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NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN
Buzztime, Inc.

Fiscal Year 2016

 

Section Description 1  Approval

This Plan has been approved by the Nominating and Corporate Governance/
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 it relates to the integration to this Plan.

 

2  Effective Dates   The Plan Period is January 1, 2016 – December 31, 2016. 3
 Eligibility

To be an eligible participant in the Plan, Executives must be employed by
Buzztime on or before October 1, 2016, on active, full-time, paid status and not
be a participant in any other Buzztime incentive compensation program. (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 Executive 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 Plan must be funded, based
on the achievement of the Corporate Goals during the Plan Period, as outlined
below; and (b) the Participant must be employed by Buzztime on the Payout Date.

 

(2) Corporate Goals – Our 2016 Corporate Goals are as follows:

 

      A. To meet target EBITDA as approved by the Board of Directors. EBITDA is
defined as earnings before interest, tax, depreciation and amortization as
disclosed in Buzztime’s financial reports. Payout weighted up to 35% of payout
pool.                 B. To meet target revenue growth, as approved by the Board
of Directors. Payout weighted up to 35% of payout pool.                 C. To
achieve certain strategic milestones, as evaluated by the Committee. Payout
weighted up to 30% of payout pool.

   

 

If the Corporate Goals are exceeded, the Committee, at its sole discretion, may
choose to pay out a larger pool amount.

 

(3) Target Payout

 

Each Participant will have a Target Payout, assigned by his/her position and job
level, and will be paid in cash and expressed as a percentage of his/her annual
base salary, excluding benefits, as of December 31, 2016. The Target Payout
amount will be adjusted when warranted pursuant to Sections 5 and 6.

 

 

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(4) Plan Terms

 

The Incentive Payout amount is based on the following terms:

 

% of Corporate Goals Achievement - Overall percent achieved of the Corporate
Goals.

 

Participant’s Target Payout Amount - Participant’s annual base salary x the
Target Payout. Please refer to your personal incentive memo.

 

Individual Incentive Payout – The incentive payout amount an individual is
awarded after the payout formula is completed subject to all sections of this
Plan.

 

Executive – Executive is defined as the titles of Chief Executive Officer, Chief
Financial Officer, VP of Finance (as Chief Accounting Officer), or any
additional executive level position, as determined by the Committee, that the
Company hires during 2016. These titles are considered Participants under this
Plan.

 

(5) Performance Determination

 

Buzztime’s actual performance against the Corporate Goals 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 the Corporate Goals are
measured.

 

(6) Payout Formula

 

Please refer to your personal incentive memo for formula payout examples.

 

 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 2016, but no later than March 15,
2017.

 

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.

 

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: An Executive 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.

 

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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.

 

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. Executive Incentive Plan for Eligible Employees of NTN
Buzztime, Inc. Fiscal Year 2016, which includes the preceding three (3) 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 shall under no circumstances be shared with other employees of
NTN Buzztime or with anyone outside the Company without the express consent of
the Chief Financial Officer or Director of Human Resources of the Company unless
required to do so under Sarbanes Oxley Act or the Securities Exchange
Commission.

 

    Plan Participant Name (Please Print)           Plan Participant Signature  
        Date  

 

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