Document:

exhibit104.htm

Exhibit 10.4

 

 

INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT, made effective as of the 1st day of July, 2009 by and between Charles & Colvard, Ltd., a North Carolina corporation (the "Company"), and Neil Boss (the "Contractor").

RECITALS:

A.      The Company is engaged in the business of designing, developing, manufacturing, and selling moissanite jewels (the “Business”) and desires to engage the Contractor to assist the Company in providing financial and accounting services (the “Services”) for the business.

B.      The Contractor desires to provide such services to the Company on the terms and for the compensation set forth herein.

NOW THEREFORE, the parties hereto agree as follows:

1.      Engagement.  The Company hereby engages the Contractor as a nonexclusive contractor to perform the Services (as defined herein) subject to the terms and conditions of this Agreement, and the Contractor hereby accepts such engagement for and in consideration of the compensation hereinafter provided and agrees to use his best efforts in performing the Services.  The Contractor shall perform his obligations hereunder in compliance with the terms of this Agreement and any and all applicable laws and regulations.  The Contractor acknowledges that this is a nonexclusive engagement by the Company and that the Company retains the right to appoint additional contractors as the Company, in its sole and unrestricted judgment, may from time to time determine to be in the best interests of the Company without liability or obligation to the Contractor.

2.      Services.

a.      The Contractor agrees to provide financial and accounting services for the Company and perform other duties related thereto as the Company may determine from time to time (the “Services”).  Contractor warrants to the Company that the Services will be performed in a professional, timely and workmanlike manner.

b.      The Contractor shall execute a Confidential Disclosure Agreement in substantially the form attached hereto as Exhibit A concurrent with the execution of this Agreement.

3.      Licenses, Tools and Materials.  Contractor shall be responsible for obtaining, at Contractor’s own expense, all licenses, permits and bonds as may be required by any federal, state or local law or regulation for the performance of Contractor’s duties hereunder.  The Company shall be responsible for supplying at its cost all necessary tools and materials to be used by Contractor.

4.      Limitations.  Nothing in this Agreement shall be construed to give the Contractor authority to represent the Company before any court or governmental or regulatory agency without the express prior written authorization of the Company.  In addition, all files, books, accounts, records and other information of any nature, however recorded or stored, and related to the Company (the "Records") shall at all times belong to the Company and to the extent possessed by the Contractor hereunder, such possession shall be for the benefit

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                       

  

  

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of and as agent for the Company.  The Contractor's possession of the Records is at the will of the Company and is solely for the purpose of enabling the Contractor to perform his obligations hereunder.  The Records shall be readily separable from the records of the Contractor.

5.      Term.  The term of this Agreement shall commence on the date hereof and shall continue thereafter through and including the close of business on June 30, 2010.  Notwithstanding the foregoing, the Company may terminate this Agreement for “cause,” as defined herein, by giving written notice of at least 30 days in advance of its desire to terminate this Agreement for cause.  The Company shall be deemed to have cause for terminating Contractor’s engagement in the event Contractor (i) demonstrates any dishonesty or engages in any act of moral turpitude, (ii) improperly performs or fails to perform the Services described herein, (iii) causes intentional damage to substantial property of the Company, or (iv) is unable to perform the Services because of death or a disability which renders him unable to perform the Services for 30 consecutive calendar days.

6.      Fees.  As compensation for the performance of the Services, the Company shall pay the Contractor at a rate of $90 per hour worked, billable in 1⁄4 hour increments.  Contractor will submit a report of hours worked every 2 weeks and C&C will pay contractor within 2 weeks from receipt of this report.  No amounts (including without limitation, social security, federal and state withholding taxes) shall be withheld or otherwise subtracted from the compensation paid to the Contractor pursuant to this Section 5 unless required by law.  In addition, the Contractor shall be reimbursed for all expenses incurred by the Contractor on behalf (and with the prior written authorization) of the Company, in accordance with the attached C&C Travel and Expense Policy, from the date the Contractor delivers an itemized report of such expenses, together with receipts or other evidence of payment reasonably satisfactory to the Company and its accountant.  C&C agrees to pay for existing employee healthcare benefits for the month of July 2009.

7.      Background Check, Credit Check, Drug Testing and Searches. The Contractor understands and agrees that (i) the Company may require the Contractor to undergo a criminal background check, a credit check  and/or drug testing as a condition of being allowed to perform the Services, (ii) in the sole discretion of the Company, the Contractor may be prohibited from performing the Services based upon the results of a background check, a credit check or drug test, and (iii) the Company may conduct a reasonable search of the Contractor if the Company has reasonable suspicion to believe that the Contractor has in his possession property belonging to the Company.

8.      Indemnification.  The Contractor shall defend, release, indemnify and hold the Company and its directors, officers, shareholders, employees and agents and the personal representatives and assigns of each, harmless from and against any and all claims, suits, liability, costs and expenses, including, without limitation, attorneys' fees and expenses, in connection with any knowing and intentional act or omission of the Contractor, his employees and/or agents in connection with the provision of the Services.

9.      Insurance Representations, Workplace Safety. The Contractor agrees to maintain liability, worker's compensation, errors and omission and/or other insurance in such amounts and with such carriers as the Company may reasonably request, each of which policies shall, upon request of the Company, name the Company as an additional insured.  In addition, the Contractor shall be solely responsible for workplace safety, shall maintain the workplace in accordance with industry standards and shall comply with all governmental (including federal, state and local) regulations.

10.      Notices.  All notices, demands, requests or other communications which may be or are required to be given, served or sent by one party to the other party pursuant to this Agreement shall be in writing and shall be hand delivered or mailed by certified mail, return receipt requested, postage prepaid, or sent by telefax,

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                      

  

  

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addressed as follows:

If to the Company:

300 Perimeter Park Dr. Suite A

Morrisville, NC 27560

Attention:  Richard A. Bird, CEO

Phone:  919-468-0399

If to the Contractor:

Neil S. Boss

9409 Treymore Drive

Raleigh, NC 27617

919-426-4143

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be delivered, given or sent.  Documents delivered by hand shall be deemed to have been received upon delivery; documents sent by telefax shall be deemed to have been received when the answer back is received; and documents sent by mail shall be deemed to have been received upon their receipt, or at such time as delivery is refused by the addressee upon presentation.

11.      Security.  The Contractor agrees that he will at all times comply with all security regulations in effect from time to time at the Company's premises or applicable outside such premises, to materials belonging to the Company.  The Contractor agrees not to use or disclose to any party any information, systems, equipment, ideas, processes, or methods of operation observed in connection with the performance of his obligations hereunder.

12.      Independent Contractor.

a.      Acknowledgment by Contractor.  Contractor acknowledges and agrees that Contractor will be treated, vis-a-vis the Company as an independent contractor and not as an employee, agent or authorized representative of the Company.  Contractor shall have no authority to bind the Company to any contract, agreement or obligation whatsoever.  The acts of Contractor shall in no way constitute the acts of the Company and Contractor shall not represent to any third party that Contractor has any express or implied authority to bind the Company to any such contract, agreement or obligation.

b.      Tax Matters.  Because Contractor is an independent contractor, the Company will not withhold from any compensation paid to Contractor any amounts for federal or state income taxes, or social security (FICA) for Contractor, nor will the Company pay any social security or unemployment tax with respect to Contractor.  Such taxes are the responsibility of Contractor.  Contractor agrees to indemnify and hold the Company (including its employees, officers, directors, agents, subsidiaries or affiliates) harmless, and hereby indemnifies and hold the Company harmless, from and against any damage, claim, assessment, interest charge or penalty incurred by or charged to the Company as a result of any claim, cause of action or assessment by any federal or state government or agency for any nonpayment or late payment by Contractor of any tax or contribution based upon compensation paid hereunder or because the Company did not withhold any taxes from compensation paid hereunder.

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                       

  

  

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c.      No Insurance.  Consistent with Contractor’s status as an independent contractor, the Company will not provide Contractor with any company, individual or group insurance policy or any other kind of insurance coverage whatsoever.

13.      Assignment.  Neither this Agreement or any interest herein or any rights hereunder shall be sold or assigned by the Contractor, nor shall any of the duties of the Contractor hereunder be delegated to any person, firm or corporation, without prior notice to and consent of the Company.

14.      Intellectual Property.  Any inventions, copyrights, or other intellectual property created or developed by Contractor or Contractor’s employees, or associates or sub-contractors during the term of this Agreement related to the work performed under the Agreement shall be assigned to the Company.

15.      Standard of Care.  The Contractor warrants that he will exercise due diligence to perform the Services in a professional manner in compliance with all applicable laws and regulations and the highest ethical standards.  In addition the Contractor represents and warrants that any information which he may supply the Company during the term of this Agreement (i) will have been obtained by the Contractor lawfully and from publicly available sources, and (ii) will not be confidential or proprietary to any third person.  Nothing in this Agreement shall be construed as authorizing or encouraging the Contractor to obtain information for the Company in violation of any third party's rights to copyright or trade secret protection.

16.      Miscellaneous.

a.      The provisions of this Agreement may be waived, altered, amended or repealed, in whole or in part, only on the written consent of the Company and the Contractor.

b.      Section headings and numbers used in this Agreement are included for convenience of reference only, and, if there is any conflict between any such numbers and headings, and the text of this Agreement, the text shall control.  Each of the statements set forth in the premises of this Agreement is incorporated into the Agreement as a valid and binding representation of the party or parties to whom it relates.

c.      This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without reference to the choice of law principles thereof.  If any dispute arises hereunder, the parties hereto agree that any suit brought by either party shall be heard in the courts of North Carolina or any federal court sitting in North Carolina, and the parties hereto consent to the jurisdiction of such courts.

d.      This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

e.      This Agreement, together with the Confidential Disclosure Agreement herein referenced represent the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety any and all prior written or oral agreements with respect thereto.

f.  Neither party shall have the right under this Agreement to use the name, trademark or trade names of the other, unless prior written approval has been obtained.  Any such approval or authorization shall cease upon termination of this Agreement.

 

g.  During the term of this agreement, C&C will supply contractor with a laptop computer and blackberry.

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                    

  

  

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IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Independent Contractor Agreement as of the date and year first above written.

 

 

	 	 COMPANY	 
	 	 	 	 
	 	 CHARLES & COLVARD, LTD.	 
	 	 	 	 
	 	 By:	 /s/ R. A. Bird	 
	 	 	 Richard A. Bird, CEO	 
	 	 	 	 
	 	 CONTRACTOR	 
	 	 	 	 
	 	 By:	 /s/ Neil S. Boss	 
	 	 	 Neil S. Boss	 

 

 

 

 

 

 

 

 

 

 

 

 

 

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                      

  

  

  

ADDENDUM TO INDEPENDENT CONTRACTOR AGREEMENT

THIS ADDENDUM will supplement the INDEPENDENT CONTRACTOR AGREEMENT, made effective as of the 1st day of July, 2009 by and between Charles & Colvard, Ltd., a North Carolina corporation (the "Company"), and Neil Boss (the "Contractor").

RECITALS:

	
A.  

	
The Company agrees to offer Contractor a minimum of 25 hours of billable time each week during the period beginning August 1, 2009 and ending January 31, 2010.  If the Company does not offer 25 hours of work per week during this period, the company will still pay contractor at $90 per hour for the 25 hour minimum.  Contractor also agrees to make himself available for a minimum of 25 hours per week during this period.  Contractor can inform the Company of time needed off with at least 7 days notice and time off may not exceed 7 consecutive business days.  Company is not obligated to pay the minimum 25 hours per week for time requested off by Contractor.

	
B.  

	
All other terms of the Independent Contractor Agreement made effective July 1, 2009 remain in effect.

IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Independent Contractor Agreement as of the date and year first above written.

 

	 	 COMPANY	 
	 	 	 	 
	 	 CHARLES & COLVARD, LTD.	 
	 	 	 	 
	 	 By:	 /s/ Timothy L. Krist	 
	 	 	 Timothy Krist, CFO	 
	 	 	 	 
	 	 CONTRACTOR	 
	 	 	 	 
	 	 By:	 /s/ Neil S. Boss	 
	 	 	 Neil S. Boss	 

 

 

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                      

  

  

  

2nd ADDENDUM TO INDEPENDENT CONTRACTOR AGREEMENT

THIS 2nd ADDENDUM will supplement the INDEPENDENT CONTRACTOR AGREEMENT (“IC Agreement”), made effective as of the 1st day of July, 2009 by and between Charles & Colvard, Ltd., a North Carolina corporation (the "Company"), and Neil Boss (the "Contractor").

RECITALS:

	
A.  

	
The Company agrees to offer Contractor a minimum of 25 hours of billable time each week during the period beginning February 1, 2010 and ending April 30, 2010.  If the Company does not offer 25 hours of work per week during this period, the company will still pay contractor at $80 per hour for the 25 hour minimum.  Contractor also agrees to make himself available for a minimum of 25 hours per week during this period.  Contractor can inform the Company of time needed off with at least 7 days notice and time off may not exceed 7 consecutive business days.  Company is not obligated to pay the minimum 25 hours per week for time requested off by Contractor.

	
B.  

	
Item 5 of the IC Agreement is hereby amended to reflect that the term of the IC Agreement shall be extended through June 30, 2011.

	
C.  

	
Item 6 of the IC Agreement is hereby amended to reflect that the company shall pay Contractor at a rate of $80 per hour effective February 1, 2010.  Effective May 1, 2010 and through the term of the IC agreement, Contractor will not be paid for consultations of less than 15 minutes.

	
D.  

	
All other terms of the Independent Contractor Agreement made effective July 1, 2009 remain in effect.

	
E.  

	
All other terms of the 1st Addendum to Independent Contractor Agreement made remain in effect  unless otherwise superceded in this 2nd Addendum.

IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Independent Contractor Agreement as of the date and year first above written.

 

 

	 	 COMPANY	 
	 	 	 	 
	 	 CHARLES & COLVARD, LTD.	 
	 	 	 	 
	 	 By:	 /s/ Timothy L. Krist	 
	 	 	 Timothy Krist, CFO	 
	 	 	 	 
	 	 Date	 12/13/09	 
	 	 	 	 
	 	 CONTRACTOR	 
	 	 	 	 
	 	 By:	 /s/ Neil S. Boss	 
	 	 	 Neil S. Boss	 
	 	 	 	 
	 	 Date	 12/14/09	 

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.                                                                                                                                                                                       

  

  

  

3td ADDENDUM TO INDEPENDENT CONTRACTOR AGREEMENT

THIS 3rd ADDENDUM will supplement the INDEPENDENT CONTRACTOR AGREEMENT (“IC Agreement”), made effective as of the 1st day of July, 2009 by and between Charles & Colvard, Ltd., a North Carolina corporation (the "Company"), and Neil Boss (the "Contractor").

RECITALS:

	
A.  

	
The Company agrees to offer Contractor a minimum of 25 hours of billable time each week during the period beginning May 1, 2010 and ending July 31, 2010.  If the Company does not offer 25 hours of work per week during this period, the company will still pay contractor at $80 per hour for the 25 hour minimum.  Contractor also agrees to make himself available for a minimum of 25 hours per week during this period.  Contractor can inform the Company of time needed off with at least 7 days notice and time off may not exceed 7 consecutive business days.  Company is not obligated to pay the minimum 25 hours per week for time requested off by Contractor.  The weekly minimum of 25 hours is subject to change upon mutual agreement of the parties.

	
B.  

	
All other terms of the Independent Contractor Agreement made effective July 1, 2009 remain in effect.

	
C.  

	
All other terms of the 1st Addendum and 2nd Addendum to Independent Contractor Agreement made remain in effect unless otherwise superceded in this 3rd Addendum.

IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Independent Contractor Agreement as of the date and year first above written.

 

	 	 COMPANY	 
	 	 	 	 
	 	 CHARLES & COLVARD, LTD.	 
	 	 	 	 
	 	 By:	 /s/ Timothy L. Krist	 
	 	 	 Timothy Krist, CFO	 
	 	 	 	 
	 	 Date	 2/26/10	 
	 	 	 	 
	 	 CONTRACTOR	 
	 	 	 	 
	 	 By:	 /s/ Neil S. Boss	 
	 	 	 Neil S. Boss	 
	 	 	 	 
	 	 Date	 2/26/10	 

  

300 Perimeter Park Drive, Suite A     Morrisville, NC 27560     Telephone 919.468.0399

Facsimile 919.468.0486     www.moissanite.com

CONFIDENTIAL Charles & Colvard, Ltd.ntnbuzz_10q-ex1002.htm

Exhibit 10.2

  

NTN BUZZTIME INC.

2010 PERFORMANCE INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

 

NTN Buzztime, Inc., a Delaware corporation (the “Company”), hereby grants an Option to purchase shares of its Common Stock (the “Shares”) to the Optionee named below.  The terms and conditions of the Option are set forth in this cover sheet, in the attachment and in the NTN Buzztime, Inc. 2010 Performance Incentive Plan (the “Plan”).

 

 

Date of Option Grant:  __________________, [YEAR]

 

Name of Optionee:  _________________________________________________

 

Number of Shares Covered by Option:  ______________

 

Exercise Price per Share:  $_____.___

 

Fair Market Value of a Share on Date of Option Grant:  $_____.___

 

Expiration Date:  _____________, [YEAR]  [DO NOT EXCEED TEN YEARS FROM GRANT]

 

Vesting Calculation Date:  _____________, [YEAR]

 

Vesting Schedule:

 

Subject to all the terms of the attached Agreement, your right to purchase Shares under this Option shall vest as to one-fourth (1/4) of the total number of Shares covered by this Option, as shown above, on the first anniversary of the Vesting Calculation Date.  Thereafter, the number of Shares which you may purchase under this Option shall vest at the rate of one-forty-eighth (1/48) of the total number of Shares covered by this Option per calendar month on the last day of each of the thirty-six (36) months following the month of the first anniversary of the Vesting Calculation Date.  The resulting aggregate number of vested Shares will be rounded to the nearest whole number.  No Shares will vest after your Service has terminated for any reason.

 

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement, the Plan and Plan prospectus, copies of which are also enclosed.

 

Optionee: ________________________________________________________________________________

(Signature)

 

Company: ________________________________________________________________________________

(Signature)

 

Title: ____________________________________________________________________________________

 

Attachment

 

  

  

  

 

NTN BUZZTIME, INC.

2010 PERFORMANCE INCENTIVE PLAN

 

INCENTIVE STOCK OPTION AGREEMENT

 

	
The Plan and

Other Agreements

	
The text of the Plan is incorporated in this Agreement by reference.  Certain capitalized terms used in this Agreement are defined in the Plan.

 

This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option.  Any prior agreements, commitments or negotiations concerning this Option are superseded.

 

	
Incentive Stock Option

	
This Option is intended to be an Incentive Stock Option under section 422 of the Code and will be interpreted accordingly.

 

However, this Option will be treated as a Nonstatutory Stock Option on the day after three (3) months after you cease to be an employee of the Company (and any Subsidiary or any Parent): (i) even if you continue to provide Service after your employment has terminated or (ii) if your termination of employment was for any reason other than due to your death or Disability.  In addition, to the extent that all or part of this Option exceeds the $100,000 limitation rule of section 422(d) of the Code, this Option or the lesser excess part will be treated as a Nonstatutory Stock Option.

 

This Option is not intended to be deferred compensation under section 409A of the Code and will be interpreted accordingly.

 

	
Vesting

	
This Option is only exercisable before it expires and then only with respect to the vested portion of the Option.  This Option will vest according to the Vesting Schedule on the attached cover sheet.

 

	
Term

	
Your Option will expire in any event no later than the Expiration Date, as shown on the cover sheet.  Your Option will expire earlier if your Service terminates, as described below.

 

If the Expiration Date specified in the attached cover sheet falls on a day on which the NYSE Amex (“AMEX”) is open for trading, then any unexercised portion of this Option that is outstanding shall be forfeited without consideration as of 3:45 P.M. New York time on the Expiration Date.

 

However, if the Expiration Date specified in the attached cover sheet falls on any day on which the AMEX is not open for trading, then your ability to exercise this Option will terminate as of 3:45 P.M. New York time on the last day in which the AMEX is open for trading that occurs immediately prior to the Expiration Date.

 

 

 

  

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Termination of Service - General

	
If your Service terminates for any reason other than (i) being terminated by the Company for Cause or (ii) due to your death or Disability, then your Option will expire at the close of business at Company headquarters on the date that is ninety (90) days after your Termination Date.

 

	
Termination of Service - Death or Disability

	
If your Service terminates because of your death or Disability, then your Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after your Termination Date.  If your Service terminates because of your death, then your estate or heirs may exercise the vested portion of your Option during this twelve (12) month period.

 

	
Termination of Service – by the Company for Cause

	
If your Service is terminated by the Company for Cause or if you commit an act(s) of Cause while this Option is outstanding, as determined by the Committee in its sole discretion, then you shall immediately forfeit all rights to your Option and the Option shall immediately expire.

 

	
Leaves of Absence

	
For purposes of this Option, your Service does not terminate when you go on a bona fide leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law.  However, no portion of this Option will be treated as an Incentive Stock Option as of the day after three (3) months after you went on leave, unless your right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when the approved leave ends unless you immediately return to active work.

 

The Company determines which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.

 

	
Notice of Exercise

	
When you wish to exercise this Option, you must notify the Company by filing a “Notice of Exercise” form at the address given on the form.  Your notice must specify how many Shares you wish to purchase.  Your notice must also specify how your Shares should be registered (in your name only or in your and your spouse’s names as community property or as joint tenants with right of survivorship).  The notice will be effective when it is received by the Company.

 

If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

 

 

 

 

 

 

  

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Form of Payment

	
When you submit your notice of exercise, you must include payment of the Exercise Price for the Shares you are purchasing.  Payment may be made in one (or a combination) of the following forms:

 

·  Cash, your personal check, a cashier’s check or a money order.

 

·  Shares which have already been owned by you for more than six (6) months and which are surrendered to the Company.  The Fair Market Value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Exercise Price.

 

·  To the extent a public market for the Shares exists as determined by the Company, by Cashless Exercise through delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

 

	
Withholding Taxes

	
You will be solely responsible for payment of any and all applicable taxes associated with this Option.

 

You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or sale of Shares acquired under this Option.

 

	
Restrictions on Exercise and Resale

	
By signing this Agreement, you agree not to (i) exercise this Option (“Exercise Prohibition”), or (ii) sell, transfer, dispose of, pledge, hypothecate, make any short sale of, or otherwise effect a similar transaction of any Shares acquired under this Option (each a “Sale Prohibition”) at a time when applicable laws, regulations or Company or underwriter trading policies prohibit the exercise or disposition of Shares.  The Company will not permit you to exercise this Option if the issuance of Shares at that time would violate any law or regulation.  Notwithstanding anything to the contrary, this Option is granted on the condition that the Company’s stockholders approve the Plan prior to February 3, 2011.  You understand and agree that this Option may not be exercised unless the Company's stockholders timely approve the Plan.  If the Company’s stockholders do not approve the Plan prior to February 3, 2011, then this Option shall be immediately forfeited without consideration.  The Company shall have the right to designate one or more periods of time, each of which generally will not exceed one hundred eighty (180) days in length (provided however, that such period may be extended in connection with the Company’s release (or announcement of release) of earnings results or other material news or events), and to impose an Exercise Prohibition and/or Sale Prohibition, if the Company determines (in its sole discretion) that such limitation(s) is needed in connection with a public offering of Shares or to comply with an underwriter’s request or trading policy, or could in any way facilitate a lessening of any restriction on transfer pursuant to the Securities Act or any state securities laws with respect to any issuance of securities by the Company, facilitate the registration or qualification of any securities by the Company under the Securities Act or any state securities laws, or facilitate the perfection of any exemption from the registration or qualification requirements of the Securities Act or any applicable state securities laws for the issuance or transfer of any securities.  The Company may issue stop/transfer instructions and/or appropriately legend any stock certificates issued pursuant to this Option in order to ensure compliance with the foregoing.  Any such Exercise Prohibition shall not alter the vesting schedule set forth in this Agreement other than to limit the periods during which this Option shall be exercisable.

 

 

  

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If the sale of Shares under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Shares being acquired upon exercise of this Option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

 

You may also be required, as a condition of exercise of this Option, to enter into any Company stockholder agreement or other agreements that are applicable to stockholders.

 

If you sell or otherwise dispose of any of the Shares acquired pursuant to the exercise of this Option on or before the later of (i) the date that is two years after the Date of Option Grant or (ii) the date that is one year after the applicable exercise of this Option, then you shall within ten days of any and all such sales or dispositions provide the Company with written notice of such transactions including without limitation the date of each disposition, the number of Shares that you disposed of in each transaction and their original Date of Option Grant, and the amount of proceeds you received from each disposition.

 
	
Transfer of Option

	
Prior to your death, only you may exercise this Option.  You cannot transfer, assign, alienate, pledge, attach, sell, or encumber this Option.  If you attempt to do any of these things, this Option will immediately become invalid.  You may, however, dispose of this Option in your will or it may be transferred by the laws of descent and distribution.  Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in your Option in any other way.

 

	
Retention Rights

	
Your Option or this Agreement does not give you the right to be retained by the Company (or any Parent or any Subsidiaries or Affiliates) in any capacity.  The Company (or any Parent and any Subsidiaries or Affiliates) reserves the right to terminate your Service at any time and for any reason.

 

This Option and the Shares subject to the Option are not intended to constitute or replace any pension rights or compensation and are not to be considered compensation of a continuing or recurring nature, or part of Optionee’s normal or expected compensation, and in no way represent any portion of Optionee’s salary, compensation or other remuneration for any purpose, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

 

	
Stockholder Rights

	
You, or your estate or heirs, have no rights as a stockholder of the Company until a certificate for your Option’s Shares has been issued.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan.

 

	
Adjustments

	
In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of Shares covered by this Option (rounded down to the nearest whole number) and the Exercise Price per Share may be adjusted pursuant to the Plan.  Your Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

 

 

 

  

5

  

 

	
Legends

	
All certificates representing the Shares issued upon exercise of this Option shall, if applicable, have endorsed thereon the following legends:

 

	  	
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

	  	
“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

	
Applicable Law

	
This Agreement will be interpreted and enforced under the laws of the State of Delaware.

 

	
Voluntary Participant

	
Optionee acknowledges that Optionee is voluntarily participating in the Plan.

 

	
No Rights to Future Awards

	
Optionee’s rights, if any, in respect of or in connection with this Option or any other Award are derived solely from the discretionary decision of the Company to permit Optionee to participate in the Plan and to benefit from a discretionary Award.  By accepting this Option, Optionee expressly acknowledges that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards to Optionee or benefits in lieu of Options or any other Awards even if Options have been granted repeatedly in the past.  All decisions with respect to future Option grants, if any, will be at the sole discretion of the Committee.

 

	
Future Value

	
The future value of the underlying Shares is unknown and cannot be predicted with certainty.  If the underlying Shares do not increase in value after the Date of Option Grant, the Option will have little or no value.  If Optionee exercises the Option and obtains Shares, the value of the Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price.

 

	
No Advice Regarding Grant

	
The Company has not provided any tax, legal or financial advice, nor has the Company made any recommendations regarding Optionee’s participation in the Plan, or Optionee’s acquisition or sale of the underlying Shares.  Optionee is hereby advised to consult with Optionee’s own personal tax, legal and financial advisors regarding Optionee’s participation in the Plan before taking any action related to the Plan.

 

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

 

 

 

  

6

  

 

NTN BUZZTIME, INC.

NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION BY OPTIONEE

 

NTN Buzztime, Inc.

5966 La Place Court

Carlsbad, California 92008

Attention:  Secretary

 

	
Re:

	
Exercise of Incentive Stock Option to Purchase Shares of Company Stock

 

	
  

	_____________________________________________ 

	
  

	
[PRINT NAME OF OPTIONEE]

 

Pursuant to the Incentive Stock Option Agreement dated ___________________, ______ between NTN Buzztime, Inc., a Delaware corporation, (the “Company”) and me, made pursuant to the 2010 Performance Incentive Plan (the “Plan”), I hereby request to purchase _______ Shares (whole number only and must be not less than 100 Shares or the remaining number of vested Shares under this Option) of common stock of the Company (the “Shares”), at the exercise price of $__________ per Share.  I am hereby making full payment of the aggregate exercise price by one or more of the following forms of payment in accordance with the whole number percentages that I have provided below.  I further understand and agree that I will timely satisfy any and all applicable tax withholding obligations as a condition of this Option exercise.

 

	
Percentage

of Payment

	Form of Payment As Provided In the Incentive Stock Option Agreement
	 	 
	________%	Cash/My Personal Check/Cashier’s Check/Money Order (payable to “NTN Buzztime, Inc.”)
	 	 
	________%	Cashless Exercise as provided in the Incentive Stock Option Agreement
	 	 
	________%	Surrender of Vested Shares (Valued At Their Fair Market Value) Owned
	 	 
	100%	By Me For More Than Six (6) Months 

 

 

Check one:              ̈  The Shares certificate is to be issued and registered in my name only.

 

 ̈  The Shares certificate is to be issued and registered in my name and my spouse’s name.

 

___________________________________________

[PRINT SPOUSE’S NAME, IF CHECKING SECOND BOX]

 

Check one (if checked second box above):

 

 ̈ Community Property or  ̈ Joint Tenants With Right of Survivorship

 

I acknowledge that I have received, understand and continue to be bound by all of the terms and conditions set forth in the Plan, Plan prospectus and in the Incentive Stock Option Agreement.

 

Dated:  __________________

 

 

	________________________________________________ 	________________________________________________ 
	(Optionee’s Signature)	(Spouse’s Signature)**
	 	 
	 	

**Spouse must sign this Notice of Exercise if listed above.

	 	 
	________________________________________________ 	________________________________________________ 
	 	 
	________________________________________________ 	________________________________________________ 
	(Full Address)	(Full Address)

 

 

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

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