the expertise and
insights into high technology companies that he gained during
his tenure as Managing Director and Senior Research Analyst at
Piper Jaffray & Co. and his experience as a director
of high technology companies led the Board of Directors to
conclude that he should serve as a director.
Ellen F.
Siminoff (Age 42)
Chief Executive Officer, Shmoop University, Inc.
Ms. Siminoff has served on our Board since June 2008. Since
March 2008, Ms. Siminoff has served as Chief Executive
Officer of Shmoop University, Inc., an education-based web
publishing company. From March 2004 to March 2008,
Ms. Siminoff served as the Chief Executive Officer of
Efficient Frontier, a provider of paid search engine marketing
solutions. From 1996 to 2002, Ms. Siminoff served in
various capacities at Yahoo!, including as Senior Vice President
of Entertainment and Small Business and Senior Vice President of
Corporate Development. Ms. Siminoff also serves on the
Board of Journal Communications, Inc. and U.S. Auto Parts
Network, Inc., as well as several privately held companies.
Ms. Siminoff holds an A.B. degree in economics from
Princeton University and an M.B.A. from Stanford University.
Ms. Siminoffs experience as the Chief Executive
Officer of two high technology companies, her broad range of
experience at a leading consumer Internet company and her
experience as a director of high technology companies led the
Board of Directors to conclude that she should serve as a
director.
Continuing
Class II Directors (whose terms expire at the 2012 Annual
Meeting)
Ann
Mather (Age 49)
Independent Director of and Advisor to Technology and Media
Companies
Ms. Mather has served on our Board since September 2005.
Since May 2004, Ms. Mather has served as an advisor to
technology and media companies. From September 1999 to May 2004,
Ms. Mather was Executive Vice President and Chief Financial
Officer for Pixar Animation Studios Inc. From 1992 to July 1999,
she held various executive positions at The Walt Disney Company,
including Senior Vice President of Finance and Administration
for its Buena Vista International Theatrical Division. Prior to
then, she served in various roles with Alico, a division of AIG,
Inc., Polo Ralph Lauren Europes retail operations,
Paramount Pictures Corporation and KPMG in London.
6
Ms. Mather also serves on the boards of directors of Google
Inc., where she is a member of its audit committee, and Ariat
International, Inc. During the last five years, she also served
as a director of Shopping.com from May 2004 until it was
acquired by eBay in August 2005, where she was chair of its
audit committee and a member of its corporate governance and
nominating committee, and Central European Media Enterprises
Ltd., where she served on its audit and related party
committees. Ms. Mather holds an M.A. from Cambridge
University in England.
Ms. Mathers experience as the Chief Financial Officer
of two companies, including a publicly traded company, her
international experience gained through several executive
positions in Europe and her experience as a director of high
technology companies led the Board of Directors to conclude that
she should serve as a director. In addition, our Board of
Directors determination, in light of her experience as a
principal financial officer and director overseeing or assessing
the performance of companies and public accountants as described
above, that Ms. Mather is an audit committee
financial expert lends further support to her financial
acumen and qualifications for serving on our Board of Directors.
Daniel L.
Skaff (Age 50)
Managing Partner, Sienna Ventures
Mr. Skaff has served on our Board since December 2001,
served as our lead independent director from June 2005 until
July 2009 and served as co-Chairman of our Board from July 2009
to January 2010. Mr. Skaff is the founder of Sienna
Ventures, a private equity firm, and has served as its Managing
Partner since its inception in June 2000. He also co-founded Pon
North America Inc., a distribution company, and served as its
Chairman from May 1998 to May 2001. Mr. Skaff also is a
founding investor and lead director of Protocol Communications
Inc., a call center and integrated marketing services business,
where he served as a director from June 1998 to December 1999.
Mr. Skaff also serves on the boards of directors of EBT
Mobile China, Plc, One California Bank FSB and Vivaro, Inc. He
is currently on the investment committee of the Marin Community
Foundation, a large charitable organization, and the Harvard
College Fund Council, and was a founding advisory board
member of Northstar Capital LLC, a subordinated debt fund based
in Minneapolis. Mr. Skaff holds an A.B. in economics with
honors from Harvard University and an M.B.A. from the Wharton
School, University of Pennsylvania, where he was a Wharton
Fellow.
Mr. Skaffs experience in the venture capital
industry, where he focuses on consumer, retail, wireless and
financial services businesses, his experience as a director of
high technology and the insights he has gained into our business
during his more than eight years on our Board, including more
than four years as our lead independent director and six months
as our co-Chairman, led the Board of Directors to conclude that
he should serve as a director.
CORPORATE
GOVERNANCE
Our Board of Directors has adopted Corporate Governance
Principles that are designed to assist the Board in observing
practices and procedures that serve the best interests of Glu
and our stockholders. The Nominating and Governance Committee is
responsible for overseeing these Corporate Governance Principles
and periodically making recommendations to the Board regarding
any changes. These Corporate Governance Principles address,
among other things, our policy on succession planning and senior
leadership development, retirement, Board performance
evaluations, committee structure and stock ownership
requirements.
We maintain a corporate governance page on our company website
that includes key information about corporate governance
matters, including copies of our Corporate Governance
Principles, our Code of Conduct and Business Ethics for all
employees, including the Companys senior executive and
financial officers, and the charter for each Board committee.
The link to this corporate governance page can be found at
www.glu.com/investors.
Board
Responsibilities and Leadership Structure
Our Board of Directors oversees managements performance on
behalf of Glus stockholders. The Boards primary
responsibilities are (1) to select, oversee and determine
compensation for our President and Chief Executive Officer who,
with senior management, runs Glu on a
day-to-day
basis, (2) to monitor managements
7
performance to assess whether Glu is operating in an effective,
efficient and ethical manner to create value for Glus
stockholders and (3) to periodically review Glus
long-range plans, business initiatives, capital projects and
budget matters.
The Board and its committees meet throughout the year on a set
schedule, and also hold special meetings and act by written
consent from time to time as appropriate. The Board held nine
meetings during fiscal 2009. The independent directors meet
without management present at regularly scheduled executive
sessions at each quarterly Board meeting and some special Board
meetings. During 2009, the independent directors held executive
sessions at five Board meetings. The Board has delegated certain
responsibilities and authority to the committees described
below. Committees report regularly to the full Board on their
activities and actions.
The Board has designated Mr. Miller as its Chairman. We
believe it is beneficial to separate the roles of Chief
Executive Officer and Chairman to facilitate their differing
roles in the leadership of our company. The role of the Chairman
includes setting the agenda for, and presiding over, all
meetings of the Board, including executive sessions of
non-management or independent directors, providing input
regarding information sent to the Board, serving as liaison
between the Chief Executive Officer and the independent
directors and providing advice and assistance to the Chief
Executive Officer. Mr. Miller also is a key participant in
establishing performance objectives and overseeing the process
for the annual evaluation of our Chief Executive Officers
performance. In addition, under our Amended and Restated Bylaws,
our Chairman has the authority to call special meetings of our
Board and stockholders. In contrast, the Chief Executive Officer
is responsible for handling the
day-to-day
management direction of our company, serving as a leader to the
management team and formulating corporate strategy.
Mr. Miller, as an independent director and our Chairman,
brings experience, oversight and expertise from outside our
company and industry, while Mr. de Masi, as a director and our
Chief Executive Officer, brings company and industry-specific
experience and expertise. We believe that this structure allows
for a balanced corporate vision and strategy, which are
necessary to address the challenges and opportunities facing us.
Role of
the Board in Risk Oversight
One of our Boards key functions is providing oversight of
our risk management process. The Board does not have a standing
risk management committee, but rather administers this oversight
function directly through the Board as a whole, as well as
through Board standing committees that address risks inherent in
their respective areas of oversight. In particular, our Audit
Committee has the responsibility to consider and discuss our
major financial risk exposures and the steps our management has
taken to monitor and control these exposures, our Compensation
Committee assesses and monitors whether any of our compensation
policies and programs has the potential to encourage excessive
risk-taking, our Nominating and Governance Committee monitors
our major legal compliance risk exposures and our program for
promoting and monitoring compliance with applicable legal and
regulatory requirements and our Board is responsible for
monitoring and assessing strategic risk exposure and other risks
not covered by our committees.
The full Board (or the appropriate committee in the case of
risks that are under the purview of a particular committee)
receives reports on risk facing Glu from our Chief Executive
Officer or other members of management to enable it to
understand our risk identification, risk management and risk
mitigation strategies. When a committee receives the report, the
chairman of the relevant committee reports on the discussion to
the full Board during the committee reports portion of the next
Board meeting. However, it is the responsibility of the
committee chairs to report findings regarding material risk
exposures to the Board as quickly as possible.
Director
Independence
Our Board currently includes seven independent directors, two of
whom are standing for election. To be considered independent
under NASDAQ rules, a director may not be employed by the
Company or engage in certain types of business dealings with
Glu. In addition, as required by NASDAQ rules, the Board has
made a determination as to each independent director that no
relationship exists which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. In making these
determinations, the Board reviewed and discussed information
provided by the directors and by the Company with regard to each
directors business and personal activities as they relate
to Glu and Glus management. In assessing
8
director independence under NASDAQ rules, the Nominating and
Governance Committee and the full Board reviewed relevant
transactions, relationships and arrangements that may affect the
independence of our Board members, including that
(1) Mr. Miller served as our interim President and
Chief Executive Officer from December 1, 2009 until
January 4, 2010, (2) Ms. Mather was during 2009,
and currently is, a director of Google Inc., a company with
which we conduct business in the ordinary course, and
(3) Mr. Seawells step-daughter is an employee of
PricewaterhouseCoopers LLP, our independent registered public
accounting firm, although she has not worked on our audit.
Following review of these transactions and other relevant
standards, the Board has determined that each of
Ms. Mather, Mr. Miller, Mr. Moran, Mr. Nada,
Mr. Seawell, Ms. Siminoff and Mr. Skaff is an
independent director.
Attendance
at Board, Committee and Annual Stockholders Meetings
The Board expects that each director will prepare for, attend
and participate in all Board and applicable committee meetings
and that each Board member will see that other commitments do
not materially interfere with his or her service on the Board.
Our Corporate Governance Principles provide that non-employee
directors may not serve on the boards of more than five public
companies, and our Chief Executive Officer may not serve on the
boards of more than three public companies, in each case
including Glu.
No director attended fewer than 75% of the aggregate number of
meetings of the Board and the committees on which he or she
served. Two directors attended the 2009 Annual Meeting of
Stockholders. Under our Corporate Governance Principles, all
directors are encouraged to attend the annual meetings of
Glus stockholders.
Board
Committees and Charters
The Board currently has a standing Audit Committee, Compensation
Committee and Nominating and Governance Committee. The members
of each committee are appointed by the Board based on
recommendations of the Nominating and Governance Committee. Each
member of these committees is an independent director as
determined by the Board in accordance with NASDAQ listing
standards. Each committee has a charter and annually reviews its
charter and makes recommendations to our Board for revision to
reflect changes in laws and regulations and evolving best
practices. Copies of each charter can be found on our website at
http://www.glu.com/investors.
Current committee members are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominating and
|
|
|
|
|
Compensation
|
|
Governance
|
Director
|
|
Audit Committee
|
|
Committee
|
|
Committee
|
|
Ann Mather
|
|
Chair
|
|
|
|
|
William J. Miller
|
|
|
|
|
|
Chair
|
Richard A. Moran
|
|
|
|
Member
|
|
|
Hany M. Nada
|
|
Member
|
|
|
|
|
Daniel L. Skaff
|
|
|
|
Chair
|
|
Member
|
A. Brooke Seawell
|
|
Member
|
|
|
|
|
Ellen F. Siminoff
|
|
|
|
Member
|
|
Member
|
Audit
Committee
The Audit Committee currently consists of three of our outside
directors, Ms. Mather, who is the committee chair, and
Messrs. Nada and Seawell. Mr. Seawell was appointed to
the Audit Committee in April 2010 in connection with the
rotation of Mr. Skaff from the Audit Committee to the
Nominating and Governance Committee. The composition of our
Audit Committee meets the requirements for independence under
the current NASDAQ Stock Market and SEC rules and regulations.
Each member of our Audit Committee is financially literate. Our
Board has determined that Ms. Mather and Mr. Seawell
are audit committee financial experts as defined in
Item 407(d) of
Regulation S-K,
and that Mr. Skaff qualified as an audit committee
financial expert during his service on the committee. The
Audit Committee met seven times during 2009, including holding
an executive session with our independent registered public
accounting firm at each meeting. The responsibilities and
activities of the Audit
9
Committee are described in greater detail in the section titled
Audit Committee Report in this proxy statement and
the committees charter, which was most recently revised in
January 2010, posted on our website.
Compensation
Committee
The Compensation Committee currently consists of three of our
outside directors, Mr. Skaff, who is the committee chair,
Mr. Moran and Ms. Siminoff. Mr. Skaff joined the
Compensation Committee in December 2009 replacing
Mr. Miller who left the Committee on December 1, 2009
in connection with his appointment as our interim President and
Chief Executive Officer. The composition of the Compensation
Committee meets the requirements for independence under the
current NASDAQ Stock Market and SEC and the rules and
regulations of the Internal Revenue Code (the Code).
The Compensation Committee, which met seven times and acted by
written consent seven times during 2009, discharges the
responsibilities of our Board relating to compensation of our
executive officers and oversees our company-wide cash and equity
compensation programs. The responsibilities and activities of
the Compensation Committee are described in greater detail in
the section titled Compensation Discussion and
Analysis in this proxy statement and the committees
charter, which was most recently revised in January 2010, posted
on our website.
Nominating
and Governance Committee
The Nominating and Governance Committee currently consists of
three of our outside directors, Mr. Miller, who is the
committee chair, Ms. Siminoff and Mr. Skaff.
Mr. Miller and Mr. Skaff were each appointed to the
Nominating and Governance Committee in April 2010 in connection
with the rotation of Mr. Seawell from the Nominating and
Governance Committee to the Audit Committee. The composition of
our Nominating and Governance Committee meets the requirements
for independence under the current NASDAQ Stock Market and SEC
rules and regulations. Our Nominating and Governance Committee,
which met two times during 2009, makes recommendations to the
Board regarding Board and committee composition and appropriate
corporate governance standards, reviews related party
transactions and administers our Code of Business Conduct and
Ethics and Corporate Governance Principles, among other things.
The responsibilities and activities of the Audit Committee are
described in greater detail in the committees charter,
which was most recently revised in April 2010, posted on our
website.
Compensation
Committee Interlocks and Insider Participation
During 2009, Messrs. Miller, Moran and Skaff and
Ms. Siminoff each served on the Compensation Committee.
None of these individuals is or has been an officer or employee
of Glu or any of its subsidiaries, except that Mr. Miller
served as our interim President and Chief Executive Officer from
December 1, 2009 until January 4, 2010 while our
search for a permanent successor continued, having resigned from
the Compensation Committee effective as of December 1,
2009. There are no other relationships between committee members
and Glu or any other company that are required to be disclosed
under this caption by SEC regulations.
DIRECTOR
COMPENSATION
Overview
The Compensation Committee and the Nominating and Governance
Committee evaluate the appropriate level and form of
compensation for non-employee directors and recommend changes to
the Board when appropriate. The Board adopted the following
policy with respect to the 2009 compensation of non-employee
directors:
|
|
|
|
|
Non-employee directors receive an annual cash retainer of
$20,000;
|
|
|
|
The chair of the Audit Committee receives additional annual cash
compensation of $15,000;
|
|
|
|
The chair of the Compensation Committee receives additional
annual cash compensation of $15,000;
|
|
|
|
The chair of the Nominating and Governance Committee receives
additional annual cash compensation of $5,000; and
|
10
|
|
|
|
|
Each non-employee director receives additional annual
compensation of $5,000 for service on each of the Audit
Committee, Compensation Committee or Nominating and Governance
Committee, other than as chair.
|
In addition, until July 6, 2009, Daniel L. Skaff served as
our lead independent director, and in such capacity received
additional annual cash compensation of $15,000. On July 6,
2009, our Board elected Mr. Skaff and William J. Miller as
co-Chairmen of our Board of Directors, with each of
Mr. Skaff and Mr. Miller receiving additional annual
cash compensation of $30,000 in such role; Mr. Skaff
received this additional annual cash compensation in lieu of the
compensation he previously received as our lead independent
director.
On January 4, 2010, our Board elected Mr. Miller as
the sole Chairman of our Board of Directors. As our sole
Chairman, Mr. Miller will receive additional annual cash
compensation of $15,000 rather than the $30,000 of additional
annual cash compensation he previously received as a co-Chairman
of our Board of Directors.
All cash compensation to directors is paid in arrears in
quarterly installments upon continuing service. We also
reimburse our directors for reasonable expenses in connection
with attendance at Board and committee meetings.
Our non-employee director compensation program provides that
each non-employee director will receive an annual grant, at that
directors discretion, of either (1) a grant of a
number of shares of Glu restricted stock with a then fair market
value equal to $50,000, or 6,700 shares, whichever is less
or (2) an option to purchase three times as many shares of
our common stock, calculated based on such lesser amount. This
annual grant, which is awarded effective as of close of market
on the day of our annual meeting of stockholders, vests in equal
monthly installments over one year. In addition, each new
non-employee director is eligible to receive an initial equity
award of, at that directors discretion, either (1) a
grant of a number of shares of Glu restricted stock with a then
fair market value equal to $150,000, or 20,000 shares,
whichever is less or (2) an option to purchase three times
as many shares of our common stock, calculated based on such
lesser amount. This initial grant vests with respect to
162/3%
of the underlying shares after six months and thereafter vests
in equal monthly installments over the next 30 months.
Each of our incumbent non-employee directors elected to receive
a stock option grant as his or her annual award for 2009, which
was granted on May 29, 2009 following our 2009 Annual
Meeting of Stockholders. Each director received an option to
purchase 20,100 shares of our common stock with an exercise
price of $0.76 per share, which option vests pro rata monthly
over one year. In addition, for their service as co-Chairmen of
our Board, each of Mr. Skaff and Mr. Miller were
granted an option on August 7, 2009 to purchase
30,000 shares of our common stock with an exercise price of
$1.07 per share. These options were to vest and become
exercisable on a monthly basis as to 9.09% of the underlying
shares, beginning as of July 1, 2009, such that the option
would fully vest in 11 months so long as Mr. Skaff or
Mr. Miller, as applicable, served as a co-Chairman of our
Board. Finally, we also awarded Mr. Miller an option to
purchase 75,000 shares of our common stock with an exercise
price of $1.05 per share on December 1, 2009 in connection
with his appointment as our interim President and Chief
Executive Officer. This option was to vest and become
exercisable in equal 25,000 share monthly installments over
three months, subject to Mr. Millers continued
service as Glus interim President and Chief Executive
Officer. Each of these 2009 grants are reported in the
Director Summary Compensation Table below.
We do not provide additional compensation to Mr. de Masi for his
service on our Board because he is an officer of the Company.
11
Director
Summary Compensation Table
The following table sets forth certain information with respect
to compensation awarded to, earned by or paid to each person who
served as a non-employee director during 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
Option Awards
|
|
|
Name
|
|
in Cash ($)
|
|
(1)(2)(3)($)
|
|
Total ($)
|
|
Ann Mather
|
|
|
35,000
|
|
|
|
6,225
|
|
|
|
41,225
|
|
William J. Miller
|
|
|
42,500(4
|
)
|
|
|
53,481
|
|
|
|
95,981
|
|
Richard A. Moran
|
|
|
25,000
|
|
|
|
6,225
|
|
|
|
31,225
|
|
Hany M. Nada
|
|
|
25,000
|
|
|
|
6,225
|
|
|
|
31,225
|
|
A. Brooke Seawell
|
|
|
25,000
|
|
|
|
6,225
|
|
|
|
31,225
|
|
Ellen F. Siminoff
|
|
|
30,000
|
|
|
|
6,225
|
|
|
|
36,225
|
|
Daniel L. Skaff
|
|
|
43,750
|
|
|
|
19,551
|
|
|
|
63,301
|
|
|
|
|
(1) |
|
Amounts shown in this column do not reflect dollar amounts
actually received by the non-employee director. Instead, these
amounts reflect the aggregate full grant date fair value
calculated in accordance with FASB ASC Topic 718 (formerly
SFAS 123R) for awards granted during 2009. See
Note 11 Stock Option and Other Benefit
Plans in the notes to consolidated financial
statements contained in our annual report on
Form 10-K
for the year ended December 31, 2009 for a description of
the ASC Topic 718 methodology and assumptions. |
|
(2) |
|
Each of the listed directors received an option on May 29,
2009 to purchase 20,100 shares of our common stock with an
exercise price of $0.76 per share. In addition, for their
service as co-Chairmen of our Board, each of Mr. Skaff and
Mr. Miller were granted an option on August 7, 2009 to
purchase 30,000 shares of our common stock with an exercise
price of $1.07 per share, of which 13,636 shares each
actually vested (the remainder of which were forfeited). We also
awarded Mr. Miller an option to purchase 75,000 shares
of our common stock with an exercise price of $1.05 per share on
December 1, 2009 in connection with his appointment as our
interim President and Chief Executive Officer, of which
25,000 shares actually vested (the remainder of which were
forfeited). |
|
(3) |
|
The aggregate number of outstanding stock options held by each
of our non-employee directors as of December 31, 2009 was:
Ms. Mather: 126,285; Mr. Miller: 189,618;
Mr. Moran: 77,285; Mr. Nada: 84,618; Mr. Seawell:
67,952; Ms. Siminoff: 113,655; and Mr. Skaff: 114,618.
Of the shares held by Mr. Miller as of December 31,
2009, 66,364 shares were forfeited as of January 4,
2010. This was due to the fact that (a) 16,364 of the
30,000 shares subject to the option awarded to
Mr. Miller on August 7, 2009 relating to his service
as a co-Chairman of our Board were forfeited when he ceased
serving as a co-Chairman on January 4, 2010 and
(b) 50,000 of the 75,000 shares subject to the option
awarded to Mr. Miller on December 1, 2009 in
connection with his appointment as our interim President and
Chief Executive Officer were forfeited when he ceased serving in
such capacity on January 4, 2010. In addition, 16,364 of
the shares held by Mr. Skaff as of December 31, 2009
were forfeited as of January 4, 2010 when he ceased serving
as a co-Chairman of our Board. |
|
(4) |
|
Mr. Miller also received $31,250 of cash compensation for
his service as our interim President and Chief Executive Officer
which is not included in this amount. |
STOCKHOLDER
MATTERS
Stockholder
Communications with Directors
Stockholders may communicate with the Board by sending an email
to bod@glu.com, or by sending written correspondence to: Board,
c/o Corporate
Secretary, Glu Mobile Inc., 2207 Bridgepointe Parkway,
Suite 300, San Mateo, California 94404. Communications
are distributed to the Board, or to any individual directors as
appropriate, depending on the facts and circumstances outlined
in the communication. The Board has instructed the Corporate
Secretary to review all correspondence and to determine, in his
discretion, whether matters submitted are appropriate for Board
consideration. In particular, the Board has directed that
communications such as product or commercial inquiries or
complaints, resume and other job inquiries, surveys and general
business solicitations or advertisements should not be forwarded
to the Board. In addition, material that is unduly hostile,
threatening,
12
illegal, patently offensive or similarly inappropriate or
unsuitable will be excluded, with the provision that any
communication that is filtered out must be made available to any
non-management director upon request. The Corporate Secretary
may forward certain communications elsewhere in the company for
review and possible response.
Stockholder
Recommendations of Director Candidates
The Nominating and Governance Committee will consider nominees
recommended by stockholders for election as directors. If a
stockholder would like to recommend a director candidate for our
2011 Annual Meeting of Stockholders, the stockholder must
deliver the recommendation in writing to the Corporate
Secretary, Glu Mobile Inc., 2207 Bridgepointe Parkway,
Suite 300, San Mateo, California 94404. Evaluations of
candidates generally involve a review of background materials,
internal discussions and interviews with selected identified
candidates as appropriate. In conducting its review and
evaluation, the Nominating and Governance Committee may solicit
the views of management, other members of the Board and other
individuals it believes may have insight into a candidates
qualifications and the needs of the Board and its committees.
Candidates for the Board are generally selected based on desired
skills and experience in the context of the existing composition
of the Board and needs of the Board and its committees at that
time, including the requirements of applicable SEC and NASDAQ
rules. The Nominating and Governance Committee will consider
these needs and further evaluate each candidates
qualifications based on their independence, integrity,
collegiality, diversity, skills, financial, technical,
operational and other expertise and experience, breadth of
experience, practical wisdom, judgment, knowledge about our
business or industry, personal and professional ethics,
availability and commitment to representing and enhancing the
long-term interests of our stockholders. From time to time, the
Nominating and Governance Committee may also identify and
consider other factors that reflect our environment as it
evolves or that it believes will otherwise contribute to the
Boards overall effectiveness and our success. Although the
Nominating and Governance Committee does not have a specific
policy on diversity, the committee considers the criteria noted
above in selecting nominees for directors, including members
from diverse backgrounds who combine a broad spectrum of
experience and expertise. The Nominating and Governance
Committee does not assign specific weights to particular
criteria, and no particular criterion is necessarily applicable
to all candidates, and will choose candidates to recommend for
nomination based on the specific needs of the Board and Glu at
that time. Although the Nominating and Governance Committee uses
these and other criteria as appropriate to evaluate candidates,
the Nominating and Governance Committee has no stated minimum
criteria for candidates. Final approval of nominees to be
presented for election is determined by the full Board.
Stockholder
Proposals for the 2011 Annual Meeting of Stockholders
Any stockholder who intends to present a proposal for inclusion
in Glus 2011 proxy statement and form of proxy must submit
the proposal, in writing, so that the Corporate Secretary
receives it at our principal executive offices by
December 31, 2010. Any stockholder who wishes to bring a
proposal or nominate a person for election to the Board at the
2011 Annual Meeting of Stockholders must provide written notice
of the proposal or nomination to Glus Corporate Secretary,
at our principal executive offices, between February 18,
2011 and March 20, 2011. In addition, our stockholders must
comply with the procedural requirements in our bylaws, which
stockholders can obtain from us upon request. Our bylaws are
also on file with the SEC.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
ownership of our common stock as of March 31, 2009 by:
|
|
|
|
|
Each Named Executive Officer (defined in Compensation
Discussion and Analysis below);
|
|
|
|
Each of our directors;
|
|
|
|
All current executive officers and directors as a group; and
|
|
|
|
All persons known to us to beneficially own 5% or more of our
common stock.
|
13
We calculated the Percent of Class based on
30,575,219 shares of common stock outstanding on
March 31, 2010. In accordance with SEC regulations, we also
include shares subject to options that are currently exercisable
or will become exercisable within 60 days of March 31,
2010. Those shares are deemed to be outstanding and beneficially
owned by the person holding such option for the purpose of
computing the percentage ownership of that person, but they are
not treated as outstanding for the purpose of computing the
percentage ownership of any other person. Unless otherwise
indicated, the address of each of the persons in this table is
as:
c/o Glu
Mobile Inc., 2207 Bridgepointe Parkway, Suite 300,
San Mateo, California 94404.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
Nature of
|
|
|
|
|
Beneficial
|
|
Percent of
|
Name of Beneficial Owner
|
|
Ownership
|
|
Class
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
New Enterprise Associates 10, L.P.(1)
|
|
|
4,794,443
|
|
|
|
15.7
|
%
|
Stephens Investment Management, LLC and affiliated persons(2)
|
|
|
2,831,956
|
|
|
|
9.3
|
|
SRB Management, L.P. and affiliated persons(3)
|
|
|
2,421,425
|
|
|
|
7.9
|
|
BAVP, L.P.(4)
|
|
|
2,400,819
|
|
|
|
7.9
|
|
Granite Global Ventures(5)
|
|
|
2,089,177
|
|
|
|
6.8
|
|
|
|
|
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
L. Gregory Ballard(6)
|
|
|
657,740
|
|
|
|
2.1
|
|
Alessandro Galvagni(7)
|
|
|
260,517
|
|
|
|
|
*
|
Eric R. Ludwig(8)
|
|
|
304,156
|
|
|
|
|
*
|
Kevin S. Chou(9)
|
|
|
129,648
|
|
|
|
|
*
|
Thomas M. Perrault(10)
|
|
|
84,940
|
|
|
|
|
*
|
Niccolo M. de Masi
|
|
|
|
|
|
|
|
*
|
Ann Mather(11)
|
|
|
129,551
|
|
|
|
|
*
|
William J. Miller(12)
|
|
|
135,981
|
|
|
|
|
*
|
Richard A. Moran(13)
|
|
|
139,951
|
|
|
|
|
*
|
Hany M. Nada(14)
|
|
|
2,173,795
|
|
|
|
7.1
|
|
A. Brooke Seawell(15)
|
|
|
77,952
|
|
|
|
|
*
|
Ellen F. Siminoff(16)
|
|
|
113,655
|
|
|
|
|
*
|
Daniel L. Skaff(17)
|
|
|
891,843
|
|
|
|
|
*
|
All current directors and executive officers as a group
(10 persons)(18)
|
|
|
4,093,599
|
|
|
|
12.9
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1% of the
outstanding shares of our common stock. |
|
(1) |
|
The information provided with respect to this stockholder is
based upon a Schedule 13G/A filed by such stockholder with
the SEC on February 5, 2010. All shares are held by New
Enterprise Associates 10, L.P. (NEA 10). NEA
Partners 10, L.P, which is the sole general partner of NEA 10,
has seven individual general partners, which collectively
determine the voting and disposition of the shares. The address
for New Enterprise Associates 10, L.P. is 1954 Greenspring
Drive, Suite 600, Timonium, Maryland 21093. See footnote
(15) regarding the relationship between this stockholder
and Mr. Seawell. |
|
(2) |
|
The information provided is based solely upon a
Schedule 13G/A filed by the stockholders with the SEC on
February 5, 2010. The shares are held directly by certain
investment limited partnerships, including Orphan Fund, L.P.
(the Partnerships), for which Stephens Investment
Management, LLC (SIM) is the general partner and
investment manager. Paul H. Stephens, P. Bartlett Stephens and
W. Bradford Stephens are each managing members and owners of SIM
and each also holds limited partnership interests in certain of
the Partnerships. Each of SIM, Paul H. Stephens, P. Bartlett
Stephens, W. Bradford Stephens and the Partnerships expressly
disclaims beneficial ownership in these securities, except to
the extent of their respective pecuniary interests therein. SIM
and the other reporting persons may be deemed to beneficially
own the securities owned |
14
|
|
|
|
|
by the Partnerships insofar as they may be deemed to have the
power to direct the voting or disposition of such securities.
The address for these persons is One Ferry Building,
Suite 255, San Francisco, California 94111. |
|
(3) |
|
The information provided is based solely upon a
Schedule 13D filed by the stockholders with the SEC on
February 12, 2010. The shares are directly held by Greenway
Opportunity Fund (QP), L.P. and SRB Greenway Opportunity Fund,
L.P., for which SRB Management, L.P. is the general partner and
investment manager. BC Advisors, LLC is the general partner of
SRB Management, L.P., and Steven R. Becker and Matthew A.
Drapkin are the sole members of BC Advisors, LLC and limited
partners of SRB Management, L.P. Each of these persons expressly
disclaims beneficial ownership in these securities, except to
the extent of their respective pecuniary interests therein. The
address for these persons is 300 Crescent Court,
Suite 1111, Dallas, Texas 75201. |
|
(4) |
|
The information provided with respect to this stockholder is
based solely upon a Schedule 13G/A filed by such stockholder
with the SEC on February 10, 2009. The voting and
disposition of our shares held by BAVP, L.P. are determined by
the four managing members of Scale Venture Management I,
LLC (formerly BA Venture Partners VI, LLC), the ultimate general
partner of BAVP, L.P. The address of BAVP, L.P. is 950 Tower
Lane, Suite 700, Foster City, California 94404. |
|
(5) |
|
Represents 2,048,439 shares held by Granite Global
Ventures II L.P. and 40,738 shares held by GGV II
Entrepreneurs Fund L.P. The address of each of these
entities is 2494 Sand Hill Road, Suite 100, Menlo Park,
California 94025. See footnote (14) regarding the
relationship between this stockholder and Mr. Nada. |
|
(6) |
|
Represents 569,406 shares subject to options that are
exercisable within 60 days of March 31, 2010;
13,334 shares held by Mr. Ballards minor
children and 75,000 shares held in The L. Gregory
Ballard & Lucy H. Ballard Trustees for the Ballard
Family GRAT. Mr. Ballard resigned as a director, executive
officer and employee of Glu effective December 1, 2009. |
|
(7) |
|
Includes 232,705 shares subject to options that are
exercisable within 60 days of March 31, 2010.
Mr. Galvagni resigned as an executive officer and employee
of Glu effective April 12, 2010. |
|
(8) |
|
Includes 247,156 shares subject to options that are
exercisable within 60 days of March 31, 2010. |
|
(9) |
|
Represents 126,315 shares subject to options that are
exercisable within 60 days of March 31, 2010. |
|
(10) |
|
Includes 36,875 shares subject to options that are
exercisable within 60 days of March 31, 2010.
Mr. Perrault resigned as an executive officer and employee
of Glu effective April 15, 2010. |
|
(11) |
|
Includes 126,285 shares subject to options that are
exercisable within 60 days of March 31, 2010. |
|
(12) |
|
Includes 125,981 shares subject to options that are
exercisable within 60 days of March 31, 2010. |
|
(13) |
|
Represents 62,666 shares held by the Moran Family 2003
Revocable Trust and 77,285 shares subject to options that
are exercisable within 60 days of March 31, 2010. |
|
(14) |
|
Represents 2,048,439 shares held by Granite Global
Ventures II L.P. and 40,738 shares held by GGV II
Entrepreneurs Fund L.P. Mr. Nada is a managing
director of the general partner of the foregoing entities, which
has seven individual managing directors, and shares voting and
investment power with respect to the shares held by these
entities with the other managing directors of the general
partner. Mr. Nada disclaims beneficial ownership of these
shares except to the extent of his individual pecuniary
interests in these entities. Also represents 84,618 shares
subject to options that are exercisable within 60 days of
March 31, 2010. |
|
(15) |
|
Represents 10,000 shares held by The Rosemary and A. Brooke
Seawell Revocable Trust and 67,952 shares subject to
options that are exercisable within 60 days of
March 31, 2010. Excludes 4,794,443 shares held by NEA
10. Mr. Seawell is a venture partner of NEA Development
Corp., an entity that provides administrative services to the
foregoing entities. Mr. Seawell does not have voting or
dispositive power with respect to any of the shares held by NEA
10, and disclaims beneficial ownership of any securities held by
them, except to the extent of his respective proportionate
pecuniary interests in these entities. |
|
(16) |
|
Represents 113,655 shares subject to options that are
exercisable within 60 days of March 31, 2010, of which
33,785 shares, if these options were exercised in full,
would be subject to vesting and right of repurchase in our favor
upon the individuals cessation of service prior to vesting. |
|
(17) |
|
Includes 27,252 shares held by the Daniel &
Michelle Skaff Trust and 100,981 shares subject to options
that are exercisable within 60 days of March 31, 2010.
Also includes 763,557 shares held by Sienna Limited |
15
|
|
|
|
|
Partnership III, L.P. and 53 shares held by Sienna
Associates III, L.L.C. Mr. Skaff is the managing member of
Sienna Associates III, L.L.C., the general partner of Sienna
Limited Partnership III, L.P. Mr. Skaff and two other
individuals share voting and dispositive power over these shares
and disclaim beneficial ownership of these shares except to the
extent of their respective individual pecuniary interests in
this entity. The address of Sienna Limited Partnership III, L.P.
and Mr. Skaff is 2330 Marinship Way, Suite 130,
Sausalito, California 94965. |
|
(18) |
|
Represents the shares included in footnotes (8), (9) and
(11) through (17). Includes 1,070,228 shares subject
to options that are exercisable within 60 days of
March 31, 2010, of which 33,785 shares, if these
options were exercised in full, would be subject to vesting and
right of repurchase in our favor upon the individuals
cessation of service prior to vesting. Excludes the shares
indicated to be excluded in footnotes (15) and (17). |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16 of the Exchange Act requires our directors and
certain of our officers, and persons who own more than 10% of
our common stock, to file initial reports of ownership and
reports of changes in ownership with the SEC. Such persons are
required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely on our review
of the copies of such forms furnished to us and written
representations from these officers and directors, we believe
that all Section 16(a) filing requirements were met during
2009, except that a Form 4 with respect to the exercise by
Jill S. Braff, our former Senior Vice President of Global
Publishing, of an option on March 18, 2009 was not filed
until March 24, 2009.
COMPENSATION
DISCUSSION AND ANALYSIS
The following discussion and analysis of compensation
arrangements of our executive officers should be read together
with the compensation tables and related disclosures set forth
below. This discussion contains forward-looking statements that
are based on our current plans, considerations, expectations and
determinations regarding future compensation programs. The
actual amount and form of compensation and the compensation
programs that we adopt may differ materially from currently
planned programs as summarized in this discussion.
The Compensation Committee, comprised of three non-employee
members of our Board, oversees our compensation plans and
policies, approves the compensation of our executive officers
and administers our stock compensation plans. The Compensation
Committees basic responsibilities are to review the
performance of our management in achieving corporate goals and
objectives and to ensure that our executive officers are
compensated effectively in a manner consistent with our strategy
and competitive practices. This Compensation Discussion and
Analysis (CD&A) contains a discussion and
analysis of the compensation approved by the Compensation
Committee and earned by or paid to the executive officers named
below (the Named Executive Officers) in 2009 who are
included in the Summary Compensation Table below:
|
|
|
|
|
L. Gregory Ballard, our former President and Chief Executive
Officer;
|
|
|
|
William J. Miller, our former interim President and Chief
Executive Officer;
|
|
|
|
Alessandro Galvagni, our former Senior Vice President, Global
Product Development and Chief Technology Officer;
|
|
|
|
Eric R. Ludwig, our Senior Vice President and Chief Financial
Officer;
|
|
|
|
Kevin S. Chou, our Vice President and General Counsel; and
|
|
|
|
Thomas M. Perrault, our former Vice President of Global Human
Resources.
|
On July 8, 2009, we announced that Mr. Ballard had
indicated his intention to transition his role as our President
and Chief Executive Officer. Mr. Ballard remained as our
President and Chief Executive Officer until December 1,
2009, at which time our Board appointed Mr. Miller as our
interim President and Chief Executive Officer. Mr. Miller
remained our interim President and Chief Executive Officer for
the remainder of 2009, with our Board appointing Niccolo M. de
Masi as our new President and Chief Executive Officer effective
as of January 4, 2010. Each of Mr. Galvagni and
Mr. Perrault were employed by us for all of 2009, and each
terminated his
16
employment with Glu in April 2010. The effects of these
decisions on our executive compensation are discussed in this
CD&A.
Compensation
Philosophy and Objectives
The Compensation Committee has established a compensation
program for executive officers designed to attract individuals
with the skills necessary for us to achieve our business plan,
to motivate those individuals, to reward those individuals
fairly over time and to retain those individuals who continue to
perform at or above the levels that we expect. It is also
designed to reinforce a sense of ownership, urgency and overall
entrepreneurial spirit and to link rewards to measurable
corporate and, where appropriate, individual performance. We
believe that the most effective executive compensation program
is one that is designed to reward the achievement of specific
long-term and strategic goals, and which aligns executive
officers interests with those of the stockholders by
rewarding performance of established goals, with the ultimate
objective of creating stockholder value. The Compensation
Committee evaluates compensation to ensure that Glu maintains
the ability to attract and retain talented employees in key
positions and that compensation provided to key employees
remains competitive relative to the compensation paid to
similarly situated executive officers of our peer companies. To
that end, the Compensation Committee believes that executive
compensation packages provided by Glu to its executive officers
should include both cash and stock-based compensation that
reward performance against established goals.
The Compensation Committee works within the framework of a
pay-for-performance
philosophy to determine each component of an executive
officers compensation package based on numerous factors,
including:
|
|
|
|
|
the individuals particular background and circumstances,
including training and prior relevant work experience;
|
|
|
|
the individuals role with us and the compensation paid to
similar persons in the companies represented in the compensation
data that we review;
|
|
|
|
the demand for individuals with the individuals specific
expertise and experience at the time of hire or review;
|
|
|
|
performance goals and other expectations for the position where
appropriate;
|
|
|
|
comparison to other executives within our company having similar
levels of expertise and experience; and
|
|
|
|
compensation data of peer companies for similar positions.
|
The Compensation Committee performs at least annually a
strategic review of our executive officers compensation
levels to determine whether they provide adequate incentives and
motivation and whether they appropriately compensate our
executive officers relative to comparable executive officers in
other companies with which we compete for executives.
In making compensation decisions for 2009, the Compensation
Committee gave significant weight to the Companys
financial performance for the year, and in setting compensation
for 2010, the Compensation Committee considered the
Companys operating plan approved by the Board with respect
to cash and equity compensation and the existing equity awards
held by our executive officers with respect to equity
compensation.
17
Components
of Executive Compensation
In 2009, our executive officers were compensated through the
following compensation elements, each designed to achieve one or
more of our overall compensation objectives:
|
|
|
|
|
Component
|
|
How Determined
|
|
Objective
|
|
|
|
|
|
|
Base Salary
|
|
Market data and scope of the executives responsibilities
|
|
Attract and retain experienced executives
|
|
|
|
|
|
Non-Equity Incentive (Cash) Bonus Plan
|
|
Market data and scope of executives responsibility and
based on achieving pre-established corporate financial objectives
|
|
Motivate executives to achieve the Companys 2009 financial
plan and to achieve strategic goals
|
|
|
|
|
|
Long-Term Equity Incentive Awards
|
|
Market data, scope of executives responsibility and value
of existing equity awards
|
|
Align interests of our executives with our stockholders
|
The Compensation Committee views these components of
compensation as related but distinct. Although the Compensation
Committee reviews total compensation, it does not believe that
significant compensation derived from one component of
compensation should negate or reduce compensation from other
components. The Compensation Committee determines the
appropriate level for each compensation component based on our
compensation philosophy discussed above. Except as described in
this CD&A, the Compensation Committee has not adopted any
formal or informal policies or guidelines for allocating
compensation between long-term and currently paid out
compensation, between cash and non-cash compensation, or among
different forms of non-cash compensation. However, our Named
Executive Officers have the ability to directly influence
overall Company performance, so a greater portion of their pay
is tied to short and long-term incentive programs than is the
case for most other Glu employees. In addition, the Compensation
Committees philosophy is to make a greater percentage of
an employees compensation performance-based as he or she
becomes more senior and to keep cash compensation to the minimum
competitive level while providing the opportunity to be well
rewarded through equity if we perform well over time, consistent
with our
pay-for-performance
culture.
Benchmarking
In April 2007, Radford and the Compensation Committee considered
a set of peer companies in connection with a Radford assessment
of our equity compensation program for our employees in general.
Radford conferred with our management to develop a proposed
group of peer companies of companies similar to us based on
industry, financial and organizational comparability. Radford
and management presented the proposed group of peer companies to
Compensia and the Compensation Committee for consideration and,
based on input from Compensia and the committee, the group of
peer companies was modified slightly to reflect their view of
better aligned comparators, including consideration of similar
growth characteristics for example. At the Compensation
Committees July 2008 meeting, Compensia presented to the
Compensation Committee for the committees input a new
group of peer companies of companies similar to Glu, again based
on industry, financial and organizational comparability, along
with a new set of surveys and market data for the new peer group
that Compensia would be using in 2008 for the benchmarking. The
new group of peer companies included most of the group of peer
companies used by Compensia and the Compensation Committee for
benchmarking in 2007, but also included Compensias
recommendations for certain additions and deletions. The
Compensation Committee accepted Compensias recommended
revisions to the peer group companies, since it believed that
this peer group was representative of companies in our revenue
range and industry that are a fair representation of the
employment market in which Glu competes.
For the Compensation Committees October 2008 meeting,
Compensia prepared a peer analysis based on data from the
following sources for the Compensation Committees
consideration in determining the 2009 cash and stock-based
compensation for all of our executive officers:
|
|
|
|
|
comparable position compensation data for the following peer
companies: Actuate, Aruba Networks, Autobytel, BigBand Networks,
Chordiant Software, CommVault Systems, CyberSource, DemandTec,
|
18
|
|
|
|
|
Digimarc, DivX, NetSuite, Omniture, Riverbed Technology,
Shutterfly, Sonic Solutions, SuccessFactors and Taleo; and
|
|
|
|
|
|
the Radford July 2008 Broad High-Tech Industry Executive Survey
of primarily public and some private software companies, limited
to companies with revenues between $50 million and
$200 million.
|
The Compensation Committees judgments regarding market
levels of base compensation and aggregate equity holdings were
based, in part, on a report prepared by Compensia at the
Compensation Committees request; the report compared our
executive compensation with the executive compensation at our
peer companies and the companies contained in the Radford survey
specified above, analyzing various factors including employee
headcount and revenues.
For 2008 executive compensation decisions, the Compensation
Committee utilized as a guideline the 60th percentile for
base salaries and total cash compensation and approximately the
75th percentile for equity grants, as measured against our
peer companies and the companies contained in the Radford survey
specified above. The Compensation Committees choice of
these percentiles reflected consideration of our
stockholders interests in paying what was necessary, but
not significantly more than necessary, to attract and retain
talented executive officers and motivate them to achieve our
annual financial plan and individual strategic goals, while
conserving cash and equity as much as practicable. The
Compensation Committee chose to target equity grants at a higher
percentile than cash compensation because it had fixed salaries
near the median of comparable executive officers salaries.
For 2009 executive compensation decisions, however, while the
Compensation Committee reviewed the percentile information set
forth in the Compensia report, it also considered a number of
additional factors in making executive compensation decisions,
including the Companys overall performance, the executive
officers overall performance, the scope of responsibility
of the executive officer and the then-current compensation and
equity holdings of the executive officer. We believe that, given
the industry in which we operate and the corporate culture that
we have created, the executive compensation levels that we have
established are generally sufficient to retain our existing
executive officers and to hire new executive officers when and
as required.
The Compensation Committees considered the information
discussed above at its October 2008 and November 2008 meetings
at which it set 2009 annual base salaries and began considering
2009 total cash compensation, including target bonus-plan
awards. In addition, the Compensation Committee also considered
this information at its February 2009 meeting at which it
approved the 2009 Executive Bonus Plan.
At its July 2009 meeting, the Compensation Committee determined
not to engage Compensia to prepare a formal executive
compensation report based on peer company data and market
surveys, but instead elected to utilize the prior years
data since it believed that there had been little change with
respect to executive compensation due, in large part, to global
economic conditions, and that the expense of such an engagement
was therefore not warranted. As a result, the executive
compensation decisions made by the Compensation Committee in
2009, including the option grants awarded to the Named Executive
Officers in 2009, were based on the information discussed above
and a discussion with Compensia regarding general compensation
trends in 2009.
Base
Salary
The Compensation Committee fixes executive officer base
compensation at a level it believes enables Glu to hire and
retain individuals in a competitive environment and to reward
satisfactory individual performance and a satisfactory level of
contribution to our overall business goals. The Compensation
Committee also takes into account the base compensation payable
by companies believed to be our competitors and by other
companies it believed to be those with which we generally
compete for executive officer talent. The base salaries of
executive officers are determined at the time of hiring by
evaluating the responsibilities of the position held and the
experience and performance of the individual. The Compensation
Committee reviews executive salaries annually, typically in the
fourth quarter, and adjusts them as appropriate to reflect
changes in the peer companies, individual performance and
responsibility, prior experience and salary history. In
instances where an executive officer is uniquely key to our
success or has a role that does not exactly match the
benchmarking data, the Compensation Committee takes these
factors into consideration. In the event of a promotion during
the year, base salaries may be increased at mid-year to reflect
increased responsibilities.
19
The table below sets forth the salaries for each of Named
Executive Officers, other than Mr. Miller, for 2009 as
compared to 2008:
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
2008 Salary
|
|
2009 Salary
|
|
L. Gregory Ballard
|
|
$
|
375,000
|
|
|
$
|
281,250
|
|
Alessandro Galvagni
|
|
|
270,000
|
|
|
|
270,000
|
|
Eric R. Ludwig
|
|
|
250,000
|
|
|
|
250,000
|
|
Kevin S. Chou
|
|
|
205,000
|
|
|
|
225,000
|
|
Thomas M. Perrault
|
|
|
210,000
|
|
|
|
210,000
|
|
In October 2008, the Compensation Committee approved an increase
in Mr. Chous base salary to $225,000, effective
November 1, 2008, in connection with his designation as an
executive officer of the Company. In addition, the Compensation
Committee believed that this increase was merited in light of
Mr. Chous key role with Glu and due to the fact that
Mr. Chous base salary was significantly below the
guideline levels reviewed by the committee, as evidenced by the
report that Compensia delivered at the Compensation
Committees October 2008 meeting.
In December 2008, the Compensation Committee, at
Mr. Ballards request, approved a 25% reduction in
Mr. Ballards annual base salary from $375,000 to
$281,250, effective as of January 1, 2009. Mr. Ballard
requested this salary reduction in light of Glus 2008
financial performance, which was below plan, and to assist in
our ongoing cost-reduction efforts. However, for purposes of our
change of control severance agreement with Mr. Ballard, his
annual base salary was still deemed to be $375,000 (or such
higher salary as may then be in effect), which the Compensation
Committee believed was appropriate since Mr. Ballard
voluntarily elected to reduce his base salary.
The Compensation Committee determined to keep the base salaries
of Messrs. Galvagni, Ludwig and Perrault at their 2008
levels. The Compensation Committee believed that a salary
increase for these individuals was not warranted in light of
Glus 2008 financial performance and due to the fact that
the base salaries of Messrs. Galvagni and Perrault were
above the guideline levels reviewed by the committee. With
respect to Mr. Perrault, the Compensation Committee also
considered the fact that he joined Glu in August 2008, and that
it was premature to consider any increase to his base salary.
The Compensation Committee approved an annualized base salary of
$375,000 for Mr. Miller in connection with his appointment
as our interim President and Chief Executive Officer on
December 1, 2009. The Compensation Committee believed such
base salary to be consistent with both the guideline levels
reviewed by the committee and the salary it expected would be
required to retain a full-time President and Chief Executive
Officer. In addition, the Compensation Committee believed such
base salary to be appropriate in light of the anticipated burden
that Mr. Miller was undertaking (and consequent sacrifices
to his other interests) in agreeing to assume this position with
Glu, potentially for an extended period.
Cash
Bonuses under Our Non-Equity Incentive Plan
The Compensation Committee designs our executive bonus plan to
focus management on, and reward them for, achieving key
corporate financial objectives. The Compensation Committee
utilizes cash bonuses to reward performance achievements with a
time horizon of one year or less, while utilizing salary as the
base amount necessary to match the Companys competitors
for executive talent.
20
Our 2009 executive bonus plan was adopted by the Compensation
Committee in February 2009 to reward all executive officers,
vice presidents and certain senior director-level employees. It
contemplated the payment to a participant of a maximum annual
bonus equal to a percentage of the participants current
annual base salary approved by the Compensation Committee in the
case of our executive officers, and in the case of non-executive
officers, our Chief Executive Officer and Chief Financial
Officer. Mr. Miller did not participate in the 2009
executive bonus plan. The 2009 targets and actual bonuses earned
for our Named Executive Officers, other than Mr. Miller,
are set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 Target
|
|
2009 Target
|
|
|
|
2009 Target
|
|
2009 Bonus
|
Named Executive Officer
|
|
Percentage
|
|
Percentage
|
|
2009 Salary
|
|
Bonus
|
|
Earned
|
|
L. Gregory Ballard
|
|
|
75
|
%
|
|
|
85
|
%
|
|
$
|
281,250
|
|
|
$
|
239,063
|
|
|
|
|
|
Alessandro Galvagni
|
|
|
50
|
%
|
|
|
50
|
%
|
|
$
|
270,000
|
|
|
$
|
135,000
|
|
|
|
|
|
Eric R. Ludwig
|
|
|
50
|
%
|
|
|
50
|
%
|
|
$
|
250,000
|
|
|
$
|
125,000
|
|
|
|
|
|
Kevin S. Chou
|
|
|
30
|
%
|
|
|
40
|
%
|
|
$
|
225,000
|
|
|
$
|
90,000
|
|
|
|
|
|
Thomas M. Perrault
|
|
|
30
|
%
|
|
|
40
|
%
|
|
$
|
210,000
|
|
|
$
|
84,000
|
|
|
|
|
|
The Compensation Committee believed that the increase to the
target bonus percentages for Mr. Ballard was merited due to
his key role with Glu, the fact that his total cash compensation
was below the guideline levels reviewed by the committee and in
light of his voluntary salary reduction that was implemented in
December 2008. The Compensation Committee believed that the
increases to the target bonus percentages for Messrs. Chou
and Perrault were merited due to the fact that each of them had
been designated executive officers in October 2008 in
recognition of the expansion and importance of their roles with
Glu and due to the fact that their total cash compensation was
below the guideline levels reviewed by the committee.
We based the annual bonuses under our 2009 executive bonus plan
on two components Glu revenues and Glu non-GAAP
operating margin. In light of the developments in our business,
industry and financial position, the Compensation Committee felt
that the annual bonus should be based on our executive
officers success as a team achieving corporate financial
goals. This is in contrast to the 2008 executive bonus plan in
which 20-25%
of our executive officers annual bonuses were based upon
the achievement of individual goals. The Compensation Committee
believed it to be preferable to have the annual bonuses for our
executives based on objective measures that reflected the
achievement of significant corporate financial goals rather than
more subjective individual contributions that were not
correlated as precisely with the overall success of Glu. The
Compensation Committee chose revenues and non-GAAP operating
margin because it believed that, as a growth company, we should
reward revenue growth, but only if that revenue growth is
achieved cost effectively, and that a profitable company with
little or no growth was not acceptable. In addition, non-GAAP
operating margin was closely aligned with the Companys
2009 operating plan approved by the Board and was a primary
measure that management and the Board used to evaluate our
performance. The targets were based on our annual operating
plan, as approved by the Board. The Compensation Committee
elected to award bonuses annually, rather than quarterly as we
did in 2008, because the committee believed a more long-term
orientation was appropriate given the uncertainty and
unpredictability of operations in a small company in the
then-current economic and industry environment; the committee
believed that management should not be rewarded for one or two
successful quarters if performance for the entire year did not
meet or exceed the targets.
Our 2009 executive bonus plan provided that, for each Named
Executive Officer, 50% of his bonus could be earned based on Glu
achieving at least 105% of its revenue target and 50% of his
bonus could be earned based on Glu achieving at least 105% of
its non-GAAP operating margin target, with each component of the
bonus evaluated independently of the other. If Glu met either
component at 105% of its plan, then the Named Executive Officer
would earn 100% of the bonus related to that component, whether
or not Glu met the 105% threshold on the other component. If Glu
met either component at or above 115% of its plan, then the
Named Executive Officer would earn 130% of the bonus related to
that component; however, before either component of the bonus
may be earned above target, the 105% threshold must be met on
the other component. If Glu achieved both the revenue and the
non-GAAP operating margin components above the 105% minimum
threshold but below the 115% maximum threshold, then the bonus
earned would be scaled up on a straight-line basis.
21
The Compensation Committee established the 2009 target financial
measures in February 2009 when it adopted the 2009 executive
bonus plan. The target financial measures were based on our 2009
annual operating plan approved by our Board in December 2008.
The 2009 target and actual financial measures for purposes of
our 2009 executive bonus plan were as follows (in thousands):
|
|
|
|
|
|
|
2009 Financial Measures
|
|
Target
|
|
Actual
|
|
2009 Revenues
|
|
$
|
86.0 million
|
|
|
$79.3 million
|
2009 Non-GAAP Operating Margin
|
|
|
7.368 million
|
|
|
(1.922) million
|
Appendix A to this proxy statement includes a
reconciliation of these non-GAAP operating margin amounts to the
most comparable GAAP measure.
The Compensation Committee did not award bonuses to any of our
Named Executive Officers because we did not achieve at least
105% of our revenue target or 105% of our non-GAAP operating
margin target.
As Glus interim President and Chief Executive Officer,
Mr. Miller was eligible to receive a cash bonus of up to a
target of 85% of his annual base salary, pro-rated based on the
period of time that he served as Glus interim President
and Chief Executive Officer. In January 2010, our Board of
Directors awarded Mr. Miller a bonus of $13,000,
representing approximately one-half of the target bonus he was
eligible to receive, in recognition of Mr. Millers
contributions in leading the Company through the Chief Executive
Officer transition period.
Equity
Compensation
We utilize initial and refresh stock options to reward long-term
performance, with strong corporate performance and extended
executive officer tenure producing potentially significant value
for the executive officer. Generally, a significant stock option
grant is made in the year when an executive officer commences
employment with us. This grant is made within our written
guidelines for new hire grants, consistent with the executive
officers position and considering also the benchmarks. The
size of each grant is generally set at a level that the
Compensation Committee deems appropriate to create a meaningful
opportunity for significant equity compensation and is based
upon the grant guidelines, the individuals position with
us and the individuals potential for future responsibility
and promotion. The relative weight given to each of these
factors varies from individual to individual at the Compensation
Committees discretion. Adjustments may be made as the
Compensation Committee deems reasonable to attract candidates.
These initial grants vest over four years and no shares vest
before the one year anniversary of the executives
employment. The Compensation Committee spreads the vesting of
our options over four years to compensate executive officers for
their contribution over a period of time.
In May 2009, the Compensation Committee awarded options to
purchase 40,000 shares of common stock to Mr. Ludwig
and Mr. Galvagni and 25,000 shares to Mr. Chou
and Mr. Perrault. Each of these grants has an exercise
price of $0.78 per share and vest with respect to 25% of the
underlying shares on the first anniversary of the grant date and
as to 1/48th of the shares of common stock underlying it monthly
thereafter. These grants were issued to these Named Executive
Officer in order to build long-term retentive value for our most
critical employees in light of, among other things, the fact
that (1) none of the Named Executive Officers, except
Mr. Chou, received a salary increase for the 2009 fiscal
year, (2) executive officers would not receive any cash
bonus payment during 2009 due to Glu moving to annual, rather
than quarterly, bonus payments under its executive bonus plan,
(3) none of the executive officers was eligible to
participate in the stock option exchange program that we
implemented in May 2009 and (4) the threat of loss of
executives at a time when the Companys execution was
critical and Glu was perceived by talent competitors as a
target. See Executive Compensation Plan
Information Option Exchange Program below for
more information regarding this stock option exchange program.
In August 2009, we awarded options to purchase
60,000 shares of common stock to Mr. Ludwig and
Mr. Galvagni. Each of these grants has an exercise price of
$1.07 per share and were to vest with respect to 50% of the
underlying shares on the date that a new Chief Executive Officer
joined Glu (the Start Date), with the remaining 50%
of the underlying shares vesting and becoming exercisable on the
six-month anniversary of the Start Date. Our Board deemed the
appointment of Mr. Miller as our interim President and
Chief Executive Officer on December 1, 2009 to be the Start
Date. These grants were issued to Mr. Ludwig and
Mr. Galvagni for retention purposes, as the Board believed
that retention of them was important to the successful
transition to a new Chief
22
Executive Officer and that these executives should be provided
an additional measure of comfort given the uncertainty
surrounding Glus Chief Executive position, as
Mr. Ballard had announced his intention to transition his
role.
In December 2009, the Compensation Committee awarded options to
purchase 140,000 shares of common stock to Mr. Ludwig
and Mr. Galvagni and 90,000 shares to Mr. Chou
and Mr. Perrault. Each of these grants has an exercise
price of $1.0648 per share and vest with respect to 25% of the
underlying shares on the first anniversary of the grant date and
as to 1/48th of the shares of common stock underlying it monthly
thereafter. The Compensation Committee approved these annual
refresh grants after considering the 2008 peer analysis data
prepared by Compensia, supplemented by a discussion with
Compensia on the general compensation trends for 2009.
All of the grants discussed above have a six-year term and have
an exercise price equal to the closing price of our common stock
on the date of grant. The value of these grants for financial
statement reporting purposes is reflected in the Grants of
Plan-Based Awards in 2009 table below. The options granted
to our Named Executive Officers in 2009 represented
approximately 43.4% of the total number of options that we
awarded to all employees in 2009.
To date, we have not awarded shares of restricted stock to our
executive officers. Since we have been in a growth phase of our
business, the Compensation Committee believes that stock options
currently provide a more powerful incentive for our executive
officers. However, the Compensation Committee may approve
restricted stock awards in the future.
Risk
Analysis of Performance-Based Compensation Plans
The Compensation Committee believes that although a significant
portion of total target compensation provided to our executive
officers is performance-based, our executive compensation
programs do not encourage excessive and unnecessary risk-taking.
The design of these compensation programs is intended to
encourage our executive officers to remain focused on both the
short-and long-term operational and financial goals of the
Company in several key respects. For example, our 2009 executive
bonus plan included both revenue and non-GAAP operating margin
metrics, as the Compensation Committee believed that, as a
growth company, we should reward revenue growth, but only if
that revenue growth is achieved cost effectively, and that a
profitable company with little or no growth was not acceptable.
In addition, our 2009 executive bonus plan no longer contained
individual goals, as the Compensation Committee believed it to
be preferable to have the annual bonuses for our executives
based on objective measures that reflected the achievement of
significant corporate financial goals rather than more
subjective individual contributions that were not correlated as
precisely with the overall success of Glu. Our 2009 executive
bonus plan also capped potential bonuses at 130% of the target
awards, which we believe limits the incentive for excessive
risk-taking by our executives. In addition, stock options
granted to our executive officers generally vest with respect to
25% of the underlying shares on the first anniversary of the
grant date and as to 1/48th of the underlying shares monthly
thereafter, encouraging executive officers to focus on sustained
stock price appreciation over the long term.
Transitional
Employment Agreement with Mr. Ballard
On July 8, 2009, Glu and Mr. Ballard entered into a
Transitional Employment Agreement (the Transitional
Agreement) in connection with the transition of Glus
Chief Executive Officer position. Pursuant to the terms of the
Transitional Agreement, because Mr. Ballard continued his
employment with Glu until December 1, 2009 when
Mr. Miller was appointed as our interim President and Chief
Executive Officer, Mr. Ballard received:
|
|
|
|
|
continued payment of his base salary (at an annual rate of
$281,250) through December 31, 2009;
|
|
|
|
a lump sum payment of $278,906.25, representing 10.5/12ths of
the maximum bonus Mr. Ballard could be eligible for under
our Executive Bonus Plan, which was paid on Glus first
regular pay cycle in 2010;
|
|
|
|
$328,125, representing 10.5/12ths of Mr. Ballards
$375,000 base salary that was in effect prior to his voluntary
salary reduction, as discussed above, which was paid on
Glus first regular pay cycle in 2010;
|
|
|
|
reimbursement for up to nine months of COBRA premiums;
|
23
|
|
|
|
|
an additional nine months of vesting with respect to his
remaining unvested options to purchase Glu common stock;
|
|
|
|
an extension of the post-termination exercise period applicable
to his vested stock options until September 30,
2010; and
|
|
|
|
the right to keep his laptop computer and Blackberry device,
subject to a review by Glus information technology
department for confidential proprietary information.
|
Our Board of Directors believed that the terms of the
Transitional Agreement were appropriate given the fact that
Mr. Ballard had agreed to continue serving as President and
Chief Executive Officer until the earlier to occur of Glus
hiring of a replacement President and Chief Executive Officer or
January 1, 2010, and that Glu could have suffered serious
operational issues if Mr. Ballard were to leave prior to
identifying and retaining his successor.
Severance
and Change of Control Payments
Each of our executive officers has an agreement with us that
provides for payments and benefits if the individual is
terminated under certain circumstances within 12 months
following a change of control of the Company. For a description
of these agreements and quantification of these severance and
change of control benefits, please see the discussion under
Executive Compensation-Potential Payments Upon Termination
or Change in Control below.
On July 6, 2009, our Board approved retention arrangements
for Mr. Galvagni and Mr. Ludwig. Pursuant to these
retention arrangements, in the event that the employment with
Glu of Mr. Galvagni or Mr. Ludwig is terminated by Glu
without cause or as the result of an involuntary
termination prior to June 30, 2010, the terminated
executive will receive an amount equal to six months of his
annualized base salary plus 50% of what his bonus would have
been for the year in which he is terminated once such bonus
amount is determined subsequent to the end of such year. As
discussed above, the Board believed that these retention
arrangements were desirable given the uncertainty surrounding
Glus Chief Executive Position, as Mr. Ballard had
announced his intention to transition his role. In April 2010,
Mr. Galvagnis employment relationship with Glu
terminated and he received the payments described in this
paragraph in connection with his separation from Glu.
Absent a change of control event and except for the retention
arrangements described in the preceding paragraph, no executive
officer is entitled upon termination to either equity vesting
acceleration or cash severance payments.
Our Board decided to provide these arrangements to mitigate some
of the risk that exists for executives working in a small public
company, an environment where there is a meaningful likelihood
that we may be acquired. These arrangements are intended to
attract and retain qualified executives that have employment
alternatives available to them that may appear to them to be
less risky absent these arrangements and to mitigate a potential
disincentive to consideration and execution of such an
acquisition where the services of these executive officers may
not be required by the acquirer.
Other
Benefits
Executive officers are eligible to participate in all of our
employee benefit plans, such as medical, dental, vision, group
life, disability, and accidental death and dismemberment
insurance and our 401(k) plan, in each case on the same basis as
other employees. As part of our cost-reduction efforts, in
February 2009 we elected to indefinitely suspend our 401(k)
match for U.S. employees, which includes all of our current
executive officers. We also provide vacation and other paid
holidays to most of our employees which are comparable to those
provided at peer companies. Although our executive officers also
receive such paid holidays, as of July 2009 as part of
cost-reduction efforts, they no longer accrue vacation time
which, if unused, is paid to them when their employment with Glu
terminates. There were no special benefits or perquisites
provided to any executive officer in 2009.
Financial
Restatements
The Compensation Committee has not adopted a policy with respect
to whether we will make retroactive adjustments to any cash- or
equity-based incentive compensation paid to executive officers
(or others) where the
24
payment was predicated upon the achievement of financial results
that were subsequently the subject of a restatement. The
Compensation Committee has considered the adoption of such a
policy, but believes that this issue would be best addressed
when and if the need actually arises, after all of the facts
regarding the restatement are known.
Role of
Executive Officers in Compensation Decisions
For compensation decisions relating to executive officers other
than our Chief Executive Officer, the Chief Executive Officer,
as the manager of the members of the executive team, assesses
each individuals contributions to their respective goals
and makes a recommendation to the Compensation Committee
regarding any merit-based adjustment to salary, the amount of
cash bonus and bonus level for the coming year and replenishment
stock option or other equity compensation grant. The
Compensation Committee evaluates, discusses and modifies or
approves these recommendations and conducts a similar evaluation
of our Chief Executive Officers contributions to corporate
goals and achievement of individual goals. Consistent with our
compensation philosophy, each employees evaluation begins
with a written self-assessment, the supervisors own
evaluation of the employees performance and input from
others within Glu. Our Chief Executive Officer bases his
recommendations in part upon annual performance reviews of our
executive officers, including a review of self-evaluations
prepared by such executive officers. The Compensation Committee
may exercise its discretion in modifying any recommended
compensation adjustments or awards to executive officers.
Compensation Committee meetings during 2009 typically included,
for all or a portion of each meeting, not only the Compensation
Committee members but also our Chief Executive Officer, our Vice
President of Global Human Resources and our Vice President and
General Counsel. Any executive officers attending a Compensation
Committee meeting excused himself for those portions of the
meeting in which his own compensation was discussed or
considered.
Equity
Granting Policy
Equity awards may be granted by either the Compensation
Committee or our Stock Option Administration Committee, which is
currently comprised of our Chief Executive Officer, our Chief
Financial Officer and our Vice President and General Counsel.
The Compensation Committee has delegated authority to our Stock
Option Administration Committee to grant equity awards to
employees who are not executive officers and do not report to
the Chief Executive Officer, up to a certain number of shares
per individual, as specified by the Compensation Committee. In
order for the Stock Option Administration Committee to act, our
Chief Executive Officer and at least one other member of that
committee must vote. The Stock Option Administration Committee
reports to the Compensation Committee awards approved by the
Stock Option Administration Committee promptly after any such
approvals. Equity grants made to individuals who report to our
Chief Executive Officer or to individuals who receive amounts
above the stated share limit per individual must be approved by
the Compensation Committee.
Equity awards are typically granted on regularly scheduled Stock
Option Administration Committee meetings held on the second
Tuesday of each month. The only exception is for new hire or
promotion grants that require Compensation Committee approval,
which grants are generally approved at or around the time the
individual is hired or promoted. The Stock Option Administration
Committee does not have discretion to set other grant dates for
awards made pursuant to its delegated authority. Our annual
performance-related awards for our executive officers are
currently made at the Compensation Committee meeting held during
our fourth quarter, at which the Compensation Committee reviews
executive compensation for the upcoming year.
Other than as described in this CD&A and under the sections
in this proxy statement titled Director Compensation
above, we do not have any program, plan or obligation that
requires us to grant equity compensation on specified dates.
The exercise price of a newly granted option (i.e., not an
option assumed or substituted in connection with a corporate
transaction) is the closing price of our common stock on the
date of grant.
Tax and
Accounting Treatment of Compensation
In designing our compensation programs, the Compensation
Committee considers the financial accounting and tax
consequences to the Company, as well as the tax consequences to
our employees. We account for equity
25
compensation paid to our employees under the rules of FASB ASC
Topic 718 (formerly SFAS 123R), which requires us to
estimate and record an expense for each award of equity
compensation over the service period of the award. Accounting
rules also require us to record cash compensation as an expense
at the time the obligation is accrued. Management considers the
FASB ASC Topic 718 cost of outstanding equity awards as part of
our equity grant recommendations to the Compensation Committee.
Section 162(m) of the Code places a limit of
$1 million on the amount of compensation that we may deduct
in any one year with respect to our Chief Executive Officer, our
Chief Financial Officer and each of our three most highly paid
executive officers. There is an exception to the $1 million
limitation for performance-based compensation meeting certain
requirements. To qualify for the exemption, we asked our
stockholders to approve a limit under our 2007 Equity Incentive
Plan (the 2007 Plan) on the maximum number of shares
for which a participant may be granted stock options in any
calendar year. Because this limit was adopted, any compensation
deemed paid to an executive officer when he or she exercises an
option with an exercise price that is at least equal to the fair
market value of the option shares on the grant date should
qualify as performance-based compensation and should not be
subject to the $1 million deduction limitation. To maintain
flexibility in compensating executive officers in a manner
designed to promote varying corporate goals, the Compensation
Committee has not adopted a policy requiring all compensation to
be deductible. However, to date we have not exceeded the
$1 million limit for any executive officer. Moreover,
exceeding that limitation may not result in the current payment
of increased federal income taxes due to our significant net
operating loss carryforward and the fact that we have not
achieved sustained profitability.
We currently intend that all cash compensation paid will be tax
deductible for us. However, with respect to equity compensation
awards, while any gain recognized by an employee from a
nonstatutory option should be deductible, if an option is an
incentive stock option, we will not be able to deduct any gain
recognized by the employee unless there is a disqualifying
disposition by the employee.
We also consider the tax impact to employees in designing our
compensation programs, particularly our equity compensation
programs. For example, employees generally control the timing of
taxation with respect to stock options. We structure cash bonus
compensation so that it is taxable to our employees at the time
it becomes available to them.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed this
Compensation Disclosure and Analysis set forth above with our
management. Based on its review and discussions, the
Compensation Committee recommended to our Board that the
Compensation Disclosure and Analysis be included in this proxy
statement.
Daniel L. Skaff (Chair)
Richard Moran
Ellen F. Siminoff
26
EXECUTIVE
COMPENSATION
Please see Item 10 Directors, Executive Officers and
Corporate Governance in our Annual Report on
Form 10-K
for 2009, which accompanies these proxy materials, regarding the
identity of our executive officers and their respective business
experience.
Summary
Compensation Table
The following table shows compensation earned during 2009 by our
Named Executive Officers. For information about employment
contracts, termination of employment and
change-of-control
arrangements between Glu and the Named Executive Officers, see
Potential Payments upon Termination or Change in
Control below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
Name and
|
|
Fiscal
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($) (1)
|
|
|
($) (2)
|
|
|
($) (3)
|
|
|
($)
|
|
|
L. Gregory Ballard
|
|
|
2009
|
|
|
|
333,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
884
|
|
|
|
334,346
|
|
Former President and Chief Executive Officer
|
|
|
2008
|
|
|
|
375,000
|
|
|
|
|
|
|
|
116,476
|
|
|
|
67,500
|
|
|
|
3,599
|
|
|
|
562,575
|
|
|
|
|
2007
|
|
|
|
301,442
|
|
|
|
|
|
|
|
292,575
|
|
|
|
73,500
|
|
|
|
|
|
|
|
667,517
|
|
William J. Miller(4)
|
|
|
2009
|
|
|
|
31,250
|
|
|
|
13,000
|
(5)
|
|
|
33,930
|
(6)
|
|
|
|
|
|
|
|
|
|
|
31,250
|
|
Former Interim President and Chief Executive
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alessandro Galvagni
|
|
|
2009
|
|
|
|
280,462
|
|
|
|
|
|
|
|
103,596
|
|
|
|
|
|
|
|
|
|
|
|
384,058
|
|
Former Senior Vice President of Product
|
|
|
2008
|
|
|
|
270,000
|
|
|
|
|
|
|
|
28,332
|
|
|
|
47,250
|
|
|
|
|
|
|
|
345,582
|
|
Development and Chief Technology Officer
|
|
|
2007
|
|
|
|
240,576
|
|
|
|
|
|
|
|
175,545
|
|
|
|
29,062
|
|
|
|
|
|
|
|
445,183
|
|
Eric R. Ludwig(7)
|
|
|
2009
|
|
|
|
259,712
|
|
|
|
|
|
|
|
103,596
|
|
|
|
|
|
|
|
|
|
|
|
363,308
|
|
Senior Vice President and Chief Financial
|
|
|
2008
|
|
|
|
241,164
|
|
|
|
6,904
|
(8)
|
|
|
95,548
|
|
|
|
31,771
|
|
|
|
|
|
|
|
368,483
|
|
Officer
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin S. Chou(9)
|
|
|
2009
|
|
|
|
233,712
|
|
|
|
|
|
|
|
49,237
|
|
|
|
|
|
|
|
520
|
|
|
|
283,469
|
|
Vice President and General Counsel
|
|
|
2008
|
|
|
|
208,333
|
|
|
|
35,000
|
(10)
|
|
|
17,314
|
|
|
|
21,525
|
|
|
|
4,855
|
|
|
|
252,027
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas M. Perrault(11)
|
|
|
2009
|
|
|
|
218,135
|
|
|
|
|
|
|
|
49,237
|
|
|
|
|
|
|
|
727
|
|
|
|
268,099
|
|
Former Vice President of Global Human
|
|
|
2008
|
|
|
|
80,769
|
|
|
|
|
|
|
|
97,412
|
|
|
|
|
|
|
|
2,181
|
|
|
|
180,362
|
|
Resources
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts shown in this column do not reflect dollar amounts
actually received by the officer. Instead, these amounts reflect
the aggregate full grant date fair value calculated in
accordance with FASB ASC Topic 718 for awards granted during
2009. See Note 11 Stock Option and Other
Benefit Plans in the notes to consolidated financial
statements contained in our annual report on
Form 10-K
for the year ended December 31, 2009 for a description of
the ASC Topic 718 methodology and assumptions. The number of
stock options granted in 2009 to our Named Executive Officers is
shown in the Grants of Plan-Based Awards in 2009
table included below. |
|
(2) |
|
The amounts represent total performance-based bonuses that were
earned during the given year, and paid in the quarter following
when the bonus was earned, under our executive bonus plan. See
the Compensation Discussion and Analysis section of
this proxy statement and the Grants of Plan-Based Awards
in 2009 table included below for further information
regarding our executive bonus plan. |
|
(3) |
|
Represents matching contributions under our 401(k) plan (such
matching contributions were discontinued in February 2009). |
|
(4) |
|
Mr. Miller was appointed as our interim President and Chief
Executive Officer on December 1, 2009. |
|
(5) |
|
Represents a bonus awarded to Mr. Miller in recognition of
his contributions as our interim President and Chief Executive
Officer. |
|
(6) |
|
Represents the aggregate full grant date fair value of the stock
option we awarded to Mr. Miller in connection with his
appointment as our interim President and Chief Executive Officer
and does not include the aggregate full grant date fair value of
the other stock options we granted to Mr. Miller in 2009
which related to his service as one of our directors. For
information regarding the full grant date fair value of the
stock options we awarded |
27
|
|
|
|
|
to Mr. Miller in 2009 related to his service as one of our
directors, see the Director Compensation section of
this proxy statement. |
|
(7) |
|
Mr. Ludwig joined us in January 2005 and was designated an
executive officer on in April 2008 when he was promoted to
Senior Vice President, Finance. Mr. Ludwig became our Chief
Financial Officer on July 31, 2008. |
|
(8) |
|
Represents a bonus earned in connection with
Mr. Ludwigs service as our Interim Chief Financial
Officer. |
|
(9) |
|
Mr. Chou joined us in July 2006 and was designated an
executive officer on October 22, 2008. |
|
|
|
(10) |
|
Represents a $10,000 bonus earned in connection with
Mr. Chous efforts on one of our acquisitions and a
$25,000 bonus for Mr. Chous service as our Interim
Vice President of Human Resources from May 2008 to August 2008. |
|
(11) |
|
Mr. Perrault joined us in August 2008 and was designated an
executive officer on October 22, 2008. |
For a description of the payments we made to Mr. Ballard
and Mr. Galvagni in 2010 in connection with their
termination of service with Glu, please see the Potential
Payments Upon Termination or Change in Control section of
this proxy statement.
Grants of
Plan-Based Awards in 2009
The following table provides information about equity awards
granted under our 2007 Plan to the Named Executive Officers
during 2009 and cash bonus awards for which the Named Executive
Officers were eligible in 2009 under our executive bonus plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
|
|
Number of
|
|
|
|
|
|
|
|
|
Payouts Under Non-
|
|
Securities
|
|
Exercise
|
|
Grant Date
|
|
|
|
|
Equity Incentive
|
|
Underlying
|
|
Price of
|
|
Fair Value
|
|
|
Grant
|
|
Plan Awards(1)
|
|
Options
|
|
Option
|
|
of Option
|
Name
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Awards(2)
|
|
Awards
|
|
Awards(3)
|
|
L. Gregory Ballard
|
|
|
02/25/09
|
|
|
$
|
119,531
|
|
|
$
|
239,063
|
|
|
$
|
310,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William J. Miller
|
|
|
12/01/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(4)
|
|
$
|
1.05
|
|
|
$
|
33,930
|
|
Alessandro Galvagni(5)
|
|
|
02/25/09
|
|
|
|
67,500
|
|
|
|
135,000
|
|
|
|
175,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0.78
|
|
|
|
12,712
|
|
|
|
|
08/07/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
1.07
|
|
|
|
26,652
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,000
|
|
|
|
1.0648
|
|
|
|
64,232
|
|
Eric R. Ludwig
|
|
|
02/25/09
|
|
|
|
62,500
|
|
|
|
125,000
|
|
|
|
162,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0.78
|
|
|
|
12,712
|
|
|
|
|
08/07/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
1.07
|
|
|
|
26,652
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,000
|
|
|
|
1.0648
|
|
|
|
64,232
|
|
Kevin S. Chou
|
|
|
02/25/09
|
|
|
|
45,000
|
|
|
|
90,000
|
|
|
|
117,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
0.78
|
|
|
|
7,945
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
|
|
1.0648
|
|
|
|
41,292
|
|
Thomas M. Perrault(5)
|
|
|
02/25/09
|
|
|
|
42,000
|
|
|
|
84,000
|
|
|
|
109,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
0.78
|
|
|
|
7,945
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
|
|
1.0648
|
|
|
|
41,292
|
|
|
|
|
(1) |
|
For 2009, all of the Named Executive Officers other than
Mr. Miller were eligible to earn a bonus under our
Executive Bonus Plan, based on the Company achieving certain
Corporate GAAP Revenue and Corporate Non-GAAP Operating
Margin objectives. The Threshold column represents
the smallest total bonus that could have been earned under our
Executive Bonus Plan if we had met either of the Corporate
GAAP Revenue or Corporate Non-GAAP Operating Margin
objectives at 105% of plan but did not meet the other objective
at a minimum of 105% of plan. The Target column
represents the target bonus that could have been earned by each
executive if we achieved both the Corporate GAAP Revenue
and the Corporate Non-GAAP Operating Margin objectives at
105% of plan. The Maximum column represents the
maximum total bonus that could have been earned under our
Executive Bonus Plan if we achieved both the Corporate
GAAP Revenue and the |
28
|
|
|
|
|
Corporate Non-GAAP Operating Margin objectives at 115% of
plan or greater. For more details on our Executive Bonus Plan,
see Compensation Discussion and Analysis above. |
|
(2) |
|
Each option vests as to 25% of the underlying shares of common
stock on the first anniversary of the grant date and as to
1/48th of the underlying shares monthly thereafter. These
options are subject to accelerated vesting upon certain events
following a change of control event, as discussed in
Severance and Change of Control
Agreements below. |
|
(3) |
|
Amounts shown in this column do not reflect dollar amounts
actually received by the officer. Instead, these amounts reflect
the aggregate full grant date fair value calculated in
accordance with FASB ASC Topic 718 for awards granted during
2009. See Note 11 Stock Option and Other
Benefit Plans in the notes to consolidated financial
statements contained in our annual report on
Form 10-K
for the year ended December 31, 2009 for a description of
the ASC Topic 718 methodology and assumptions. |
|
(4) |
|
Represents the stock option we awarded to Mr. Miller in
connection with his appointment as our interim President and
Chief Executive Officer and does not include the other stock
options we granted to Mr. Miller in 2009 which related to
his service as one of our directors. For information regarding
the stock options we awarded to Mr. Miller in 2009 related
to his service as one of our directors, see the Director
Compensation section of this proxy statement. |
|
(5) |
|
Each of Mr. Galvagni and Mr. Perrault terminated their
employment with Glu in April 2010. As a result, none of their
options granted in 2009 vested and such options were, as a
result, forfeited, with the exception of 30,000 of the
60,000 shares subject to the option granted to
Mr. Galvagni on August 7, 2009. |
29
Outstanding
Equity Awards at the End of 2009
The following table provides information with respect to
outstanding stock options held by our Named Executive Officers
as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
Option
|
|
Option
|
|
|
Grant
|
|
Underlying Options(1)(2)
|
|
Exercise
|
|
Expiration
|
Name
|
|
Date
|
|
Exercisable
|
|
Unexercisable
|
|
Price($)(3)
|
|
Date
|
|
L. Gregory Ballard
|
|
|
07/20/06
|
|
|
|
183,333
|
|
|
|
|
|
|
|
3.90
|
|
|
|
07/20/16
|
|
|
|
|
09/07/06
|
|
|
|
130,553
|
|
|
|
|
|
|
|
10.53
|
|
|
|
09/07/16
|
|
|
|
|
11/29/07
|
|
|
|
85,938
|
|
|
|
|
|
|
|
5.95
|
|
|
|
11/29/13
|
|
|
|
|
10/31/08
|
|
|
|
169,582
|
|
|
|
|
|
|
|
0.89
|
|
|
|
10/31/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
569,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William J. Miller(4)
|
|
|
03/21/07
|
|
|
|
30,250
|
|
|
|
2,750
|
(5)
|
|
|
11.50
|
|
|
|
03/21/17
|
|
|
|
|
04/20/07
|
|
|
|
305
|
|
|
|
28
|
(5)
|
|
|
11.88
|
|
|
|
04/20/17
|
|
|
|
|
06/04/08
|
|
|
|
31,185
|
|
|
|
|
|
|
|
4.81
|
|
|
|
06/04/14
|
|
|
|
|
05/29/09
|
|
|
|
11,724
|
|
|
|
8,376
|
(6)
|
|
|
0.76
|
|
|
|
05/29/15
|
|
|
|
|
08/07/09
|
|
|
|
13,636
|
|
|
|
16,364
|
(7)
|
|
|
1.07
|
|
|
|
08/07/15
|
|
|
|
|
12/01/09
|
|
|
|
|
|
|
|
75,000
|
(8)
|
|
|
1.05
|
|
|
|
12/01/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
87,100
|
|
|
|
102,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alessandro Galvagni
|
|
|
04/28/05
|
|
|
|
43,333
|
|
|
|
|
|
|
|
4.50
|
|
|
|
04/28/10
|
|
|
|
|
09/07/06
|
|
|
|
60,936
|
|
|
|
14,063
|
|
|
|
10.53
|
|
|
|
09/07/16
|
|
|
|
|
11/29/07
|
|
|
|
39,062
|
|
|
|
35,938
|
|
|
|
5.95
|
|
|
|
11/29/13
|
|
|
|
|
10/31/08
|
|
|
|
26,250
|
|
|
|
63,750
|
|
|
|
0.89
|
|
|
|
10/31/14
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0.78
|
|
|
|
05/21/15
|
|
|
|
|
08/07/09
|
|
|
|
30,000
|
|
|
|
30,000
|
(9)
|
|
|
1.07
|
|
|
|
08/07/15
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
140,000
|
|
|
|
1.0648
|
|
|
|
12/16/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
199,581
|
|
|
|
323,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric R. Ludwig
|
|
|
04/28/05
|
|
|
|
16,666
|
|
|
|
|
|
|
|
4.50
|
|
|
|
04/28/10
|
|
|
|
|
07/20/06
|
|
|
|
49,453
|
|
|
|
|
|
|
|
3.90
|
|
|
|
07/20/16
|
|
|
|
|
09/07/06
|
|
|
|
40,624
|
|
|
|
9,375
|
|
|
|
10.53
|
|
|
|
09/07/16
|
|
|
|
|
11/29/07
|
|
|
|
33,854
|
|
|
|
31,146
|
|
|
|
5.95
|
|
|
|
11/29/13
|
|
|
|
|
04/28/08
|
|
|
|
16,666
|
|
|
|
23,334
|
|
|
|
4.39
|
|
|
|
04/28/14
|
|
|
|
|
10/31/08
|
|
|
|
26,250
|
|
|
|
63,750
|
|
|
|
0.89
|
|
|
|
10/31/14
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0.78
|
|
|
|
05/21/15
|
|
|
|
|
08/07/09
|
|
|
|
30,000
|
|
|
|
30,000
|
(9)
|
|
|
1.07
|
|
|
|
08/07/15
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
140,000
|
|
|
|
1.0648
|
|
|
|
12/16/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
213,513
|
|
|
|
337,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin S. Chou
|
|
|
07/20/06
|
|
|
|
53,610
|
|
|
|
9,723
|
|
|
|
3.90
|
|
|
|
07/20/16
|
|
|
|
|
01/25/07
|
|
|
|
12,152
|
|
|
|
4,514
|
|
|
|
10.65
|
|
|
|
01/25/17
|
|
|
|
|
11/29/07
|
|
|
|
20,833
|
|
|
|
19,167
|
|
|
|
5.95
|
|
|
|
11/29/13
|
|
|
|
|
10/31/08
|
|
|
|
16,041
|
|
|
|
38,959
|
|
|
|
0.89
|
|
|
|
10/31/14
|
|
|
|
|
05/21/09
|
|
|
|
|
|
|
|
25,000
|
|
|
|
0.78
|
|
|
|
05/21/15
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
90,000
|
|
|
|
1.0648
|
|
|
|
12/16/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
102,636
|
|
|
|
187,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas M. Perrault
|
|
|
05/21/09
|
|
|
|
|
|
|
|
25,000
|
|
|
|
0.78
|
|
|
|
05/21/15
|
|
|
|
|
08/04/08
|
|
|
|
23,333
|
|
|
|
46,667
|
|
|
|
3.79
|
|
|
|
08/04/14
|
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
90,000
|
|
|
|
1.0648
|
|
|
|
12/16/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
|
|
|
|
23,333
|
|
|
|
161,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Except as otherwise described in these footnotes, each option
that is not fully vested vests with respect to 25% of the
underlying shares on the first anniversary of the grant date and
as to 1/48th of the shares of common stock underlying it monthly
thereafter. |
30
|
|
|
(2) |
|
We have entered into the severance agreement described under
Potential Payments upon Termination or Change
in Control below, which provide for accelerating of
vesting of certain equity awards made or to be made to each of
our Named Executive Officers if certain events occur following a
change of control of the Company. |
|
(3) |
|
Represents the fair market value of a share of our common stock
on the options grant date, as determined by our Board, or
if the grant date was after our initial public offering, the
closing price of our common stock on the NASDAQ Global Market on
the grant date. |
|
(4) |
|
All of the options granted to Mr. Miller were granted to
him in connection with his service as one of our directors other
than the option to purchase 75,000 shares of our common
stock that we granted Mr. Miller on December 1, 2009,
which option was granted to Mr. Miller in connection with
his appointment as our interim President and Chief Executive
Officer. |
|
(5) |
|
This option vests with respect to
162/3%
of the underlying shares after six months on the six-month
anniversary of the grant date and thereafter vests in equal
monthly installments over the next 30 months. |
|
(6) |
|
This option vests in equal monthly installments over one year. |
|
(7) |
|
This option vested and became exercisable on a monthly basis,
beginning as of July 1, 2009 (the Vesting Start
Date), as to 9.09% of the underlying shares on the
one-month anniversary of the Vesting Start Date and as to an
additional 9.09% of the underlying shares on each monthly
anniversary thereafter, for as long as Mr. Miller served as
a co-chairman of our Board. This option ceased vesting on
January 4, 2010 when Mr. Miller was no longer serving
as a co-chairman of our Board. |
|
(8) |
|
This option was to vest and become exercisable in equal
25,000 share monthly installments over three months,
subject to Mr. Millers continued service as our
interim President and Chief Executive Officer. This option
ceased vesting on January 4, 2010 when Mr. Miller was
no longer serving as our interim President and Chief Executive
Officer. |
|
(9) |
|
This option was to vest and become exercisable with respect to
50% of the underlying shares on the date that a new Chief
Executive Officer joined Glu (the Start Date) and
the remaining 50% of the underlying shares vest and become
exercisable on the six-month anniversary of the Start Date. Our
Board deemed the appointment of Mr. Miller as our interim
President and Chief Executive Officer on December 1, 2009
to be the Start Date. |
Option
Exercises and Stock Vested in 2009
The following table shows information about stock option
exercises for each of the Named Executive Officers during 2009,
including the value realized upon exercise. None of our Named
Executive Officers had stock awards that vested during 2009.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Shares Acquired
|
|
Value Realized
|
Name
|
|
On Exercise
|
|
On Exercise($)(1)
|
|
L. Gregory Ballard
|
|
|
166,666
|
|
|
|
79,213
|
|
William J. Miller
|
|
|
|
|
|
|
|
|
Alessandro Galvagni
|
|
|
|
|
|
|
|
|
Eric R. Ludwig
|
|
|
|
|
|
|
|
|
Kevin S. Chou
|
|
|
|
|
|
|
|
|
Thomas M. Perrault
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The value realized on exercise of option awards is calculated as
follows: (i) if the exercise involved a sale of some or all
of the exercised shares, the difference between the actual price
at which the exercised shares were sold and the exercise price
of the options; or (ii) in all other cases, the difference
between the closing market price of our common stock as reported
on the NASDAQ Global Market on the date of exercise and the
exercise price of the options. |
31
Pension
Benefits and Nonqualified Deferred Compensation
We do not provide any pension benefits or a nonqualified
deferred compensation plan to the Named Executive Officers.
Potential
Payments upon Termination or Change in Control
Mr. Ballard
In January 2007, the Compensation Committee approved a severance
agreement with Mr. Ballard. The agreement provided that,
should Mr. Ballard terminate his employment for good
reason or be terminated, other than for cause
or disability, within 12 months after a change in
control transaction, he would continue for 12 months
to receive his then-current base salary and benefits (other than
any prospective bonus) he might have been eligible to receive.
Mr. Ballard would also be eligible to receive a partial
bonus prorated for the portion of the relevant period served by
him prior to the termination. Additionally, all of his unvested
options or outstanding shares of common stock subject to our
lapsing right of repurchase would become fully vested. The
Compensation Committee approved an amendment to
Mr. Ballards agreement in October 2008 related to
compliance with Section 409A of the Code.
In December 2008, the Compensation Committee, at
Mr. Ballards request, approved a reduction in
Mr. Ballards annual base salary from $375,000 to
$281,250, effective as of January 1, 2009. Mr. Ballard
requested this salary reduction in light of Glus 2008
financial performance, which was below plan, and to assist in
our ongoing cost-reduction efforts. However, for purposes of our
change of control severance agreement with Mr. Ballard, his
annual base salary was still deemed to be $375,000 (or such
higher salary as may then be in effect), which the Compensation
Committee believed was appropriate since Mr. Ballard
voluntarily elected to reduce his base salary.
See the description of the severance arrangement entered between
Glu and Mr. Ballard in July 2009 under Compensation
Discussion and Analysis Transitional Employment
Agreement with Mr. Ballard above.
Messrs. Chou,
Galvagni, Ludwig and Perrault
We have entered into severance agreements with each of
Messrs. Chou, Galvagni, Ludwig and Perrault, under which,
should the executive terminate his employment for good
reason or be terminated, other than for cause
or disability, within 12 months after a change in
control transaction, the executive would continue for six
months to receive his then-current base salary and benefits
(other than any prospective bonus) the executive might have been
eligible to receive. Each such executive will also be eligible
to receive a partial bonus prorated for the portion of the
relevant period served by the executive prior to the
termination. Additionally, each of these executives
outstanding unvested options or outstanding shares of common
stock subject to our lapsing right of repurchase would become
vested as to an additional 50% of the shares originally subject
to that option or lapsing repurchase right. Finally, each of the
executives would receive reimbursement for up to 12 months
of COBRA premiums.
The following are the definitions generally used in the
severance agreements and retention arrangements described for
each of the Named Executive Officers above:
A change in control transaction is defined to mean
the closing of (1) a merger or consolidation in one
transaction or a series of related transactions, in which our
securities held by our stockholders before the merger or
consolidation represent less than 50% of the outstanding voting
equity securities of the surviving corporation after the
transaction or series of related transactions, (2) a sale
or other transfer of all or substantially all of our assets as a
going concern, in one transaction or a series of related
transactions, followed by the distribution to our stockholders
of any proceeds remaining after payment of creditors or
(3) a transfer of more than 50% of our outstanding voting
equity securities by our stockholders to one or more related
persons or entities other than Glu in one transaction or a
series of related transactions.
Good reason is defined to mean the executives
resignation of employment from Glu expressly based on the
occurrence of any of the following conditions, without the
executives informed written consent, provided, however,
that with respect to each of the following conditions, the
executive must (a) within 90 days following
32
its occurrence, deliver to us a written notice explaining the
specific basis for the executives belief that he is
entitled to terminate his employment due to an Involuntary
Termination and (b) give us an opportunity to cure any of
the following within 30 days following delivery of such
notice and explanation: (1) a material reduction in his
duties, position or responsibilities, or his removal from these
duties, position and responsibilities, unless he is provided
with a position of substantially equal or greater organizational
level, duties, authority and compensation; provided, however,
that a change of title, in and of itself, or a reduction of
duties, position or responsibilities solely by virtue of our
being acquired and made part of a larger entity will not
constitute an Involuntary Termination, (2) a
greater than 15% reduction in his then current annual base
compensation that is not applicable to our other executive
officers or (3) without his express written consent, a
relocation to a facility or a location more than 30 miles
from his then current location of employment. Involuntary
Termination does not include a termination of employment for
death or permanent disability.
Cause is defined to mean (1) the
executives committing an act of gross negligence, gross
misconduct or dishonesty, or other willful act, including
misappropriation, embezzlement or fraud, that materially
adversely affects us or any of our customers, suppliers or
partners, (2) his personal dishonesty, willful misconduct
in the performance of services for us, or breach of fiduciary
duty involving personal profit, (3) his being convicted of,
or pleading no contest to, any felony or misdemeanor involving
fraud, breach of trust or misappropriation or any other act that
our Board reasonably believes in good faith has materially
adversely affected, or upon disclosure will materially adversely
affect, us, including our public reputation, (4) any
material breach of any agreement with us by him that remains
uncured for 30 days after written notice by us to him,
unless that breach is incapable of cure, or any other material
unauthorized use or disclosure of our confidential information
or trade secrets involving personal benefit or (5) his
failure to follow the lawful directions of our Board or, if he
is not the Chief Executive Officer, the lawful directions of the
Chief Executive Officer, in the scope of his employment unless
he reasonably believes in good faith that these directions are
not lawful and notifies our Board or Chief Executive Officer, as
the case may be, of the reasons for his belief.
See the discussion of the retention arrangements entered into
with Mr. Galvagni and Mr. Ludwig in July 2009 under
Compensation Discussion and Analysis Severance
and Change of Control Payments above.
The following table below estimates the potential payments to
each Named Executive Officer upon involuntary termination or his
terminating his employment for good reason within 12 months
following a change in our control as of December 31, 2009
upon the terms of the agreements set forth above. None of our
Named Executive Officers have agreements with us that provide
for potential payments upon termination absent a change of
control or upon death or disability, other than arrangements
generally available to all of our employees (such as payout of
accrued but unused paid time off).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Acceleration
|
|
Benefits &
|
Name
|
|
Salary ($)
|
|
Shares(1)
|
|
Value ($)(2)
|
|
Perquisites ($)
|
|
L. Gregory Ballard(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William J. Miller
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alessandro Galvagni
|
|
|
135,000
|
|
|
|
311,665
|
|
|
|
25,026
|
|
|
|
16,293
|
|
Eric R. Ludwig
|
|
|
125,000
|
|
|
|
300,833
|
|
|
|
25,026
|
|
|
|
17,104
|
|
Kevin S. Chou
|
|
|
112,500
|
|
|
|
146,666
|
|
|
|
15,609
|
|
|
|
12,910
|
|
Thomas M. Perrault
|
|
|
105,000
|
|
|
|
92,500
|
|
|
|
8,459
|
|
|
|
6,097
|
|
|
|
|
(1) |
|
Reflects acceleration of vesting of 50% of the shares originally
subject to that option. |
|
(2) |
|
These amounts are calculated by aggregating the sums determined
by multiplying, for each award, (i) the number of
accelerated stock options by (ii) the positive difference,
if any, between the closing price per share of our common stock
on the NASDAQ Global Market on December 31, 2009, which was
$1.15, and the option exercise price per share. |
|
(3) |
|
Mr. Ballards employment with Glu terminated on
December 1, 2009 and he received the payments described
under Compensation Discussion and Analysis
Transitional Employment Agreement with Mr. Ballard
above. |
33
EQUITY
COMPENSATION PLAN INFORMATION
Equity
Compensation Plan Table
The following table sets forth certain information, as of
December 31, 2009, concerning securities authorized for
issuance under all of our equity compensation plans: our 2007
Plan, our 2007 Employee Stock Purchase Plan (the
ESPP), our 2008 Equity Inducement Plan (the
Inducement Plan) and our 2001 Second Amended and
Restated Stock Option Plan (the 2001 Plan), which
plan terminated upon the adoption of the 2007 Plan. Each of the
2007 Plan and ESPP contains an evergreen provision,
pursuant to which on January 1st of each year we
automatically add 3% and 1%, respectively, of our shares of
Common Stock outstanding on the preceding
December 31st to the shares reserved for issuance
under each plan. The evergreen provision of our 2007 Plan
expires after the increase on January 1, 2011, while the
evergreen provision of our ESPP expires after the increase on
January 1, 2015. In addition, pursuant to a pour
over provision in our 2007 Plan, options that are
cancelled, expired or terminated under the 2001 Plan are added
to the number of shares reserved for issuance under our 2007
Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
Number of
|
|
|
|
|
|
for Future Issuance
|
|
|
|
Securities to be
|
|
|
|
|
|
Under Equity
|
|
|
|
Issued Upon
|
|
|
Weighted-Average
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
(Excluding
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Securities
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Reflected in Column
|
|
Plan Category
|
|
and Rights
|
|
|
and Rights
|
|
|
(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
4,672,216
|
|
|
$
|
3.46
|
|
|
|
1,916,445
|
(1)
|
Equity compensation plans not approved by security holders
|
|
|
169,245
|
(2)
|
|
|
4.39
|
|
|
|
1,250,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
4,841,461
|
|
|
$
|
3.49
|
|
|
|
3,166,445
|
(4)
|
|
|
|
(1) |
|
Represents 1,404,193 shares available for issuance under
our the 2007 Plan, which plan permits the grant of incentive and
nonstatutory stock options, stock appreciation rights,
restricted stock, stock awards and restricted stock units; and
512,252 shares available for issuance under the ESPP. In
addition, 995,719 shares subject to outstanding options
under the 2001 Plan may be re-issued under the 2007 Plan
pursuant to the pour over provision described above. |
|
(2) |
|
Represents outstanding options under the Inducement Plan. |
|
(3) |
|
Represents shares available for issuance under the Inducement
Plan, which plan permits the grant of nonstatutory stock options. |
|
(4) |
|
Excludes 910,796 shares available for issuance under the
2007 Plan and 303,599 shares available for issuance under
the ESPP, which in each case were added to the respective share
reserve on January 1, 2010 pursuant to the evergreen
provisions described above. |
Equity
Compensation Plans Not Approved by Security Holders
In March 2008, our Board of Directors adopted the Inducement
Plan to augment the shares available under its existing 2007
Plan. The Inducement Plan, which has a ten-year term, did not
require the approval of our stockholders. We initially reserved
600,000 shares of our common stock for grant and issuance
under the Inducement Plan, and on December 28, 2009, the
Compensation Committee of our Board of Directors increased the
number of shares reserved for issuance under the Inducement Plan
to 1,250,000 shares in connection with the appointment of
Niccolo M. de Masi as our new President and Chief Executive
Officer. As of December 31, 2009, there were
1,250,000 shares available for future grants under the
Inducement Plan, and on January 4, 2010, we granted Mr. de
Masi a stock option to purchase 1,250,000 shares of our
common stock under the Inducement Plan. We may only grant
nonstatutory stock options (NSOs) under the
Inducement Plan and grants under the
34
Inducement Plan may only be made to persons not previously an
employee or director of Glu, or following a bona fide period of
non-employment, as an inducement material to such
individuals entering into employment with us and to
provide incentives for such persons to exert maximum efforts for
our success. We may grant NSOs under the Inducement Plan at
prices less than 100% of the fair value of the shares on the
date of grant, at the discretion of our Board of Directors. The
fair value of our common stock is determined by the last sale
price of our stock on the NASDAQ Global Market on the date of
determination. If any option granted under the 2008 Plan expires
or terminates for any reason without being exercised in full,
the unexercised shares will be available for grant by us under
the Inducement Plan. All outstanding NSOs are subject to
adjustment for any future stock dividends, splits, combinations,
or other changes in capitalization as described in the
Inducement Plan. If we were acquired and the acquiring
corporation did not assume or replace the NSOs granted under the
Inducement Plan, or if we were to liquidate or dissolve, all
outstanding awards will expire on such terms as our Board of
Directors determines.
Option
Exchange Program
On April 22, 2009, we launched a stock option exchange
program for our U.S. and U.K. employees who held options
with exercise prices at or above $1.25 (the Exchange
Program). Our executive officers and non-employee
directors were not eligible to participate in the Exchange
Program. Under the Exchange Program, employees who elected to
tender an eligible option received a new nonstatutory stock
option, granted under the 2007 Plan, for a certain number of
shares, depending on the exercise price of the underlying option
(the New Options). These New Options will vest over
three years, in equal monthly installments (i.e., with no
initial cliff), and have a six-year term. The grant
date of the New Options was May 22, 2009, which was the
first trading day following the closing of the Exchange Program.
The Compensation Committee approved the Exchange Program
(1) to provide our eligible U.S. and U.K. employees
with the opportunity to own options that over time may have a
greater potential to increase in value, which we hope will
create better performance incentives for those employees and
will maximize the value of our common stock for our current
stockholders, (2) to decrease the number of outstanding
options with little retentive effect and (3) to increase
the number of shares available for future awards under the 2007
Plan (the options cancelled pursuant to the Exchange Program
will be available for future issuances pursuant to the terms of
that plan).
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Review,
Approval or Ratification of Transactions with Related
Persons
Our Nominating and Governance Committee has adopted a written
related-person transactions policy. The Nominating and
Governance Committee reviews transactions that may be
related-person transactions, which are transactions
between Glu and related persons in which the aggregate amount
involved exceeds or may be expected to exceed $120,000 and in
which a related person has or will have a direct or indirect
material interest. For purposes of the policy, a related person
is a director, executive officer, nominee for director, or a
greater than 5% beneficial owner of Glus common stock, in
each case the beginning of our last fiscal year, and their
immediate family members.
This policy provides that, barring special facts or
circumstances, a related person does not have a direct or
indirect material interest in the following categories of
transactions:
|
|
|
|
|
employment-related compensation to executive officers that is
approved by the Compensation Committee;
|
|
|
|
compensation to non-employee directors that is reported in
Glus proxy statement;
|
|
|
|
any transaction with another company to which the related
partys only relationship is as a director, beneficial
owner of less than 10% of that companys shares, or
employee (other than an executive officer), if the aggregate
amount involved does not exceed the greater of $500,000 or 2% of
that companys total annual revenues;
|
|
|
|
any transaction where the related partys interest arises
solely from the ownership of our common stock and all holders of
our common stock receive the same benefit on a pro rata basis
(e.g., a dividend); and
|
|
|
|
ordinary course business travel and expenses, advances and
reimbursements.
|
35
In determining whether to approve or ratify a related-person
transaction, the Nominating and Governance Committee will take
into account, among other factors it deems appropriate, whether
the transaction is on terms no less favorable than terms
generally available to an unaffiliated third party under the
same or similar circumstances, the extent of the related
partys interest in the transaction, the benefits to Glu of
the transaction, the potential impact on a directors
independence and whether the transaction would impair the
judgment of a director or executive officer to act in the best
interests of Glu and its stockholders.
Certain
Transactions with Related Persons
Other than the compensation arrangements that are described
above in Director Compensation, Compensation
Discussion and Analysis and Executive Compensation
and Related Information, and the indemnification
agreements described below, since January 1, 2009, we have
not been a party to any transaction or series of similar
transactions in which the amount involved exceeded or will
exceed $120,000 and in which any director, nominee for director,
executive officer, holder of more than 5% of our common stock or
certain persons or entities affiliated with them had or will
have a material interest.
Our Board and stockholders have approved, and we have entered
into, indemnity agreements with each of our directors and
executive officers that may be broader than the specific
indemnification provisions contained in the Delaware General
Corporation Law. These indemnity agreements may require us,
among other things, to indemnify our directors and executive
officers against liabilities that may arise by reason of their
status or service. These indemnity agreements may also require
us to advance all expenses incurred by the directors and
executive officers in investigating or defending any such
action, suit or proceeding. We believe that these agreements are
necessary to attract and retain qualified individuals to serve
as directors and executive officers. We have obtained insurance
policies under which, subject to the limitations of the
policies, coverage is provided to our directors and officers
against loss arising from claims made by reason of breach of
fiduciary duty or other wrongful acts as a director or officer,
including claims relating to public securities matters, and to
us with respect to payments that may be made by us to these
officers and directors pursuant to our indemnification
obligations or otherwise as a matter of law.
See also Corporate Governance Director
Independence for information the Board considered in
determining the independence of three of our
directors Ann Mather, William J. Miller and A.
Brooke Seawell.
36
AUDIT
COMMITTEE REPORT
The Audit Committee of the Board is composed of Ms. Mather
and Messrs. Nada and Seawell, each of whom is an
independent director, as independence for audit committee
members is defined in The NASDAQ Stock Markets listing
standards. During 2009, the Audit Committee consisted of
Ms. Mather and Messrs. Nada and Skaff; however,
Mr. Seawell was appointed to the Audit Committee in April
2010 as Mr. Skaffs replacement.
As members of the Audit Committee, we assist the Board in
fulfilling its responsibilities relating to the oversight of the
accounting, financial reporting, internal controls, financial
practices and audit activities of Glu and its subsidiaries.
In fulfilling its oversight role, the Audit Committee has
reviewed and discussed with management and the independent
registered public accounting firm Glus audited financial
statements. The Audit Committee met seven times during 2009,
including meetings with Glus independent registered public
accounting firm, PricewaterhouseCoopers LLP, to review
Glus quarterly and annual results. It is not the duty of
the Audit Committee to plan or conduct audits or to determine
that the financial statements are complete and accurate and
conform to generally accepted accounting principles. Management
is responsible for the preparation, presentation and integrity
of Glus financial statements, accounting and financial
reporting principles, internal controls and procedures designed
to ensure compliance with accounting standards, applicable laws
and regulations. PricewaterhouseCoopers LLP is responsible for
expressing an opinion on the conformity of Glus audited
financial statements to generally accepted accounting principles.
The Audit Committee discussed with Glus independent
registered public accounting firm the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended (Communication with Audit Committees). The Audit
Committee has received from the independent registered public
accounting firm the written disclosures and the letter required
by the applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firms communications with the Audit Committee
concerning independence and has discussed with the independent
registered public accounting firm that firms independence.
Based upon the Audit Committees review and discussions
referred to above, the Audit Committee recommended to the Board
that Glus audited consolidated financial statements be
included in Glus Annual Report on
Form 10-K
for the year ended December 31, 2009, filed with the SEC on
March 31, 2010.
Submitted by the Audit Committee of the Board,
Ann Mather (Chair)
Hany M. Nada
A. Brooke Seawell
37
PROPOSAL NO. 2
APPROVAL
OF AN AMENDMENT TO THE 2007 EQUITY INCENTIVE PLAN
Our Board of Directors is requesting stockholder approval of an
amendment to the 2007 Plan to add an additional
3,000,000 shares to the number of shares of common stock
authorized for issuance under the 2007 Plan.
In April 2010, our Board of Directors approved an amendment to
the 2007 Plan, subject to stockholder approval, to reflect this
increase to the 2007 Plans share reserve. Our Board of
Directors increased the share reserve to ensure that we have a
sufficient number of shares to continue to utilize a broad array
of equity incentives in order to retain the services of our and
our affiliates employees, consultants and directors, to
provide incentives for such persons to exert maximum efforts
toward our success, and to attract and retain the new talent to
our company that we will require to execute our strategy and
grow our business.
The affirmative vote of the holders of a majority of votes cast
either in person or by proxy at the Annual Meeting will be
required to approve the amendment to the 2007 Plan. Abstentions
and broker non-votes are counted towards a quorum. Abstentions
will have the same effect as a vote against
Proposal No. 2, but broker non-votes will not be
counted for any purpose in determining whether the proposal has
been approved.
The Board
recommends that stockholders vote FOR the
approval of an amendment to the 2007 Plan.
The terms and provisions of the 2007 Plan are summarized below.
This summary, however, does not purport to be a complete
description of the 2007 Plan. The 2007 Plan, amended to reflect
the increase in number of shares reserved, has been filed with
the SEC as an attachment to this proxy statement and may be
accessed from the SECs website at www.sec.gov. The
following summary is qualified in its entirety by reference to
the complete text of the 2007 Plan. Any stockholder that wishes
to obtain a copy of the actual plan document may do so by
written request to: Corporate Secretary, Glu Mobile Inc., 2207
Bridgepointe Parkway, Suite 300, San Mateo, California
94404.
The following is a summary of the material features of the 2007
Plan.
General
The 2007 Plan provides for the grant of incentive stock options,
nonstatutory stock options, restricted stock awards, stock
appreciation rights, restricted stock units and stock bonuses
and performance shares (collectively, the stock
awards). The 2007 Plan also provides the ability to grant
performance shares that may qualify the compensation
attributable to those awards as performance-based compensation
for purposes of the Code, as explained in greater detail below.
Incentive stock options granted under the 2007 Plan are intended
to qualify as incentive stock options within the
meaning of Section 422 of the Code. Nonstatutory stock
options granted under the 2007 Plan are not intended to qualify
as incentive stock options under the Code. See Federal
Income Tax Information for a discussion of the tax
treatment of stock awards.
Purpose
Our Board adopted the 2007 Plan to provide a means to retain the
services of our employees, directors, consultants, independent
contractors and advisors, and those of any parent or subsidiary
of ours, to attract and retain the new talent to our company
that we will require to execute our strategy and grow our
business, and to provide a means by which these eligible
individuals may be given an opportunity to benefit from
increases in the value of our common stock through the grant of
stock awards, thereby aligning the long-term compensation and
interests of those individuals with our stockholders.
Administration
The 2007 Plan is administered by our Compensation Committee, all
of the members of which are non-employee directors under
applicable federal securities laws and outside directors as
defined under applicable
38
federal tax laws. Our Compensation Committee has the authority
to construe and interpret the 2007 Plan, grant and determine the
terms of each award, including the exercise price, the number of
shares subject to the award, the exercisability of the award and
the form of consideration payable upon exercise of the award,
and make all other determinations necessary or advisable for the
administration of the 2007 Plan. The Compensation Committee also
has the authority to institute an exchange program whereby
outstanding awards may be surrendered, cancelled or exchanged.
Eligibility
The 2007 Plan provides for the grant of incentive stock options
only to our employees and employees of any parent or subsidiary
of ours. All awards other than incentive stock options may be
granted to our employees, directors, consultants, independent
contractors and advisors, and those of any parent or subsidiary
of ours. As of March 18, 2010, we had a total of
479 employees and seven non-employee directors who would be
eligible to be granted awards from the 2007 Plan.
Stock
Subject to the 2007 Plan
We are proposing an increase in the available share reserve
under the 2007 Plan by 3,000,000 shares of our common
stock. If such increase is approved by our stockholders, the
cumulative aggregate share authorization under our 2007 Plan
will increase from 5,871,148 to 8,871,148 shares. As of
April 8, 2010, 3,183,656 shares of common stock were
subject to outstanding options under the 2007 Plan and
1,231,890 shares of common stock remained available for
future issuance.
The number of shares available for grant and issuance under the
2007 Plan has been, and will be, increased automatically on
January 1 of each of 2008 through 2011 by an amount equal to 3%
of our shares outstanding on the immediately preceding
December 31, unless our Board of Directors, in its
discretion, determines to make a smaller increase. In addition,
the following shares will again be available for grant and
issuance under our 2007 Plan:
|
|
|
|
|
shares surrendered pursuant to an exchange program;
|
|
|
|
shares subject to an option or stock appreciation right granted
under our 2007 Plan that cease to be subject to the option or
stock appreciation right for any reason other than exercise of
the option or stock appreciation right;
|
|
|
|
shares subject to an award granted under our 2007 Plan that are
subsequently forfeited or repurchased by us at the original
issue price; or
|
|
|
|
shares subject to an award granted under our 2007 Plan that
otherwise terminates without shares being issued.
|
Terms of
Options
The 2007 Plan provides for the grant of nonstatutory stock
options, incentive stock options or a combination of each.
Incentive stock options may only be granted to our employees and
employees of any parent or subsidiary of ours. Subject to
appropriate adjustment as provided in the 2007 Plan, no person
will be eligible to receive more than 333,333 shares in any
calendar year under our 2007 Plan other than a new employee of
ours or a new employee of any parent or subsidiary of ours, who
will be eligible to receive no more than 666,666 shares
under the plan in the calendar year in which the employee
commences employment. Subject to adjustment as provided in the
2007 Plan, in no event shall more than 16,666,666 shares of
our common stock be available for issuance pursuant to the
exercise of incentive stock options granted under the 2007 Plan.
Each stock option granted under the 2007 Plan must be evidenced
by a written agreement between us and the optionee specifying
the number of shares subject to the stock option and the other
terms and conditions of the stock option, consistent with the
requirements of the 2007 Plan. The exercise price of each stock
option may not be less than the fair market value of a share of
our common stock on the date of grant (except in connection with
the assumption or substitution for another stock option in a
manner qualifying under Sections 409A and 424(a) of the
Code). In addition, any incentive stock option granted to a
person who at the time of grant owns stock possessing
39
more than 10% of the total combined voting power of all classes
of our stock or any subsidiary corporation of Glu (a Ten
Percent Stockholder) must have an exercise price equal to
at least 110% of the fair market value of a share of our common
stock on the date of grant.
The 2007 Plan provides that the stock option exercise price may
be paid in cash or by check or, where expressly approved by our
Compensation Committee and permitted under applicable law, by
means of:
|
|
|
|
|
cancellation of indebtedness;
|
|
|
|
surrender of shares of our common stock owned by the optionee
having a fair market value not less than the aggregate exercise
price of the shares being exercised;
|
|
|
|
waiver of compensation due or accrued to the optionee for
services rendered or to be rendered to Glu or a parent or
subsidiary of Glu;
|
|
|
|
a broker-assisted cashless exercise;
|
|
|
|
by any combination of the above methods; or
|
|
|
|
any other method of payment permitted by applicable law.
|
Our Compensation Committee may provide for options to be
exercised only as they vest or to be immediately exercisable
with any shares issued on exercise being subject to our right of
repurchase that lapses as the shares vest. Options may vest
based on time or achievement of performance conditions. In
general, our employee stock options vest over a four-year
period, with 25% of the underlying shares vesting on the first
anniversary of the grant date and the remaining shares vesting
in equal monthly installments thereafter for the following three
years. Stock options granted to our continuing directors
generally vest in equal monthly installments over one year.
Stock options granted to new directors generally vest with
respect to
162/3%
of the underlying shares after six months and thereafter vest in
equal monthly installments over the next 30 months.
Stock options granted to our employees and directors will expire
not later than ten years from the date of grant and in no event
will the term of an incentive stock option granted to a Ten
Percent Stockholder exceed five years. Since October 2007, we
have generally granted stock options having a six-year term,
whereas we had previously generally granted options having a
ten-year term. Subject to the term of the stock option, a stock
option generally will remain exercisable for three months
following the optionees termination of service, except
that if service terminates as a result of an optionees
death or disability, the stock option generally will remain
exercisable for 12 months, and, if an employee
optionees service is terminated for cause, the stock
option will terminate immediately. The Committee, in its
discretion, may provide different post-termination exercise
periods, but in any event the stock option must be exercised no
later than the original expiration of its term.
Unless otherwise determined by our Compensation Committee, stock
options are not assignable or transferable by the optionee other
than by will or by the laws of descent and distribution.
Terms of
Stock Appreciation Rights
Stock appreciation rights provide for a payment, or payments, in
cash or shares of our common stock, to the participant based
upon the increase in the fair market value of our common stock
on the date of exercise from the stated exercise price. Stock
appreciation rights may vest based on time or achievement of
performance conditions. Each stock appreciation right awarded
under the 2007 Plan must be evidenced by a written agreement
between us and the participant specifying the terms and
conditions of the stock appreciation right, consistent with the
requirements of the 2007 Plan.
Our Compensation Committee will determine the terms of each
stock appreciation right, including the number of shares subject
to the stock appreciation right, the exercise price and the time
or times during which the stock appreciation right may be
settled, the consideration to be distributed on settlement of
the stock appreciation right and the effect of the
participants termination on his or her stock appreciation
rights. The exercise price of the stock appreciation right may
be less than the fair market value of the underlying shares of
common stock.
40
A stock appreciation right may be awarded upon satisfaction of
performance factors that are set out in advance in the
participants individual award agreement. If the stock
appreciation right is being earned upon the satisfaction of
performance factors, then the Compensation Committee will
determine the performance factors to be used, as well as the
nature, length and starting date of the performance period.
The maximum term of any stock appreciation right granted under
the 2007 Plan is ten years. Except as may be set forth in the
participants individual award agreement, vesting ceases
upon the participants termination of service unless
determined otherwise by the Compensation Committee.
Terms of
Restricted Stock Unit Awards
Restricted stock units represent the right to receive shares of
our common stock at a specified date in the future, subject to
forfeiture of that right because of termination of the
participants services to us or the participants
failure to achieve certain performance conditions. If a
restricted stock unit has not been forfeited, then on the date
specified in the restricted stock unit agreement, we will
deliver to the holder of the restricted stock unit whole shares
of our common stock, which may be subject to additional
restrictions, cash or a combination of our common stock and cash.
Our Compensation Committee will determine the terms of each
restricted stock unit award, including the number of shares
subject to the restricted stock unit award, the time or times
during which the restricted stock unit award may be settled, the
consideration to be distributed on settlement of the restricted
stock unit award and the effect of the participants
termination on his or her restricted stock unit award.
A restricted stock unit award may be granted upon satisfaction
of performance factors that are set out in advance in the
participants individual award agreement. If the stock
appreciation right is being earned upon the satisfaction of
performance factors, then the Compensation Committee will
determine the performance factors to be used, the nature, length
and starting date of the performance period and the number of
shares that will be subject to the restricted stock unit award.
Except as may be set forth in the participants individual
award agreement, vesting ceases upon the participants
termination of service unless determined otherwise by the
Compensation Committee.
Terms of
Stock Bonus Awards
Stock bonuses are awards of shares of our common stock, which
may be restricted stock or restricted stock units, that are
granted as additional compensation for service
and/or
performance. Payment from the participant is not required for
stock bonuses, and stock bonuses are generally not subject to
vesting.
Our Compensation Committee will determine the number of shares
to be awarded to a 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 Glu or
upon satisfaction of performance goals as specified in the
participants individual award agreement. Prior to the
grant of any stock bonus award, our Compensation Committee will
determine the performance factors to be used, the nature, length
and starting date of the performance period and the number of
shares that will be awarded to the participant.
Except as may be set forth in the participants individual
award agreement, vesting ceases upon the participants
termination of service unless determined otherwise by the
Compensation Committee.
Terms of
Performance Shares
Performance shares are awards denominated in shares of our
common stock that may be settled in cash or by issuance of those
shares only if performance goals established by our compensation
committee have been achieved or the awards otherwise vest. Each
performance share will have an initial value equal to the fair
market value of a share of our common stock 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.
41
Our Compensation Committee will determine the terms of each
performance share award, including the number of shares subject
to the award, the performance factors and performance period
that will determine the time and extent to which each award of
performance shares will be settled, the consideration to be
distributed on settlement of the award and the effect of the
participants termination on his or her stock appreciation
rights.
Prior to the grant of any performance share award, our
Compensation Committee will determine the performance factors to
be used, the nature, length and starting date of the performance
period and the number of shares that will be awarded to the
participant. Prior to settlement, the Compensation Committee
shall determine the extent to which the performance shares have
been earned.
Grants to
Non-Employee Directors
Non-employee members of our Board of Directors are eligible to
receive any type of award offered under the 2007 Plan except
incentive stock options, which can only be granted to employees.
If stock options or stock appreciation rights are granted to our
non-employee directors, their exercise price may not be less
than the fair market value of our common stock when the option
or stock appreciation right is granted. In the event of a
corporate transaction, all awards held by our non-employee
directors will accelerate fully and become vested and
exercisable or settled, as the case may be.
Changes
to Capital Structure
In the event any change is made to the outstanding shares of our
common stock without our receipt of consideration (whether
through stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or
similar change in our capital structure), appropriate
adjustments will be made to: (a) the maximum number of
securities issuable under the 2007 Plan, (b) the exercise
prices of and number of shares subject to outstanding options
and stock appreciation right, (c) the number of shares
subject to other outstanding awards, (d) the maximum number
of shares that may be issued as incentive stock options
(e) the maximum number of shares that may be awarded to an
individual or new employee in a calendar year and (f) the
number of shares that are granted as awards to our non-employee
directors.
Corporate
Transactions; Changes in Control
In the event of certain significant corporate transactions, any
or all outstanding awards under the 2007 Plan may be assumed or
replaced by the successor corporation. In the alternative, the
successor corporation may substitute equivalent awards or
provide substantially similar consideration to award holders 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 Glu shares held by the award
holder, substantially similar shares or other property subject
to repurchase restrictions no less favorable to the holder. In
the event such successor corporation refuses to assume, convert,
replace or substitute awards, then such awards will expire on
such transaction at such time and on such conditions as the
Board will determine. However, our Board or Compensation
Committee may accelerate the vesting of such awards in
connection with certain significant corporate transactions.
In the event of certain significant corporate transactions, the
vesting of all awards granted to non- employee members of our
Board of Directors will accelerate and such awards will become
exercisable (as applicable) in full prior to the consummation of
such corporate transaction at such times and on such conditions
as the Compensation Committee determines.
A significant corporate transaction means the occurrence of any
of the following events: (i) any person becomes the
beneficial owner of Glu securities representing 50% or more of
the total voting power represented by our then-outstanding
voting securities; (ii) our consummation of the sale or
disposition of all or substantially all of our assets;
(iii) the consummation of a merger or consolidation of Glu
with any other corporation, other than a merger or consolidation
which would result in our voting securities outstanding
immediately prior to such merger or consolidation continuing to
represent 50% of the total voting power represented by the
voting securities of Glu or such surviving entity or its parent
outstanding immediately after such merger or consolidation.
42
The acceleration of a stock award in the event of an acquisition
or similar corporate event may be viewed as an anti-takeover
provision, which may have the effect of discouraging a proposal
to acquire or otherwise obtain control over us.
Duration,
Termination and Amendment
Our Board of Directors may terminate or amend the 2007 Plan at
any time; provided, however, that the Board will not, without
the approval of our stockholders, amend the 2007 Plan in any
manner that requires such stockholder approval. Unless sooner
terminated, the 2007 Plan will terminate on January 25,
2017.
Federal
Income Tax Information
The following summary is intended only as a general guide to the
current U.S. federal income tax consequences of
participation in the 2007 Plan and does not attempt to describe
all possible federal or other tax consequences of such
participation or tax consequences based on particular
circumstances. Furthermore, the tax consequences are complex and
subject to change, and a taxpayers particular situation
may be such that some variation of the described rules is
applicable.
Incentive
Stock Options
A participant recognizes no taxable ordinary income as a result
of the grant or exercise of an incentive stock option qualifying
under Section 422 of the Code. However, the exercise of an
incentive stock option may increase the participants
alternative minimum tax liability, if any.
If a participant holds stock acquired through exercise of an
incentive stock option for more than two years from the date on
which the stock option was granted and more than one year after
the date the stock option was exercised for those shares, any
gain or loss on a disposition of those shares (a
qualifying disposition) will be a long-term capital
gain or loss. Upon such a qualifying disposition, we will not be
entitled to any income tax deduction.
Generally, if the participant disposes of the stock before the
expiration of either of those holding periods (a
disqualifying disposition), then at the time of such
disqualifying disposition, the participant will realize taxable
ordinary income equal to the lesser of (i) the excess of
the stocks fair market value on the date of exercise over
the exercise price, or (ii) the participants actual
gain, if any, on the purchase and sale. The participants
additional gain or any loss upon the disqualifying disposition
will be a capital gain or loss, which will be long-term or
short-term depending on whether the stock was held for more than
one year. To the extent the participant recognizes ordinary
income by reason of a disqualifying disposition, generally we
will be entitled (subject to the requirement of reasonableness,
the provisions of Section 162(m) of the Code, and the
satisfaction of a tax reporting obligation) to a corresponding
income tax deduction in the tax year in which the disqualifying
disposition occurs.
Nonstatutory
Stock Options
Stock options not designated or qualifying as incentive stock
options are nonstatutory stock options having no special tax
status. A participant generally recognizes no taxable ordinary
income as the result of the grant of such a stock option. Upon
exercise of a nonstatutory stock option, the participant
normally recognizes ordinary income in the amount of the
difference between the stock option exercise price and the fair
market value of the shares on the date of purchase. Generally,
we will be entitled (subject to the requirement of
reasonableness, the provisions of Section 162(m) of the
Code, and the satisfaction of a tax reporting obligation) to an
income tax deduction in the tax year in which such ordinary
income is recognized by the participant.
Upon the disposition of stock acquired by the exercise of a
nonstatutory stock option, any gain or loss, based on the
difference between the sale price and the fair market value on
the exercise date, will be taxed as capital gain or loss.
Stock
Appreciation Rights
A participant recognizes no taxable ordinary income upon the
receipt of a stock appreciation right. Upon the exercise of a
stock appreciation right, the participant will recognize
ordinary income in an amount equal to the
43
excess of the fair market value of the underlying shares of
common stock on the exercise date over the exercise price. If
the participant is an employee, such ordinary income generally
is subject to withholding of income and employment taxes. We
generally should be entitled to a deduction equal to the amount
of ordinary income recognized by the participant in connection
with the exercise of the stock appreciation right, except to the
extent such deduction is limited by applicable provisions of the
Code.
Restricted
Stock Units
No taxable income is recognized upon receipt of a restricted
stock unit award. In general, the participant will recognize
ordinary income in the year in which the shares subject to that
award vest and are actually issued to the participant in an
amount equal to the fair market value of the shares on the date
of issuance. We will be entitled (subject to the requirement of
reasonableness, the provisions of Section 162(m) of the
Code, and the satisfaction of a tax reporting obligation) to an
income tax deduction equal to the amount of ordinary income
recognized by the participant at the time the shares are issued.
In general, the deduction will be allowed for the taxable year
in which such ordinary income is recognized by the participant.
Stock
Bonuses
A participant acquiring restricted stock generally will
recognize ordinary income equal to the difference between the
fair market value of the shares on the determination
date (as defined below) and the participants
purchase price, if any. If the participant is an employee, such
ordinary income generally is subject to withholding of income
and employment taxes. The determination date is the
date on which the participant acquires the shares unless they
are subject to a substantial risk of forfeiture and are not
transferable, in which case the determination date is the
earlier of (i) the date on which the shares become
transferable or (ii) the date on which the shares are no
longer subject to a substantial risk of forfeiture. If the
determination date is after the date on which the participant
acquires the shares, the participant may elect, pursuant to
Section 83(b) of the Code, to have the date of acquisition
be the determination date by filing an election with the
Internal Revenue Service no later than 30 days after the
date the shares are acquired. Upon the sale of shares acquired
pursuant to a restricted stock award, any gain or loss, based on
the difference between the sale price and the fair market value
on the determination date, will be taxed as a capital gain or
loss. Such gain or loss will be long-term or short-term
depending on whether the stock was held for more than one year.
We will be entitled (subject to the requirement of
reasonableness, the provisions of Section 162(m) of the
Code, and the satisfaction of a tax reporting obligation) to a
corresponding income tax deduction in the year in which ordinary
income is recognized by the participant.
Performance
Shares
A participant generally will recognize no income upon the grant
of a performance share award. Upon the settlement of a
performance share award, participants normally will recognize
ordinary income in the year of receipt in an amount equal to the
cash received, if any, and the fair market value of any
unrestricted shares received. If the participant is an employee,
such ordinary income generally is subject to withholding of
income and employment taxes. If the participant receives shares
of restricted stock, the participant generally will be taxed in
the same manner as described above in Stock Bonuses.
Upon the sale of any shares received, any gain or loss, based on
the difference between the sale price and the fair market value
on the determination date, will be taxed as a
capital gain or loss. We generally should be entitled to a
deduction equal to the amount of ordinary income recognized by
the participant on the determination date, except to the extent
such deduction is limited by applicable provisions of the Code.
Potential
Limitation on Deductions
Section 162(m) of the Code denies a deduction to any
publicly held corporation for compensation paid to certain
covered employees in a taxable year to the extent
that compensation to each covered employee exceeds
$1 million. It is possible that compensation attributable
to awards granted under the 2007 Plan, when combined with all
other types of compensation received by a covered employee from
Glu, may cause this limitation to be exceeded in any particular
year. However, certain kinds of compensation, including
qualified performance-based compensation, are
disregarded for purposes of the deduction limitation.
44
In accordance with Treasury Regulations issued under
Section 162(m) of the Code, compensation attributable to
stock options and stock appreciation rights will qualify as
performance-based compensation if: (i) such awards are
approved by a compensation committee comprised solely of
outside directors, (ii) the plan contains a
per-employee limitation on the number of shares for which such
awards may be granted during a specified period, (iii) the
terms of the plan, including the per-employee limitation on
grant size, are approved by the stockholders, and (iv) the
exercise or strike price of the award is no less than the fair
market value of the stock on the date of grant. It is intended
that the Compensation Committee may grant stock options and
stock appreciation rights under the 2007 Plan that qualify as
performance-based compensation that is exempt from the
$1 million deduction limitation.
Compensation attributable to restricted stock units, stock bonus
awards and performance shares will qualify as performance-based
compensation, provided that: (i) the award is approved by a
compensation committee comprised solely of outside
directors, (ii) the award is granted (or vests) based
upon the achievement of an objective performance goal
established in writing by the compensation committee while the
outcome is substantially uncertain, (iii) the compensation
committee certifies in writing prior to the grant (or vesting,
as applicable) of the award that the performance goal has been
satisfied, and (iv) prior to the issuance, stockholders
have approved the material terms of the plan (including the
class of employees eligible for awards, the business criteria on
which the performance goals may be based, and the maximum
amount, or formula used to calculate the amount, payable upon
attainment of performance goals). It is intended that the
Compensation Committee may grant restricted stock units, stock
bonus awards and performance shares under the 2007 Plan that
qualify as performance-based compensation that is exempt from
the $1 million deduction limitation.
Awards
Granted in 2009 under the 2007 Plan
We cannot currently determine the benefits or number of shares
subject to awards that may be granted in 2010 to participants
under the 2007 Plan; therefore, the following table sets forth
information with respect to equity awards made in fiscal year
2009 under the 2007 Plan to each of the named executive officers
identified in the Executive Compensation
Summary Compensation Table contained in this proxy
statement, our non-employee directors, and the various other
indicated groups.
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
Weighted Average
|
|
Name
|
|
Number of Shares
|
|
|
Exercise Price
|
|
|
L. Gregory Ballard, Former President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
William J. Miller, Former Interim President and Chief Executive
Officer
|
|
|
75,000
|
(1)
|
|
$
|
1.05
|
|
Alessandro Galvagni, Former Senior Vice President of Product
Development and Chief Technology Officer
|
|
|
240,000
|
|
|
$
|
1.02
|
|
Eric R. Ludwig, Senior Vice President and Chief Financial Officer
|
|
|
240,000
|
|
|
$
|
1.02
|
|
Kevin S. Chou, Vice President and General Counsel
|
|
|
115,000
|
|
|
$
|
1.00
|
|
Thomas M. Perrault, Former Vice President of Global Human
Resources
|
|
|
115,000
|
|
|
$
|
1.00
|
|
Executive Group (3 persons)
|
|
|
355,000
|
|
|
$
|
1.01
|
|
Non-Executive Director Group (7 persons)
|
|
|
200,700
|
(2)
|
|
$
|
0.91
|
|
Non-Executive Officer Employee Group
|
|
|
1,022,372
|
|
|
$
|
0.83
|
|
|
|
|
(1) |
|
Represents the stock option we awarded to Mr. Miller in
connection with his appointment as our interim President and
Chief Executive Officer and does not include the other stock
options we granted to Mr. Miller in 2009 which related to
his service as one of our directors. |
|
(2) |
|
Excludes the stock option we awarded to Mr. Miller in
connection with his appointment as our interim President and
Chief Executive Officer. |
45
PROPOSAL NO. 3
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,
PRICEWATERHOUSECOOPERS LLP, FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2010
Our Audit Committee has selected, and is submitting for
ratification by the stockholders its selection of, of
PricewaterhouseCoopers LLP (PwC) to serve as our
independent registered public accounting firm for 2010. Although
stockholder approval of this proposal is not required by law,
the Audit Committee has determined that it is desirable to
request that stockholders ratify this selection. Notwithstanding
the selection, the Audit Committee, in its discretion, may
appoint a different independent registered public accounting
firm at any time, if the Audit Committee feels that such a
change would be in the best interests of Glu and its
stockholders. If our stockholders do not approve this
Proposal No. 3, the Audit Committee will reconsider
the selection of PwC as our independent registered public
accounting firm for 2010.
The following table sets forth the aggregate fees and related
expenses for which we were billed by PwC for professional
services provided by them during 2009 and 2008. The Audit
Committee considered the provision of the services corresponding
to these fees, and the Audit Committee believes that the
provision of these services is compatible with PwC maintaining
its independence. The Audit Committees pre-approval
policies and procedures require prior approval by the Audit
Committee of each engagement of PwC to perform services. All of
the professional services listed below were approved in
accordance with these policies.
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
Audit fees
|
|
$
|
1,340,972
|
|
|
$
|
1,407,000
|
|
Audit-related fees
|
|
|
79,424
|
|
|
|
33,000
|
|
Tax fees
|
|
|
72,774
|
|
|
|
313,000
|
|
All other
|
|
|
3,300
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,496,470
|
|
|
$
|
1,755,000
|
|
|
|
|
|
|
|
|
|
|
Audit
Fees
These fees consist of amounts for professional services rendered
in connection with the audit of our financial statements,
reviews of the interim financial statements included in our
quarterly reports on
Form 10-Q,
and statutory and regulatory filings or engagements. In 2008,
these fees included the audit of our internal control over
financial reporting.
Audit-Related
Fees
These fees consist of amounts for assurance and related services
that are reasonably related to the performance of the audit or
review of our financial statements that are not reported under
Audit Fees. In both years, these fees included
royalty audits, with these fees increasing in 2009 as a result
of royalty audits that PwC performed in connection with our
litigation with Skinit, Inc.
Tax
Fees
These fees consist of professional services rendered for tax
advice, planning and compliance (domestic and international).
These services include the preparation and review of income tax
returns and international returns and assistance regarding
transfer pricing; federal, state and international tax
compliance; acquisitions; and general international tax planning.
All Other
Fees
In both years, these fees consist of amounts paid for an annual
subscription to PwCs online accounting and auditing
research tool.
For more information about PwC, please see the Audit
Committee Report above.
46
Representatives of PwC are expected to attend the Annual
Meeting. These representatives will be given the opportunity to
make a statement if they desire to do so, and they will be
available to respond to appropriate questions.
The Board
recommends that stockholders vote FOR the
ratification of PricewaterhouseCoopers LLP as our independent
registered
public accounting firm for the fiscal year ending
December 31, 2010.
TRANSACTION
OF OTHER BUSINESS
At the date of this proxy statement, the Board knows of no other
business that will be conducted at the 2010 Annual Meeting of
Stockholders other than as described in this proxy statement. If
any other matter or matters are properly brought before the
Annual Meeting, or any adjournment or postponement of the Annual
Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SECs rules allow us to incorporate by reference into
this proxy statement the information we file with the SEC. This
means that we can disclose important information to you by
referring you to another document without restating that
information in this document. Any information incorporated by
reference into this proxy statement is considered to be part of
this proxy statement from the date the Company files that
document. Any reports filed by us with the SEC after the date of
this proxy statement will automatically update and, where
applicable, supersede any information contained in this proxy
statement or incorporated by reference in this proxy statement.
We incorporate by reference the information involving our
executive officers contained in Item 10 of our
Form 10-K,
as filed with the SEC on March 31, 2010 which accompanies
these proxy materials.
47
APPENDIX A
NON-GAAP RECONCILIATION
GLU
MOBILE INC.
Supplemental
Information for the Compensation Discussion and Analysis in
the
Proxy
Statement for the 2010 Annual Meeting of Stockholders
INFORMATION
REGARDING NON-GAAP FINANCIAL MEASURES AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP MEASURES
The Compensation Discussion and Analysis (CD&A)
of this proxy statement contains non-GAAP financial
measures non-GAAP operating margin (target and
actual) for the year ended December 31, 2009. Table 1 on
page A-2
of this proxy statement reconciles these non-GAAP financial
measures to the most directly comparable financial measure
prepared in accordance with Generally Accepted Accounting
Principles (GAAP).
The non-GAAP financial measures are provided in the CD&A
solely because they are used as performance metrics for
executive compensation purposes. The presentation this non-GAAP
financial measure is not intended to be considered in isolation
from, as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP, and
may be different from non-GAAP financial measures used by other
companies. In addition, non-GAAP measures have limitations in
that they do not reflect all of the amounts associated with our
results of operations as determined in accordance with GAAP. Our
Compensation Committee believes that the use of these financial
measures is appropriate for the compensation purposes for which
they are used, and we are required to disclose these measures in
the CD&A pursuant to SEC regulations.
Non-GAAP operating margin excludes the following
items from our consolidated statements of operations:
|
|
|
|
|
Acquired in-process research and development;
|
|
|
|
Amortization of intangible assets;
|
|
|
|
Stock-based compensation expense;
|
|
|
|
Impairment of goodwill;
|
|
|
|
Gain/impairment of auction-rate securities;
|
|
|
|
Restructuring charge;
|
|
|
|
MIG earnout expenses;
|
|
|
|
Transitional expenses;
|
|
|
|
Minority interest; and
|
|
|
|
Foreign currency exchange gains and losses primarily related to
the revaluation of assets and liabilities;
|
A-1
TABLE
1
GLU
MOBILE INC.
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2009
|
|
|
|
Target
|
|
|
Actual
|
|
|
|
(Unaudited, in thousands)
|
|
|
GAAP operating margin
|
|
$
|
(3,540
|
)
|
|
$
|
(14,907
|
)
|
Amortization of intangible assets
|
|
|
6,729
|
|
|
|
7,308
|
|
Stock-based compensation expense
|
|
|
3,268
|
|
|
|
2,926
|
|
Earnout compensation expense
|
|
|
875
|
|
|
|
875
|
|
Transitional expenses
|
|
|
36
|
|
|
|
|
|
Restructuring charge
|
|
|
|
|
|
|
1,876
|
|
Non-GAAP operating margin
|
|
|
7,368
|
|
|
|
(1,922
|
)
|
A-2
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 Companys 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 Companys 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;
(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:
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 Participants 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 Committees 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.
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
Participants death or Disability, then the Participant may exercise such Participants
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 Participants death (or the Participant
dies within three (3) months after a Termination other than for Cause or because of the
Participants Disability), then the Participants 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 Participants 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 Participants death, or (b) twelve (12) months after the Termination Date
when the Termination is for the Participants 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 Participants Disability, then the
Participants 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 Participants 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 Participants Options shall expire on
such Participants Termination Date, or at such later time and on such conditions as are determined
by the Committee, but in any no event later than the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify a minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum number will not
prevent any Participant from exercising the Option for the full number of Shares for which it is
then exercisable.
5.8 Limitations on ISOs. With respect to Awards granted as ISOs, to the extent that
the aggregate Fair Market Value of the Shares with respect to which such ISOs are exercisable for
the first time by the Participant during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated
as NQSOs. For purposes of this Section 5.8, ISOs will be taken into account in the order in which
they were granted. The Fair Market Value of the Shares will be determined as of the time the Option
with respect to such Shares is granted. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to ISOs, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective date of such
amendment.
5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participants 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
Participants 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 Participants Award
Agreement, vesting ceases on such Participants Termination Date (unless determined otherwise by
the Committee).
7. STOCK BONUS AWARDS.
7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to an eligible person of
Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to be
rendered or for past services already rendered to the Company or any Parent or Subsidiary. All
Stock Bonus Awards shall be made pursuant to an Award Agreement. No payment from Participant will
be required for Shares awarded pursuant to a Stock Bonus Award.
7.2 Terms of Stock Bonus Awards. The Committee will determine the number of Shares to
be awarded to the Participant under a Stock Bonus Award and any restrictions thereon. These
restrictions may be based upon completion of a specified number of years of service with the
Company or upon satisfaction of performance goals based on Performance Factors during any
Performance Period as set out in advance in the Participants 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 Participants
Award Agreement, vesting ceases on such Participants 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 Participants 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 Participants individual Award
Agreement. If the SAR is being earned upon the satisfaction of Performance Factors, then the
Committee will: (x) determine the nature, length and starting date of any Performance Period for
each SAR; and (y) select from among the Performance Factors to be used to measure the performance,
if any. Performance Periods may overlap and Participants may participate simultaneously with
respect to SARs that are subject to different Performance Factors and other criteria.
8.3 Exercise Period and Expiration Date. A SAR will be exercisable within the times
or upon the occurrence of events determined by the Committee and set forth in the Award Agreement
governing such SAR. The SAR Agreement shall set forth the expiration date; provided that no SAR
will be exercisable after the expiration of ten (10) years from the date the SAR is granted. The
Committee may also provide for SARs to become exercisable at one time or from time to time,
periodically or otherwise (including, without limitation, upon the attainment during a Performance
Period of performance goals based on Performance Factors), in such number of Shares or percentage
of the Shares subject to the SAR as the Committee determines. Except as may be set forth in the
Participants Award Agreement, vesting ceases on such Participants 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 Participants 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
Participants 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 Participants Award
Agreement, vesting ceases on such Participants Termination Date (unless determined otherwise by
the Committee).
10. PERFORMANCE SHARES.
10.1 Awards of Performance Shares. A Performance Share Award is an award to a
Participant denominated in Shares that may be settled in cash, or by issuance of those Shares
(which may consist of Restricted Stock). Grants of Performance Shares shall be made pursuant to an
Award Agreement.
10.2 Terms of Performance Shares. The Committee will determine, and each Award
Agreement shall set forth, the terms of each award of Performance Shares including, without
limitation: (a) the number of Shares deemed subject to such Award; (b) the Performance Factors and
Performance Period that shall determine the time and extent to which each award of Performance
Shares shall be settled; (c) the consideration to be distributed on settlement, and the effect of
the Participants 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 Participants
Award Agreement, vesting ceases on such Participants Termination Date (unless determined otherwise
by the Committee).
11. PAYMENT FOR SHARE PURCHASES.
Payment from Participant for Shares purchased pursuant to this Plan may be made in cash or by
check or, where expressly approved for the Participant by the Committee and where permitted by law
(and to the extent not otherwise set forth in the applicable Award Agreement):
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company held by the Participant that have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said
Award will be exercised or settled;
(c) by waiver of compensation due or accrued to the Participant for services rendered or to be
rendered to the Company or a Parent or Subsidiary of the Company;
(d) by consideration received by the Company pursuant to a broker-assisted and/or same day
sale (or other) cashless exercise program implemented by the Company in connection with the Plan;
(e) by any combination of the foregoing; or
(f) by any other method of payment as is permitted by applicable law.
12. GRANTS TO OUTSIDE DIRECTORS.
12.1 Types of Awards. Outside Directors are eligible to receive any type of Award
offered under this Plan except ISOs. Awards pursuant to this Section 12 may be automatically made
pursuant to policy adopted by the Board, or made from time to time as determined in the discretion
of the Board.
12.2 Eligibility. Awards pursuant to this Section 12 shall be granted only to Outside
Directors. An Outside Director who is elected or re-elected as a member of the Board will be
eligible to receive an Award under this Section 12.
12.3 Vesting, Exercisability and Settlement. Except as set forth in Section 21,
Awards shall vest, become exercisable and be settled as determined by the Board. With respect to
Options and SARs, the exercise price granted to Outside Directors shall not be less than the Fair
Market Value of the Shares at the time that such Option or SAR is granted.
13. WITHHOLDING TAXES.
13.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy applicable federal, state, local and international withholding tax
requirements prior to the delivery of Shares pursuant to exercise or settlement of any Award.
Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such
payment will be net of an amount sufficient to satisfy applicable federal, state, local and
international withholding tax requirements.
13.2 Stock Withholding. The Committee, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may require or permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to 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 Participants lifetime only by (A) the Participant, or
(B) the Participants guardian or legal representative; and (ii) after the Participants death, by
the legal representative of the Participants heirs or legatees
15. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
15.1 Voting and Dividends. No Participant will have any of the rights of a
shareholder with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant will be a shareholder and have all the rights
of a shareholder with respect to such Shares, including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities the Participant may
become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be subject to the
same restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with respect to Shares
that are repurchased at the Participants 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 Participants Termination at any
time within ninety (90) days after the later of the Participants Termination Date and the date the
Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participants 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 Participants 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 Participants 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 Participants 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 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 Participants 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 companys award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain unchanged
(except that the Purchase Price or the Exercise Price, as the case may be, and the number
and nature of Shares issuable upon exercise or settlement of any such Award will be adjusted
appropriately pursuant to Section 424(a) of the Code).
21.3 Outside Directors Awards. Notwithstanding any provision to the contrary herein,
in the event of a Corporate Transaction, the vesting of all Awards granted to Outside Directors
shall accelerate and such Awards shall become exercisable (as applicable) in full prior to the
consummation of such event at such times and on such conditions as the Committee determines.
22. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall be submitted for the approval
of the Companys 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 Participants
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 Companys
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 Employees employment.
Code means the United States Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
Committee means the Compensation Committee of the Board or those persons to whom
administration of the Plan, or part of the Plan, has been delegated as permitted by law.
Company means Glu Mobile Inc., or any successor corporation.
Consultant means any person, including an advisor or independent contractor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
Corporate Transaction means the occurrence of any of the following events: (i) any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power represented by the
Companys then-outstanding voting securities; (ii) the consummation of the sale or disposition by
the Company of all or substantially all of the Companys assets; (iii) the consummation of a merger
or consolidation of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation.
Director means a member of the Board.
Disability means total and permanent disability as defined in Section 22(e)(3) of the Code,
provided, however, that except with respect to Awards granted as ISOs, the Committee in its
discretion may determine whether a total and permanent disability exists in accordance with
non-discriminatory and uniform standards adopted by the Committee from time to time, whether
temporary or permanent, partial or total, as determined by the Committee.
Effective Date means the date of the underwritten initial public offering of the Companys
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 directors 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 Companys Common Stock
determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq Global Select Market, the Nasdaq Global
Market or the Nasdaq Capital Market (collectively, the Nasdaq Market), its closing price on the
Nasdaq Market on the date of determination, or if there are no sales for such date, then the last
preceding business day on which there were sales, as reported in The Wall Street Journal or such
other source as the Board or the Committee deems reliable;
(b) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street
Journal or such other source as the Board or the Committee deems reliable;
(c) if such Common Stock is publicly traded but is neither quoted on the Nasdaq Market nor
listed or admitted to trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in The Wall Street Journal or such other
source as the Board or the Committee deems reliable;
(d) in the case of an Option or SAR made on the Effective Date, the price per share at which
shares of the Companys Common Stock are initially offered for sale to the public by the Companys
underwriters in the initial public offering of the Companys 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 Companys Common Stock are subject to Section 16 of the Exchange Act.
Option means an award of an option to purchase Shares pursuant to Section 5.
Outside Director means a Director who is not an Employee of the Company or any Parent or
Subsidiary.
Parent means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
Participant means an Employee, Consultant or Director (including Outside Directors) who
receives an Award under this Plan.
Performance Factors means the factors selected by the Committee, which may include, but are
not limited to the, the following measures (whether or not in comparison to other peer companies)
to determine whether the performance goals established by the Committee and applicable to Awards
have been satisfied:
|
|
|
Net revenue and/or net revenue growth; |
|
|
|
|
Earnings per share and/or earnings per share growth; |
|
|
|
|
Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth; |
|
|
|
|
Operating income and/or operating income growth; |
|
|
|
|
Net income and/or net income growth; |
|
|
|
|
Total stockholder return and/or total stockholder return growth; |
|
|
|
|
Return on equity; |
|
|
|
|
Operating cash flow return on income; |
|
|
|
|
Adjusted operating cash flow return on income; |
|
|
|
|
Economic value added; |
|
|
|
|
Individual business objectives; and |
|
|
|
|
Company specific operational metrics. |
Performance Period means the period of service determined by the Committee, not to exceed
five (5) years, during which years of service or performance is to be measured for the Award.
Performance Share means an Award granted pursuant to Section 10 of the Plan.
Plan means this Glu Mobile Inc. 2007 Equity Incentive Plan.
Purchase Price means the price to be paid for Shares acquired under the Plan, other than
Shares acquired upon exercise of an Option or SAR.
Restricted Stock Award means an award of Shares pursuant to Section 6 of the Plan, or issued
pursuant to the early exercise of an Option.
Restricted Stock Unit means an Award granted pursuant to Section 9 of the Plan.
SEC means the United States Securities and Exchange Commission.
Securities Act means the United States Securities Act of 1933, as amended.
Shares means shares of the Companys Common Stock, as adjusted pursuant to Sections 2 and
21, and any successor security.
Stock Appreciation Right means an Award granted pursuant to Section 8 of the Plan.
Stock Bonus means an Award granted pursuant to Section 7 of the Plan.
Subsidiary means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain.
Termination or Terminated means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary of
the Company. An employee will not be deemed to have ceased to provide services in the case of (i)
sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee;
provided, that such leave is for a period of not more than 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to formal policy adopted from time to time by the Company and issued and promulgated to
employees in writing. In the case of any employee on an approved leave of absence, the Committee
may make such provisions respecting suspension of vesting of the Award while on leave from the
employ of the Company or a Parent or Subsidiary of the Company as it may deem appropriate, except
that in no event may an Award be exercised after the expiration of the term set forth in the
applicable Award Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the Participant ceased
to provide services (the Termination Date).
Unvested Shares means Shares that have not yet vested or are subject to a right of
repurchase in favor of the Company (or any successor thereto).
ANNUAL MEETING OF
STOCKHOLDERS OF
GLU MOBILE INC.
June 3, 2010
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS:
The Notice and Proxy Statement and Annual Report on Form 10-K are
available at www.glu.com/investors
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
â Please detach along perforated line and mail
in the envelope provided. â
n
20330300000000000000 3
060310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
PLEASE SIGN, DATE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN
BLUE OR BLACK INK AS SHOWN HERE
ý
|
|
|
|
|
|
|
|
|
|
|
FOR |
|
AGAINST |
|
ABSTAIN |
1.
|
|
The election of three Class III directors to serve on our
Board of Directors, each to serve until the Companys
annual meeting of stockholders to be held in 2013 and
until his successor is elected and qualified, or
until his death, resignation or removal. |
|
|
2. |
|
Approval of an amendment to the Companys 2007
Equity Incentive Plan to increase the aggregate
number of shares of common stock authorized for
issuance under the plan by 3,000,000 shares.
|
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINEES: |
|
|
|
|
|
|
|
|
|
|
|
|
o |
|
FOR ALL NOMINEES |
|
O O O |
|
Niccolo M. de Masi William J. Miller A. Brooke Seawell |
|
|
|
|
3. |
|
Ratification of the appointment of
PricewaterhouseCoopers LLP as the Companys
independent registered public accounting firm for the
fiscal year ending December 31, 2010.
|
|
o |
|
o |
|
o |
o |
|
WITHHOLD AUTHORITY FOR ALL
NOMINEES |
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL EXCEPT (See instructions
below) |
|
|
|
|
|
|
|
|
4. |
|
Transaction of such other business as may properly come before
the Annual Meeting or before any adjournments or postponements
thereof. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Only stockholders of record of our common stock at the close of
business on April 8, 2010 are entitled to notice of and to vote at the
Annual Meeting or any adjournments or postponements thereof.
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, YOU
ARE URGED TO SUBMIT YOUR PROXY OVER THE INTERNET, BY TELEPHONE OR BY
COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD AND MAILING IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE, WHETHER OR NOT YOU PLAN
TO ATTEND THE ANNUAL MEETING IN PERSON. YOU CAN WITHDRAW YOUR PROXY AT
ANY TIME BEFORE IT IS VOTED. |
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark FOR
ALL EXCEPT and fill in the circle next to each nominee you wish to
withhold, as shown here: = |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the
box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not
be submitted via this method. |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of
Stockholder |
|
Date: |
|
Signature of Stockholder |
|
Date: |
|
|
|
|
Note: |
|
Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
|
n
n
ANNUAL MEETING OF STOCKHOLDERS OF
GLU MOBILE INC.
June 3, 2010
|
|
|
|
|
|
|
PROXY VOTING INSTRUCTIONS
|
|
|
INTERNET
- Access www.voteproxy.com and follow the on-screen instructions. Have your proxy card
available when you access the web page, and use the Company Number and Account Number shown on your
proxy card.
TELEPHONE
- Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500
from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy
card available when you call and use the Company Number and Account Number shown on your proxy
card.
Vote online/phone until 11:59 PM EST the day before the meeting.
MAIL
- Sign, date and mail your proxy card in the envelope provided as soon as possible.
IN
PERSON - You may vote your shares in person by attending the Annual Meeting.
|
|
|
|
|
|
|
COMPANY NUMBER
|
|
|
|
|
|
ACCOUNT NUMBER
|
|
|
|
|
|
|
|
|
|
|
|
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS: The Notice and Proxy Statement and Annual
Report on Form 10-K
are
available at www.glu.com/investors
â Please
detach along perforated line and mail in the envelope provided IF you are not voting via
telephone or the Internet. â
n 20330300000000000000 3
060310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
ý
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
1.
The election of three Class III directors to serve on our Board of Directors, each to serve
until the Companys annual meeting of stockholders to be held in 2013 and until his successor is elected and qualified, or until his death, resignation or removal. |
|
|
2. |
|
Approval of an amendment to the Companys 2007 Equity Incentive Plan to increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,000,000 shares. |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINEES: |
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR
ALL NOMINEES
|
|
¡ ¡ |
|
Niccolo M. de Masi William J. Miller
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
WITHHOLD
AUTHORITY
|
|
¡ |
|
A. Brooke Seawell
|
|
|
|
|
3. |
|
Ratification
of the appointment of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2010. |
|
o
|
|
o
|
|
o |
|
FOR ALL
NOMINEES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL
EXCEPT (See Instructions below)
|
|
|
|
|
|
|
|
|
4. |
|
Transaction of such other business as may properly come before the Annual Meeting or before any
adjournments or postponements thereof. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Only stockholders of record of our common stock at the close of business on April 8, 2010 are
entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements
thereof. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT
and fill in the circle next to each nominee you wish to withhold, as shown here: = |
|
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, YOU ARE URGED TO SUBMIT YOUR
PROXY OVER THE INTERNET, BY TELEPHONE OR BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD
AND MAILING IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING IN PERSON. YOU CAN WITHDRAW YOUR PROXY AT ANY TIME BEFORE IT IS VOTED. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the box at right and indicate your new address
in the address space above. Please note that changes to the registered name(s) on the account may
not be submitted via this method. |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature
of Stockholder
|
|
Date:
|
|
Signature
of Stockholder
|
|
Date:
|
|
|
|
|
Note: |
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person. |
n
n
o n
GLU MOBILE INC.
PROXY FOR 2010 ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 2010
As an alternative to completing this form, you may enter your vote instruction by telephone
at 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simple instructions.
Use the Company Number and Account Number shown on your proxy card.
The undersigned hereby appoints each of Niccolo M. de Masi and Eric R. Ludwig as a proxy,
with full power of substitution, to represent and vote as designated on the reverse side, all
of the shares of Common Stock of Glu Mobile Inc. held of record by the undersigned on April 8,
2010, at the Annual Meeting of Stockholders to be held at 2207 Bridgepointe Parkway, San Mateo,
California 94404, on June 3, 2010, at 10:00 a.m. Pacific Time, or any adjournment or postponement thereof.
(Continued and to be marked, signed and dated on the reverse side)