Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 21st
day of August, 2014, by and between NTN Buzztime, Inc., a Delaware corporation
(the “Company”), and Ram Krishnan, an individual (the “Executive”).

 

RECITALS

 

THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions:

 

A. The Company desires that the Executive be employed by the Company to carry
out the duties and responsibilities described below, all on the terms and
conditions hereinafter set forth, effective as of September 15, 2014 (the
“Effective Date”).

 

B. The Executive desires to accept such employment on such terms and conditions.

 

C. This Agreement shall govern the employment relationship between the Executive
and the Company from and after the Effective Date and supersedes and negates all
previous agreements with respect to such relationship.

 

NOW, THEREFORE, in consideration of the above recitals incorporated herein and
the mutual covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the parties agree as follows:

 

1.Retention and Duties.

1.1Retention; Authorization to Work in the United States. Subject to the terms
and conditions expressly set forth in this Agreement, the Company does hereby
hire, engage and employ the Executive and the Executive does hereby accept and
agree to such hiring, engagement and employment. Executive’s employment with the
Company is “at-will” and either the Company or Executive may terminate his
employment with the Company at any time for any or no reason, subject to the
terms and conditions set forth in this Agreement. The period of time during
which Executive remains employed by the Company is referred to as the “Period of
Employment.” Notwithstanding anything else set forth in this Agreement, the
Company's hiring of Executive is conditioned upon, prior to the Effective Date,
Executive passing a background check, negative alcohol/drug screen result and
compliance with federal I-9 requirements.

1.2Duties. During the Period of Employment, the Executive shall serve the
Company as its Chief Executive Officer (the “CEO”) and shall have the powers,
duties and obligations of management typically vested in the office of the CEO,
of a corporation, subject to the directives of the Company’s Board of Directors
(the “Board”) and the corporate policies of the Company as they are in effect
and as amended from time to time throughout the Period of Employment (including,
without limitation, the Company’s business conduct and ethics policies).
Specifically, the CEO will work closely with the Board and senior management to
launch and execute the overall strategic and operational direction for the
Company. The Executive will establish Company policies and objectives in
accordance with board directives to achieve sustainable and cumulative growth
over time. Moreover, the CEO will establish responsibilities and procedures for
attaining objectives and reviews of operations and financial statements to
evaluate achievement of those objectives. During the Period of Employment, the
Executive shall report to the Board.

 

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1.3No Other Employment. During the Period of Employment, the Executive shall
both (i) devote substantially all of the Executive’s business time, energy and
skill to the performance of the Executive’s duties for the Company, and (ii)
hold no other employment. The Company shall have the right to request the
Executive to resign from any board or similar body on which he may then serve if
the Board reasonably determines that the Executive’s business related to such
service is then in competition or conflicts with any business of the Company or
any of its affiliates, successors or assigns. Nothing in this Section 1.3 shall
be construed as preventing Executive from engaging in the investment of his
personal assets.

1.4No Breach of Contract. The Executive hereby represents to the Company that:
(i) the execution and delivery of this Agreement by the Executive and the
Company and the performance by the Executive of the Executive’s duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
other agreement or policy to which the Executive is a party or otherwise bound;
(ii) the Executive has no information (including, without limitation,
confidential information and trade secrets) relating to any other person or
entity which would prevent, or be violated by, the Executive entering into this
Agreement or carrying out his duties hereunder; and (iii) except as set forth on
Exhibit A hereto, the Executive is not bound by any confidentiality, trade
secret or similar agreement (other than this Agreement and the Confidentiality
and Work for Hire Agreement attached hereto as Exhibit B (the “Confidentiality
and Work for Hire Agreement”) with any other person or entity.

1.5Location. The Executive acknowledges that the Company’s principal executive
offices are currently located in Carlsbad, California. The Executive agrees that
he will work from the Company’s principal executive offices. The Executive
acknowledges that he may be required to travel from time to time in the course
of performing his duties for the Company.

1.6Appointment to Board. The Executive will be appointed to the Board as of the
Effective Date. Upon the termination of the Executive’s employment for any
reason and upon the request of the Board, the Executive agrees to resign from
the Board and any of its committees.

 

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2.Compensation.

2.1Base Salary. The Executive’s base salary (the “Base Salary”) shall be paid in
accordance with the Company’s regular payroll practices in effect from time to
time, but not less frequently than in monthly installments. The Executive’s
initial Base Salary shall be at an annualized rate of Three Hundred Twenty Five
Thousand Dollars ($325,000). Subject to the Executive’s continued employment
with the Company, the Executive’s Base Salary shall be increased to an
annualized rate of Three Hundred Fifty Thousand Dollars ($350,000) effective
January 1, 2016.

2.2Incentive Bonus. During the Period of Employment the Executive shall be
eligible to receive an annual incentive bonus (“Incentive Bonus”) in an amount
to be determined by the Board (or its nominating and corporate
governance/compensation committee) in its sole discretion, based on the
achievement of performance objectives established by the Board (or its
nominating and corporate governance/compensation committee) for that particular
period. The Executive’s target potential Incentive Bonus amount for the 2015
calendar year shall be set at 70% of the Executive’s Base Salary. The
Executive’s target potential Incentive Bonus amount for the 2016 calendar year
shall be set at 75% of the Executive’s Base Salary. The Executive’s Incentive
Bonus shall be pro-rated for any approved leaves of absence.

For purposes of clarity, the Executive’s target potential Incentive Bonus for
2015 prior to any pro-rating shall be Two Hundred Twenty Seven Thousand Five
Hundred Dollars ($227,500), which is equal to seventy percent (70%) of his
initial Base Salary. A portion of the Incentive Bonus for 2015 will be
guaranteed in the amount of Seventy Five Thousand Dollars ($75,000). A portion
of the Incentive Bonus for 2016 will be guaranteed in the amount of Fifty
Thousand Dollars ($50,000).

The performance objectives for the Incentive Bonus for 2015 will be determined
by no later than December 31, 2014 and the parties anticipate that the
performance objectives will fall equally into three categories: strategic,
financial and operational.

The Incentive Bonus, if any, will be paid to the Executive within thirty (30)
days after receipt of the independent auditor’s report on the Company’s annual
financial statements for the year in question; provided that the Incentive Bonus
will not be deemed earned and will not be paid to the Executive unless the
Executive is employed by the Company on such payment date. Payment of the
Incentive Bonus, if any, will be subject to withholdings in accordance with the
Company’s standard payroll procedures.

 

2.3Stock Option Grants.

(a)Initial Option Grant. Subject to the other terms of this Section 2.3, the
Company will grant to the Executive an initial option (the “Initial Option”) to
purchase 3,500,000 shares of the Company’s common stock, $0.005 par value per
share (“Common Stock”). The exercise price per share for the Initial Option will
be equal to the fair market value of a share of the Common Stock on the date the
Initial Option is granted. Subject to the Executive’s continued employment by
the Company through the applicable vesting date, the Initial Option will vest as
follows: (a) 25% of the total number of shares of Common Stock subject to the
Initial Option will vest on the first anniversary of the grant date; and (b) the
remaining 75% of the total number of shares of Common Stock subject to the
Initial Option will vest in 36 substantially equal monthly installments
thereafter. The maximum term of the Initial Option will be 10 years from the
grant date, subject to earlier termination upon the termination of the
Executive’s employment with the Company, a change in control of the Company and
similar events. The Initial Option will be evidenced by an option award
agreement to be entered into between the Company and the Executive.

 

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(b)Performance Option Grant. Subject to the other terms of this Section 2.3, in
addition to the Initial Option, the Company will grant to the Executive on or
about January 1, 2015 an additional option (the “Additional Option”) to purchase
750,000 shares of Common Stock. The exercise price per share for the Additional
Option will be equal to the fair market value of a share of the Common Stock on
the date the Additional Option is granted. Subject to the Executive’s continued
employment by the Company through the applicable vesting date and subject to the
achievement of performance goals specific to the Company’s 2015 fiscal year and
which will be determined by the Board (or its nominating and corporate
governance/compensation committee) in its sole discretion, the Additional Option
will vest as follows: (a) 25% of the total number of shares of Common Stock
subject to the Additional Option will vest on the first anniversary of the grant
date; and (b) the remaining 75% of the total number of shares of Common Stock
subject to the Additional Option will vest in 36 substantially equal monthly
installments thereafter. The maximum term of the Additional Option will be 10
years from the grant date, subject to earlier termination upon the termination
of the Executive’s employment with the Company, a change in control of the
Company and similar events. The Additional Option will be evidenced by an option
award agreement to be entered into between the Company and the Executive.

(c)2016 Option Grant. Subject to the Executive's continued employment with the
Company on the date the 2016 Option (as defined below) is granted and subject to
approval by the nominating and corporate governance/compensation committee of
the Company's board of directors, the Company will grant to the Executive on or
about January 1, 2016 an option to purchase 750,000 shares of Common Stock (the
“2016 Option”). The exercise price per share of the 2016 Option will be equal to
the fair market value of a share of the Common Stock on the date the 2016 Option
is granted. Subject to the Executive’s continued employment by the Company
through the applicable vesting date and subject to the achievement of
performance goals specific to the Company’s 2016 fiscal year and which will be
determined by the Board (or its nominating and corporate governance/compensation
committee) in its sole discretion, the 2016 Option will vest as follows: (a) 25%
of the total number of shares of Common Stock subject to the 2016 Option will
vest on the first anniversary of the grant date; and (b) the remaining 75% of
the total number of shares of Common Stock subject to the 2016 Option will vest
in 36 substantially equal monthly installments thereafter. The 2016 Option, if
any, will be granted under the Company's equity incentive plan(s) as then in
effect, will be subject to the terms and conditions of such plan(s), will have a
maximum term of 10 years from the grant date, subject to earlier termination
upon the termination of the Executive’s employment with the Company, a change in
control of the Company and similar events, will be intended to qualify as an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), to the maximum extent possible
within the limitations of the Code, and will be subject to such further terms
and conditions as set forth in a written stock option agreement to be entered
into by the Company and the Executive to evidence such option.

 

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(d)Inducement Grants. The Initial Option and the Additional Option will be
awarded to the Executive as an inducement to the hiring by the Company of the
Executive. Neither the Initial Option nor the Additional Option will be granted
pursuant to the NTN Buzztime, Inc. 2010 Performance Incentive Plan, and neither
the Initial Option nor the Additional Option will be intended to qualify as an
“incentive stock option” within the meaning of Section 422 of the Code. The
Company’s obligation to grant the Initial Option and the Additional Option is
subject to the Company not receiving any objection thereto from the NYSE MKT.

(e)Change in Control. In the event that a Change in Control (as defined in
Section 4.4) occurs and there is no assumption or continuation of the options
described in this Section 2.3 that are then outstanding, and provided that the
Executive is employed by the Company through the effective date of the Change in
Control, 50% of the then unvested portion of such options will vest and become
exercisable as of immediately before such Change in Control.

 

3.Benefits.

3.1Retirement, Welfare and Fringe Benefits. During the Period of Employment, the
Executive shall be entitled to participate in all employee pension and welfare
benefit plans and programs, and fringe benefit plans and programs, made
available by the Company to the Company’s employees generally, in accordance
with the eligibility and participation provisions of such plans and as such
plans or programs may be in effect from time to time.

 

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3.2Reimbursement of Business Expenses. The Company will reimburse Executive for
all reasonable business expenses the Executive incurs during the Period of
Employment in the course and scope of the Executive’s duties, subject to the
Company’s expense reimbursement policies in effect from time to time. Executive
will be required to provide substantiation of all of such expenses on Company
approved expense report forms in accordance with Company policies. These
payments may be made as direct payments of the Executive’s invoices or bills or
by reimbursement to the Executive of costs that are incurred. The Executive will
be responsible for all income and employment taxes due on such payments; the
Company will not provide a gross-up payment to cover such tax liabilities.

3.3Paid Time Off. During the Period of Employment, the Executive shall accrue
paid time off (“PTO”) and shall be permitted time off in accordance with the
Company’s PTO policies in effect from time to time. Executive shall accrue no
less than three weeks of PTO per year. The Executive shall also be entitled to
all other holiday and leave pay generally available to other executives of the
Company.

4.Termination.

4.1Termination of Employment. The Executive’s employment by the Company may be
terminated either by the Company or by Executive at any time for any or no
reason and with or without Cause (in any case, the date that the Executive’s
employment by the Company terminates and which constitutes a "separation from
service" within the meaning of Section 409A of the Code is referred to as the
“Separation Date”).

4.2Benefits Upon Termination. If the Executive’s employment with the Company is
terminated for any reason by the Company or by the Executive, the Company shall
have no further obligation to make or provide to the Executive, and the
Executive shall have no further right to receive or obtain from the Company, any
payments or benefits except as follows:

(a)The Company shall pay the Executive (or, in the event of his death, the
Executive’s estate) any Accrued Obligations (as defined in Section 4.4) within
10 days following the Separation Date;

(b)In addition to the Accrued Obligations, if the Executive’s employment with
the Company is terminated by the Company without Cause (as defined in
Section 4.4) or by the Executive for Good Reason (as defined in Section 4.4) on
or before December 31, 2015, subject to tax withholding and other authorized
deductions and subject to the requirements of Section 4.3, the Company shall:
(i) pay the Executive as severance pay an amount equal to nine (9) months of the
Executive’s Base Salary rate in effect on the Separation Date, which shall be
payable in substantially equal installments on a bi-weekly basis over a period
of nine (9) months; and (ii) provided that the Executive timely elects continued
insurance coverage pursuant to COBRA, reimburse the Executive for a period of
nine (9) months an amount equal to the difference between the amount of the
COBRA premiums actually paid by the Executive each such month and the amount of
the most recent premium paid by the Executive immediately prior to the
Separation Date for health insurance benefits offered by the Company. The first
installment of any severance pay payable under this Section 4.2(b) shall
commence after the Executive executes the General Release (as defined in Section
4.3) and it has become effective in accordance with its terms and is not
revoked.

 

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(c)In addition to the Accrued Obligations, if the Executive’s employment with
the Company is terminated by the Company without Cause or by the Executive for
Good Reason after December 31, 2015, subject to tax withholding and other
authorized deductions and subject to the requirements of Section 4.3, the
Company shall: (i) pay the Executive as severance pay an amount equal to six (6)
months of the Executive’s Base Salary rate in effect on the Separation Date,
which shall be payable in substantially equal installments on a bi-weekly basis
over a period of six (6) months; and (ii) provided that the Executive timely
elects continued insurance coverage pursuant to COBRA, reimburse the Executive
for a period of six (6) months an amount equal to the difference between the
amount of the COBRA premiums actually paid by the Executive each such month and
the amount of the most recent premium paid by the Executive immediately prior to
the Separation Date for health insurance benefits offered by the Company. The
first installment of any severance pay payable under this Section 4.2(c) shall
commence after the Executive executes the General Release and it has become
effective in accordance with its terms and is not revoked.

(d)If the Executive’s employment with the Company is terminated by the Company
without Cause or by the Executive for Good Reason, in each case, within six
months prior to or within six months following the effective date of a Change in
Control, in addition to the Accrued Obligations and the benefits to which the
Executive is entitled under Sections 4.2(b) and 4.2(c), subject to tax
withholding and other authorized deductions and subject to the requirements of
Section 4.3, (i) the Company shall pay the Executive the Incentive Bonus that
has been earned and not previously paid (which amount shall be paid to the
Executive within thirty (30) days after receipt of the independent auditor’s
report on the Company’s annual financial statements for the year in question),
and (ii) 100% of the then unvested portion of the options described in Section
2.3 that are then outstanding will vest and become exercisable as of the later
of the Separation Date and the date immediately prior to the effective date of
the Change in Control.

 

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(e)Notwithstanding the foregoing provisions of this Section 4.2, if the
Executive breaches his obligations under the Confidentiality and Work for Hire
Agreement and/or Section 6, 7 or 8 of this Agreement at any time, from and after
the date of such breach, the Executive will no longer be entitled to, and the
Company will no longer be obligated to pay, any remaining unpaid portion of any
benefits provided in Section 4.2(b) or Section 4.2(c).

 

The foregoing provisions of this Section 4.2 shall not affect: (i) the
Executive’s receipt of benefits otherwise due terminated employees under group
insurance coverage consistent with the terms of the applicable Company welfare
benefit plan; (ii) the Executive’s rights under COBRA to continue participation
in medical, dental, hospitalization and life insurance coverage; or (iii) the
Executive’s receipt of benefits otherwise due in accordance with the terms of
the Company’s 401(k) plan (if any). In no event shall the Company’s obligations
to the Executive exceed the sum of the Accrued Obligations, the benefits
provided in Section 4.2(b), Section 4.2(c) or Section 4.2(d), if applicable, and
the benefits contemplated by this paragraph, regardless of the manner of the
Executive’s termination.

 

4.3Release; Exclusive Remedy.

(a)This Section 4.3 shall apply notwithstanding anything else contained in this
Agreement or any stock option, restricted stock or other equity-based award
agreement to the contrary. Notwithstanding any provision in this Agreement to
the contrary, as a condition precedent to any Company obligation to the
Executive pursuant to Section 4.2(b) and Section 4.2(c) or any agreement or
obligation to accelerate vesting of any equity-based award in connection with
the termination of the Executive’s employment, the Executive shall (i) upon or
promptly following his Separation Date, sign and not revoke a general release
agreement in a form prescribed by the Company (the “General Release”), and
provided further that such general release agreement is executed and becomes
effective no later than forty-five (45) days following the Executive's
Separation Date and (ii) at the Board’s request, provide the Company with a
written resignation from the Board and all of its committees. The Company shall
have no obligation to make any payment to the Executive pursuant to
Section 4.2(b) or Section 4.2(c) (or to accelerate the vesting of any
equity-based award in the circumstances as may otherwise be contemplated by the
applicable award agreement) unless and until the general release agreement
contemplated by this Section 4.3 becomes irrevocable by the Executive in
accordance with all applicable laws, rules and regulations and, at the Board’s
discretion, the Executive shall have tendered the written resignation from the
Board as contemplated by Section 1.2.

 

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(b)The Executive agrees that the General Release will include a complete release
of all known and unknown claims pursuant to California Civil Code Section 1542
and will require that the Executive acknowledge, as a condition to the payment
of any benefits under Section 4.2(b) or Section 4.2(c), as applicable, that the
payments contemplated by Section 4.2 (and any applicable acceleration of vesting
of an equity-based award in accordance with the terms of such award in
connection with the termination of the Executive’s employment) shall constitute
the exclusive and sole remedy for any termination of his employment, and the
Executive will be required to covenant, as a condition to receiving any such
payment (and any such accelerated vesting), not to assert or pursue any other
remedies, at law or in equity, with respect to any termination of employment.
The Company and Executive acknowledge and agree that there is no duty of the
Executive to mitigate damages under this Agreement. All amounts paid to the
Executive pursuant to Section 4.2 shall be paid without regard to whether the
Executive has taken or takes actions to mitigate damages.

 

4.4Certain Defined Terms.

(a)As used herein, “Accrued Obligations” means:

(i)any Base Salary that had accrued but had not been paid (including accrued and
unpaid personal time off) on or before the Separation Date;

(ii)to the extent not previously paid, a pro rata portion of the guaranteed
portion of the Incentive Bonus described in Section 2.2 for 2015 and 2016 based
on the number of days that have elapsed in 2015 or 2016, as the case may be,
through the Separation Date; and

(iii)any reimbursement due to the Executive pursuant to Section 3.2 for expenses
incurred by the Executive on or before the Separation Date.

(b)As used herein, “Cause” shall mean, as reasonably determined by the Board
(excluding the Executive, if he is then a member of the Board), (i) any act of
personal dishonesty taken by the Executive in connection with his
responsibilities as an employee of the Company which is intended to result in
substantial personal enrichment of the Executive and is reasonably likely to
result in material harm to the Company, (ii) the Executive’s conviction of a
felony which the Board reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business, (iii) a willful act
by the Executive which constitutes misconduct and is materially injurious to the
Company, (iv) continued willful violations by the Executive of the Executive’s
obligations to the Company after there has been delivered to the Executive a
written demand for performance from the Company which describes the basis for
the Company’s belief that the Executive has willfully violated his obligations
to the Company.

 

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(c)As used herein, “Change in Control” has the meaning given to such term in the
NTN Buzztime, Inc. 2010 Performance Incentive Plan attached hereto as Exhibit C.

(d)As used herein, “Good Reason” shall mean, as reasonably determined by the
Board (excluding the Executive, if he is then a member of the Board), (i) a
change in the location of the Executive’s place of employment or the principal
offices of the Company, in each case, as of the Effective Date resulting in an
increased commuting distance of more than thirty (30) miles, (ii) a reduction in
the amount of the Base Salary by 10% or more, (iii) a reduction in the
percentage of the Executive’s target potential Incentive Bonus amount from the
percentage in effect for the immediately preceding year or (iv) a change in the
Executive’s position with the Company which materially reduces his duties and
responsibilities; provided and only if such change, reduction or relocation is
effected by the Company without the Executive’s consent. Notwithstanding the
foregoing, a termination shall not be for Good Reason unless (A) the Executive
provides written notice to the Company of his intent to terminate for Good
Reason within thirty (30) days following the first occurrence of the
circumstance that he believes constitute(s) Good Reason, which notice shall
describe such circumstance, (B) the Company does not cure such circumstance
within twenty (20) days following its receipt of such notice, and (C) the
Executive voluntarily terminates his employment with the Company within thirty
(30) days following the end of the twenty (20) day cure period.

4.5Limitation on Benefits.

(a)Notwithstanding anything contained in this Agreement to the contrary, to the
extent that the payments and benefits provided under this Agreement and benefits
provided to, or for the benefit of, the Executive under any other Company plan
or agreement (such payments or benefits are collectively referred to as the
“Benefits”) would be subject to the excise tax (the “Excise Tax”) imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the
Benefits shall be reduced (but not below zero) if and to the extent that a
reduction in the Benefits would result in the Executive retaining a larger
amount, on an after-tax basis (taking into account federal, state and local
income taxes and the Excise Tax), than if the Executive received all of the
Benefits (such reduced amount if referred to hereinafter as the “Limited Benefit
Amount”). Unless the Executive shall have given prior written notice specifying
a different order to the Company to effectuate the Limited Benefit Amount, the
Company shall reduce or eliminate the Benefits by first reducing or eliminating
those payments or benefits which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with payments
or benefits which are to be paid the farthest in time from the Determination (as
hereinafter defined). Any notice given by the Executive pursuant to the
preceding sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Executive’s rights and entitlements to
any benefits or compensation.

 

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(b)A determination as to whether the Benefits shall be reduced to the Limited
Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit
Amount shall be made by the Company’s independent public accountants or another
certified public accounting firm of national reputation designated by the
Company (the “Accounting Firm”) at the Company’s expense. The Accounting Firm
shall provide its determination (the “Determination”), together with detailed
supporting calculations and documentation to the Company and the Executive
within five (5) days of the date of termination of the Executive’s employment,
if applicable, or such other time as requested by the Company or the Executive
(provided the Executive reasonably believes that any of the Benefits may be
subject to the Excise Tax), and if the Accounting Firm determines that no Excise
Tax is payable by the Executive with respect to any Benefits, it shall furnish
the Executive with an opinion reasonably acceptable to the Executive that no
Excise Tax will be imposed with respect to any such Benefits. Unless the
Executive provides written notice to the Company within ten (10) days of the
delivery of the Determination to the Executive that he disputes such
Determination, the Determination shall be binding, final and conclusive upon the
Company and the Executive.

 

5.Proprietary Information; Inventions and Developments. Concurrently with
entering into this Agreement, the Executive will execute the Confidentiality and
Work for Hire Agreement.

6.Confidentiality. The Executive hereby agrees that the Executive shall not at
any time (whether during or after the Executive’s employment with the Company),
directly or indirectly, other than in the course of the Executive’s duties
hereunder, disclose or make available to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, any
Confidential Information (as defined below); provided, however, that this
Section 6 shall not apply when (i) disclosure is required by law or by any
court, arbitrator, mediator or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order the Executive to disclose
or make available such information (provided, however, that the Executive shall
promptly notify the Company in writing upon receiving a request for such
information), or (ii) with respect to any other litigation, arbitration or
mediation involving this Agreement, including but not limited to enforcement of
this Agreement. The Executive agrees that, upon termination of the Executive’s
employment with the Company, all Confidential Information in the Executive’s
possession that is in written, digital or other tangible form (together with all
copies or duplicates thereof, including computer files) shall be returned to the
Company and shall not be retained by the Executive or furnished to any third
party, in any form except as provided herein; provided, however, that the
Executive shall not be obligated to treat as confidential, or return to the
Company copies of any Confidential Information that (a) was publicly known at
the time of disclosure to the Executive, (b) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Company by any person or entity, or (c) is lawfully disclosed
to the Executive by a third party. As used in this Agreement, the term
“Confidential Information” means: information disclosed to the Executive or
known by the Executive as a consequence of or through the Executive’s
relationship with the Company, about the customers, employees, business methods,
public relations methods, organization, procedures or finances, including,
without limitation, information of or relating to customer lists, of the Company
Group.

 

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7.Protective Covenant. The Executive acknowledges and agrees that should he
accept a position (other than an officer whose function substantially relates to
financial matters) of any business or organization where his duties, or those of
others who report directly or indirectly to him, include any activities in the
fields of electronically simulated trivia and sports games or interactive
television efforts in the hospitality industry, which in the reasonable 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 Group (a “Covered Position”), that such position would inevitably lead
to a disclosure of Confidential Information in contravention of Section 6.
Accordingly and without limiting the provisions of Section 6, the Executive
agrees that during the Period of Employment, the Executive shall not accept
employment in a Covered Position. The Executive expressly acknowledges and
agrees that the foregoing restriction is reasonable and necessary in order to
protect the Confidential Information of the Company Group.

8.Anti-Solicitation.

8.1Business Relationships. The Executive promises and agrees that during the
Period of Employment, the Executive will not, directly or indirectly,
individually or as a consultant to, or as an employee, officer, stockholder,
director or other owner or participant in any business, influence or attempt to
influence customers, vendors, suppliers, joint venturers, associates,
consultants, agents, or partners of the Company or any of its affiliates
(collectively, the “Company Group”), either directly or indirectly, to divert
their business away from the Company Group, to any individual, partnership,
firm, corporation or other entity then in competition with the business of any
entity within the Company Group, and he will not otherwise materially interfere
with any business relationship of any entity within the Company Group.

8.2Executives. The Executive promises and agrees that during the Period of
Employment and for a period of one (1) year thereafter, the Executive will not,
directly or indirectly, individually or as a consultant to, or as an employee,
officer, stockholder, director or other owner of or participant in any business,
solicit (or assist in soliciting) any person who is then, or at any time within
six (6) months prior thereto was, an employee of an entity within the Company
Group who earned annually $25,000 or more as an employee of such entity during
the last six (6) months of his or her own employment to work for (as an
employee, consultant or otherwise) any business, individual, partnership, firm,
corporation, or other entity whether or not engaged in competitive business with
any entity in the Company Group.

 

12

 

 

9.Withholding Taxes. Notwithstanding anything else herein to the contrary, the
Company may withhold (or cause there to be withheld, as the case may be) from
any amounts otherwise due or payable under or pursuant to this Agreement such
federal, state and local income, employment, or other taxes as may be required
to be withheld pursuant to any applicable law or regulation.

10.Assignment. This Agreement is personal in its nature and neither of the
parties hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that in the
event of a merger, consolidation, or transfer or sale of all or substantially
all of the assets of the Company with or to any other individual(s) or entity,
this Agreement shall, subject to the provisions hereof, be binding upon and
inure to the benefit of such successor and such successor shall discharge and
perform all the promises, covenants, duties, and obligations of the Company
hereunder.

11.Number and Gender. Where the context requires, the singular shall include the
plural, the plural shall include the singular, and any gender shall include all
other genders.

12.Section Headings. The section headings of, and titles of paragraphs and
subparagraphs contained in, this Agreement are for the purpose of convenience
only, and they neither form a part of this Agreement nor are they to be used in
the construction or interpretation thereof.

13.Governing Law. This Agreement, and all questions relating to its validity,
interpretation, performance and enforcement, as well as the legal relations
hereby created between the parties hereto, shall be governed by and construed
under, and interpreted and enforced in accordance with, the laws of the State of
California, notwithstanding any California or other conflict of law provision to
the contrary.

14.Severability. If any provision of this Agreement or the application thereof
is held invalid, the invalidity shall not affect other provisions or
applications of this Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

15.Entire Agreement. This Agreement, together with the Option Agreements and the
Exhibits contemplated hereby, including the Confidentiality and Work for Hire
Agreement and Mutual Agreement to Arbitrate, embodies the entire agreement of
the parties hereto respecting the matters within its scope. This Agreement
supersedes all prior and contemporaneous agreements of the parties hereto that
directly or indirectly bears upon the subject matter hereof. Any prior
negotiations, correspondence, agreements, proposals or understandings relating
to the subject matter hereof shall be deemed to have been merged into this
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject
matter hereof, except as expressly set forth herein.

 

13

 

16.Modifications. This Agreement may not be amended, modified or changed (in
whole or in part), except by a formal, definitive written agreement expressly
referring to this Agreement, which agreement is executed by both of the parties
hereto. Without limiting the foregoing, the at-will nature of Executive's
employment by the Company may only be modified in a writing approved by the
Company's Board of Directors and executed by both the Company and the Executive.

17.Waiver. Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

18.Arbitration. Any controversy arising out of or relating to the Executive’s
employment (whether or not before or after the expiration of the Period of
Employment), any termination of the Executive’s employment, this Agreement, the
Confidentiality and Work for Hire Agreement referred to in Section 5, the Option
Agreement or any other agreements relating to the grant to Executive of
equity-based awards, including any Year Two Option, the enforcement or
interpretation of any of such agreements, or because of an alleged breach,
default, or misrepresentation in connection with any of the provisions of any
such agreement, including (without limitation) any state or federal statutory
claims, shall be submitted to arbitration in accordance with the provisions set
forth on Exhibit D hereto.

Nothing in this Agreement or the attached Exhibit D shall prohibit or limit the
parties from seeking provisional remedies under California Code of Civil
Procedure section 1281.8, including, but not limited to, injunctive relief from
a California court of competent jurisdiction. Without limiting the foregoing,
the Executive and the Company acknowledge that any breach of any of the
covenants or provisions contained in Section 6, 7 or 8 of this Agreement or in
the Confidentiality and Work for Hire Agreement could result in irreparable
injury to either of the parties hereto for which there might be no adequate
remedy at law, and that, in the event of such a breach or threat thereof, the
non-breaching party shall be entitled to obtain a temporary restraining order
and/or a preliminary injunction and a permanent injunction restraining the other
party hereto from engaging in any activities prohibited by any covenant or
provision in Section 6, 7 or 8 of this Agreement or in the Confidentiality and
Work for Hire Agreement or such other equitable relief as may be required to
enforce specifically any of such covenants or provisions.

 

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19.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 cooperate
with the Company in connection with the procurement of any such insurance and
any claims thereunder.

20.Notices.

(a)All notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given and made if (i) delivered by hand, (ii) otherwise delivered against
receipt therefor, or (iii) sent by registered or certified mail, postage
prepaid, return receipt requested. Any notice shall be duly addressed to the
parties as follows:

(i)if to the Company:

NTN Buzztime, Inc.

2231 Rutherford Road, Suite 200

Carlsbad, CA 92008

Attn: Board of Directors

 

(ii)if to the Executive, the to address most recently on file in the payroll
records of the Company.

(b)Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 20 for the giving of notice. Any communication shall
be effective when delivered by hand, when otherwise delivered against receipt
therefor, or five (5) business days after being mailed in accordance with the
foregoing.

21.Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original as against any party whose signature
appears thereon, and all of which together shall constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories. Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose.

22.Legal Counsel; Mutual Drafting. Each party recognizes that this is a legally
binding contract and acknowledges and agrees that they have had the opportunity
to consult with legal counsel of their choice. Each party has cooperated in the
drafting, negotiation and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not be construed
against either party on the basis of that party being the drafter of such
language. The Executive agrees and acknowledges that he has read and understands
this Agreement, is entering into it freely and voluntarily, and has been advised
to seek counsel prior to entering into this Agreement and has had ample
opportunity to do so.

 

15

 

 

23.Code Section 409A.

(a)It is intended that any amounts payable under this Agreement and the
Company’s exercise of authority or discretion hereunder shall comply with
Section 409A of the Code (including the Treasury regulations and other published
guidance relating thereto) (“Code Section 409A”) so as not to subject the
Executive to any interest or additional tax imposed under Code Section 409A. To
the extent that any amount payable under this Agreement would trigger the
additional tax imposed by Code Section 409A, the Agreement shall be modified to
avoid such additional tax yet preserve (to the nearest extent reasonably
possible) the intended benefit payable to the Executive.

(b)Without limiting the generality of the foregoing, and notwithstanding any
provision in this Agreement to the contrary, any payments made from the date of
the Executive's termination of employment through March 15th of the calendar
year following such termination, are intended to constitute separate payments
for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus
payable pursuant to the "short-term deferral" rule set forth in Section
1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made
following said March 15th, they are intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an
involuntary separation from service and payable pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted
by said provision, with any excess amount being regarded as subject to the
distribution requirements of Section 409A(a)(2)(A) of the Code, including,
without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code. For
purposes of the foregoing, if upon Executive's separation from service he is
then a "specified employee" (within the meaning of Code Section 409A), then to
the extent necessary to comply with Code Section 409A and avoid the imposition
of taxes under Code Section 409A, the Company shall defer payment of
"nonqualified deferred compensation" subject to Code Section 409A payable as a
result of and within six (6) months following such separation from service under
this Agreement until the earlier of (i) the first business day of the seventh
month following Executive's separation from service, or (ii) ten (10) days after
the Company receives notification of Executive's death. If the Company
determines that any other payments hereunder fail to satisfy the distribution
requirement of Section 409A(a)(2)(A) of the Code, then the payment of such
benefit shall be delayed to the minimum extent necessary so that such payments
are not subject to the provisions of Section 409A(a)(1) of the Code. Any
payments that are delayed as a result of this Section 23(b) shall be paid
without interest.

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the first date set forth above.

 

  “COMPANY”   NTN Buzztime, Inc., a Delaware corporation       By:      /s/
Jeffrey A. Berg   Name:     Jeffrey A. Berg   Title:     CEO       “EXECUTIVE”  
    /s/ Ram Krishnan   Ram Krishnan

 

 

 

 

 

 

17

 

EXHIBIT A

 

CONFIDENTIALITY DISCLOSURE

 

 

 

None.

 

 

 

18

 

EXHIBIT B

 

NTN BUZZTIME, INC.

 

CONFIDENTIALITY AND WORK FOR HIRE AGREEMENT

 

 

 

19

 

EXHIBIT C

 

 

 

NTN BUZZTIME, INC.

 

2010 PERFORMANCE INCENTIVE PLAN

 

 

 

 

 

20

 

EXHIBIT D

 

MUTUAL AGREEMENT TO ARBITRATE

 

This Mutual Arbitration Agreement (“Arbitration Agreement”) is entered into
between NTN Buzztime, Inc. (“the Company”) and Ram Krishnan, an individual (the
“Executive”).

 

Agreement to Arbitrate Certain Disputes and Claims

 

Executive and Company agree that they will submit any claim, dispute, and/or
controversy relating to or arising from Executive's employment with Company to
final and binding arbitration. Arbitration shall be the exclusive means of
resolving the claim, dispute and/or controversy regardless of whether it is
based on tort, contract, statute, equity and/or other laws. This shall include,
but not be limited to, claims of wrongful termination, discrimination,
harassment, conversion, theft of trade secrets, unfair competition, damage to
person or property, breach of contract, defamation, violation of any other
non-criminal federal, state or other governmental common law, statute,
regulation or ordinance. This Arbitration Agreement shall apply to actions
initiated by Executive or Company.

 

Company and Executive understand and agree that arbitration of the disputes and
claims covered by this Arbitration Agreement shall be the sole and exclusive
mechanism for resolving any and all existing and future disputes or claims
arising out of Executive’s recruitment to or employment with the Company or the
termination thereof, except as specified below.

 

Claims Not Subject to Arbitration

 

Company and Executive further understand and agree that the following disputes
and claims are not covered by this Arbitration Agreement and shall therefore be
resolved as required by the law then in effect:

 

•Executive’s claims for workers’ compensation benefits, unemployment insurance,
or state or federal disability insurance.

•Either party's request for temporary injunctive relief prior to resolution of
the dispute on its merits in an arbitration proceeding.

•Any other dispute or claim that has been expressly excluded from arbitration by
statute or binding legal precedent.

•Any claims which, as a matter of law then in effect, cannot be the subject of a
mandatory arbitration agreement.

 

This Arbitration Agreement does not prevent Executive from filing a charge with
certain local, state or federal administrative agencies such as the United
States Equal Employment Opportunity Commission or the California Department of
Fair Employment and Housing, or prevent Executive from filing for unemployment
insurance or workers' compensation benefits. Nothing in this Arbitration
Agreement limits Executive's rights, or those of the Company, to seek
provisional relief pursuant to California Code of Civil Procedure section 1281.8
or any similar statute of applicable jurisdiction.

 

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Final and Binding Arbitration; Waiver of Trial Before Court, Jury or Government
Agency

 

Company and Executive understand and agree that the arbitration of disputes and
claims under this Arbitration Agreement shall be instead of a trial before a
court or jury or a hearing before a government agency. Company and Executive
understand and agree that, by signing this Arbitration Agreement, Company and
Executive are expressly waiving any and all rights to a trial before a court or
jury or before a government agency regarding any disputes and claims which
Company and Executive now have or which Company and Executive may in the future
have that are subject to arbitration under this Arbitration Agreement, except as
provided in the preceding section.

 

Arbitration Procedures

 

Any arbitration held under this Arbitration Agreement shall be conducted before
a single neutral arbitrator and shall be administered by the Judicial
Arbitration and Mediation Service ("JAMS") or its successor, unless the parties
otherwise stipulate. The party initiating arbitration must provide written
notice of the request to arbitrate to the other party and to JAMS within the
applicable statute(s) of limitations. Written notice to the Company is to be
directed to the Company's Human Resources Department. The arbitration shall be
conducted in accordance with the JAMS Employment Arbitration Rules and
Procedures (the “JAMS Rules”), available for review at http://www.jamsadr.com,
as those rules are in effect at the time of the arbitration; provided, however,
that the arbitrator shall allow the discovery authorized by California Code of
Civil Procedure section 1283.05 or any other discovery required by California
law. The parties shall attempt to jointly select the single neutral arbitrator.
If they are unable to reach agreement, the procedures contained in the JAMS
Rules shall apply, or JAMS shall appoint the single arbitrator. The parties are
entitled to be represented by counsel during the arbitration. To the extent that
any of the JAMS Rules or anything in this Arbitration Agreement conflicts with
any arbitration procedures required by California law, the arbitration
procedures required by California law shall govern.

 

In the event JAMS is no longer able to supply the arbitrator, such arbitrator
shall be selected from the American Arbitration Association ("AAA") in
accordance with AAA's employment arbitration rules, available for review at
http://www.adr.org, as those rules are in effect at the time of the arbitration,
subject to the same terms and conditions as arbitration with JAMS as referenced
in the preceding paragraph.

 

Place of Arbitration

 

The arbitration shall take place in San Diego County, California, or, at the
Executive’s option, in the county in which the Executive works, or last worked,
for the Company. The parties may agree to hold the arbitration at any other
place mutually agreeable to both of them.

 

Discovery

 

The arbitrator shall allow the discovery authorized by California Code of Civil
Procedure section 1283.05 or any other discovery required by California law.

 

Written Arbitration Award

 

In making an award, the Arbitrator shall have the authority to make any finding
and determine any remedy congruent with applicable law, including an award of
compensatory or punitive damages. In reaching a decision, the Arbitrator shall
adhere to relevant law and applicable legal precedent, and shall have no power
to vary therefrom.

 

22

 

 

The Arbitrator shall issue a written award that sets forth the essential
findings and conclusions on which the award is based. The Arbitrator shall have
the authority to award any relief authorized by law in connection with the
asserted claims or disputes. The Arbitrator’s award shall be final and binding
on both the Company and Executive and it shall provide the exclusive remedy(ies)
for resolving any and all disputes and claims subject to arbitration under this
Arbitration Agreement. The Arbitrator’s award shall be subject to correction,
confirmation, or vacation, by a competent California court as provided by
California Code of Civil Procedure Section 1285.8 et seq and any applicable
California case law setting forth the standard of judicial review of arbitration
awards. The arbitrator shall not have the power to commit errors of law or legal
reasoning, and the award may be vacated or corrected on appeal to a court of
competent jurisdiction for any such error.

 

Governing Law

 

Company and Executive understand that this Arbitration Agreement and its
validity, construction and performance shall be governed by the laws of the
State of California, without reference to rules relating to conflicts of law.
Any dispute(s) and claim(s) to be arbitrated under this Arbitration Agreement
shall be governed by the laws of the State of California, without reference to
rules relating to conflicts of law.

 

Costs of Arbitration

 

The Company will bear the arbitrator’s fee and any other type of expense or cost
that the employee would not be required to bear if he or she were free to bring
the dispute(s) or claim(s) in court as well as any other expense or cost that is
unique to arbitration. If the Executive is the party initiating arbitration, he
will be required to contribute to the administrative costs of the arbitration
the same amount which he would have paid as a filing fee in order to commence
the action in a civil court of law. The Company and Executive shall each bear
their own attorneys’ fees incurred in connection with the arbitration, and the
arbitrator will not have authority to award attorneys’ fees unless a statute or
contract at issue in the dispute specifically authorizes the award of attorneys’
fees to the prevailing party, in which case the arbitrator shall have the
authority to make an award of attorneys’ fees as required or permitted by
applicable law. If there is a dispute as to whether the Company or Executive is
the prevailing party in the arbitration, the Arbitrator will decide this issue.

 

Severability

 

Company and Executive understand and agree that if any term or portion of this
Arbitration Agreement shall, for any reason, be held to be invalid or
unenforceable or to be contrary to public policy or any law, then the remainder
of this Arbitration Agreement shall not be affected by such invalidity or
unenforceability but shall remain in full force and effect, as if the invalid or
unenforceable term or portion thereof had not existed within this Arbitration
Agreement.

 

Complete Agreement

 

Company and Executive understand and agree that this Arbitration Agreement and
the Employment Agreement to which this agreement is attached contain the
complete agreement between the Company and Executive regarding the subjects
covered hereby; that it supersedes any and all prior representations and
agreements between us, if any. This Arbitration Agreement may be modified only
in a writing, expressly referencing this Arbitration Agreement and Executive by
full name, and signed by the Chief Executive Officer of the Company. Any such
written modification must also expressly state the intention of the parties to
modify this Arbitration Agreement.

 

Knowing and Voluntary Agreement

 

The Executive is advised to consult with attorneys of his or her own choosing
before signing this Arbitration Agreement, and acknowledges that he or she has
had an opportunity to do so. By signing this Arbitration Agreement, Executive
agrees that he or she has read this Arbitration Agreement carefully and
understand that by signing it, he or she is waiving all rights to a trial or
hearing before a court or jury or government agency of any and all disputes and
claims regarding Executive’s employment with the Company or the recruitment to
or termination thereof (except as otherwise stated herein).

 

Consideration

 

The parties' mutual agreement to arbitrate the claims identified herein, and the
Company's agreement to pay most of the costs associated with the arbitration,
provide good and sufficient consideration for the mutual promises to arbitrate.

 

23

 

 

 

PLEASE READ CAREFULLY. BY SIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY ARE
GIVING UP THEIR RIGHT TO FILE A LAWSUIT IN A COURT OF LAW AND TO HAVE THEIR CASE
HEARD BY A JUDGE OR JURY AS TO ANY CLAIMS COVERED BY THIS AGREEMENT TO
ARBITRATE.

 

 

 

 

 

 

 

Date: September 16, 2014

 

 

 

 

 

/s/ Ram Krishnan

Ram Krishnan

 

 

 

Date:   September 16, 2014

NTN Buzztime, Inc.

 

 

 

Jeffrey Berg

 

By:

Title: Chairman

 

 

 

 

24