Stock Option Agreement



 EXHIBIT 4.12 
 NTN BUZZTIME, INC. 
 2004 PERFORMANCE INCENTIVE PLAN 
 INCENTIVE STOCK OPTION AGREEMENT 
 THIS INCENTIVE STOCK OPTION AGREEMENT (this “Option Agreement”) dated July 10, 2006 by and between NTN BUZZTIME, INC., a Delaware corporation (the “Corporation”), and
Dario Santana (the “Grantee”) evidences the incentive stock option (the “Option”) granted by the Corporation to the Grantee as to the number of shares of the Corporation’s Common Stock first set forth below.

  

			
	 Number of Shares of Common Stock:1     750,000
	  	Award Date:                 July 10, 2006
		
	 Exercise Price per Share:1                            $1 .49
	  	Expiration Date:1,2
        July 9, 2016

 Vesting1,2 The Option shall become vested in 48 substantially equal monthly installments, with the first installment vesting on August 9, 2006 and an additional
installment vesting on the 9th day of each of the 47 months thereafter. 
 The Option is granted under the NTN Buzztime, Inc. 2004 Performance Incentive Plan (the “Plan”) and subject to the Terms and Conditions
of Incentive Stock Option (the “Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option has been granted to the Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Grantee. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Option set forth herein. The Grantee acknowledges receipt of a copy of the Terms, the
Plan and the Prospectus for the Plan. 
  

					
	“GRANTEE”	  		 	 NTN BUZZTIME, INC.
 a Delaware
corporation

	 /s/    DARIO SANTANA
	  		 	
	Signature	  	By:	 	 /s/    ANDY WROBEL

	 Dario Santana
	  	Print Name:	 	 Andy Wrobel

	Print Name	  	Title:	 	 CFO


 CONSENT OF SPOUSE 
 In consideration of the Corporation’s execution of this Option Agreement, the undersigned spouse of the Grantee agrees to be bound by all of the
terms and provisions hereof and of the Plan. 
  

			
	 /s/    SARA H. SANTANA
	  	 7/26/06

	Signature of Spouse	  	Date



	1.	Subject to adjustment under Section 7.1 of the Plan. 


	2.	Subject to early termination under Section 4 of the Terms and Section 7.4 of the
Plan, the Option shall terminate at the close of business on the Expiration Date. 








 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTION 
  

	1.	Vesting; Limits on Exercise. 

 The Option
shall vest and become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover page of this Option Agreement. The Option may be exercised only to the extent the Option is vested and
exercisable. 
  

	 	•	 	Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised),
and such right shall continue, until the expiration or earlier termination of the Option, 

  

	 	•	 	No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated. 

  

	 	•	 	Minimum Exercise. No fewer than 100 shares of Common Stock (subject to adjustment under Section 7.1 of the Plan) may be purchased at any one time, unless the number
purchased is the total number at the time exercisable under the Option. 

  

	 	•	 	ISO Value Limit. If the aggregate fair market value of the shares with respect to which ISOs (whether granted under the Option or otherwise) first become exercisable by the
Grantee in any calendar year exceeds $100,000, as measured on the applicable Award Dates, the limitations of Section 5.1.2 of the Plan shall apply and to such extent the Option will be rendered a nonqualified stock option.


  

	2.	Continuance of Employment/Service Required; No Employment/Service Commitment. 

 The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or
mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan. 
 Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Corporation or any of its Subsidiaries, affects the Grantee’s status, if he or she is an
employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or service, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation. 
  

	3.	Method of Exercise of Option. 

 The Option
shall be exercisable by the delivery to the Secretary of the Corporation (or such other person as the Administrator may require pursuant to such administrative exercise procedures as the Administrator may implement from time to time) of: 

 

	 	•	 	a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the
Committee may require from time to time, 








  

	 	•	 	payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Corporation, or (subject to compliance with all applicable
laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Participant, valued at their Fair Market Value on the
exercise date, provided, however, that any shares initially acquired upon exercise of a stock option or otherwise from the Corporation must have been owned by the Participant for at least six (6) months before the date of such
exercise; 

  

	 	•	 	any written statements or agreements required pursuant to Section 8.1 of the Plan; and 

  

	 	•	 	satisfaction of the tax withholding provisions of Section 8.5 of the Plan. 

 The Administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Administrator. 
 The Option will qualify as an ISO only if it meets all of the applicable requirements of the Code. The Option may be rendered a nonqualified stock option if the
Administrator permits the use of one or more of the non-cash payment alternatives referenced above. 
  

	4.	Early Termination of Option. 

 4.1
Possible Termination of Option upon Change in Control. The Option is subject to termination in connection with a Change in Control Event or certain similar reorganization events as provided in Section 7.4 of the Plan. 
 4.2 Termination of Option upon a Termination of Grantee’s Employment or Services. Subject to earlier termination on the Expiration Date of
the Option or pursuant to Section 4.1 above, if the Grantee ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary, the following rules shall apply (the last day that the Grantee is employed by or provides
services to the Corporation or a Subsidiary is referred to as the Grantee’s “Severance Date”): 
  

	 	•	 	other than as expressly provided below in this Section 4.2, (a) the Grantee will have until the date that is 3 months after his or her Severance Date to exercise the
Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for
the 3-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 3-month period; 

  

	 	•	 	 if the termination of the Grantee’s employment or services occurs in connection with an Involuntary Termination (as defined below) as provided in
Section 5.3(b) of the Employment Agreement (as defined below), then the Grantee (or his beneficiary or 










 
personal representative, as the case may be) will have until the date that is 6 months after the Grantee’s Severance Date to exercise the Option,
(b) the Option, to the extent not vested (or subject to accelerated vesting) on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 6-month period following the Severance Date
and not exercised during such period, shall terminate at the close of business on the last day of the 6-month period; 
  

	 	•	 	if the Grantee’s employment or services are terminated by the Corporation or a Subsidiary for Cause (as defined below), the Option (whether vested or not) shall terminate on
the Severance Date. 

 The Grantee is a party to that certain Employment Agreement, dated as of June 7, 2006, with the
Corporation (the “Employment Agreement”). The Option is subject to accelerated vesting in connection with an Involuntary Termination of the Grantee’s employment as provided in Section 5.3(b) of the Employment Agreement.

 For purposes of the Option, the terms “Involuntary Termination,” “Cause,” “Good Reason” and
“Disability” shall have the respective meanings ascribed to such terms in Section 5.5 of the Employment Agreement. 
 In all events the Option is subject to earlier termination on the Expiration Date of the Option or as contemplated by Section 4.1. The Administrator shall be the sole judge of whether the Grantee continues to render employment or
services for purposes of this Option Agreement. 
 Notwithstanding any post-termination exercise period provided for herein or in the Plan,
the Option will qualify as an ISO only if it is exercised within the applicable exercise periods for ISOs under, and meets all of the other requirements of, the Code. If the Option is not exercised within the applicable exercise periods for ISOs or
does not meet such other requirements, the Option will be rendered a nonqualified stock option. 
  

	5.	Non-Transferability. 

 The Option and any
other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as set forth in Section 5.7 of the Plan. 
  

	6.	Notices. 

 Any notice to be given under the
terms of this Option Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records, or at such
other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage
and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Grantee is no longer employed by the Corporation or
a Subsidiary, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 6. 








	7.	Plan. 

 Except as provided herein, the Option
and all rights of the Grantee under this Option Agreement are subject to, and the Grantee agrees to be bound by, all of the terms and conditions of the Plan, incorporated herein by this reference. In the event of a conflict or inconsistency between
the terms and conditions of this Option Agreement and of the Plan, the terms and conditions of this Option Agreement shall govern. The Grantee agrees to be bound by the terms of the Plan and this Option Agreement (including these Terms). The Grantee
acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Option Agreement. Unless otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority
on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by
appropriate action of the Board or the Administrator under the Plan after the date hereof. 
  

	8.	Entire Agreement. 

 This Option Agreement
(including these Terms) and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement
may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely
affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 
  

	9.	Governing Law. 

 This Option Agreement shall
be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. 
  

	10.	Effect of this Agreement. 

 Subject to the
Corporation’s right to terminate the Option pursuant to Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation. 
  

	11.	Counterparts. 

 This Option Agreement may be
executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  

	12.	Section Headings. 

 The section headings of
this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.