Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On February 8, 2021, Glu Mobile Inc., a
Delaware corporation (the “Company”), Electronic Arts Inc., a Delaware corporation (“Parent”), and Giants
Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”) entered into an
Agreement and Plan of Merger (“Merger Agreement”). Pursuant to the terms of, and subject to the conditions specified
in, the Merger Agreement, Merger Sub will merge with and into the Company, and the Company will become a wholly owned subsidiary
of Parent (the “Merger”).
The Board of Directors of the Company (the
“Board”) unanimously (i) determined that the Merger and the other transactions contemplated by the Merger Agreement
(collectively, the “Transactions”), individually and in the aggregate, are fair to and in the best interests of the
Company and the Company’s stockholders, (ii) approved the Merger Agreement and the Transactions and declared it advisable
that the Company enter into the Merger Agreement and consummate the Transactions in accordance with the Delaware General Corporate
Law and (iii) recommended that the Company’s stockholders adopt the Merger Agreement.
Subject to the terms and conditions of
the Merger Agreement, at the effective time of the Merger (the “Effective Time”), if the Merger is completed, each
share of common stock, par value $0.0001 per share (the “Shares”), of the Company issued and outstanding as of immediately
prior to the Effective Time, other than (i) Shares held by Parent, Merger Sub, the Company or any of their respective subsidiaries
immediately prior to the Effective Time and (ii) Shares owned by a holder who has properly demanded appraisal under Delaware law,
will be automatically converted into the right to receive cash in an amount equal to $12.50, without interest (the “Merger
Consideration”) and less any applicable withholding taxes.
Each
Share underlying a Company stock option that is vested, unexpired, unexercised and outstanding as of the Effective Time will be
cancelled and automatically converted into the right to receive the difference between the Merger Consideration and the applicable
per share exercise price, without interest and less any applicable tax withholdings. Each Share underlying a Company restricted
stock unit that is vested, unexpired, unsettled and outstanding as of the Effective Time will be cancelled and automatically converted
into the right to receive the Merger Consideration, without interest and less any applicable tax withholdings. Unvested Company
stock options and unvested Company restricted stock units held by continuing Company employees will be assumed by Parent and converted
into corresponding awards relating to a number of shares of common stock of Parent in accordance with the formula in the Merger
Agreement, with substantially identical terms and conditions as were applicable to the corresponding Company awards immediately
prior to the Effective Time, except as such terms and conditions are modified by the Merger Agreement. Each Company performance-based
stock option and restricted stock unit that is unvested, unexpired, unexercised and outstanding as of the Effective Time for which
the performance period has not been completed as of the Effective Time will, as of immediately prior to the Effective Time, be
deemed achieved at “target” (or the equivalent, as applicable) and be converted to a time-based vesting schedule that
corresponds to each performance period.
The
consummation of the Merger is subject to customary closing conditions, including, among others: (i) the approval of the Merger
and adoption of the Merger Agreement by the affirmative vote of the holders of at least a majority of the outstanding Shares
entitled to vote thereon in favor of the adoption of the Merger Agreement and to approve the Merger; (ii) the accuracy of
the parties’ respective representations and warranties in the Merger Agreement, subject to specified materiality qualifications;
(iii) compliance by the parties with their respective covenants in the Merger Agreement in all material respects; (iv) the absence
of any law, order or other legal restraint or injunction by any court or governmental entity having jurisdiction that prevents
the consummation of the Merger (a “Restraint”); (v) the expiration or termination of any waiting periods or receipt
of any requisite consents under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval under Austrian
antitrust laws (the “Antitrust Approvals”); (vi) the absence of a material adverse effect (as defined in the Merger
Agreement) with respect to the Company on or after the date of the Merger Agreement that is continuing as of immediately prior
to the Effective Time. The Transactions are not subject to a financing condition.
The Company has made customary representations
and warranties in the Merger Agreement and has agreed to customary covenants regarding the operation of the business of the Company
and its subsidiaries prior to the consummation of the Merger. In addition, the Company has agreed not to initiate, solicit, knowingly
facilitate or encourage (including by way of providing information) the making, submission or announcement of any inquiries, proposals
or offers related to alternative acquisition proposals, subject to customary exceptions for the Company to respond to unsolicited
proposals to the extent the Board determines in good faith that the failure to do so would be inconsistent with the fiduciary duties
of the Board.
The
Merger Agreement contains certain termination rights for the parties, including (i) the right of the Company in certain circumstances
to terminate the Merger Agreement and accept a “Superior Proposal” (as defined in the Merger Agreement), (ii) the right
of either the Company or Parent to terminate the Merger Agreement if the Merger has not been completed on or before August 7, 2021,
which date may be extended for a period of up to three months if all conditions other than conditions relating to a Restraint or
regulatory approvals have been satisfied as of such date and (iii) if the approval of the Company’s stockholders is
not obtained. The Merger Agreement provides that the Company will be required to pay Parent a termination fee of $78.9 million
in certain circumstances, including if the Board changes or withdraws its recommendation of the Merger to the Company’s stockholders
or the Company terminates the Merger Agreement to accept a Superior Proposal.
The foregoing description of the Merger
Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement,
a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The representations,
warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specified
dates, were solely for the benefit of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the
execution of the Merger Agreement. The representations and warranties have been made for the purpose of allocating contractual
risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards
of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely
on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or
condition of the Company, Parent or Merger Sub. Moreover, information concerning the subject matter of the representations, warranties
and covenants may change after the Effective Time, which subsequent information may or may not be fully reflected in public disclosures.
Press Release
On February 8, 2021, the Company issued a press release announcing
its entry into the Merger Agreement, a copy of which is attached as Exhibit 99.1.