Exhibit 10.3
 
 
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NTN Buzztime, Inc. Corporate Incentive Plan for Eligible Employees of NTN
Buzztime, Inc.
Fiscal Year 2011
 
Section
Description
1
Approval
This Plan has been approved by the Nominating, Corporate Governance and
Compensation Committee (“the Committee”). This Plan may be changed or modified
at any time at the discretion of the Committee. The Committee also has
discretion on the impact of merger and acquisition activity and/or investments
made beyond the core business as well as any non-recurring accounting
adjustments as it relates to the integration to this Plan.
 
2
Effective Dates
The Plan Period is January 1, 2011 – December 31, 2011.
 
3
Eligibility
To be an eligible Participant in the Plan, Participants must be employed by
Buzztime on or before October 1, 2011, on active, full-time, paid status and not
be a Participant in any other Buzztime incentive compensation Plan. (All
eligible employees are referred to in this Plan as “Participant(s)”). Only
Participants may earn incentive compensation under this Plan.
 
Additionally, plan Participants must confirm they have read, understood, and
agree to abide by the term and conditions in the Personal Incentive Memo and
this incentive plan.
 
Any newly hired Participant who becomes eligible for the Plan during the year
may be eligible to receive a prorated incentive amount.
This Plan supersedes any previous contractual agreements or prior incentive
plans.
 
4
Plan Design
(1) Prerequisites to Earning Incentive Compensation
To earn incentive compensation under this Plan, subject to provisions of Section
6, the following criteria must be satisfied: (a) the Participant must be
employed by Buzztime on the Payout Date(s).
 
(2) Performance Measurements
 
(a) Achievement of targeted EBITDA as approved by the Board of Directors
 
EBITDA is defined as earnings before interest, tax, depreciation and
amortization ( “EBITDA” ).
 
(b) Achievement of Player “Visits" / Play Duration metrics as approved by the
Committee
 
(c) Achievement of increased levels of Account Retention in the subscriber-
customer base and accelerated rates of new subscriber acquisition as approved by
the Committee
 
(d) Achievement of increased levels of Advertising and Marketing Services Sales
on the network as approved by the Committee
 
(3) Payout Weighting and Incentive Earned
 
(a) Payout - fifty percent (50%) of the payout will be based on meeting
Performance Measurement 2(a) the achievement of EBITDA. This is a single trigger
requirement and not contingent upon meeting other measurements. The payout pool
generated for allocation is formulaic and dependent upon thelevel of pre-accrual
EBITDA achieved.
 

 
 
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(b) The remaining fifty percent (50%) of the payout will be based on achievement
of measurements 2(b) – 2(d). The Committee will evaluate the level of
achievement between performance and plan activities which will determine if a
payout is warranted. This payout portion of the incentive plan is at the sole
discretion of the Committee.
 
(c) Incentive Earned – Incentive is earned when the Committee approves a payout
as evidenced in Committee meeting minutes and the Participant is employed on the
payout date(s) subject to all sections of this Plan. These conditions may likely
occur on different dates.
 
(3) Performance Determination
Buzztime’s actual performance against the Performance Measurements for the Plan
Period will be determined and approved by the Committee as soon as practicable
after the Plan Period ends, subject to the completion and approval by Buzztime
of the relevant financial or other Buzztime reports upon which Performance
Measurements 2(a) - (d) can be evaluated upon.
 
Ongoing reporting and forecasts will be generated to provide Participants and
the Committee progress updates against performance measurements.
 
(4) Target Payout
Each Participant will have a Target Payout, assigned by his/her position
and job level. The Target Payout expressed as a percentage of their “annual base
salary” excluding benefits as of December 31, 2011.
 
The Target Payout amount will be adjusted when warranted pursuant to Sections 5
and 6.
 
(5) Plan Terms
The Incentive Payout amount is based on the following terms:
 
Participant’s Target Payout Amount - Participant’s annual base salary x the
Target Payout. For example, annual base salary of $50,000 x 10% = $5,000 Target
Payout Amount. Please refer to your personal incentive memo for the percentage
amount.
 
Individual Incentive Payout – The incentive payout amount an individual is
awarded after the payout calculations are completed subject to all sections of
this Plan.
 
(6) Payout Calculation
Please refer to your personal incentive memo for sample calculation scenarios
for illustrative purposes only.
 
5
Payout
Details
Payout Date(s): Subject to Section 8, and provided all the of prerequisites to
earning incentive compensation are met pursuant to Section 4, a cash payout will
occur within 30 days after receipt of the independent auditor’s report on
Buzztime’s annual financial statements for 2011, but no later than March 15,
2012.
 
Prorated Payouts: The Individual Incentive Payout that otherwise would have been
earned in the Plan Period will be prorated when the provisions of Section 6
apply.
 

 
 
 
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Plan Administration and Interpretation: This Plan shall be administered and
interpreted by the Committee at its sole discretion. The Committee must approve
any exceptions to the term and conditions of this Plan.
 
401k deferrals: In accordance with the NTN Buzztime, Inc. 401k Plan, no 401k
deductions will be withheld from incentive (“bonus”) wages.
 
Taxes: Incentive payments are in addition to the Participant’s base salary and
are included as total cash compensation and, as such, recorded on the
Participant’s W-2 (or applicable country statement) statement of wages.
Individual Incentive Payouts are considered taxable income and are reported as
Gross Income (not “after taxes”). Participants will have all appropriate payroll
taxes and withholdings deducted from these incentive payments at the IRS
supplemental tax rate.
 
6
Prorated Participation
Late Entry into the Plan: A Participant who enters into an eligible position
and, therefore, becomes a Participant after the beginning of the Plan Period
(either through new hire, promotion or transfer) will be assigned a Target
Payout and will be able to earn prorated incentive payment on that basis.
 
Effect of Termination: A PARTICIPANT MUST BE EMPLOYED ON THE PAYOUT DATE(S) TO
EARN AN INCENTIVE PAYMENT. IF A PARTICIPANT VOLUNTARILY RESIGNS FROM EMPLOYMENT
PRIOR TO THE PAYOUT DATE, NO INCENTIVE PAYMENT IS EARNED. IF BUZZTIME TERMINATES
A PARTICIPANT’S EMPLOYMENT PRIOR TO THE PAYOUT DATE(S), NO INCENTIVE PAYMENT IS
EARNED.
 
Effect of Disciplinary Action: Any Participant under disciplinary action (any
level of performance counseling, warning and/or performance improvement plan)
will be ineligible to participate in the Plan. If the employee upon
reevaluation, however, is released from disciplinary action, he/she will at that
same time resume eligibility under the Plan and may be eligible to receive a
prorated incentive amount that excludes the period of time he/she was under
disciplinary action.
 
Internal Promotions and Transfers: Employees who transfer within Buzztime and/or
are promoted into new positions that are not eligible to participate in this
Plan will be paid a prorated Individual Incentive Payout. Participants who
transfer within and/or promoted into new positions will be re-evaluated to
ensure they are at the appropriate incentive level based on their position and
job level. The incentive payment during the time in the Plan Period he or she
was a Participant is subject to the prerequisites to earning incentive
compensation.
 
Approved Time Off: The Individual Incentive Payout will not be prorated to
account for time off due to personal time off not associated with a leave of
absence.
 
Leave of Absence: The Individual Incentive Payout for Participants who are on an
approved leave of absence from Buzztime will be prorated based on the length of
the approved leave during the Plan Period. During the time an employee is on an
approved leave of absence, he or she will not be considered a Participant.
 
7
At Will Employment
Employment with Buzztime is at-will. This means that just as a Participant is
free to resign at any time, Buzztime reserves the right to discharge a
Participant at any time, with or without cause or advance notice. In connection
with the “at-will” employment relationship, Buzztime also reserves the right to
exercise its managerial discretion in reassigning, transferring, promoting or
demoting an employee, at any time. Participation in the Plan does not guarantee
continued employment for any particular period of time or otherwise change
Buzztime’s policy of employment at-will.

 
 
 
 
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8
    
     Company Management Rights
 
Buzztime reserves the right to amend or terminate this Plan, at any time, at the
Board’s discretion, with or without advance notice. Any amendments to the Plan
will be in writing and approved by the Committee. If this Plan is amended or
terminated prior to the end of the Plan Period, Participants will be paid,
according to any amending or terminating documents.
 
This Plan will automatically terminate at the end of the Plan Period, except
that the Payout provisions will continue in effect until satisfied. However,
Buzztime, at its discretion, may elect to re-issue the Plan, in writing, with
new Effective Dates.
 
     

 
 
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Acknowledgement
 
Your signature below indicates that you have read, understood, and agreed to the
entire NTN Buzztime, Inc. Corporate Incentive Plan for Eligible Employees of NTN
Buzztime, Inc. Fiscal Year 2011, which includes the preceding four (4) pages and
the Personal Incentive Memo for your position. Different positions are eligible
for different incentives and not all positions are eligible for the same level
of incentive. Information contained in these documents is strictly confidential
and is discouraged from being shared with other employees of NTN Buzztime or
with anyone outside the Company without the express consent of the Chief
Financial Officer or Vice President of Human Resources of the Company unless
required to do so under Sarbanes Oxley Act or the Securities Exchange Commission
or other State and Federal laws.
 
 
 

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Plan Participant Name (Please Print)
 
 

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Plan Participant Signature
 
 

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Date
 
 
 
 
 
 
 
 
 
 
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