UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 10, 2017
NTN BUZZTIME, INC.
(Exact name of Registrant as Specified in Charter)
Delaware | 001-11460 | 31-1103425 | ||
(State
or Other Jurisdiction
|
(Commission
File Number) |
(I.R.S. Employer Identification No.) |
2231 Rutherford Rd. Suite 200 | ||
Carlsbad, California | 92008 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code : (760) 438-7400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pu™rsuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously reported, in February 2016, the Nominating and Corporate Governance/Compensation Committee (the “Committee”) of our Board of Directors approved the NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2016 (“2016 Plan”). On March 10, 2017, the Committee approved Amendment 1 to the 2016 Plan (“Amendment 1”). Amendment 1 permits the payout of any incentive compensation earned under the 2016 Plan to 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. Amended 2010 Performance Incentive Plan, or (iii) any combination of (i) and (ii). Before Amendment 1 was approved, any such payout was required to be paid in cash.
The foregoing summary description of Amendment 1 does not purport to be complete and is qualified in its entirety by reference to Amendment 1, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Also on March 10, 2017, the Committee adopted the NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2017(the “2017 Plan”). The 2017 Plan provides for performance-based, at-risk compensation.
The 2017 Plan period is from January 1, 2017 to December 31, 2017. The Committee will administer and interpret the 2017 Plan. 2017 Plan participants include those individuals with the title of Chief Executive Officer, Chief Financial Officer, Sr. Vice President of Marketing, VP of Finance (as Chief Accounting Officer) and any additional executive level position, as determined by the Committee, who we hire during 2017. Individuals who are eligible to participate in the 2017 Plan must be employed by us on or before October 1, 2017, 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 2017 Plan after January 1, 2017 (either through new hire, promotion or transfer) will be eligible to earn incentive compensation under the 2017 Plan on a prorated basis.
The 2017 Plan participants will be eligible to earn incentive compensation based on the level of achievement of the following performance measures:
● | targeted earnings before interest, tax, depreciation and amortization (EBITDA), as approved by our Board of Directors (weighted up to 20%); | |
● | targeted revenue growth, as approved by our Board of Directors (weighted up to 40%); and | |
● | certain strategic milestones, as evaluated by the Committee (weighted up to 40%). |
Each 2017 Plan participant will have a target payout amount, based on a percentage of his or her annual base salary (excluding benefits) as of December 31, 2017, that is assigned according to such participant’s position and job level. The target payout amounts for current 2017 Plan participants are: Chief Executive Officer—75%; Chief Financial Officer and Executive Vice President—50%; Sr. Vice President of Marketing—30% and VP of Finance (as Chief Accounting Officer)—10%.
The Committee will determine the achievement level of the performance measures and the actual incentive payout amount awarded to a plan 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 following December 31, 2017. Subject to the other terms of the 2017 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 the Company’s common stock issued under the NTN Buzztime, Inc. Amended 2010 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 date we receive our independent auditor’s report on our annual financial statements for 2017, but no later than March 15, 2018.
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The table below sets out the target payout amount for each of our named executive officers under the 2017 Plan, assuming all performance measures are achieved at a rate of 100%:
Named Executive Officer | Target Payout Amount ($) | |||
Ram Krishnan, Chief Executive Officer | 262,500 | |||
Allen Wolff, Chief Financial Officer and Executive Vice President | 132,500 | |||
Sandra Gurrola, Vice President of Finance | 16,500 |
In order for a participant to earn and receive any incentive payout under the 2017 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 2017 Plan may be amended, modified or terminated at any time at the discretion of our Board of Directors with or without advance notice. If the 2017 Plan is amended prior to the end of the plan period, participants will be paid according to any amending or terminating documents. The 2017 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 2017 Plan does not purport to be complete and is qualified in its entirety by reference to the 2017 Plan, a copy of which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No | Description | ||
10.1 | Amendment 1 to the NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2016 dated March 10, 2017. | ||
10.2 | The NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2017 dated March 10, 2017. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NTN BUZZTIME, INC. | ||
Dated: March 13, 2017 | By: | /s/ Allen Wolff |
Allen Wolff Chief Financial Officer and Executive Vice President |
NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc.
Fiscal Year 2016
AMENDMENT 1
The NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2016 (the “ Plan ”) is hereby amended, effective March 10, 2017, as follows:
Section 4(3). Target Payout
Section 4(3) of the Plan is deleted in its entirety and replaced with the following:
Each Participant will have a Target Payout, assigned by his/her position and job level, and will be paid, at the discretion and in the sole determination of the Committee, in either (i) cash, (ii) shares of the Company’s common stock (“Shares”) issued under the NTN Buzztime, Inc. Amended 2010 Performance Incentive Plan (as amended from time to time, the “2010 PIP”), or any successor long-term incentive plan, or (iii) any combination of (i) and (ii), and expressed as a percentage of his/her annual base salary, excluding benefits, as of December 31, 2016. If a Target Payout is settled in Shares, the value of such Shares at the time of settlement shall not when combined with any cash paid to settle such Target Payout exceed the maximum amount of such Target Payout. The Target Payout amount will be adjusted when warranted pursuant to Sections 5 and 6.
Section 5. Payout Dates and Taxes.
The paragraph with the heading “Payout Date(s)” in Section 5 of the Plan is deleted in its entirety and replaced with the following:
Payout Date(s): Subject to Section 8, and provided all the of prerequisites to earning incentive compensation are met pursuant to Section 4, the Target Payout will be paid in accordance with Section 4(3) within 30 days after receipt of the independent auditor’s report on Buzztime’s annual financial statements for 2016, but no later than March 15, 2017.
The following sentence is added at the end of the paragraph with the heading “Taxes” in Section 5:
Deductions from a payout in the form of Shares shall be governed by the 2010 PIP and the applicable grant documentation, if any.
NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc.
Fiscal Year 2017
4 | Plan Design | (1) | Prerequisites to Earning Incentive Compensation |
To earn incentive compensation under this Plan, subject to provisions of Section 6, the following criteria must be satisfied : (a) The Plan must be funded, based on the achievement of the Corporate Goals during the Plan Period, as outlined below; and (b) the Participant must be employed by Buzztime on the Payout Date. |
(2) | Corporate Goals | |
Our 2017 Corporate Goals are as follows: |
A. | To meet target EBITDA as approved by the Board of Directors. EBITDA is defined as earnings before interest, tax, depreciation and amortization as disclosed in Buzztime’s financial reports. Payout weighted up to 20% of payout pool. | |
B. | To meet target revenue growth, as approved by the Board of Directors. Payout weighted up to 40% of payout pool. | |
C. | To achieve certain strategic milestones, as evaluated by the Committee. Payout weighted up to 40% of payout pool | |
If the Corporate Goals are exceeded, the Committee, at its sole discretion, may choose to pay out a larger pool amount. |
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(3) | Target Payout | |||
Each Participant will have a Target Payout, assigned by his/her position and job level, and will be paid, at the discretion and in the sole determination of the Committee, in either (i) cash, (ii) shares of the Company’s common stock (“Shares”) issued under the NTN Buzztime, Inc. Amended 2010 Performance Incentive Plan (as amended from time to time, the “2010 PIP”), or any successor long-term incentive plan, or (iii) any combination of (i) and (ii), and expressed as a percentage of his/her annual base salary, excluding benefits, as of December 31, 2017. If a Target Payout is settled in Shares, the value of such Shares at the time of settlement shall not, when combined with any cash paid to settle such Target Payout, exceed the maximum amount of such Target Payout. The Target Payout amount will be adjusted when warranted pursuant to Sections 5 and 6 | ||||
(4) | Plan Terms | |||
The Incentive Payout amount is based on the following terms: | ||||
● | % of Corporate Goals Achievement - Overall percent achieved of the Corporate Goals. | |||
● | Participant’s Target Payout Amount - Participant’s annual base salary x the Target Payout. Please refer to your personal incentive memo. | |||
● | Individual Incentive Payout – The incentive payout amount an individual is awarded after the payout formula is completed subject to all sections of this Plan. | |||
● | Executive – Executive is defined as the titles of Chief Executive Officer, Chief Financial Officer, VP of Finance (as Chief Accounting Officer), Sr. Vice President of Marketing or any additional executive level position, as determined by the Committee, that the Company hires during 2017. These titles are considered Participants under this Plan. | |||
(5) | Performance Determination | |||
Buzztime’s actual performance against the Corporate Goals for the Plan Period will be determined and approved by the Committee as soon as practicable after the Plan Period ends, subject to the completion and approval by Buzztime of the relevant financial or other Buzztime reports upon which the Corporate Goals are measured. | ||||
(6) | Payout Formula | |||
Please refer to your personal incentive memo for formula payout examples. |
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Payout Details |
Payout Date(s): Subject to Section 8, and provided all the of prerequisites to earning incentive compensation are met pursuant to Section 4, the Target Payout will be paid in accordance with Section 4(3) within 30 days after receipt of the independent auditor’s report on Buzztime’s annual financial statements for 2017, but no later than March 15, 2018. |
Prorated Payouts: The Individual Incentive Payout that otherwise would have been earned in the Plan Period will be prorated when the provisions of Section 6 apply. | ||
Plan Administration and Interpretation: This Plan shall be administered and interpreted by the Committee at its sole discretion. The Committee must approve any exceptions to the term and conditions of this Plan. | ||
401k deferrals: In accordance with the NTN Buzztime, Inc. 401k Plan, no 401k deductions will be withheld from incentive (“bonus”) wages. |
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Taxes: Incentive payments are in addition to the Participant’s base salary and are included as total cash compensation and, as such, recorded on the Participant’s W-2 (or applicable country statement) statement of wages. Individual Incentive Payouts are considered taxable income and are reported as Gross Income (not “after taxes”). Participants will have all appropriate payroll taxes and withholdings deducted from these incentive payments at the IRS supplemental tax rate. Deductions from a payout in the form of Shares shall be governed by the 2010 PIP and the applicable grant documentation, if any | ||
6 | Prorated Participation | Late Entry into the Plan: An Executive who enters into an eligible position and, therefore, becomes a Participant after the beginning of the Plan Period (either through new hire, promotion or transfer) will be assigned a Target Payout and will be able to earn prorated incentive payment on that basis. |
Effect of Termination: A Participant must be employed on the Payout Date(s) to earn an incentive payment. If a Participant voluntarily resigns from employment prior to the Payout Date) , no incentive payment is earned. If Buzztime terminates a Participant’s employment prior to the Payout Date(s) , no incentive payment is earned. | ||
Effect of Disciplinary Action: Any Participant under disciplinary action (any level of performance counseling, warning and/or performance improvement plan) will be ineligible to participate in the Plan. If the employee upon reevaluation, however, is released from disciplinary action, he/she will at that same time resume eligibility under the Plan and may be eligible to receive a prorated incentive amount that excludes the period of time he/she was under disciplinary action. | ||
Internal Promotions and Transfers: Employees who transfer within Buzztime and/or are promoted into new positions that are not eligible to participate in this Plan will be paid a prorated Individual Incentive Payout. Participants who transfer within and/or promoted into new positions will be re-evaluated to ensure they are at the appropriate incentive level based on their position and job level. The incentive payment during the time in the Plan Period he or she was a Participant is subject to the prerequisites to earning incentive compensation. | ||
Approved Time Off: The Individual Incentive Payout will not be prorated to account for time off due to personal time off not associated with a leave of absence. | ||
Leave of Absence: The Individual Incentive Payout for Participants who are on an approved leave of absence from Buzztime will be prorated based on the length of the approved leave during the Plan Period . During the time an employee is on an approved leave of absence, he or she will not be considered a Participant . | ||
7 | At Will Employment | Employment with Buzztime is at-will. This means that just as a Participant is free to resign at any time, Buzztime reserves the right to discharge a Participant at any time, with or without cause or advance notice. In connection with the “at-will” employment relationship, Buzztime also reserves the right to exercise its managerial discretion in reassigning, transferring, promoting or demoting an employee, at any time. Participation in the Plan does not guarantee continued employment for any particular period of time or otherwise change Buzztime’s policy of employment at-will. |
8 | Company Management Rights | Buzztime reserves the right to amend or terminate this Plan, at any time, at the Board’s discretion, with or without advance notice. Any amendments to the Plan will be in writing and approved by the Committee. If this Plan is amended or terminated prior to the end of the Plan Period , Participants will be paid, according to any amending or terminating documents. |
This Plan will automatically terminate at the end of the Plan Period , except that the Payout provisions will continue in effect until satisfied. However, Buzztime, at its discretion, may elect to re-issue the Plan, in writing, with new Effective Dates. |
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Acknowledgement
Your signature below indicates that you have read, understood, and agreed to the entire NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2017, which includes the preceding three (3) pages and the Personal Incentive Memo for your position. Different positions are eligible for different incentives and not all positions are eligible for the same level of incentive. Information contained in these documents is strictly confidential and shall under no circumstances be shared with other employees of NTN Buzztime or with anyone outside the Company without the express consent of the Chief Financial Officer or Director of Human Resources of the Company unless required to do so under Sarbanes Oxley Act or the Securities Exchange Commission.
Plan Participant Name (Please Print) | |
Plan Participant Signature | |
Date |
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