Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT, dated June 28, 2005, is entered into by and between
NTN COMMUNICATIONS, INC., a Delaware corporation (the “Company”), and Stanley B.
Kinsey (the “Executive”).

 

  1. Term of Employment

Subject to the provisions of Section 10 below, the Company shall employ the
Executive, and the Executive shall serve the Company in the capacity of Chief
Executive Officer for a term of eight months commencing as of July 1, 2005, and
ending February 28, 2006 (the “Term of Employment”).

 

  2. Duties

During the Term of Employment, the Executive will serve as the Company’s Chief
Executive Officer and will report directly to the Board of Directors. Executive
will serve the Company faithfully, diligently, and competently and to the best
of his ability. During the Term of Employment under this Agreement, the
Executive shall also serve as a member of the Company’s Board of Directors.

 

  3. Compensation

During the Term of Employment, the Company shall pay to the Executive as
compensation for the performance of his duties and obligations hereunder a
salary at the rate of $394,000 per annum through February 28, 2006. Such salary
shall be paid bi-weekly. In addition, the Executive will be included in the
Company executive bonus pool in a manner consistent with the 2004 executive
bonus program.

 

  4. Expenses and Other Benefits.

All travel, entertainment and other reasonable business expenses incident to the
rendering of services by the Executive hereunder will be promptly paid or
reimbursed by the Company subject to submission by the Executive in accordance
with the Company’s policies in effect from time to time.

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The Executive shall be entitled during the Term of Employment to participate in
employee benefit and welfare plans and programs of the Company including any
employee incentive stock option plans, qualified or unqualified, to the extent
that any other executives or officers of the Company or its subsidiaries are
eligible to participate and subject to the provisions, rules, regulations, and
laws applicable thereto. Notwithstanding the foregoing, the Company shall
provide the Executive, at a minimum, with the following benefits:

(a) Coverage, at no expense to the Executive, of the Executive, his wife, if
any, and those of his children who qualify as his dependents under Section 152
of the Internal Revenue code of 1954, under a major medical insurance program
with an annual cumulative deductible amount of no more than $500;

(b) Coverage of the Executive by term life insurance, payable to his designated
beneficiary, in the amount of $1,000,000, and, in the event of accidental death
or dismemberment, in the amount of $2,000,000. The premium relating to such
coverage shall not exceed $4,000 per year. Coverage shall begin the first day of
the Term of Employment hereunder and shall continue throughout the Term of
Employment; and

(c) A paid vacation of five (5) weeks, in addition to any authorized holidays of
the Company, during the Term of Employment.

(d) Incentive Stock Option Compensation - The Company will grant the Executive
250,000 Incentive Stock Options (ISO’s) at a price of $1.88 per share. The ISOs
shall vest ratably over the 12 months beginning July 1, 2005. The form of such
share grant is attached hereto as Exhibit “A.” Notwithstanding anything to the
contrary contained in the options, all of the Executive’s options will
immediately vest upon a “Change of Control Event,” as defined in Section 10
hereof.

 

  5. Death or Disability

This Agreement shall be terminated by the death of the Executive and also may be
terminated by the Board of Directors of the Company if the Executive shall be
rendered incapable by illness or any physical or mental disability
(individually, a “disability”) from substantially complying with the terms,
conditions and provisions to be observed and performed on his part for a period
in excess of six months (whether or not consecutive) during any 12 months during
the Term of Employment. If this Agreement is to be terminated by reason of
illness, or any physical or mental disability of the Executive, the Company
shall give thirty days’ written notice to that effect to the Executive in the
manner provided herein and the Executive shall be entitled to the greater of: i)
one year’s additional compensation; or ii) the compensation that was to accrue
during the balance of the Term of Employment; and, in each case, including those
benefits described in Sections 4(a), (b), (c) and (d) hereof.

 

  6. Disclosure of Information; Inventions and Discoveries

Except as provided in the California Labor Code, the Executive shall promptly
disclose to the Company all processes, trademarks, inventions, improvements,
discoveries and other information (collectively, “developments”) directly
related to the business of the Company conceived, developed or acquired by him
alone or with others during the Term of Employment by the Company, whether or
not during regular working hours or through the use of material or facilities of
the Company. For the purpose of Sections 6, 7 and 8 hereof, the business of the
Company includes without limitation the fields of electronically simulated
sports games or interactive television applications. All such developments shall
be the sole and exclusive property of the Company, and upon request the
Executive shall deliver to the Company all drawings, sketches, models and other
data and records relating to such development. In the

 

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event any such development shall be deemed by the Company to be patentable, the
Executive shall, at the expense of the Company, assist the Company in obtaining
a patent or patents thereon and execute all documents and do all other things
necessary or proper to obtain letters patent and invest the Company with full
title thereto.

 

  7. Non-Competition

The Company and the Executive agree that the services rendered by the Executive
hereunder are unique and irreplaceable. During his employment by the Company and
to the extent permitted by law, for a period of one year thereafter, the
Executive shall not become an executive officer (other than an officer whose
function substantially relates to financial matters) of any business in the
fields of electronically simulated sports games or interactive television, which
in the judgment of the Company is, or as a result of the Executive’s engagement
or participation would become, directly competitive with any aspect of the
business of the Company.

 

  8. Non-Disclosure

The Executive will not at any time after the date of this Employment Agreement
divulge, furnish or make accessible to anyone (otherwise than in the regular
course of business of the Company) any knowledge or information with respect to
confidential or secret processes, inventions, discoveries, improvements,
formulas, plans, material, devices, ideas or other know-how, whether patentable
or not, with respect to any confidential or secret engineering, development or
research work or with respect to any other confidential or secret aspect of the
business of the Company (including, without limitation, customer lists, supplier
lists and pricing arrangements with customers or suppliers), except to the
extent such disclosure is (a) in the performance of his duties under this
Agreement, (b) required by applicable law, (c) lawfully obtainable from other
sources, (d) authorized in writing by the Company, or (e) when required to do so
by legal process, that requires him to divulge, disclose or make accessible such
information.

 

  9. Remedies

The Company may pursue any appropriate legal, equitable or other remedy,
including injunctive relief, in respect of any failure by the Executive to
comply with the provisions of Sections 6, 7 or 8 hereof, it being acknowledged
by the Executive that the remedy at law for any such failure would be
inadequate. If the Company shall have failed to cure any material breach by the
Company of any material provision of this Agreement within 30 days after notice
by the Executive to the Company specifying such breach with particularity, the
Executive may, in addition to other remedies, give notice to the Company of
acceleration of the entire amount of compensation which was to accrue to the
Executive during the balance of the Term of Employment, and such amount shall be
immediately due and payable to the Executive.

 

  10. Termination

The Executive’s employment with the Company may be terminated by the Board of
Directors of the Company (i) upon three (3) days’ notice to the Executive in the
event of the Executive’s personal dishonesty, willful misconduct or breach of
fiduciary duty or (ii) upon

 

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thirty (30) days’ notice to the Executive if the Executive shall be in material
breach of any material provision of this Employment Agreement other than as
provided in clause (i) above and shall have failed to cure such breach during
such thirty day period. Any such notice to the Executive shall specify with
particularity the reason for termination or proposed termination.

In the event of termination under this Section 10 or under Section 5 (except as
provided therein), the Company’s unaccrued obligations under this Agreement
shall cease and the Executive shall forfeit all right to receive any unaccrued
compensation or benefits hereunder but shall have the right to reimbursement of
expenses already incurred. Notwithstanding any termination of the Agreement
pursuant to this Section 10 or by reason of disability under Section 5, the
Executive, in consideration of his employment hereunder to the date of such
termination, shall remain bound by the provisions of Sections 6, 7 and 8 (unless
this Agreement is terminated on account of the breach hereof by the Company) of
this Agreement except that if this Agreement is terminated following a Change in
Control Event (as defined below) then the Executive shall remain bound only by
the provisions of Sections 6 and 8.

Termination without cause or any attempt by the Board of Directors of the
Company to reassume any of the responsibilities or duties from the Executive or
to change the duties of the Executive without cause shall be deemed a breach of
this Agreement by the Company without cause and shall immediately entitle the
Executive, as liquidated damages therefore, to the greater of: i) one year’s
additional compensation; or ii) the compensation that was to accrue during the
balance of the Term of Employment; and, in each case, including those benefits
described in Sections 4(a), (b), (c) and (d) hereof.

Notwithstanding anything to the contrary contained herein, the Executive or the
Company shall have the option to terminate this Agreement at any time following
a “Change in Control Event.” In the event of such termination either by the
Company or by the Executive following a Change in Control Event, the company
shall immediately entitle the Executive, as liquidated damages therefore, to one
year’s additional compensation, including those benefits described in Sections
4(a), (b), (c) and (d) hereof. A “Change in Control Event” shall mean:

(a) The acquisition by any individual entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (a “Person”) of beneficial ownership of 50% or more of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”) or any approval
of such acquisition by the Board of Directors of the Company, provided that such
acquisition is accomplished within six months of such approval; provided,
however, that the following acquisitions shall not constitute a Change in
Control Event: (A) any acquisition by the Company or (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company.

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual who becomes a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be

 

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considered as though such individual were a member of the Incumbent Board; but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or

(c) Approval by the shareholders of the Company of a reorganization, merger or
consolidation (a “transaction”), unless, following such transaction in each
case, more than 50% of, respectively, the then outstanding shares of common
stock of the Company resulting from such transaction and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entitles who
were the beneficial owners, respectively, of the outstanding Common stock and
Outstanding Voting Securities immediately prior to such transaction; or

(d) Approval by the shareholders of the Company of (A) a complete liquidation or
dissolution of the Company or (B) the sale or other disposition of all or
substantially all of the assets of the Company unless such assets are sold to a
corporation and following such sale or other disposition, the condition
described in paragraph (c) above is satisfied.

(e) A non-voluntary removal by the Board of the Executive’s additional position
of Chairman of the Board of Directors.

 

  11. Resignation

In the event that the Executive’s services hereunder are terminated under
Section 5 or 10 of this Agreement (except by death), the Executive agrees that
he will deliver his written resignation as a Director of the Company to the
Board of Directors, such resignation to become effective immediately.

Upon expiration of the Term of Employment or termination pursuant to Section 5
or 10 hereof, the Executive or his personal representative shall promptly
deliver to the Company all books, memoranda, plans, records and written data of
every kind relating to the business and affairs of the Company which are then in
his possession on account of his employment hereunder, but excluding all such
materials in the Executive’s possession which are personal and not property of
the Company or which he holds on account of his past or current status as a
director or shareholder of the Company.

 

  12. Arbitration

Any dispute or controversy arising under this Agreement or relating to its
interpretation or the breach hereof, including the arbitrability of any such
dispute or controversy, shall be determined and settled by arbitration in San
Diego, California pursuant to the Rules then obtaining of the American
Arbitration Association. Any award rendered herein shall be final and binding on
each and all of the parties, and judgment may be entered thereon in any court of
competent jurisdiction.

 

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  13. Insurance

The Company shall have the right at its own cost and expense to apply for and to
secure in its own name, or otherwise, life, health or accident insurance or any
or all of them covering the Executive, and the Executive agrees to submit to any
usual and customary medical examination and otherwise to cooperate with the
Company in connection with the procurement of any such insurance, and any claims
thereunder.

 

  14. Waiver of Breach

Any waiver of any breach of this Employment Agreement shall not be construed to
be a continuing waiver or consent to any subsequent breach on the part either of
the Executive or of the Company.

 

  15. Assignment

Neither party hereto may assign his or its rights or delegate his or its duties
under this Employment Agreement without the prior written consent of the other
party; provided, however, that this Agreement shall inure to the benefit of and
be binding upon the successors and assignees of the Company, all as though such
successors and assignees of the Company and their respective successors and
assignees were of the Company, upon (a) a sale of all or substantially all of
the Company’s assets, or upon merger or consolidation of the Company with or
into any other corporation, and (b) upon delivery on the effective day of such
sale, merger or consolidation to the Executive of a binding instrument of
assumption by such successors and assigns of the rights and liabilities of the
Company under this Agreement, provided, however, that no such assignment or
transfer will relieve the Company from its payment obligations hereunder in the
event the transferee or assignee fails to timely discharge them. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
other than his rights to compensation and benefits, which may be transferred by
will or operation of law or as otherwise specifically provided or permitted
hereunder or under the terms of any applicable employee benefit plan.

 

  16. Contract Renewal

The Executive and the Company will attempt to have completed the negotiation of
an extension of this agreement by January 1, 2006. If no agreement has been
reached by that time, the Executive may ask the Company to extend this Agreement
by one year under the existing terms of the Agreement, along with a 3% base
compensation increase. If, by February 28, 2006, the Company has not presented a
renewal offer comparable to the current contact, the Executive may be released
from the agreement and will be entitled to one year’s compensation, including
those benefits described in Sections 4(a), (b), (c) and (d) hereof.

 

  17. Notices

Any notice required or desired to be given hereunder shall be in writing and
shall be deemed sufficiently given when delivered or 3 days after mailing in
United States certified or registered mail, postage prepaid, to the party for
whom intended at the following address:

 

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The Company:

NTN COMMUNICATIONS, INC

5966 La Place Court

Suite 100

Carlsbad, CA 92001

The Executive:

Stanley B. Kinsey

P. O. Box 3050

6821 Farms View Court

Rancho Santa Fe, CA 92067

or to such other address as either party may from time to time designate by like
notice to the other.

 

  18. General

The terms and provisions of this Agreement shall constitute the entire agreement
by the Company and the Executive with respect to the subject manner hereof, and
shall supersede any and all prior agreements or understandings between the
Executive and the Company, whether written or oral. This Agreement may be
amended or modified only by a written instrument executed by the Executive and
the Company, and any such amendment or modification or any termination of this
Agreement shall become effective only after written approval thereof has been
received by the Executive. This Agreement shall be governed by and construed in
accordance with California law. In the event that any terms or provisions of
this Agreement shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining terms and provisions hereof. In the event of any judicial, arbitral or
other proceeding between the parties hereto with respect to the subject matter
hereof, the prevailing party shall be entitled, in addition to all other relief,
to reasonable attorney’s fees and expenses and court costs.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year limit above written.

 

    NTN COMMUNICATIONS. INC.    

By:

  /s/ Andy Wrobel         Secretary

 

AGREED TO AND ACCEPTED:

    By   /s/ Stanley B. Kinsey    

By:

  /s/ Gary Arten   Stanley B. Kinsey       Gary Arten         Chair, NTN
Compensation Committee

 

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