--------------------------------------------------------------------------------

Exhibit 10.2
  
NTN BUZZTIME INC.
2010 PERFORMANCE INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
 
NTN Buzztime, Inc., a Delaware corporation (the “Company”), hereby grants an
Option to purchase shares of its Common Stock (the “Shares”) to the Optionee
named below.  The terms and conditions of the Option are set forth in this cover
sheet, in the attachment and in the NTN Buzztime, Inc. 2010 Performance
Incentive Plan (the “Plan”).
 
 
Date of Option Grant:  __________________, [YEAR]
 
Name of Optionee:  _________________________________________________
 
Number of Shares Covered by Option:  ______________
 
Exercise Price per Share:  $_____.___
 
Fair Market Value of a Share on Date of Option Grant:  $_____.___
 
Expiration Date:  _____________, [YEAR]  [DO NOT EXCEED TEN YEARS FROM GRANT]
 
Vesting Calculation Date:  _____________, [YEAR]
 
Vesting Schedule:
 
Subject to all the terms of the attached Agreement, your right to purchase
Shares under this Option shall vest as to one-fourth (1/4) of the total number
of Shares covered by this Option, as shown above, on the first anniversary of
the Vesting Calculation Date.  Thereafter, the number of Shares which you may
purchase under this Option shall vest at the rate of one-forty-eighth (1/48) of
the total number of Shares covered by this Option per calendar month on the last
day of each of the thirty-six (36) months following the month of the first
anniversary of the Vesting Calculation Date.  The resulting aggregate number of
vested Shares will be rounded to the nearest whole number.  No Shares will vest
after your Service has terminated for any reason.
 
By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement, the Plan and Plan prospectus, copies of
which are also enclosed.
 
Optionee: ________________________________________________________________________________
(Signature)
 
Company:
________________________________________________________________________________
(Signature)
 
Title:
____________________________________________________________________________________
 
Attachment
 
 
 

--------------------------------------------------------------------------------

 
 
NTN BUZZTIME, INC.
2010 PERFORMANCE INCENTIVE PLAN
 
INCENTIVE STOCK OPTION AGREEMENT
 
The Plan and
Other Agreements
The text of the Plan is incorporated in this Agreement by reference.  Certain
capitalized terms used in this Agreement are defined in the Plan.
 
This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this Option.  Any prior agreements, commitments or
negotiations concerning this Option are superseded.
 
Incentive Stock Option
This Option is intended to be an Incentive Stock Option under section 422 of the
Code and will be interpreted accordingly.
 
However, this Option will be treated as a Nonstatutory Stock Option on the day
after three (3) months after you cease to be an employee of the Company (and any
Subsidiary or any Parent): (i) even if you continue to provide Service after
your employment has terminated or (ii) if your termination of employment was for
any reason other than due to your death or Disability.  In addition, to the
extent that all or part of this Option exceeds the $100,000 limitation rule of
section 422(d) of the Code, this Option or the lesser excess part will be
treated as a Nonstatutory Stock Option.
 
This Option is not intended to be deferred compensation under section 409A of
the Code and will be interpreted accordingly.
 
Vesting
This Option is only exercisable before it expires and then only with respect to
the vested portion of the Option.  This Option will vest according to the
Vesting Schedule on the attached cover sheet.
 
Term
Your Option will expire in any event no later than the Expiration Date, as shown
on the cover sheet.  Your Option will expire earlier if your Service terminates,
as described below.
 
If the Expiration Date specified in the attached cover sheet falls on a day on
which the NYSE Amex (“AMEX”) is open for trading, then any unexercised portion
of this Option that is outstanding shall be forfeited without consideration as
of 3:45 P.M. New York time on the Expiration Date.
 
However, if the Expiration Date specified in the attached cover sheet falls on
any day on which the AMEX is not open for trading, then your ability to exercise
this Option will terminate as of 3:45 P.M. New York time on the last day in
which the AMEX is open for trading that occurs immediately prior to the
Expiration Date.

 
 
 
 
2

--------------------------------------------------------------------------------

 
 
 
Termination of Service - General
If your Service terminates for any reason other than (i) being terminated by the
Company for Cause or (ii) due to your death or Disability, then your Option will
expire at the close of business at Company headquarters on the date that is
ninety (90) days after your Termination Date.
 
Termination of Service - Death or Disability
If your Service terminates because of your death or Disability, then your Option
will expire at the close of business at Company headquarters on the date that is
twelve (12) months after your Termination Date.  If your Service terminates
because of your death, then your estate or heirs may exercise the vested portion
of your Option during this twelve (12) month period.
 
Termination of Service – by the Company for Cause
If your Service is terminated by the Company for Cause or if you commit an
act(s) of Cause while this Option is outstanding, as determined by the Committee
in its sole discretion, then you shall immediately forfeit all rights to your
Option and the Option shall immediately expire.
 
Leaves of Absence
For purposes of this Option, your Service does not terminate when you go on a
bona fide leave of absence that was approved by the Company in writing, if the
terms of the leave provide for continued Service crediting, or when continued
Service crediting is required by applicable law.  However, no portion of this
Option will be treated as an Incentive Stock Option as of the day after three
(3) months after you went on leave, unless your right to return to active work
is guaranteed by law or by a contract.  Your Service terminates in any event
when the approved leave ends unless you immediately return to active work.
 
The Company determines which leaves count for this purpose, and when your
Service terminates for all purposes under the Plan.
 
Notice of Exercise
When you wish to exercise this Option, you must notify the Company by filing a
“Notice of Exercise” form at the address given on the form.  Your notice must
specify how many Shares you wish to purchase.  Your notice must also specify how
your Shares should be registered (in your name only or in your and your spouse’s
names as community property or as joint tenants with right of
survivorship).  The notice will be effective when it is received by the Company.
 
If someone else wants to exercise this Option after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.
 

 
 
 
 
 
 
3

--------------------------------------------------------------------------------

 
 
Form of Payment
When you submit your notice of exercise, you must include payment of the
Exercise Price for the Shares you are purchasing.  Payment may be made in one
(or a combination) of the following forms:
 
·  Cash, your personal check, a cashier’s check or a money order.
 
·  Shares which have already been owned by you for more than six (6) months and
which are surrendered to the Company.  The Fair Market Value of the Shares,
determined as of the effective date of the Option exercise, will be applied to
the Exercise Price.
 
·  To the extent a public market for the Shares exists as determined by the
Company, by Cashless Exercise through delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker to sell Shares and
to deliver all or part of the sale proceeds to the Company in payment of the
aggregate Exercise Price.
 
Withholding Taxes
You will be solely responsible for payment of any and all applicable taxes
associated with this Option.
 
You will not be allowed to exercise this Option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the Option exercise or sale of Shares acquired under this Option.
 
Restrictions on Exercise and Resale
By signing this Agreement, you agree not to (i) exercise this Option (“Exercise
Prohibition”), or (ii) sell, transfer, dispose of, pledge, hypothecate, make any
short sale of, or otherwise effect a similar transaction of any Shares acquired
under this Option (each a “Sale Prohibition”) at a time when applicable laws,
regulations or Company or underwriter trading policies prohibit the exercise or
disposition of Shares.  The Company will not permit you to exercise this Option
if the issuance of Shares at that time would violate any law or
regulation.  Notwithstanding anything to the contrary, this Option is granted on
the condition that the Company’s stockholders approve the Plan prior to February
3, 2011.  You understand and agree that this Option may not be exercised unless
the Company's stockholders timely approve the Plan.  If the Company’s
stockholders do not approve the Plan prior to February 3, 2011, then this Option
shall be immediately forfeited without consideration.  The Company shall have
the right to designate one or more periods of time, each of which generally will
not exceed one hundred eighty (180) days in length (provided however, that such
period may be extended in connection with the Company’s release (or announcement
of release) of earnings results or other material news or events), and to impose
an Exercise Prohibition and/or Sale Prohibition, if the Company determines (in
its sole discretion) that such limitation(s) is needed in connection with a
public offering of Shares or to comply with an underwriter’s request or trading
policy, or could in any way facilitate a lessening of any restriction on
transfer pursuant to the Securities Act or any state securities laws with
respect to any issuance of securities by the Company, facilitate the
registration or qualification of any securities by the Company under the
Securities Act or any state securities laws, or facilitate the perfection of any
exemption from the registration or qualification requirements of the Securities
Act or any applicable state securities laws for the issuance or transfer of any
securities.  The Company may issue stop/transfer instructions and/or
appropriately legend any stock certificates issued pursuant to this Option in
order to ensure compliance with the foregoing.  Any such Exercise Prohibition
shall not alter the vesting schedule set forth in this Agreement other than to
limit the periods during which this Option shall be exercisable.

 
 
 
4

--------------------------------------------------------------------------------

 
 

 
If the sale of Shares under the Plan is not registered under the Securities Act,
but an exemption is available which requires an investment or other
representation, you shall represent and agree at the time of exercise that the
Shares being acquired upon exercise of this Option are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall
make such other representations as are deemed necessary or appropriate by the
Company and its counsel.
 
You may also be required, as a condition of exercise of this Option, to enter
into any Company stockholder agreement or other agreements that are applicable
to stockholders.
 
If you sell or otherwise dispose of any of the Shares acquired pursuant to the
exercise of this Option on or before the later of (i) the date that is two years
after the Date of Option Grant or (ii) the date that is one year after the
applicable exercise of this Option, then you shall within ten days of any and
all such sales or dispositions provide the Company with written notice of such
transactions including without limitation the date of each disposition, the
number of Shares that you disposed of in each transaction and their original
Date of Option Grant, and the amount of proceeds you received from each
disposition.
 
Transfer of Option
Prior to your death, only you may exercise this Option.  You cannot transfer,
assign, alienate, pledge, attach, sell, or encumber this Option.  If you attempt
to do any of these things, this Option will immediately become invalid.  You
may, however, dispose of this Option in your will or it may be transferred by
the laws of descent and distribution.  Regardless of any marital property
settlement agreement, the Company is not obligated to honor a notice of exercise
from your spouse, nor is the Company obligated to recognize your spouse’s
interest in your Option in any other way.
 
Retention Rights
Your Option or this Agreement does not give you the right to be retained by the
Company (or any Parent or any Subsidiaries or Affiliates) in any capacity.  The
Company (or any Parent and any Subsidiaries or Affiliates) reserves the right to
terminate your Service at any time and for any reason.
 
This Option and the Shares subject to the Option are not intended to constitute
or replace any pension rights or compensation and are not to be considered
compensation of a continuing or recurring nature, or part of Optionee’s normal
or expected compensation, and in no way represent any portion of Optionee’s
salary, compensation or other remuneration for any purpose, including but not
limited to, calculating any severance, resignation, termination, redundancy,
dismissal, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.
 
Stockholder Rights
You, or your estate or heirs, have no rights as a stockholder of the Company
until a certificate for your Option’s Shares has been issued.  No adjustments
are made for dividends or other rights if the applicable record date occurs
before your stock certificate is issued, except as described in the Plan.
 
Adjustments
In the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Shares covered by this Option (rounded down to the
nearest whole number) and the Exercise Price per Share may be adjusted pursuant
to the Plan.  Your Option shall be subject to the terms of the agreement of
merger, liquidation or reorganization in the event the Company is subject to
such corporate activity.
 

 
 
 
5

--------------------------------------------------------------------------------

 
 
Legends
All certificates representing the Shares issued upon exercise of this Option
shall, if applicable, have endorsed thereon the following legends:
 
 
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”
 
 
“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED.”

 
Applicable Law
This Agreement will be interpreted and enforced under the laws of the State of
Delaware.
 
Voluntary Participant
Optionee acknowledges that Optionee is voluntarily participating in the Plan.
 
No Rights to Future Awards
Optionee’s rights, if any, in respect of or in connection with this Option or
any other Award are derived solely from the discretionary decision of the
Company to permit Optionee to participate in the Plan and to benefit from a
discretionary Award.  By accepting this Option, Optionee expressly acknowledges
that there is no obligation on the part of the Company to continue the Plan
and/or grant any additional Awards to Optionee or benefits in lieu of Options or
any other Awards even if Options have been granted repeatedly in the past.  All
decisions with respect to future Option grants, if any, will be at the sole
discretion of the Committee.
 
Future Value
The future value of the underlying Shares is unknown and cannot be predicted
with certainty.  If the underlying Shares do not increase in value after the
Date of Option Grant, the Option will have little or no value.  If Optionee
exercises the Option and obtains Shares, the value of the Shares acquired upon
exercise may increase or decrease in value, even below the Exercise Price.
 
No Advice Regarding Grant
The Company has not provided any tax, legal or financial advice, nor has the
Company made any recommendations regarding Optionee’s participation in the Plan,
or Optionee’s acquisition or sale of the underlying Shares.  Optionee is hereby
advised to consult with Optionee’s own personal tax, legal and financial
advisors regarding Optionee’s participation in the Plan before taking any action
related to the Plan.

 
By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above, and in the Plan and Plan prospectus.
 
 
 
 
6

--------------------------------------------------------------------------------

 
 
NTN BUZZTIME, INC.
NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION BY OPTIONEE
 
NTN Buzztime, Inc.
5966 La Place Court
Carlsbad, California 92008
Attention:  Secretary
 
Re:
Exercise of Incentive Stock Option to Purchase Shares of Company Stock

 
 
_____________________________________________ 

 
[PRINT NAME OF OPTIONEE]

 
Pursuant to the Incentive Stock Option Agreement dated ___________________,
______ between NTN Buzztime, Inc., a Delaware corporation, (the “Company”) and
me, made pursuant to the 2010 Performance Incentive Plan (the “Plan”), I hereby
request to purchase _______ Shares (whole number only and must be not less than
100 Shares or the remaining number of vested Shares under this Option) of common
stock of the Company (the “Shares”), at the exercise price of $__________ per
Share.  I am hereby making full payment of the aggregate exercise price by one
or more of the following forms of payment in accordance with the whole number
percentages that I have provided below.  I further understand and agree that I
will timely satisfy any and all applicable tax withholding obligations as a
condition of this Option exercise.
 
Percentage
of Payment
Form of Payment As Provided In the Incentive Stock Option Agreement    
________% Cash/My Personal Check/Cashier’s Check/Money Order (payable to “NTN
Buzztime, Inc.”)     ________% Cashless Exercise as provided in the Incentive
Stock Option Agreement     ________% Surrender of Vested Shares (Valued At Their
Fair Market Value) Owned     100% By Me For More Than Six (6) Months 

 
 
Check one:             ¨  The Shares certificate is to be issued and registered
in my name only.
 
¨  The Shares certificate is to be issued and registered in my name and my
spouse’s name.
 
___________________________________________
[PRINT SPOUSE’S NAME, IF CHECKING SECOND BOX]
 
Check one (if checked second box above):
 
¨ Community Property or ¨ Joint Tenants With Right of Survivorship
 
I acknowledge that I have received, understand and continue to be bound by all
of the terms and conditions set forth in the Plan, Plan prospectus and in the
Incentive Stock Option Agreement.
 
Dated:  __________________
 
 

________________________________________________ 
________________________________________________  (Optionee’s Signature)
(Spouse’s Signature)**      
**Spouse must sign this Notice of Exercise if listed above.
    ________________________________________________ 
________________________________________________     
________________________________________________ 
________________________________________________  (Full Address) (Full Address)

 
 
*THIS NOTICE OF EXERCISE MAY BE REVISED BY THE COMPANY AT ANY TIME WITHOUT
NOTICE.
 
 
 

--------------------------------------------------------------------------------