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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): June 7, 2006
NTN Buzztime, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-11460
(State or Other Jurisdiction of (Commission File Number)
Incorporation or Organization)
31-1103425
(I.R.S. Employer Identification No.)
5966 La Place Court
Carlsbad, California 92008
(Address of Principal Executive Offices) (Zip Code)
(760) 438-7400
(Registrant's Telephone Number, Including Area Code)
Not applicable
(Former name or former address, if changed since last report.)
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 240.425)
/_/ Soliciting material pursuant 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))
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Item 1.01 Entry into a Material Definitive Agreement.
On June 7, 2006, NTN Buzztime, Inc. (the "Company") entered into an
Employment Agreement with Dario Santana (the "Employment Agreement"), pursuant
to which Mr. Santana will become Chief Executive Officer of the Company,
effective July 10, 2006. As disclosed in the Current Report on Form 8-K filed
by the Company on December 20, 2005, Stanley B. Kinsey will resign as Chief
Executive Officer effective upon Mr. Santana's assuming that position.
Mr. Santana's Employment Agreement, a copy of which is attached hereto as
Exhibit 10.1 and incorporated herein by reference, provides for a two-year term
ending July 9, 2008. The term will be automatically extended for an additional
one-year period on that date (and each June 30 thereafter) unless either party
gives written notice of its intent not to extend the term.
The Employment Agreement provides for Mr. Santana to receive base salary
at the annual rate of $400,000 and an annual incentive bonus opportunity based
on the achievement of performance criteria to be established by the Compensation
Committee. For the remainder of 2006 and 2007, Mr. Santana's target incentive
bonus will be not less than 50% of his base salary and will be based on the
Company's performance relative to revenue and EBITDA targets established by the
Compensation Committee. Mr. Santana will be entitled to participate in the
Company's other benefit plans on terms consistent with those applicable to the
Company's employees generally. The Company will also pay Mr. Santana up to
$150,000 for his costs to relocate to the San Diego, California metropolitan
area.
In addition, Mr. Santana will be granted an option to purchase 750,000
shares of the Company's common stock, effective as of July 10, 2006, and an
additional option to purchase 250,000 shares of the Company's common stock,
effective as of July 10, 2007. Each option will vest in monthly installments
over a four-year period following the date of grant, will have an exercise price
equal to the fair market value of the underlying shares on the date of grant,
and will have a term of 10 years. A copy of the form of Option Agreement
evidencing the option to be granted as of July 10, 2006 is attached hereto as
Exhibit 10.2 and incorporated herein by this reference.
If Mr. Santana's employment with the Company is terminated by the Company
without "cause" or by Mr. Santana for "good reason" (as such terms are defined
in the Employment Agreement), subject to Mr. Santana's delivering a release of
claims in favor of the Company, Mr. Santana will be entitled to a severance
benefit equal to (i) one times his base salary at the annualized rate in effect
on his severance date, and (ii) the cost of Mr. Santana's COBRA premiums for
continued medical insurance coverage for Mr. Santana and his spouse and
dependent children until the first anniversary of his severance date (or, if
earlier, the date Mr. Santana becomes eligible for coverage under the health
plan of a future employer). The severance benefit will be payable in bi-weekly
installments until the later of the first anniversary of the severance date or
the last day of the term of the Employment Agreement. In addition, any portion
of Mr. Santana's outstanding options scheduled to vest within the six-month
period following the severance date will immediately vest, and Mr. Santana will
have six months following the severance date in which to exercise the vested
portion of his outstanding options.
If the Company provides notice of its election not to renew the term of the
Employment Agreement, Mr. Santana will be entitled to payment of the cash
severance benefit and continued medical coverage described in the preceding
paragraph commencing upon the expiration of the term of the Employment
Agreement.
The Employment Agreement includes certain protective covenants, including
confidentiality provisions and, with respect to the period Mr. Santana is
employed by the Company and a one-year period thereafter, non-competition and
non-solicitation covenants. In the event of a breach by Mr. Santana of any of
these covenants, the Company has the right to stop paying the severance benefits
to Mr. Santana described above.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
As earlier announced by the Company, Stanley B. Kinsey, age 52, has
indicated his desire to resign as the Company's Chief Executive Officer
effective upon the appointment of his successor. He remains a director.
Effective July 10, 2006, Dario Santana, age 50, will become the Company's
Chief Executive Officer. In connection with Mr. Santana's appointment, the
Company and Mr. Santana entered into the Employment Agreement, dated as of
June 7, 2006, as described under Item 1.01 of this Form 8-K. Such description
is incorporated herein by reference. The Board of Directors has also agreed to
appoint Mr. Santana as a member of the Board of Directors effective as of
July 10, 2006.
The Board of Directors has appointed Barry Bergsman, age 69, to succeed
Mr. Kinsey as Chairman of the Board of Directors effective upon Mr. Kinsey's
resignation.
Mr. Santana was, most recently, President of Tyco Fire & Security - Latin
America, a services and technology company with annual revenues approaching
$300M, which operates under the brand names ADT, Sensormatic and Simplex
Grinnell. Prior to joining Tyco in October 2002, he was the President and COO
of Aerocast, Inc. a streaming media start-up, which delivered entertainment
quality video to the broadband enabled home. Mr. Santana was an executive with
General Instrument/Motorola Broadband from 1992 until 2000; his last role at
Motorola was VP/GM Advanced Network Systems. Mr. Santana holds a MBA from the
Harvard Business School and an engineering degree from Purdue University.
Mr. Kinsey has served as Chairman and Chief Executive Officer of the
Company since October 1998 and has been a member of its board since November
1997. From 1976 to 1978, Mr. Kinsey was an analyst in the consulting division
of Arthur Anderson & Co. (now Accenture). From 1980 to 1985, he was a senior
executive with The Walt Disney Company. In 1985, Mr. Kinsey left his position
with The Walt Disney Studios to co-found IWERKS Entertainment, a
high-technology entertainment company. Mr. Kinsey was chairman and chief
executive officer at IWERKS from its inception until 1995. Mr. Kinsey holds a
bachelors degree from DePauw University and an MBA from Stanford University.
Mr. Bergsman has been a member of the Company's Board of Directors
since 1998 and was appointed the Company's lead director in August, 2004. He
is president of Baron Enterprises, Inc., a privately owned consulting company
established in 1965. As president of Intertel Communications, Inc., from 1985
to 1998, Mr. Bergsman pioneered the use of the telephone and interactive
technology for promotion, entertainment and information. Prior to 1985,
Mr. Bergsman was engaged in television production and syndication and was
an executive with CBS. He currently serves as a director and member of the
management team of Photogenesis, Inc., a private medical device and
biotechnology company.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
10.1 Employment Agreement, dated as of June 7, 2006, between
NTN Buzztime, Inc. and Dario Santana.
10.2 Form of Incentive Stock Option Agreement between NTN Buzztime,
Inc. and Dario Santana.
99.1 Press Release, dated June 12, 2006, issued by NTN Buzztime, Inc.
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, thereunto duly authorized.
NTN Buzztime, Inc.
(Registrant)
By: /s/ Andy Wrobel
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Date: June 14, 2006 Andy Wrobel
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Chief Financial Officer