Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Amendment to Employment Agreement and Executive Retention Bonus
On May 27, 2020, we entered into a second amendment to the employment agreement
we entered into with our senior vice president of finance, Sandra Gurrola (the
"Second Amendment"), and in connection therewith, we also entered into a
retention bonus and general release of all claims agreement with Ms. Gurrola
(the "Retention Agreement"). Under the Second Amendment, the amount of severance
compensation we must pay Ms. Gurrola if her employment with us is terminated by
us without cause or by her for good reason was reduced from (a) nine months of
her base salary to (b) two months of her base salary plus the incentive
compensation she is eligible to receive under our 2020 executive incentive plan,
and if so paid, she agreed to waive payment to her of such incentive
compensation under our 2020 executive incentive plan. All other material terms
and conditions of Ms. Gurrola's severance compensation and benefits remained the
same, including that the payment of any severance compensation or benefits is
subject to her delivering to us a general release of claims in our favor. Under
the Retention Agreement, in exchange for the reduction in her severance
compensation described above and subject to Ms. Gurrola signing and not revoking
a general release of claims in our favor, we agreed to pay Ms. Gurrola a
retention bonus of $110,833, which is equivalent to seven months of her monthly
salary, and which will be paid in three installments, the last of which will be
made on June 19, 2020. If, prior to August 31, 2020, Ms. Gurrola's employment is
terminated by us for cause or by Ms. Gurrola without good reason, Ms. Gurrola
must return to us 50% of the amount of the retention bonus paid to her on or
before such termination of employment and we will have no obligation to pay any
unpaid retention bonus.
The foregoing summary descriptions of the Second Amendment and the Retention
Agreement do not purport to be complete and are qualified in their entirety by
reference to the Second Amendment and the Retention Agreement, copies of which
are filed as exhibits to this report and are incorporated herein by reference.
2020 Executive Incentive Plan
On June 1, 2020, the Nominating and Corporate Governance/Compensation Committee
(the "Committee") of our Board of Directors adopted the NTN Buzztime, Inc.
Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal
Year 2020 (the "2020 Plan"). The 2020 Plan provides for performance-based,
at-risk compensation.
The 2020 Plan period is from January 1, 2020 to December 31, 2020. The Committee
will administer and interpret the 2020 Plan. The 2020 Plan participants include
those individuals with the title of Chief Executive Officer, Chief Financial
Officer, and SVP of Finance (as Chief Accounting Officer), and any individual
who we hire, promote or transfer to an executive level position, as determined
by the Committee, during 2020. Individuals who are eligible to participate in
the 2020 Plan must be employed by us on or before October 1, 2020, on active,
full-time, paid status, and must not be a participant in any of our other
incentive compensation programs. Any individual who becomes eligible to
participate in the 2020 Plan after January 1, 2020 (either through new hire,
promotion or transfer) will be eligible to earn incentive compensation under the
2020 Plan on a prorated basis.
The 2020 Plan participants will be eligible to earn incentive compensation based
on the level of achievement of the corporate goals set forth in each
participant's personal incentive memo.
Each participant will have a target payout, assigned by his/her position and job
level. Consistent with the terms of their employment agreements and as
previously reported, the target payout amounts for our named executive officers
who continue to be employed us, and currently the only 2020 Plan participants,
are: Chief Executive Officer- $150,000 and SVP of Finance (as Chief Accounting
Officer)-$38,000.
The Committee will determine the achievement level of the performance measures
and the actual incentive payout amount awarded to a participant. If the
performance measures are exceeded, the Committee, in its sole discretion, may
choose to pay out a larger pool amount. The Committee's determination will be
made as soon as practicable, subject to the completion and approval of the
relevant financial or other company reports upon which the corporate goals are
measured. Subject to the other terms of the 2020 Plan, the incentive payout, if
any, will be paid at the discretion and in the sole determination of the
Committee, either in (i) cash, (ii) shares of our common stock issued under the
NTN Buzztime, Inc. 2019 Performance Incentive Plan or any successor long-term
incentive plan, or (iii) any combination of (i) and (ii). Such payment will be
made within 30 days after the applicable corporate goal is achieved, subject to
any agreement between us and a participant to the contrary or inconsistent with
the foregoing. In the event a goal is achieved in advance of the quarter for
which it was an incentive target, the payment of the goal is accelerated.
In order for a participant to earn and receive any incentive payout under the
2020 Plan, the Committee must have approved such incentive payout as evidenced
in the Committee meeting minutes and the participant must be employed by us on
the payout date.
The 2020 Plan may be amended, modified or terminated at any time at the
discretion of the Committee with or without advance notice. If the 2020 Plan is
amended prior to the end of the plan period, participants will be paid according
to any amending or terminating documents. The 2020 Plan will automatically
terminate at the end of the plan period, except that the payout provisions will
continue in effect until satisfied.
The foregoing summary description of the 2020 Plan does not purport to be
complete and is qualified in its entirety by reference to the 2020 Plan, a copy
of which is filed as an exhibit to this report and is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1* Second Amendment to Employment Agreement dated May 27, 2020 by and
between NTN Buzztime, Inc. and Sandra Gurrola
10.2* Retention Bonus and General Release of All Claims Agreement dated May
27, 2020 by and between NTN Buzztime, Inc. and Sandra Gurrola
10.3* NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of
NTN Buzztime, Inc. Fiscal Year 2020
* Management contract or compensatory plan
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