<PAGE>
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) March 5, 1997
NTN COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-11460 31-1103425
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
5966 La Place Court, Carlsbad, California 92008
(Address of principal executive offices) (Zip code)
</TABLE>
619-438-7400
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
The index to exhibits appears at page 2 of this report.
<PAGE>
ITEM 5. OTHER EVENTS
Recent Management Reorganization
- -------------------------------
On March 5, 1997, NTN Communications, Inc. ("NTN") announced a
reorganization of its executive management personnel in which Patrick J. Downs
resigned as NTN's Chairman and Chief Executive Officer and Daniel C. Downs
resigned as President. Both men will continue serving on NTN's Board of
Directors.
NTN's press release announcing this recent development, including the
interim appointment of Messrs. Downs' successors, is attached as an exhibit to
this report and incorporated herein. Along with Messrs. Downs, two NTN Vice
Presidents, Ronald E. Hogan and Gerald P. McLaughlin, along with Michael J.
Downs, President of NTN's LearnStar subsidiary, resigned in connection with the
reorganization. Messrs P. Downs, D. Downs, McLaughlin and Hogan agreed to serve
as consultants for the ending December 31, 1999. In consideration therefor, the
Company has extended the terms of certain of their options.
NTN has entered into separate agreements with each of the former
officers setting out the terms on which their existing contracts with NTN will
be settled. Under the agreements, NTN will continue to pay the former executives
their current annual salaries for the remaining terms of their employment
agreements with NTN, which expire on or before December 31, 1999. These
payments, along with to the respectives amounts NTN has agreed to pay to Alan
Magerman, a director of NTN, and payments to the former executives for accrued
vacation, deferred compensation and miscellaneous other items total
approximately $5 million.
Each of the former officers was indebted to NTN for certain loans
extended to them as previously disclosed by NTN. In connection with the
reorganization, an aggregate of $2.9 million of indebtedness of the former
officers to NTN as of December 31, 1996 was cancelled. NTN also agreed to cancel
a total of approximately $1.4 million of similar indebtedness owed by Mr.
Magerman and Donald Klosterman, another NTN director. The agreements with the
former officers contain releases by the former executives in favor of NTN and
call for the former officers to return to the company for cancellation options
to purchase an aggregate of 2.1 million shares of Common Stock. The Company also
agreed to general releases in favor of the former executives. A copy of the
agreements and releases are attached hereto as exhibits and incorporated herein
be reference.
As reported in its press release and as referred to below in this
Report, NTN expects to record substantial charges relating to the management
reorganization.
Fourth Quarter Loss
- -------------------
On March 20, 1997, NTN announced that it expects to report a fourth
quarter loss of approximately $16 million. NTN also reported that it expects to
record charges of approximately $5 million in the first quarter of 1997 relating
to the management reorganization and to incur a loss from continuing operations
in the first quarter resulting from the delay in receiving FCC approval for the
Playmaker/(TM)/ keypad and charges required under Financial Accounting Standards
Board Statement No. 123 in connection with the issuance of warrants to purchase
common stock of NTN.
NTN's press release is attached as an exhibit to this Report and
incorporated herein by reference.
The foregoing estimates regarding fourth quarter and final quarter
results are forward-looking statements. NTN is in the process of finalizing its
financial statements for fiscal 1996 and its accounting treatment of the various
aspects of the recent management reorganization and other matters mentioned, and
the actual charges and loss to NTN may vary from these estimates.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following exhibits included with this report are made part hereof:
2
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<TABLE>
<CAPTION>
Sequential Page No.
-------------------
<C> <S> <C>
2.1 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Patrick J. Downs
2.2 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Daniel C. Downs
2.3 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Ronald E. Hogan
2.4 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Gerald P. McLaughlin
2.5 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Michael J. Downs
2.6 Resignation and General Release Agreement, dated as of December 31, 1996, between
NTN and Robert Klosterman
2.7 Letter agreement, dated March 4, 1997, between NTN and Alan Magerman
3.1 Consulting Agreement, dated as of December 31, 1996, between NTN and Patrick J. Downs
3.2 Consulting Agreement, dated as of December 31, 1996, between NTN and Daniel C. Downs
3.3 Consulting Agreement, dated as of December 31, 1996, between NTN and Ronald E. Hogan
3.4 Consulting Agreement, dated as of December 31, 1996, between NTN and Gerald P. McLaughlin
3.5 Consulting Agreement, dated as of March 14, 1997, between NTN and Donald Klosterman
4.1 General Release, dated as of December 31, 1996, between NTN and Patrick J. Downs
4.2 General Release, dated as of December 31, 1996, between NTN and Daniel C. Downs
4.3 General Release, dated as of December 31, 1996, between NTN and Ronald E. Hogan
4.4 General Release, dated as of December 31, 1996, between NTN and Gerald P. McLaughlin
4.5 General Release, dated as of December 31, 1996, between NTN and Michael J. Downs
4.6 General Release, dated as of December 31, 1996, between NTN and Robert Klosterman
99.1 NTN press release dated March 5, 1997
99.2 NTN press release dated March 20, 1997
</TABLE>
3
<PAGE>
SIGNATURES
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 COMMUNICATIONS, INC.
Date: March 19, 1997 By:
-----------------------------------------
/s/ Gerald Sokol, Jr.
President and
Chief Operating Officer
4
<PAGE>
Exhibit 2.1
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Patrick J. Downs, an
individual ("P. Downs"), and NTN Communications, Inc., a corporation
("Company"), is a resignation agreement which includes a general release of
claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, P. Downs and Company agree as follows:
1. P. Downs resigns effective seven days following the complete execution
of this Agreement in all capacities as an officer and as an employee of Company
and each of its subsidiaries and affiliates, such resignations to be effective
as of December 31, 1996. Company hereby agrees to retain P. Downs as a
consultant commencing on January 1, 1997 and ending on December 31, 1999 in
accordance with the terms and conditions of the Consulting Agreement attached
hereto as Exhibit A. In the event P. Downs remains on the Board of Directors of
Company he shall be compensated on the same basis as other outside directors
other than compensation for initially becoming a director.
2. Company and P. Downs agree to the following actions (no payments
hereunder shall be made or other actions taken until seven days following the
complete execution of this Agreement) in full and complete discharge of any and
all of Company's obligations to P. Downs, including, without limitation, all
obligations under P. Downs's Employment Agreement dated January 1, 1990, as
amended on June 19, 1992 (the "Employment Agreement"), the Performance
Associated Senior Executive Retirement Plan and the Deferred Compensation Plan:
a. Company shall pay to P. Downs as severance payments $18,164.16 per
month for the 12 months ending December 31, 1997, $20,616.32 per month for the
12 months ending December 31, 1998, and $23,399.53 per month for the 12 months
ending December 31, 1999, less appropriate withholding taxes, as required. If
any severance payment is not paid by Company for more than 90 consecutive days,
then the severance payments set forth in this paragraph 2(a) shall be
accelerated and become immediately due and payable.
b. Company shall pay to P. Downs an amount of $177,002 in payment of
accrued vacation to which P. Downs is entitled under the Employment Agreement,
payable one-third on execution of this Agreement, one-third on January 1, 1998
and the remaining one-third January 1, 1999, all less appropriate withholdings,.
c. Company shall pay to P. Downs cash in the total amount of
$86,705.26 less appropriate withholdings, representing deferred compensation to
which P. Downs is entitled, payable one-third on execution of this Agreement,
one-third on January 1, 1998 and the remaining one-third January 1, 1999.
1.
<PAGE>
d. Until December 31, 1999, Company shall continue to include
P. Downs under Company's medical insurance program, without cost to P. Downs.
e. Until December 31, 1999, Company shall use its best efforts to
provide (without extraordinary charges and provided that P. Downs meets standard
insurance company requirements) P. Downs life insurance, payable to P. Downs's
beneficiary, in the amount of $1,000,000, and in the event of accidental death
or dismemberment, in the amount of $2,000,000, without cost to P. Downs.
f. For a period of 36 months commencing on January 1, 1997 and ending
on December 31, 1999, Company will provide P. Downs with a car allowance of $500
per month.
g. P. Downs presently owns warrants to purchase 200,000 shares of
Common Stock of Company and incentive or non qualified options to purchase
1,184,000 shares of Common Stock of Company. P. Downs shall return to Company
for cancellation the following options:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
50,000 $7.250 8/11/98
200,000 $7.250 8/11/98
15,000 $6.500 11/28/99
185,000 $6.500 11/28/99
184,000 $ 4.75 1/15/98
</TABLE>
h. P. Downs is presently indebted to Company in the principal amount
of $680,043.54. Such indebtedness is represented by a promissory note (the
"Note") which provides that if P. Downs is terminated by Company for any reason
other than for "cause" at any time within the three year term of the Note the
balance of the Note and any interest accrued thereon will be cancelled. P. Downs
and Company agree that the Note shall be cancelled and shall be of no further
force and effect. Company shall return such cancelled Note to P. Downs. Company
may withhold from all amounts due to P. Downs herein all payroll taxes, if
required by law, relating to the cancellation of the Note.
i. P. Downs is also indebted to Company in the principal amount of
$250,834.93. Such indebtedness shall also be cancelled and shall be of no
further force and effect. Company may withhold from all amounts due P. Downs all
payroll taxes relating to the cancellation of such indebtedness. Company shall
execute and deliver to P. Downs the Release attached as Exhibit B hereto.
3. P. Downs shall return to Company and shall not take or copy in any
form or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information. P. Downs represents to
Company that all documents pertaining to NTN, inclusive of existing and past
subsidiaries, but exclusive of personal items, in his
2.
<PAGE>
possession whether located on Company premises, at P. Downs' home or elsewhere,
have been returned to Company and that he has retained no copies in any form.
This representation applies to all forms of written materials, including but not
limited to schematics, diagrams, formulations, tapes, descriptions of inventions
and products, operator manuals, maintenance manuals, training manuals, software
manuals, software code, technical memoranda, research bulletin, financial
information, marketing plans, identities of customers and vendors, contract
terms and information obtained in confidence from customers and vendors. P.
Downs hereby reaffirms his obligation, as set forth in his employment agreement,
confidentiality and work for hire agreement and any other legal documents that
he signed either before or during his employment with Company not to disclose
any confidential or trade secret information to any third party and not to use
the information for any purpose whatsoever except as expressly authorized in
writing by an authorized representative of Company, and except as necessary or
appropriate in fulfilling his responsibilities as a member of the Board of
Directors of the Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and P. Downs relating to any
alleged violation of Company policies or procedures or any state or federal law
or regulation, this Agreement does not constitute an adjudication or finding on
the merits and it is not, and shall not be construed as, an admission by Company
of any violation of its policies, procedures, state or federal laws or
regulations. Moreover, neither this Agreement nor anything in this Agreement
shall be construed to be or shall be admissible in any proceeding as evidence of
or an admission by Company of any violation of its policies, procedures, state
or federal laws or regulations. This Agreement may be introduced, however, in
any proceeding to enforce the Agreement. Such introduction shall be pursuant to
an order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein, P.
Downs on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Releasees, arising out of or in any way connected with his
employment or other relationships with Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under Title VII of
the
3.
<PAGE>
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the
California Fair Employment and Housing Act, the California Family Rights Act, or
any claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disability.
6. It is the intention of Company in executing this instrument that the
same shall be effective as a bar to each and every claim, demand and cause of
action hereinabove specified. In furtherance of this intention, P. Downs hereby
expressly waives any and all rights and benefits conferred upon him by the
provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those related to unknown and
unsuspected claims, demands and causes of action, if any, as well as those
relating to any other claims, demands and causes of action hereinabove
specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASES, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
P. Downs acknowledges that he may hereafter discover claims or facts in
addition to or different from those which P. Downs now knows or believes to
exist with respect to the subject matter of this Agreement and which, if known
or suspected at the time of executing this Agreement, may have materially
affected this Settlement. Nevertheless, P. Downs hereby waives any right, claim
or cause of action that might arise as a result of such different or additional
claims or facts. P. Downs acknowledges that he understands the significance and
consequences of such release and such specific waiver of SECTION 1542.
7. P. Downs expressly acknowledges and agrees that, by entering into this
Agreement he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement. P. Downs further
expressly acknowledges and agrees that:
a. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
b. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
c. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
4.
<PAGE>
8. P. Downs acknowledges that by reason of his position with Company he
has been given access to lists of customers, prices, engineering plans, and
similar confidential or proprietary materials or information respecting
Company's business affairs. P. Downs represents that he has held all such
information confidential and will continue to do so, and that he will not use
such confidential information and relationships for any business (which term
herein includes a partnership, firm, corporation or any other entity) without
the prior written consent of Company.
9. P. Downs agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and he shall not disclose them to any
other person except for his attorneys and tax advisors or except as otherwise
required by law or in the event of public disclosure of such matters by Company.
Without limiting the generality of the foregoing, P. Downs will not respond to
or in any way participate in or contribute to any public discussion, notice or
other publicity concerning, or in any way relating to, execution of this
Agreement or the events (including any negotiations) which led to its execution.
Without limiting the generality of the foregoing, P. Downs specifically agrees
that he shall not disclose information regarding this Agreement to any current
or former employee of Releasees. P. Downs hereby agrees that disclosure by him
of any of the terms and conditions of the Agreement in violation of the
foregoing shall constitute and be treated as a material breach of this
Agreement.
10. P. Downs warrants and represents that P. Downs has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and P. Downs shall defend, indemnify and
hold harmless Company from and against any claim (including the payment of
attorneys' fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
11. P. Downs and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. P. Downs
shall be exclusively liable for the payment of all federal and state taxes which
may be due as the result of the consideration received as set forth herein and
P. Downs hereby represents that P. Downs shall make payments on such taxes at
the time and in the amount required of P. Downs. In addition, P. Downs hereby
agrees fully to defend, indemnify and hold harmless Releasees and each of them
from payment of taxes, interest and/or penalties that are required of them
(other than those payroll taxes which are the Company's obligation to pay) by
any government agency at any time as the result of payment of the consideration
set forth herein.
13. This instrument, the Consulting Agreement and the General Release
constitute and contain the entire agreement and understanding concerning P.
Downs's employment, resignation from the same and the other subject matters
addressed herein between the parties,
5.
<PAGE>
and supersede and replace all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matters hereof. These
are integrated documents. This Agreement may be modified only by a writing
signed by the parties.
14. Either P. Downs or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by P. Downs. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by P. Downs, unless it is revoked during the seven-day
period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Company agrees to continue to indemnify P. Downs to the extent set
forth in the existing Bylaws of Company and the Indemnity Agreement between
Company and P. Downs dated April 7, 1988. In the event of a conflict between
the Indemnity Agreement and the Bylaws, the provisions providing P. Downs with
the greatest rights and remedies with respect to indemnification shall control.
19. Any dispute or controversy between P. Downs, on the one hand, and
Company (or any Releasee), on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter thereof, otherwise in
any way arising out of, related to, or connected with P. Downs's employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
6.
<PAGE>
20. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
21. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
22. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
23. In consideration of the payment of $29,545.24, P. Downs agrees that
for a period of 36 months from the date hereof P. Downs shall not, directly or
indirectly, without the prior written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in direct competition with the primary businesses
presently conducted by Company, or any of the subsidiaries or affiliates of
Company. Notwithstanding anything in this Section 23b to the contrary, nothing
in this Agreement shall limit P. Downs's right to hold and make passive
investments not in excess of 2 1/2% of the outstanding Common Stock of any
publicly traded entity.
24. This Agreement, the Consulting Agreement and the General Release
embody the entire agreement of the parties and supersede any other prior oral or
written agreements, arrangements or understandings between P. Downs and Company.
This Agreement may not be changed or terminated orally but only by an agreement
in writing signed by the parties hereto.
25. The waiver by Company of a breach of any provision of this Agreement
by P. Downs shall not operate or be construed as a waiver of any subsequent
breach by him. The waiver by P. Downs of a breach of any provision of this
Agreement by Company shall not operate or be construed as a waiver of any
subsequent breach by Company.
7.
<PAGE>
26. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
8.
<PAGE>
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
--------------------------------
Patrick J. Downs
Approved as to form:
By:
----------------------------
Attorney for Patrick J. Downs
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By:
----------------------------
Approved as to form:
TROY & GOULD PROFESSIONAL CORPORATION
By:
---------------------------------
Attorney for NTN Communications, Inc.
9.
<PAGE>
ENDORSEMENT
-----------
I, Patrick J. Downs, hereby acknowledge that I was given or took 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
-----------------------------
Patrick J. Downs
10.
<PAGE>
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of NTN Communications, Inc. and as an
officer, director and employee of any subsidiaries or affiliates of NTN
Communications, Inc.
Very truly yours,
---------------------------------
Patrick J. Downs
11.
<PAGE>
Exhibit 2.2
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Daniel C. Downs, an individual
("D. Downs"), and NTN Communications, Inc., a corporation ("Company"), is a
resignation agreement which includes a general release of claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, D. Downs and Company agree as follows:
1. D. Downs resigns effective seven days following the complete execution
of this Agreement in all capacities as an officer and as an employee of Company
and each of its subsidiaries and affiliates, such resignations to be effective
as of December 31, 1996. Company hereby agrees to retain D. Downs as a
consultant commencing on January 1, 1997 and ending on December 31, 1999 in
accordance with the terms and conditions of the Consulting Agreement attached
hereto as Exhibit A. In the event D. Downs remains on the Board of Directors of
Company he shall be compensated on the same basis as other outside directors
other than compensation for initially becoming a director.
2. Company and D. Downs agree to the following actions (no payments
hereunder shall be made or other actions taken until seven days following the
complete execution of this Agreement) in full and complete discharge of any and
all of Company's obligations to D. Downs, including, without limitation, all
obligations under D. Downs's Employment Agreement dated January 1, 1990, as
amended on June 19, 1992 (the "Employment Agreement"), the Performance
Associated Senior Executive Retirement Plan and the Deferred Compensation Plan:
a. Company shall pay to D. Downs as severance payments $18,164.16 per
month for the 12 months ending December 31, 1997, $20,616.32 per month for the
12 months ending December 31, 1998, and $23,399.53 per month for the 12 months
ending December 31, 1999, less appropriate withholding taxes, as required. If
any severance payment is not paid by Company for more than 90 consecutive days,
then the severance payments set forth in this paragraph 2(a) shall be
accelerated and become immediately due and payable.
b. Company shall pay to D. Downs an amount of $152,761.69, all less
appropriate withholdings, in payment of accrued vacation to which D. Downs is
entitled under the Employment Agreement, payable one-third on execution of this
Agreement, one-third on January 1, 1998 and the remaining one-third January 1,
1999.
c. Upon completed execution of this Agreement, Company shall pay to D.
Downs cash in the amount of $121,387.35 less appropriate withholdings,
representing deferred compensation to which D. Downs is entitled.
1.
<PAGE>
d. Until December 31, 1999, Company shall continue to include D. Downs
under Company's medical insurance program, without cost to D. Downs.
e. Until December 31, 1999, Company shall use its best efforts to
provide (without extraordinary charges and provided that D. Downs meets standard
insurance company requirements) D. Downs life insurance, payable to D. Downs's
beneficiary, in the amount of $1,000,000, and in the event of accidental death
or dismemberment, in the amount of $2,000,000, without cost to D. Downs.
f. For a period of 36 months commencing on January 1, 1997 and ending
on December 31, 1999, Company will provide D. Downs with a car allowance of $500
per month.
g. D. Downs presently owns warrants to purchase 200,000 shares of
Common Stock of Company and incentive or non qualified options to purchase
1,184,000 shares of Common Stock of Company. D. Downs shall return to Company
for cancellation the following options:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
50,000 $7.250 8/11/98
185,000 $8.000 11/28/99
200,000 $7.250 8/11/98
15,000 $8.000 11/28/99
234,000 $ 4.75 1/15/98
</TABLE>
h. D. Downs is presently indebted to Company in the principal amount
of $629,140.54. Such indebtedness is represented by a promissory note (the
"Note") which provides that if D. Downs is terminated by Company for any reason
other than for "cause" at any time within the three year term of the Note the
balance of the Note and any interest accrued thereon will be cancelled. D. Downs
and Company agree that the Note shall be cancelled and shall be of no further
force and effect. Company shall return such cancelled Note to D. Downs. Company
may withhold from all amounts due to D. Downs herein all payroll taxes, if
required by law, relating to the cancellation of the Note.
i. Company shall execute and deliver to D. Downs the Release attached
as Exhibit B hereto.
3. D. Downs shall return to Company and shall not take or copy in any form
or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information. D. Downs represents to
Company that all documents pertaining to NTN, inclusive of existing and past
subsidiaries, but exclusive of personal items, in his possession whether located
on Company premises, at D. Downs' home or elsewhere have been returned to
Company and that he has retained no copies in any form. This representation
applies to all forms of written materials, including but not limited to
2.
<PAGE>
schematics, diagrams, formulations, tapes, descriptions of inventions and
products, operator manuals, maintenance manuals, training manuals, software
manuals, software code, technical memoranda, research bulletin, financial
information, marketing plans, identities of customers and vendors, contract
terms and information obtained in confidence from customers and vendors. D.
Downs hereby reaffirms his obligation, as set forth in his employment agreement,
confidentiality and work for hire agreement and any other legal documents that
he signed either before or during his employment with Company not to disclose
any confidential or trade secret information to any third party and not to use
the information for any purpose whatsoever except as expressly authorized in
writing by an authorized representative of Company, and except as necessary or
appropriate in fulfilling his responsibilities as a member of the Board of
Directors of the Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and D. Downs relating to any
alleged violation of Company policies or procedures or any state or federal law
or regulation, this Agreement does not constitute an adjudication or finding on
the merits and it is not, and shall not be construed as, an admission by Company
of any violation of its policies, procedures, state or federal laws or
regulations. Moreover, neither this Agreement nor anything in this Agreement
shall be construed to be or shall be admissible in any proceeding as evidence of
or an admission by Company of any violation of its policies, procedures, state
or federal laws or regulations. This Agreement may be introduced, however, in
any proceeding to enforce the Agreement. Such introduction shall be pursuant to
an order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein, D.
Downs on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Releasees, arising out of or in any way connected with his
employment or other relationships with Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the
California Fair Employment and Housing Act, the California Family Rights Act, or
any claim for severance pay, bonus,
3.
<PAGE>
sick leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers' compensation.
6. It is the intention of Company in executing this instrument that the
same shall be effective as a bar to each and every claim, demand and cause of
action hereinabove specified. In furtherance of this intention, D. Downs hereby
expressly waives any and all rights and benefits conferred upon him by the
provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those related to unknown and
unsuspected claims, demands and causes of action, if any, as well as those
relating to any other claims, demands and causes of action hereinabove
specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASES,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR."
D. Downs acknowledges that he may hereafter discover claims or facts in addition
to or different from those which D. Downs now knows or believes to exist with
respect to the subject matter of this Agreement and which, if known or suspected
at the time of executing this Agreement, may have materially affected this
Settlement. Nevertheless, D. Downs hereby waives any right, claim or cause of
action that might arise as a result of such different or additional claims or
facts. D. Downs acknowledges that he understands the significance and
consequences of such release and such specific waiver of SECTION 1542.
7. D. Downs expressly acknowledges and agrees that, by entering into this
Agreement he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement. D. Downs further
expressly acknowledges and agrees that:
a. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
b. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
c. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
8. D. Downs acknowledges that by reason of his position with Company he
has been given access to lists of customers, prices, engineering plans, and
similar confidential
4.
<PAGE>
or proprietary materials or information respecting Company's business affairs.
D. Downs represents that he has held all such information confidential and will
continue to do so, and that he will not use such confidential information and
relationships for any business (which term herein includes a partnership, firm,
corporation or any other entity) without the prior written consent of Company.
9. D. Downs agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and he shall not disclose them to any
other person except for his attorneys and tax advisors or except as otherwise
required by law or in the event of public disclosure of such matters by Company.
Without limiting the generality of the foregoing, D. Downs will not respond to
or in any way participate in or contribute to any public discussion, notice or
other publicity concerning, or in any way relating to, execution of this
Agreement or the events (including any negotiations) which led to its execution.
Without limiting the generality of the foregoing, D. Downs specifically agrees
that he shall not disclose information regarding this Agreement to any current
or former employee of Releasees. D. Downs hereby agrees that disclosure by him
of any of the terms and conditions of the Agreement in violation of the
foregoing shall constitute and be treated as a material breach of this
Agreement.
10. D. Downs warrants and represents that D. Downs has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and D. Downs shall defend, indemnify and
hold harmless Company from and against any claim (including the payment of
attorneys' fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
11. D. Downs and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. D. Downs
shall be exclusively liable for the payment of all federal and state taxes which
may be due as the result of the consideration as set forth herein and D. Downs
hereby represents that D. Downs shall make payments on such taxes at the time
and in the amount required of D. Downs. In addition, D. Downs hereby agrees
fully to defend, indemnify and hold harmless Releasees and each of them from
payment of taxes, interest and/or penalties that are required of them (other
than those payroll taxes which are the Company's obligations to pay) by any
government agency at any time as the result of payment of the consideration set
forth herein.
13. This instrument, the Consulting Agreement and the General Release
constitute and contain the entire agreement and understanding concerning D.
Downs's employment, resignation from the same and the other subject matters
addressed herein between the parties, and supersede and replace all prior
negotiations and all agreements proposed or otherwise,
5.
<PAGE>
whether written or oral, concerning the subject matters hereof. These are
integrated documents. This Agreement may be modified only by a writing signed by
the parties.
14. Either D. Downs or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by D. Downs. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by D. Downs, unless it is revoked during the seven-day
period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Company agrees to continue to indemnify D. Downs to the extent set
forth in the existing Bylaws of Company and the Indemnity Agreement between
Company and D. Downs dated April 7, 1988. In the event of a conflict between
the Indemnity Agreement and the Bylaws, the provision providing D. Downs with
the greatest rights and remedies with respect to indemnification shall control.
19. Any dispute or controversy between D. Downs, on the one hand, and
Company (or any Releasee), on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter thereof, otherwise in
any way arising out of, related to, or connected with D. Downs's employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
20. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this
6.
<PAGE>
Agreement have been completely read and explained to them by their attorneys,
and that those terms are fully understood and voluntarily accepted by them.
21. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
22. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
23. In consideration of the payment of $29,545.34, D. Downs agrees that
for a period of 36 months from the date hereof D. Downs shall not, directly or
indirectly, without the prior written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in direct competition with the primary businesses
presently conducted by Company, or any of the subsidiaries or affiliates of
Company. Notwithstanding anything in this Section 23b to the contrary, nothing
in this Agreement shall limit D. Downs's right to hold and make passive
investments not in excess of 2 1/2% of the outstanding Common Stock of any
publicly traded entity.
24. This Agreement, the Consulting Agreement and the General Release
embody the entire agreement of the parties and supersede any other prior oral or
written agreements, arrangements or understandings between D. Downs and Company.
This Agreement may not be changed or terminated orally but only by an agreement
in writing signed by the parties hereto.
25. The waiver by Company of a breach of any provision of this Agreement
by D. Downs shall not operate or be construed as a waiver of any subsequent
breach by him. The waiver by D. Downs of a breach of any provision of this
Agreement by Company shall not operate or be construed as a waiver of any
subsequent breach by Company.
7.
<PAGE>
26. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
--------------------------------
Daniel C. Downs
Approved as to form:
By:
----------------------------
Attorney for Daniel C. Downs
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By:
----------------------------
Approved as to form:
TROY & GOULD PROFESSIONAL CORPORATION
By:
---------------------------------
Attorney for NTN Communications, Inc.
8.
<PAGE>
ENDORSEMENT
-----------
I, Daniel C. Downs, hereby acknowledge that I was given or took 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
-----------------------------
Daniel C. Downs
9.
<PAGE>
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of NTN Communications, Inc. and as an
officer, director and employee of any subsidiaries or affiliates of NTN
Communications, Inc.
Very truly yours,
--------------------------------
Daniel C. Downs
10.
<PAGE>
Exhibit 2.3
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Ronald E. Hogan, an individual
("Hogan"), and NTN Communications, Inc., a corporation ("Company"), is a
resignation agreement which includes a general release of claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, Hogan and Company agree as follows:
1. Hogan resigns effective seven days following the complete execution of
this Agreement in all capacities as an officer and as an employee of Company and
each of its subsidiaries and affiliates, such resignations to be effective as of
December 31, 1996. Company hereby agrees to retain Hogan as a consultant
commencing on January 1, 1997 and ending on December 31, 1999 in accordance with
the terms and conditions of the Consulting Agreement attached hereto as Exhibit
A.
2. Company and Hogan agree to the following actions (no payments hereunder
shall be made or other actions taken until seven days following the complete
execution of this Agreement) in full and complete discharge of any and all of
Company's obligations to Hogan, including, without limitation, all obligations
under Hogan's Employment Agreement dated January 1, 1990, as amended on June 19,
1992 (the "Employment Agreement"), the Performance Associated Senior Executive
Retirement Plan and the Deferred Compensation Plan:
a. Company shall pay to Hogan as severance payments $14,204.24 per
month for the 12 months ending December 31, 1997, $16,121.81 per month for the
12 months ending December 31, 1998, and $18,298.26 per month for the 12 months
ending December 31, 1999, less appropriate withholding taxes, as required. If
any severance payment is not paid by Company for more than 90 consecutive days,
then the severance payments set forth in this paragraph 2(a) shall be
accelerated and become immediately due and payable.
b. Company shall pay to Hogan an amount of $134,475.39, payable
$7,470.86per month for 18 months, all less appropriate withholdings, in payment
of accrued vacation to which Hogan is entitled under the Employment Agreement.
c. Company shall pay to Hogan cash in the amount of $138,729, less
appropriate withholdings, representing deferred compensation to which Hogan is
entitled.
d. Until December 31, 1999, Company shall continue to include Hogan
under Company's medical insurance program, without cost to Hogan.
1.
<PAGE>
e. Until December 31, 1999, Company shall use its best efforts to
provide (without extraordinary charges and provided that R. Hogan meets standard
insurance company requirements) provide Hogan life insurance, payable to Hogan's
beneficiary, in the amount of $1,000,000, and in the event of accidental death
or dismemberment, in the amount of $2,000,000, without cost to Hogan.
f. Hogan presently owns warrants to purchase 200,000 shares of Common
Stock of Company and incentive or non qualified options to purchase 458,000
shares of Common Stock of Company. Hogan shall return to Company for
cancellation the following options:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
30,000 $7.250 8/11/98
20,000 $3.500 11/04/06
120,000 $7.250 8/11/98
50,000 $5.750 4/1/99
25,000 $6.375 7/05/01
</TABLE>
g. Hogan is presently indebted to Company in the principal amount of
$445,383.97. Such indebtedness is represented by a promissory note (the "Note")
which provides that if Hogan is terminated by Company for any reason other than
for "cause" at any time within the three year term of the Note the balance of
the Note and any interest accrued thereon will be cancelled. Hogan and Company
agree that the Note shall be cancelled and shall be of no further force and
effect. Company shall return such cancelled Note to Hogan. Company shall
execute and deliver to Hogan the Release attached as Exhibit B hereto. Company
may withhold from all amounts due to Hogan herein all payroll taxes, if required
by law, relating to the cancellation of the Note.
3. Hogan shall return to Company and shall not take or copy in any form or
manner lists of customers, prices, engineering plans, and similar confidential
and proprietary materials or information. Hogan represents to Company that all
documents pertaining to NTN, inclusive of existing and past subsidiaries, but
exclusive of personal items, in his possession whether located on Company
premises, at Hogan's home or elsewhere, have been returned to Company and that
he has retained no copies in any form. This representation applies to all forms
of written materials, including but not limited to schematics, diagrams,
formulations, tapes, descriptions of inventions and products, operator manuals,
maintenance manuals, training manuals, software manuals, software code,
technical memoranda, research bulletin, financial information, marketing plans,
identities of customers and vendors, contract terms and information obtained in
confidence from customers and vendors. Hogan hereby reaffirms his obligation,
as set forth in his employment agreement, secrecy agreement, confidentiality and
work for hire agreement and any other legal documents that he signed either
before or during his employment with Company not to disclose any confidential or
trade secret information to any third party and not to use the information for
any purpose
2.
<PAGE>
whatsoever except as expressly authorized in writing by an authorized
representative of Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and Hogan relating to any alleged
violation of Company policies or procedures or any state or federal law or
regulation, this Agreement does not constitute an adjudication or finding on the
merits and it is not, and shall not be construed as, an admission by Company of
any violation of its policies, procedures, state or federal laws or regulations.
Moreover, neither this Agreement nor anything in this Agreement shall be
construed to be or shall be admissible in any proceeding as evidence of or an
admission by Company of any violation of its policies, procedures, state or
federal laws or regulations. This Agreement may be introduced, however, in any
proceeding to enforce the Agreement. Such introduction shall be pursuant to an
order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Hogan on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Releasees, arising out of or in any way connected with his
employment or other relationships with Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the
California Fair Employment and Housing Act, the California Family Rights Act, or
any claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disabiliy.
6. It is the intention of Company in executing this instrument that the
same shall be effective as a bar to each and every claim, demand and cause of
action hereinabove specified. In furtherance of this intention, Hogan hereby
expressly waives any and all rights and benefits conferred upon him by the
provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those
3.
<PAGE>
related to unknown and unsuspected claims, demands and causes of action, if any,
as well as those relating to any other claims, demands and causes of action
hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASES, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
Hogan acknowledges that he may hereafter discover claims or facts in
addition to or different from those which Hogan now knows or believes to exist
with respect to the subject matter of this Agreement and which, if known or
suspected at the time of executing this Agreement, may have materially affected
this Settlement. Nevertheless, Hogan hereby waives any right, claim or cause of
action that might arise as a result of such different or additional claims or
facts. Hogan acknowledges that he understands the significance and consequences
of such release and such specific waiver of SECTION 1542.
7. Hogan expressly acknowledges and agrees that, by entering into this
Agreement he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement. Hogan further
expressly acknowledges and agrees that:
a. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
b. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
c. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
8. Hogan acknowledges that by reason of his position with Company he has
been given access to lists of customers, prices, engineering plans, and similar
confidential or proprietary materials or information respecting Company's
business affairs. Hogan represents that he has held all such information
confidential and will continue to do so, and that he will not use such
information and relationships for any business (which term herein includes a
partnership, firm, corporation or any other entity) without the prior written
consent of Company.
9. Hogan agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and he shall not disclose them to any
other person except for his attorneys and tax advisors or except as otherwise
required by law or in the event of public disclosure of such matters by Company.
Without limiting the generality of the
4.
<PAGE>
foregoing, Hogan will not respond to or in any way participate in or contribute
to any public discussion, notice or other publicity concerning, or in any way
relating to, execution of this Agreement or the events (including any
negotiations) which led to its execution. Without limiting the generality of the
foregoing, Hogan specifically agrees that he shall not disclose information
regarding this Agreement to any current or former employee of Releasees. Hogan
hereby agrees that disclosure by him of any of the terms and conditions of the
Agreement in violation of the foregoing shall constitute and be treated as a
material breach of this Agreement.
10. Hogan warrants and represents that Hogan has not heretofore assigned
or transferred to any person not a party to this Agreement any released matter
or any part or portion thereof and Hogan shall defend, indemnify and hold
harmless Company from and against any claim (including the payment of attorneys'
fees and costs actually incurred whether or not litigation is commenced) based
on or in connection with or arising out of any such assignment or transfer made,
purported or claimed.
11. Hogan and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. Hogan
shall be exclusively liable for the payment of all federal and state taxes which
may be due as the result of the consideration received from the settlement of
disputed claims as set forth herein and Hogan hereby represents that Hogan shall
make payments on such taxes at the time and in the amount required of Hogan. In
addition, Hogan hereby agrees fully to defend, indemnify and hold harmless
Releasees and each of them from payment of taxes, interest and/or penalties that
are required of them by any government agency at any time as the result of
payment of the consideration set forth herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning Hogan's employment, resignation from the same and the
other subject matters addressed herein between the parties, and supersedes and
replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters hereof. This is an
integrated document. This Agreement may be modified only by a writing signed by
the parties.
14. Either Hogan or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by Hogan. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by Hogan, unless it is revoked during the seven-day
period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can
5.
<PAGE>
be given effect without the invalid provisions or applications and to this end
the provisions of this Agreement are declared to be severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Company agrees to continue to indemnify Hogan to the extent set forth
in the existing Bylaws of Company and the Indemnity Agreement between Company
and Hogan dated April 7, 1988.
19. Any dispute or controversy between Hogan, on the one hand, and Company
(or any Releasee), on the other hand, in any way arising out of, related to, or
connected with this Agreement or the subject matter thereof, otherwise in any
way arising out of, related to, or connected with Hogan's employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
20. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
21. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
22. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
6.
<PAGE>
23. In consideration of the payment of $23,104.16, Hogan agrees that for a
period of 36 months from the date hereof Hogan shall not, directly or
indirectly, without the prior written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in competition with the businesses presently conducted
by Company, or any of the subsidiaries or affiliates of Company.
Notwithstanding anything in this Section 23b to the contrary, nothing in this
Agreement shall limit Hogan's right to hold and make passive investments not in
excess of the outstanding Common Stock of any publicly traded entity.
24. This Agreement embodies the entire agreement of the parties and
supersedes any other prior oral or written agreements, arrangements or
understandings between Hogan and Company. This Agreement may not be changed or
terminated orally but only by an agreement in writing signed by the parties
hereto.
25. The waiver by Company of a breach of any provision of this Agreement
by Hogan shall not operate or be construed as a waiver of any subsequent breach
by him. The waiver by Hogan of a breach of any provision of this Agreement by
Company shall not operate or be construed as a waiver of any subsequent breach
by Company.
26. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
7.
<PAGE>
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
________________________________
Ronald E. Hogan
Approved as to form:
By: ____________________________
Attorney for Ronald E. Hogan
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By: ____________________________
Approved as to form:
TROY & GOULD PROFESSIONAL CORPORATION
By: _________________________________
Attorney for NTN Communications, Inc.
8.
<PAGE>
ENDORSEMENT
-----------
I, Ronald E. Hogan, hereby acknowledge that I was given or took 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
_____________________________
Ronald E. Hogan
9.
<PAGE>
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of NTN Communications, Inc. and as an
officer, director and employee of any subsidiaries or affiliates of NTN
Communications, Inc.
Very truly yours,
________________________________
Ronald E. Hogan
10.
<PAGE>
Exhibit 2.4
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Gerald P. McLaughlin, an
individual ("McLaughlin"), and NTN Communications, Inc., a corporation
("Company"), is a resignation agreement which includes a general release of
claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, McLaughlin and Company agree as follows:
1. McLaughlin resigns effective seven days following the complete
execution of this Agreement in all capacities as an officer and as an employee
of Company and each of its subsidiaries and affiliates, such resignations to be
effective as of December 31, 1996. Company hereby agrees to retain McLaughlin
as a consultant commencing on January 1, 1997 and ending on December 31, 1999 in
accordance with the terms and conditions of the Consulting Agreement attached
hereto as Exhibit A.
2. Company and McLaughlin agree to the following actions (no payments
hereunder shall be made or other actions taken until seven days following the
complete execution of this Agreement) in full and complete discharge of any and
all of Company's obligations to McLaughlin, including, without limitation, all
obligations under McLaughlin's Employment Agreement dated January 1, 1990, as
amended on June 19, 1992 (the "Employment Agreement"), the Performance
Associated Senior Executive Retirement Plan and the Deferred Compensation Plan:
a. Company shall pay to McLaughlin as severance payments $19,788.53
per month for the 12 months ending December 31, 1997, $22,459.93 per month for
the 12 months ending December 31, 1998, and $25,492.08 per month for the 12
months ending December 31, 1999, less appropriate withholding taxes, as
required. If any severance payment is not paid by Company for more than 90
consecutive days, then the severance payments set forth in this paragraph 2(a)
shall be accelerated and become immediately due and payable.
b. Company shall pay to McLaughlin an amount of $93,671.34, payable
$5,203.96 per month for 18 months, all less appropriate withholdings, in
payment of accrued vacation to which McLaughlin is entitled under the Employment
Agreement.
c. Company shall pay to McLaughlin cash in the amount of $233,535.60
less appropriate withholdings, representing deferred compensation to which
McLaughlin is entitled.
d. Until December 31, 1999, Company shall continue to include
McLaughlin under Company's medical insurance program, without cost to
McLaughlin.
1.
<PAGE>
e. Until December 31, 1999, Company shall use its best efforts to
provide (without extraordinary charges and provided that McLaughlin meets
standard insurance company requirements) McLaughlin life insurance, payable to
McLaughlin's beneficiary, in the amount of $1,000,000, and in the event of
accidental death or dismemberment, in the amount of $2,000,000, without cost to
McLaughlin.
f. For a period of 36 months ending December 31, 1999, Company will
provide McLaughlin with a car allowance of $500 per month.
g. McLaughlin presently owns incentive or non qualified options to
purchase shares of Common Stock of Company. McLaughlin shall return to Company
for cancellation the following options:
<TABLE>
<CAPTION>
No. of Shares Exercise Price
------------- --------------
<S> <C>
30,000 $ 7.25
75,000 $6.375
95,000 $ 7.25
</TABLE>
h. Company shall issue to McLaughlin a new fully vested option to
purchase 150,000 shares of Common Stock of Company at an exercise price of
$3.875 per share and expiring on December 31, 2001.
i. Company shall vest the following options: (a) 75,000 options
having an exercise price of $4.50 and an expiration date of August 4, 2003; and
(b) 25,000 options having an exercise price of $3.50 and an expiration date of
November 4, 2006.
j. McLaughlin is presently indebted to Company in the principal
amount of $492,690.23. Such indebtedness is represented by a promissory note
(the "Note") which provides that if McLaughlin is terminated by Company for any
reason other than for "cause" at any time within the three year term of the Note
the balance of the Note and any interest accrued thereon will be cancelled.
McLaughlin and Company agree that the Note shall be cancelled and shall be of no
further force and effect. Company shall return such cancelled Note to
McLaughlin. Company may withhold from all amounts due to Mclaughlin herein all
payroll taxes, if required by law, relating to the cancellation of the Note.
k. Company shall execute and deliver to McLaughlin the Release
attached as Exhibit B hereto.
3. As of the execution of this Agreement and as a condition to the
receipt by McLaughlin of any payments hereunder, McLaughlin has or shall have
returned to Company and shall not take or copy in any form or manner lists of
customers, prices, engineering plans, and similar confidential and proprietary
materials or information, including, without limitation, those items set forth
on Exhibit C hereto. McLaughlin represents to Company that all documents
pertaining to NTN, inclusive of existing and past subsidiaries, but
2.
<PAGE>
exclusive of personal items, in his possession whether located on Company
premises, at McLaughlin's home or elsewhere, have been returned to Company and
that he has retained no copies in any form. This representation applies to all
forms of written materials, including but not limited to schematics, diagrams,
formulations, tapes, descriptions of inventions and products, operator manuals,
maintenance manuals, training manuals, software manuals, software code,
technical memoranda, research bulletin, financial information, marketing plans,
identities of customers and vendors, contract terms and information obtained in
confidence from customers and vendors. McLaughlin hereby reaffirms his
obligation, as set forth in his employment agreement, secrecy agreement,
confidentiality and work for hire agreement and any other legal documents that
he signed either before or during his employment with Company not to disclose
any confidential or trade secret information to any third party and not to use
the information for any purpose whatsoever except as expressly authorized in
writing by an authorized representative of Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and McLaughlin relating to any
alleged violation of Company policies or procedures or any state or federal law
or regulation, this Agreement does not constitute an adjudication or finding on
the merits and it is not, and shall not be construed as, an admission by Company
of any violation of its policies, procedures, state or federal laws or
regulations. Moreover, neither this Agreement nor anything in this Agreement
shall be construed to be or shall be admissible in any proceeding as evidence of
or an admission by Company of any violation of its policies, procedures, state
or federal laws or regulations. This Agreement may be introduced, however, in
any proceeding to enforce the Agreement. Such introduction shall be pursuant to
an order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
McLaughlin on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Releasees, arising out of or in any way connected with his
employment or other relationships with Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with
3.
<PAGE>
Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or any claim for
severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, workers' compensation
or dis6. It is the intention of Company in executing this instrument that the
same shall be effective as a bar to each and every claim, demand and cause of
action hereinabove specified. In furtherance of this intention, McLaughlin
hereby expressly waives any and all rights and benefits conferred upon him by
the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly
consents that this Agreement shall be given full force and effect according to
each and all of its express terms and provisions, including those related to
unknown and unsuspected claims, demands and causes of action, if any, as well as
those relating to any other claims, demands and causes of action hereinabove
specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASES, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
6. McLaughlin acknowledges that he may hereafter discover claims or facts
in addition to or different from those which McLaughlin now knows or believes to
exist with respect to the subject matter of this Agreement and which, if known
or suspected at the time of executing this Agreement, may have materially
affected this Settlement. Nevertheless, McLaughlin hereby waives any right,
claim or cause of action that might arise as a result of such different or
additional claims or facts. McLaughlin acknowledges that he understands the
significance and consequences of such release and such specific waiver of
SECTION 1542.
7. McLaughlin expressly acknowledges and agrees that, by entering into
this Agreement he is waiving any and all rights or claims that he may have
arising under the Age Discrimination in Employment Act of 1967, as amended,
which have arisen on or before the date of execution of this Agreement.
McLaughlin further expressly acknowledges and agrees that:
a. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
b. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
c. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
4.
<PAGE>
8. McLaughlin acknowledges that by reason of his position with Company he
has been given access to lists of customers, prices, engineering plans, and
similar confidential or proprietary materials or information respecting
Company's business affairs. McLaughlin represents that he has held all such
information confidential and will continue to do so, and that he will not use
such information for any business (which term herein includes a partnership,
firm, corporation or any other entity) without the prior written consent of
Company.
9. McLaughlin agrees that the terms and conditions of this Agreement
shall remain confidential as between the parties and he shall not disclose them
to any other person except for his attorneys and tax advisors or except as
otherwise required by law or in the event of public disclosure of such matters
by Company. Without limiting the generality of the foregoing, McLaughlin will
not respond to or in any way participate in or contribute to any public
discussion, notice or other publicity concerning, or in any way relating to,
execution of this Agreement or the events (including any negotiations) which led
to its execution. Without limiting the generality of the foregoing, McLaughlin
specifically agrees that he shall not disclose information regarding this
Agreement to any current or former employee of Releasees. McLaughlin hereby
agrees that disclosure by him of any of the terms and conditions of the
Agreement in violation of the foregoing shall constitute and be treated as a
material breach of this Agreement.
10. McLaughlin warrants and represents that, to the best of his knowledge,
McLaughlin has not heretofore assigned or transferred to any person not a party
to this Agreement any released matter or any part or portion thereof and
McLaughlin shall defend, indemnify and hold harmless Company from and against
any claim (including the payment of attorneys' fees and costs actually incurred
whether or not litigation is commenced) based on or in connection with or
arising out of any such assignment or transfer.
11. McLaughlin and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes.
McLaughlin shall be exclusively liable for the payment of all federal and state
taxes which may be due as the result of the consideration received from the
settlement of disputed claims as set forth herein and McLaughlin hereby
represents that McLaughlin shall make payments on such taxes at the time and in
the amount required of McLaughlin. In addition, McLaughlin hereby agrees fully
to defend, indemnify and hold harmless Releasees and each of them from payment
of taxes, interest and/or penalties that are required of them by any government
agency at any time as the result of payment of the consideration set forth
herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning McLaughlin's employment, resignation from the same and
the other subject matters addressed herein between the parties, and supersedes
and replaces all
5.
<PAGE>
prior negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters hereof. This is an integrated document.
This Agreement may be modified only by a writing signed by the parties.
14. Either McLaughlin or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by McLaughlin. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by McLaughlin, unless it is revoked during the seven-
day period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Any dispute or controversy between McLaughlin, on the one hand, and
Company (or any Releasee), on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter thereof, otherwise in
any way arising out of, related to, or connected with McLaughlin's employment
with Company, shall be resolved through final and binding arbitration in San
Diego, California, pursuant to California Civil Procedure Code (S)(S) 1282-
1284.2. The arbitration shall be before the American Arbitration Association
Employee Dispute Panel and shall be governed by the National Rules for the
Resolution of Employment Disputes promulgated by the American Arbitration
Association. In the event of such arbitration, the prevailing party shall be
entitled to recover all reasonable costs and expenses incurred by such party in
connection therewith, including attorneys' fees. The nonprevailing party shall
also be solely responsible for all costs of the arbitration, including, but not
limited to, the arbitrator's fees, court reporter fees, and any and all other
administrative costs of the arbitration, and promptly shall reimburse the
prevailing party for any portion of such costs previously paid by the prevailing
party. Any dispute as to the reasonableness of costs and expenses shall be
determined by the arbitrator.
19. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
20. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full
6.
<PAGE>
force to the basic terms and intent of this Agreement and which are not
inconsistent with its terms.
21. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
22. In consideration of the payment of $28,358.92, receipt of which is
hereby acknowledged, McLaughlin agrees that for a period of 36 months from the
date hereof McLaughlin shall not, directly or indirectly, without the prior
written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in direct competition with the primary businesses
presently conducted by Company, or any of the subsidiaries or affiliates of
Company. Notwithstanding anything in this Section 2b to the contrary, nothing
in this Agreement shall limit McLaughlin's right to hold and make passive
investments not in excess of 2 1/2% of the outstanding Common Stock of any
publicly traded entity.
23. This Agreement embodies the entire agreement of the parties and
supersedes any other prior oral or written agreements, arrangements or
understandings between McLaughlin and Company. This Agreement may not be
changed or terminated orally but only by an agreement in writing signed by the
parties hereto.
24. The waiver by Company of a breach of any provision of this Agreement
by McLaughlin shall not operate or be construed as a waiver of any subsequent
breach by him. The waiver by McLaughlin of a breach of any provision of this
Agreement by Company shall not operate or be construed as a waiver of any
subsequent breach by Company.
25. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
7.
<PAGE>
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
--------------------------------
Gerald P. McLaughlin
Approved as to form:
By:
----------------------------
Attorney for Gerald P. McLaughlin
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By:
----------------------------
Approved as to form:
TROY & GOULD PROFESSIONAL CORPORATION
By:
---------------------------------
Attorney for NTN Communications, Inc.
8.
<PAGE>
ENDORSEMENT
-----------
I, Gerald P. McLaughlin, hereby acknowledge that I was given or took 21
days to consider the foregoing Agreement and voluntarily chose to sign the
Agreement prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
-----------------------------
Gerald P. McLaughlin
9.
<PAGE>
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of NTN Communications, Inc. and as an
officer, director and employee of any subsidiaries or affiliates of NTN
Communications, Inc.
Very truly yours,
--------------------------------
Gerald P. McLaughlin
10.
<PAGE>
Exhibit 2.5
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Michael J. Downs, an
individual ("M. Downs"), and NTN Communications, Inc., a corporation and
LearnStar, Inc. (collectively "Company"), is a resignation agreement which
includes a general release of claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, M. Downs and Company agree as follows:
1. M. Downs resigns effective seven days following the complete execution
of this Agreement in all capacities as an officer and as an employee of Company
and each of its subsidiaries and affiliates, such resignations to be effective
as of December 31, 1996.
2. Company and M. Downs agree to the following actions (no payments
hereunder shall be made or other actions taken until seven days following the
complete execution of this Agreement) in full and complete discharge of any and
all of Company's obligations to M. Downs, including, without limitation, all
obligations under M. Downs's Employment Agreement dated November 1, 1995
a. Company shall pay to M. Downs as severance payments $12,500.00 per
month for the 12 months ending December 31, 1997, and $12,500.00 per month for
the 10 months ending October 28, 1998, less appropriate withholding taxes, as
required.
b. Until April 30, 1997, assuming M. Downs elects COBRA coverage,
Company shall pay M. Downs' COBRA premium for medical benefits through April 30,
1997. M. Downs will receive the same coverage as current medical coverage
through April 30, 1997.
c. Company shall pay to M. Downs an amount of $ 19,352.68, payable
$879.67 per month for 22 months, all less appropriate withholdings, in payment
of accrued vacation to which M. Downs is entitled under the Employment
Agreement.
d. M. Downs shall return the following options to the Company for
cancellation:
30,000 options having an exercise price of $7.25 and an expiration date of
8/11/98
35,000 options having an exercise price of $4.75 and an expiration date of
1/15/98
70,000 options having an exercise price of $7.25 and an expiration date of
8/11/98
50,000 options having an exercise price of $5.75 and an expiration date of
4/1/99
25,000 options having an exercise price of $6.375 and an expiration date of
7/5/01
e. M. Downs shall retain 25,000 warrants held by him having an exercise
price of $4.75 and an expiration date of 1/15/98
1.
<PAGE>
f. As set forth in paragraph 3.2 of the Employment Agreement, in the
event that M. Downs procures another position as an employee or an independent
contractor at any time from the effective date hereof through October 31, 1998,
severance payments to which M. Downs would otherwise be entitled as set forth in
paragraph 2.a., above, shall be offset by any sums, whether in cash or in kind,
earned by M. Downs by virtue of such other position.
3. M. Downs shall return to Company and shall not take or copy in any form
or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information. M. Downs represents to
Company that all documents pertaining to NTN or LearnStar, inclusive of existing
and past parent companies and subsidiaries, but exclusive of personal items, in
his possession whether located on Company premises, at M. Downs' home or
elsewhere, have been returned to Company and that he has retained no copies in
any form. This representation applies to all forms of written materials,
including but not limited to schematics, diagrams, formulations, tapes,
descriptions of inventions and products, operator manuals, maintenance manuals,
training manuals, software manuals, software code, technical memoranda, research
bulletin, financial information, marketing plans, identities of customers and
vendors, contract terms and information obtained in confidence from customers
and vendors. M. Downs hereby reaffirms his obligation, as set forth in his
employment agreement, secrecy agreement, confidentiality and work for hire
agreement and any other legal documents that he signed either before or during
his employment with Company not to disclose any confidential or trade secret
information to any third party and not to use the information for any purpose
whatsoever except as expressly authorized in writing by an authorized
representative of Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and M. Downs relating to any
alleged violation of Company policies or procedures or any state or federal law
or regulation, this Agreement does not constitute an adjudication or finding on
the merits and it is not, and shall not be construed as, an admission by Company
of any violation of its policies, procedures, state or federal laws or
regulations. Moreover, neither this Agreement nor anything in this Agreement
shall be construed to be or shall be admissible in any proceeding as evidence of
or an admission by Company of any violation of its policies, procedures, state
or federal laws or regulations. This Agreement may be introduced, however, in
any proceeding to enforce the Agreement. Such introduction shall be pursuant to
an order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein, M.
Downs on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes
2.
<PAGE>
of action, obligations, debts, costs, expenses, attorneys' fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden, which he now owns or holds or he has at any time
heretofore owned or held or may in the future hold as against said Releasees,
arising out of or in any way connected with his employment or other
relationships with Company or his resignation from employment or any other
transactions, occurrences, acts or omissions or any loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said Releasees, or any of them, committed or
omitted prior to the date of this Agreement including, without limiting the
generality of the foregoing, any claim under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or any claim for
severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, workers' compensation
or disability insurance. It is the intention of Company in executing this
instrument that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified. In furtherance of this
intention, M. Downs hereby expressly waives any and all rights and benefits
conferred upon him by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL
CODE and expressly consents that this Agreement shall be given full force and
effect according to each and all of its express terms and provisions, including
those related to unknown and unsuspected claims, demands and causes of action,
if any, as well as those relating to any other claims, demands and causes of
action hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASES, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
6. M. Downs acknowledges that he may hereafter discover claims or facts
in addition to or different from those which M. Downs now knows or believes to
exist with respect to the subject matter of this Agreement and which, if known
or suspected at the time of executing this Agreement, may have materially
affected this Settlement. Nevertheless, M. Downs hereby waives any right, claim
or cause of action that might arise as a result of such different or additional
claims or facts. M. Downs acknowledges that he understands the significance and
consequences of such release and such specific waiver of SECTION 1542.
7. M. Downs expressly acknowledges and agrees that, by entering into this
Agreement he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement. M. Downs further
expressly acknowledges and agrees that:
3.
<PAGE>
a. In return for this Agreement he will receive compensation at
least equal to that which he was already entitled to receive before entering
into this Agreement;
b. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
c. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
d. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
8. M. Downs acknowledges that by reason of his position with Company he
has been given access to lists of customers, prices, engineering plans, and
similar confidential or proprietary materials or information respecting
Company's business affairs. M. Downs represents that he has held all such
information confidential and will continue to do so, and that he will not use
such information and relationships for any business (which term herein includes
a partnership, firm, corporation or any other entity) without the prior written
consent of Company.
9. M. Downs agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and he shall not disclose them to any
other person except for his attorneys and tax advisors or except as otherwise
required by law or in the event of public disclosure of such matters by Company.
Without limiting the generality of the foregoing, M. Downs will not respond to
or in any way participate in or contribute to any public discussion, notice or
other publicity concerning, or in any way relating to, execution of this
Agreement or the events (including any negotiations) which led to its execution.
Without limiting the generality of the foregoing, M. Downs specifically agrees
that he shall not disclose information regarding this Agreement to any current
or former employee of Releasees. M. Downs hereby agrees that disclosure by him
of any of the terms and conditions of the Agreement in violation of the
foregoing shall constitute and be treated as a material breach of this
Agreement.
10. M. Downs warrants and represents that M. Downs has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and M. Downs shall defend, indemnify and
hold harmless Company from and against any claim (including the payment of
attorneys' fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
11. M. Downs and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
4.
<PAGE>
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. M. Downs
shall be exclusively liable for the payment of all federal and state taxes which
may be due as the result of the consideration received from the settlement of
disputed claims as set forth herein and M. Downs hereby represents that M. Downs
shall make payments on such taxes at the time and in the amount required of M.
Downs. In addition, M. Downs hereby agrees fully to defend, indemnify and hold
harmless Releasees and each of them from payment of taxes, interest and/or
penalties that are required of them by any government agency at any time as the
result of payment of the consideration set forth herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning M. Downs's employment, resignation from the same and
the other subject matters addressed herein between the parties, and supersedes
and replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters hereof. This is an
integrated document. This Agreement may be modified only by a writing signed by
the parties.
14. Either M. Downs or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by M. Downs. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by M. Downs, unless it is revoked during the seven-day
period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Any dispute or controversy between M. Downs, on the one hand, and
Company (or any Releasee), on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter thereof, otherwise in
any way arising out of, related to, or connected with M. Downs's employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
5.
<PAGE>
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
19. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
20. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
21. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
22. M. Downs agrees that for a period of 24 months from the date hereof M.
Downs shall not, directly or indirectly, without the prior written consent of
Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in competition with the businesses presently conducted
by Company, or any of the subsidiaries or affiliates of Company. Notwithstanding
anything in this Section 23b to the contrary, nothing in this Agreement shall
limit M. Downs's right to hold and make passive investments not in excess of the
outstanding Common Stock of any publicly traded entity.
23. This Agreement embodies the entire agreement of the parties and
supersedes any other prior oral or written agreements, arrangements or
understandings between M. Downs and Company. This Agreement may not be changed
or terminated orally but only by an agreement in writing signed by the parties
hereto.
24. The waiver by Company of a breach of any provision of this Agreement
by M. Downs shall not operate or be construed as a waiver of any subsequent
breach by him.
6.
<PAGE>
The waiver by M. Downs of a breach of any provision of this Agreement by Company
shall not operate or be construed as a waiver of any subsequent breach by
Company.
25. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
________________________________
Michael J. Downs
Approved as to form:
By: ____________________________
Attorney for Michael J. Downs
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By: ____________________________
Approved as to form:
TROY & GOULD PROFESSIONAL CORPORATION
By: _________________________________
Attorney for NTN Communications, Inc.
7.
<PAGE>
ENDORSEMENT
-----------
I, Michael J. Downs, hereby acknowledge that I was given or took 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
_____________________________
Michael J. Downs
8.
<PAGE>
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of LearnStar, a subsidiary of NTN
Communications, Inc. and as an officer, director and employee of any
subsidiaries or affiliates of NTN Communications, Inc.
Very truly yours,
________________________________
Michael J. Downs
9.
<PAGE>
EXHIBIT 2.6
SEVERANCE, WAIVER AND RELEASE AGREEMENT
---------------------------------------
This Waiver and Release Agreement ("Agreement") is entered into by and
between Robert Klosterman ("Employee") and NTN Communications, Inc. ("Company").
The Company will provide Employee with a basic severance benefit of two weeks
base pay without entering into this Agreement. However, should Employee enter
into this Agreement, Employee will receive the increased benefits set forth in
Paragraphs 2a and 2b hereof. Employee has decided to enter into this Agreement.
1. Company and Employee mutually agree to resolve all differences by
entering into this Agreement, under which Employee's employment shall end
effectively as of December 31, 1996, as part of a reduction in force.
2. As consideration for the promises and covenants given by Employee in
this Agreement, Company agrees to the following:
a. Assuming Employee elects COBRA coverage, Company shall pay
Employee's COBRA premium for medical benefits through April 30, 1997. Employee
will receive the same coverage as current medical coverage through April 30,
1997.
b. Employee shall receive as severance payment the cash amount of
$50,000.00, less appropriate withholdings.
c. Employee shall also receive the total amount of $17,846.83 payable
$2,926.06 per month for 6 months commencing from the date of completed execution
of this Agreement in payment for accrued vacation, from which appropriate
withholdings shall be deducted.
d. Employee is presently indebted to Company in the principal amount
of $237,382.69, which indebtedness is represented by a promissory note dated as
of April 10, 1996 (the "Note"). Employee and Company agree that the Note shall
be cancelled and shall be of no further force and effect. Company shall return
the cancelled Note to Employee. Company may withhold from all amounts due to
Employee herein all payroll taxes relating to the cancellation of the Note.
e. Employee shall return the following option to Company for
cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price
------------- --------------
<S> <C>
6,000 $6.50
8,000 $6.375
8,000 $4.50
5,000 $3.50
</TABLE>
1.
<PAGE>
f. Employee has previously been granted 15,000 non-qualified stock
options at an exercise price of $2.00 per share with an expiration date of July
17, 1997. These non-qualified stock options shall be immediately vested and
Company shall waive any provision that requires the exercise of such options
within a specified time period following termination. Further, the expiration
date will be extended to July 17, 1998.
3. In consideration and in return for the promises and covenants
undertaken herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, Employee releases and discharges Company and its
parent, subsidiary and related entities, past and present, and their trustees,
officers, directors, employees and/or agents (referred to collectively as
"Releasees") from any and all claims, demands, payments, wages, agreements,
obligations and causes of action arising out of or in any way connected with any
transactions, occurrences, acts or omissions, whether known or unknown,
suspected or unsuspected, arising out of Employee's employment relationship with
Company, or Employee's separation from employment, or from any other cause or
act or omission by or on the part of Releasees, or any of them, that occurred on
or before the Effective Date of this Agreement. EMPLOYEE ALSO SPECIFICALLY
AGREES TO WAIVE ANY RIGHT TO RECOVERY BASED ON STATE OR FEDERAL AGE, SEX,
PREGNANCY, RACE, COLOR, NATIONAL ORIGIN, MARITAL STATUS, RELIGION, VETERAN
STATUS, SEXUAL ORIENTATION, DISABILITY, MEDICAL CONDITION, OR OTHER ANTI-
DISCRIMINATION LAWS, INCLUDING WITHOUT LIMITATION, TITLE VII, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH DISABILITIES ACT AND THE
CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, ALL AS AMENDED, WHETHER SUCH CLAIM
BE BASED ON AN ACTION FILED BY EMPLOYEE OR BY A GOVERNMENT AGENCY. Employee
agrees that Employee's employment with Company will end irrevocably, and will
not be resumed again at any time in the future, unless Company seeks Employee
out for employment and Employee accepts.
4. Employee expressly waives any and all rights and benefits conferred by
the provisions of Section 1542 of the California Civil Code and expressly
consents that this Agreement shall be given full force and effect according to
each and all of its express terms and provisions, including those relating to
unknown and unsuspected claims, demands and causes of action, if any, as well as
those relating to any other claims, demands and causes of action referred to
above. Section 1542 provides:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must
have materially affected his settlement with the debtor."
Having been so apprised, Employee nevertheless hereby voluntarily elects to and
does waive the rights described in Civil Code Section 1542 and elects to assume
all risks for claims that now exist in Employee's favor, known or unknown, that
are released under this Agreement.
2.
<PAGE>
5. Employee acknowledges Company has hereby advised Employee in writing
to discuss this Agreement with an attorney before executing it and that Company
has provided Employee at least forty-five (45) days within which to review and
consider that Agreement before signing it. If Employee decides not to use all
45 days, then Employee knowingly and voluntarily waives any claims that Employee
was not, in fact, given that period of time or did not use the entire forty-five
(45) days to consult an attorney and/or to consider this Agreement. Employee
may revoke this Agreement for up to seven (7) calendar days following its
execution by delivering in writing such a revocation to Gerry Sokol no later
than 5:00 p.m. on the seventh day following execution of this Agreement by
Employee. If Employee does not revoke this Agreement within the time specified,
it shall become effective at 12:00:01 a.m. on the eighth day after it is signed
by the Employee (the "Effective Date"). If Employee revokes the Agreement,
Employee will not receive the benefits listed under Paragraph 2 above. If
Employee does not revoke the Agreement, the Employee will receive the benefits
listed under Paragraph 2a and payment of the severance benefit under Paragraph
2b will be made on the Effective Date.
6. As conditions of this Agreement, Employee: a) agrees to comply with
all policies and procedures of Company; b) represents that all Company property,
including but not limited to keys and credit cards, has been returned to
Company; and c) agrees to cooperate with Company in arranging for an orderly
transfer of files and projects.
7. This Agreement shall be construed in accordance with, and be deemed
governed by, the laws of the State of California. This Agreement is intended as
the final, complete and exclusive statement of the terms of the parties'
agreement and cannot be modified in any respect except in writing signed by
Employee and Company's authorized representative. This Agreement shall
supersede all previous contracts or agreements, whether written or oral, between
Company and Employee.
I have read the foregoing SEVERANCE, WAIVER AND RELEASE AGREEMENT, and I
accept and agree to the provisions contained herein and hereby execute it
voluntarily and with full understanding of its consequences.
READ CAREFULLY, THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
Date:
------------------- ---------------------------------------
NTN COMMUNICATIONS, INC.
Date:
------------------- ---------------------------------------
ROBERT KLOSTERMAN
3.
<PAGE>
SETTLEMENT TERMS
----------------
BOB KLOSTERMAN (Complete Termination)
- --------------
1. Cash severance $ 50,000
2. Pay out accrued vacation of $17,556.33 over 6 months @ $2,926.06 per month.
3. Forgive tax note $237,382.69
4. Return the following options to NTN for cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price
------------- --------------
<S> <C>
6,000 $6.50
8,000 $6.375
8,000 $4.50
5,000 $3.50
</TABLE>
5. Extend 15,000 (non-qualified) options @ $2.00 to 7/17/97: Company to waive
provision requiring exercise within specified time period following
termination.
6. Complete release
4.
<PAGE>
SETTLEMENT TERMS
----------------
DON KLOSTERMAN (Remains a Director)
- --------------
1. Forgive tax note $1,179,043
2. Return 150,000 stock options to NTN for cancellation:
30,000 @ $8.25
70,000 @ $8.25
50,000 @ $5.75
3. Pat Downs to return 184,000 stock options @ $4.75 to NTN for cancellation.
4. Dan Downs to return 234,000 stock options @ $4.75 to NTN for cancellation.
5. Keep intact the following warrants:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
200,000 $2.00 6/15/97
</TABLE>
5.
<PAGE>
EXHIBIT 2.7
[LOGO OF NTN COMMUNICATIONS, INC.]
March 4, 1997
Mr. Alan Magerman
NTN Communications, Inc.
5966 La Place Court
Carlsbad, CA 92008-8830
Dear Alan:
This will confirm the following with respect to options to purchase
Common Stock of NTN Communications, Inc. (the "Company") held by you and with
respect to a loan from the Company to you in the amount of $185,274.44:
1. The expiration date of an option to purchase 245,000 shares of Common
Stock of the Company at $4.75 is hereby extended from January 15, 1998 to
January 15, 2003. Such option is deemed fully vested and any provision in such
option requiring exercise of such option within a specified period of time
following termination of your employment is hereby waived by the Company.
2. The Company hereby fully vests your option to purchase 200,000 shares
of Common Stock of the Company at $4.50 expiring on August 4, 2003 and your
option to purchase 200,000 shares of Common Stock of the Company at $3.50
expiring on November 4, 2006, and waives any provision in either of such options
requiring exercise of such options within a specified period of time following
termination of your employment.
3. Your debt to the Company in the amount of $185,274.44 is hereby
forgiven.
Sincerely,
/s/ Gerald Sokol, Jr.
Gerald Sokol, Jr.
[LETTERHEAD OF NTN COMMUNICATIONS, INC.]
<PAGE>
Exhibit 3.1
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made as of January 1, 1997
by and between NTN Communications, Inc., a Delaware corporation (the "Company"),
and Patrick J. Downs("Consultant").
1. Consulting Arrangement. The Company shall employ Consultant, and
----------------------
Consultant shall serve the Company as a Consultant.
2. Duties. Consultant will perform consulting services for the Company
------
regarding matters as may reasonably be requested from time to time by the
Company, provided that such requests shall not require a substantial portion of
Consultant's time. The failure of Consultant to perform consulting services
hereunder will not permit the Company to withhold any amounts owing to
Consultant pursuant to the Resignation and General Release Agreement dated as of
December 31, 1996.
3. Term. The term of the Agreement shall be for the three year period
----
commencing January 1, 1997 and ending on December 31, 1999.
4. Compensation. In consideration of Consultant's services pursuant to
------------
Paragraph 2 hereof, the Company hereby agrees that, as of the date hereof:
a. The expiration date of Consultant's existing warrants to purchase
150,000 shares of Common Stock of the Company with an exercise price of $4.75
per share shall be extended to January 15, 2003;
b. The expiration date of Consultant's existing warrants to purchase
200,000 shares of Common Stock of the Company with an exercise price of $2.00
per share shall be extended to June 15, 2002.
c. Company shall waive any provision in any Stock Option Plan
Agreement or Grant which requires the exercise of such options within a
specified period of time following termination with respect to the following
options: (a) 200,000 options to purchase Common Stock of the Company with an
exercise price of $4.50 per share having an expiration date of August 4, 2003;
and (b) 200,000 options to purchase Common Stock of the Company with an exercise
price of $3.50 per share having an expiration date of November 4, 2006.
5. Expenses. All reasonable business expenses incident to the rendering
--------
of services by Consultant hereunder which are not extraordinary and have been
previously approved by the Company, will be paid or reimbursed by the Company
subject to the submission being in accordance with the Company's policies in
effect from time to time.
1.
<PAGE>
6. Non-Disclosure. Consultant will not at any time after the date of this
--------------
Agreement divulge, furnish, or make accessible to anyone (other than in the
regular course of business of the Company) any knowledge or information with
respect to confidential or secret processes, inventions, discoveries,
improvements, formulas, plans, material, devices, or ideas or other know how,
whether patentable or not, with respect to any confidential or secret
engineering, development or research work or with respect to any other
confidential or secret aspect of the business of the Company.
Consultant agrees that for a period of 36 months from the date hereof
Consultant shall not, directly or indirectly, without the prior written consent
of Company:
a. solicit, entice, persuade or induce any employee, consultant, agent
or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or participate
in any way in, consult with or render services for any person or entity (other
than Company), or any of the subsidiaries or affiliates of Company engaged in
any business in direct competition with the primary businesses presently
conducted by Company, or any of the subsidiaries or affiliates of Company.
Notwithstanding anything in this Section 23b to the contrary, nothing in this
Agreement shall limit Consultant's right to hold and make passive investments
not in excess of 2-1/2% of the outstanding Common Stock of any publicly traded
entity.
7. Remedies. The Company may pursue any appropriate legal, equitable or
--------
other remedy, including injunctive relief, in respect of any failure to comply
with the provisions of Section 6 hereof, it being acknowledged by Consultant
that the remedy at law for any such failure would be inadequate.
8. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be one and the same instrument.
9. Modification. This Agreement may not be changed or terminated orally
------------
but only by an agreement in writing signed by the parties hereto.
10. Interpretation. Each party has cooperated in the drafting and
--------------
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
2.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NTN COMMUNICATIONS, INC.
By:
--------------------------------
AGREED:
- --------------------------------
Patrick J. Downs
3.
<PAGE>
Exhibit 3.2
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made as of January 1, 1997
by and between NTN Communications, Inc., a Delaware corporation (the "Company"),
and Daniel C. Downs("Consultant").
1. Consulting Arrangement. The Company shall employ Consultant, and
----------------------
Consultant shall serve the Company as a Consultant.
2. Duties. Consultant will perform consulting services for the Company
------
regarding matters as may reasonably be requested from time to time by the
Company, provided that such requests shall not require a substantial portion of
Consultant's time. The failure of Consultant to perform consulting services
hereunder will not permit the Company to withhold any amounts owing to
Consultant pursuant to the Resignation and General Release Agreement dated as of
December 31, 1996.
3. Term. The term of the Agreement shall be for the three year period
----
commencing January 1, 1997 and ending on December 31, 1999.
4. Compensation. In consideration of Consultant's services pursuant to
------------
Paragraph 2 hereof, the Company hereby agrees that, as of the date hereof:
a. The expiration date of Consultant's existing warrants to purchase
200,000 shares of Common Stock of the Company with an exercise price of $2.00
per share shall be extended to June 15, 2002.
b. Company shall waive any provision in any Stock Option Plan
Agreement or Grant which requires the exercise of such options within a
specified period of time following termination with respect to the following
options: (a) 200,000 options to purchase Common Stock of the Company with an
exercise price of $4.50 per share having an expiration date of August 4, 2003;
and (b) 200,000 options to purchase Common Stock of the Company with an exercise
price of $3.50 per share having an expiration date of November 4, 2006.
c. The expiration date of Consultant's existing warrants to purchase
150,000 shares of Common Stock of the Company with an exercise price of $4.75
shall be extended to January 15, 2003.
5. Expenses. All reasonable business expenses incident to the rendering
--------
of services by Consultant hereunder which are not extraordinary and have been
previously approved by the Company, will be paid or reimbursed by the Company
subject to the submission being in accordance with the Company's policies in
effect from time to time.
1.
<PAGE>
6. Non-Disclosure. Consultant will not at any time after the date of this
--------------
Agreement divulge, furnish, or make accessible to anyone (other than in the
regular course of business of the Company) any knowledge or information with
respect to confidential or secret processes, inventions, discoveries,
improvements, formulas, plans, material, devices, or ideas or other know how,
whether patentable or not, with respect to any confidential or secret
engineering, development or research work or with respect to any other
confidential or secret aspect of the business of the Company.
Consultant agrees that for a period of 36 months from the date hereof
Consultant shall not, directly or indirectly, without the prior written consent
of Company:
a. solicit, entice, persuade or induce any employee, consultant, agent
or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or participate
in any way in, consult with or render services for any person or entity (other
than Company), or any of the subsidiaries or affiliates of Company engaged in
any business in direct competition with the primary businesses presently
conducted by Company, or any of the subsidiaries or affiliates of Company.
Notwithstanding anything in this Section 23b to the contrary, nothing in this
Agreement shall limit Consultant's right to hold and make passive investments
not in excess of 2-1/2% of the outstanding Common Stock of any publicly traded
entity.
7. Remedies. The Company may pursue any appropriate legal, equitable or
--------
other remedy, including injunctive relief, in respect of any failure to comply
with the provisions of Section 6 hereof, it being acknowledged by Consultant
that the remedy at law for any such failure would be inadequate.
8. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be one and the same instrument.
9. Modification. This Agreement may not be changed or terminated orally
------------
but only by an agreement in writing signed by the parties hereto.
10. Interpretation. Each party has cooperated in the drafting and
--------------
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
2.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NTN COMMUNICATIONS, INC.
By:
-----------------------------
AGREED:
- --------------------------------
Daniel C. Downs
3.
<PAGE>
Exhibit 3.3
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made as of January 1, 1997
by and between NTN Communications, Inc., a Delaware corporation (the "Company"),
and Ronald E. Hogan ("Consultant").
1. Consulting Arrangement. The Company shall employ Consultant, and
----------------------
Consultant shall serve the Company as a Consultant.
2. Duties. Consultant will perform consulting services for the Company
------
regarding financial matters as may reasonably be requested from time to time by
the Company, provided that such requests shall not require a substantial portion
of Consultant's time.
3. Term. The term of the Agreement shall be for the three year period
----
commencing January 1, 1997 and ending on December 31, 1999.
4. Compensation. In consideration of Consultant's services pursuant to
------------
Paragraph 2 hereof, the Company hereby agrees that:
a. Consultant shall become fully vested as to an existing option to
purchase 50,000 shares of Common Stock of the Company with an exercise price of
$4.50 expiring on August 4, 2003;
b. The expiration date of Consultant's existing option to purchase
90,000 shares of Common Stock of the Company with an exercise price of $4.75 per
share shall be extended to January 15, 2003;
c. The expiration date of Consultant's existing option to purchase
73,000 shares of Common Stock of the Company with an exercise price of $4.75 per
share shall be extended to January 15, 2003;
d. The expiration date of Consultant's existing warrant to purchase
200,000 shares of Common Stock of the Company with an exercise price of $2.00
per share shall be extended to June 15, 2002.
5. Expenses. All reasonable business expenses incident to the rendering
--------
of services by Consultant hereunder which are not extraordinary and have been
previously approved by the Company, will be paid or reimbursed by the Company
subject to the submission being in accordance with the Company's policies in
effect from time to time.
6. Non-Disclosure. Consultant will not at any time after the date of this
--------------
Agreement divulge, furnish, or make accessible to anyone (other than in the
regular course
1.
<PAGE>
of business of the Company) any knowledge or information with respect to
confidential or secret processes, inventions, discoveries, improvements,
formulas, plans, material, devices, or ideas or other know how, whether
patentable or not, with respect to any confidential or secret engineering,
development or research work or with respect to any other confidential or secret
aspect of the business of the Company.
Consultant agrees that for a period of 36 months from the date hereof Consultant
shall not, directly or indirectly, without the prior written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant, agent
or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or participate
in any way in, consult with or render services for any person or entity (other
than Company), or any of the subsidiaries or affiliates of Company engaged in
any business in competition with the businesses presently conducted by Company,
or any of the subsidiaries or affiliates of Company. Notwithstanding anything in
this Section 23b to the contrary, nothing in this Agreement shall limit
Consultant's right to hold and make passive investments not in excess of the
outstanding Common Stock of any publicly traded entity.
7. Remedies. The Company may pursue any appropriate legal, equitable or
--------
other remedy, including injunctive relief, in respect of any failure to comply
with the provisions of Section 6 hereof, it being acknowledged by Consultant
that the remedy at law for any such failure would be inadequate.
8. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be one and the same instrument.
9. Modification. This Agreement may not be changed or terminated orally
------------
but only by an agreement in writing signed by the parties hereto.
10. Interpretation. Each party has cooperated in the drafting and
--------------
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
2.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NTN COMMUNICATIONS, INC.
By: _____________________________
AGREED:
_______________________________
Ronald E. Hogan
3.
<PAGE>
Exhibit 3.4
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made as of January 1, 1997
by and between NTN Communications, Inc., a Delaware corporation (the "Company"),
and Gerald P. McLaughlin ("Consultant").
1. Consulting Arrangement. The Company shall employ Consultant, and
----------------------
Consultant shall serve the Company as a Consultant.
2. Duties. Consultant will perform consulting services for the Company
------
regarding matters as may reasonably be requested from time to time by the
Company, provided that such requests shall not require a substantial portion of
Consultant's time.
3. Term. The term of the Agreement shall be for the three year period
----
commencing January 1, 1997 and ending on December 31, 1999.
4. Compensation. In consideration of Consultant's services pursuant to
------------
Paragraph 2 hereof, the Company hereby agrees that:
a. The expiration date of Consultant's existing option to purchase
75,000 shares of Common Stock of the Company with an exercise price of $4.50 per
share shall be extended to August 4, 2003;
b. The expiration date of Consultant's existing option to purchase
25,000 shares of Common Stock of the Company with an exercise price of $3.50 per
share shall be extended to November 4, 2006.
5. Expenses. All reasonable business expenses incident to the rendering
--------
of services by Consultant hereunder which are not extraordinary and have been
previously approved by the Company, will be paid or reimbursed by the Company
subject to the submission being in accordance with the Company's policies in
effect from time to time.
6. Non-Disclosure. Consultant will not at any time after the date of this
--------------
Agreement divulge, furnish, or make accessible to anyone (other than in the
regular course of business of the Company) any knowledge or information with
respect to confidential or secret processes, inventions, discoveries,
improvements, formulas, plans, material, devices, or ideas or other know how,
whether patentable or not, with respect to any confidential or secret
engineering, development or research work or with respect to any other
confidential or secret aspect of the business of the Company.
Consultant agrees that for a period of 36 months from the date hereof
Consultant shall not, directly or indirectly, without the prior written consent
of Company:
1.
<PAGE>
a. solicit, entice, persuade or induce any employee, consultant, agent
or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or participate
in any way in, consult with or render services for any person or entity (other
than Company), or any of the subsidiaries or affiliates of Company engaged in
any business in competition with the businesses presently conducted by Company,
or any of the subsidiaries or affiliates of Company. Notwithstanding anything in
this Section 6b to the contrary, nothing in this Agreement shall limit
Consultant's right to hold and make passive investments not in excess of 2-1/2%
of the outstanding Common Stock of any publicly traded entity.
7. Remedies. The Company may pursue any appropriate legal, equitable or
--------
other remedy, including injunctive relief, in respect of any failure to comply
with the provisions of Section 6 hereof, it being acknowledged by Consultant
that the remedy at law for any such failure would be inadequate.
8. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be one and the same instrument.
9. Modification. This Agreement may not be changed or terminated orally
------------
but only by an agreement in writing signed by the parties hereto.
10. Interpretation. Each party has cooperated in the drafting and
--------------
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NTN COMMUNICATIONS, INC.
By: _____________________________
AGREED:
_______________________________
Gerald P. McLaughlin
2.
<PAGE>
EXHIBIT 3.5
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made as of March 14, 1997
by and between NTN Communications, Inc., a Delaware corporation (the "Company"),
and Donald Klosterman ("Consultant").
1. Consulting Arrangement. The Company shall employ Consultant, and
----------------------
Consultant shall serve the Company as a Consultant.
2. Duties. Consultant will perform consulting services for the Company
------
regarding the Company's marketing plans and the Company's relationship with the
National Football League.
3. Term. The term of the Agreement shall be for the period commencing
----
March 14, 1997 and ending on December 31, 1999.
4. Compensation. Consultant is presently indebted to the Company in the
------------
amount of $1,179,043 plus accrued interest. In consideration of Consultant's
services pursuant to Paragraph 2 hereof, the Company shall agree to cancel and
forgive such indebtedness (including accrued interest) over a three year period
as follows: 1/3rd in 1997, 1/3rd in 1998 and 1/3rd in 1999. In the event of
Consultant's death during the term hereof the Company agrees that such
indebtedness shall be forgiven in full. In addition, Consultant owns 100,000
options to purchase the Company's Common Stock at $8.25 per share and 50,000
options to purchase the Company's Common Stock at $5.75 per share. All of such
options shall be repriced so as to be exercisable at $4.00 per share and the
terms of all such options shall be extended to January 1, 2002. Also, Consultant
owns 200,000 warrants to purchase the Company's Common Stock at $2.00 per share.
The expiration date of such warrants shall be extended from June 15, 1997 to
June 15, 2002.
5. Expenses. All reasonable and pre-approved business expenses incident
--------
to the rendering of services by Consultant hereunder will be paid or reimbursed
by the Company subject to the submission being in accordance with the Company's
policies in effect from time to time.
6. Non-Disclosure. Consultant will not at any time after the date of
--------------
this Agreement divulge, furnish, or make accessible to anyone (other than in the
regular course of business of the Company) any knowledge or information with
respect to confidential or secret processes, inventions, discoveries,
improvements, formulas, plans, material, devices, or ideas or other know how,
whether patentable or not, with respect to any confidential or secret
engineering, development or research work or with respect to any other
confidential or secret aspect of the business of the Company.
1.
<PAGE>
7. Remedies. The Company may pursue any appropriate legal, equitable or
--------
other remedy, including injunctive relief, in respect of any failure to comply
with the provisions of Section 6 hereof, it being acknowledged by Consultant
that the remedy at law for any such failure would be inadequate.
8. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be one and the same instrument.
9. Modification. This Agreement may not be changed or terminated orally
------------
but only by an agreement in writing signed by the parties hereto.
10. Interpretation. Each party has cooperated in the drafting and
--------------
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NTN COMMUNICATIONS. INC.
By: /s/ Gerald Sokol, Jr.
---------------------------
Gerald Sokol, Jr.
AGREED:
/s/ Donald Klosterman
- -------------------------------
Donald Klosterman
2
<PAGE>
Exhibit 4.1
GENERAL RELEASE
---------------
1. Parties. The parties to this General Release ("Release") are NTN
-------
Communications, Inc. ("Company") and Patrick J. Downs, an individual ("P.
Downs").
2. Background and Consideration. Company and P. Downs entered into a
----------------------------
Resignation and General Release Agreement (the "Agreement") pursuant to which
Company agreed, inter alia, to execute and deliver this Release to P. Downs.
----------
In consideration of the promises made herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as set forth below.
3. General Release. Except as to Company's rights under the Agreement,
---------------
Company for itself, its employees, agents, attorneys, joint venturers,
successors and assigns, hereby discharges and releases P. Downs and his
employees, agents, joint venturers, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature, at
law or in equity, known or unknown, matured or unmatured, foreseeable or
unforeseeable which Company now has, ever had, or may have, against P. Downs by
reason of any matter whatsoever occurring or existing up to the date of this
Release, and except insofar as may be necessary for Company to enforce its
rights pursuant to the Agreement. Company hereby covenants with P. Downs that
it will forever refrain from instituting, pursuing, or in any way aiding any
claim or demand arising out of, in any way related to, or hereafter to arise out
of, any matters hereinbefore referred to and that this Release may be pleaded as
a full and complete defense to any claim, demand, action or other proceeding
which may be brought by, or on behalf of, Company against P. Downs.
4. Unknown Claims. It is understood and agreed that this Release extends
--------------
to all claims of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, and all rights under Section 1542 of the California Civil Code
are hereby expressly waived.
Section 1542 of the California Civil Code, referred to above, reads as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
5. Enforcement of Release. If any action at law or in equity, including
----------------------
an action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this Release, the prevailing party shall be entitled
to costs in bringing and prosecuting said action, including a reasonable amount
for attorneys' fees.
1.
<PAGE>
5. Governing Law. California law will govern this Release.
-------------
IN WITNESS WHEREOF, the undersigned have hereunto affixed our signatures
this _____ day of February 1997.
NTN COMMUNICATIONS, INC.
By:
---------------------------------------
------------------------------------------
Patrick J. Downs
2.
<PAGE>
SETTLEMENT TERMS
----------------
PAT DOWNS (Remains a Director)
- ---------
1. Pay out 3 year term of contract over 36 months ($18,164.16 per month in
1997, $20,616.32 in 1998 and $23,399.53 in 1999) (based on raises of 13-
1/2% per year).
2. Pay out accrued vacation of $177,137 payable as follows: 1/3 on signing,
1/3 on 1/1/98 and 1/3 on 1/1/99.
3. Pay out of $86,705.26 for deferred compensation payable as follows: 1/3 on
signing, 1/3 on 1/1/98 and 1/3 on 1/1/99.
4. Provide medical insurance - 3 years.
5. Provide life insurance - 3 years.
6. Provide $500 per month car allowance - 3 years.
7. Compensate as outside Director, as applicable.
8. Return the following options to NTN for cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
--------------- -------------- ---------------
<S> <C> <C>
50,000 $7.25 8/11/98
185,000 $6.50 11/28/99
200,000 $7.25 8/11/98
15,000 $6.50 11/28/99
234,000 $4.75 1/15/98
</TABLE>
9. Vest and extend the following options and warrants:
<TABLE>
<CAPTION>
From To
---- --
<S> <C> <C>
100,000 options @ $4.75 1/15/98 1/15/03
200,000 warrants @ $2.00 6/15/97 6/15/02
</TABLE>
10. Keep intact the following option; Company to waive provision requiring
exercise within specified time period following termination:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
200,000 $4.50 8/04/03
200,000 $3.50 11/04/06
</TABLE>
11. Forgive tax note $680,043.54
12. Forgive other loan $250,834.93
13. Mutual release
3.
<PAGE>
Exhibit 4.2
GENERAL RELEASE
---------------
1. Parties. The parties to this General Release ("Release") are NTN
-------
Communications, Inc. ("Company") and Daniel C. Downs, an individual ("D.
Downs").
2. Background and Consideration. Company and D. Downs entered into a
----------------------------
Resignation and General Release Agreement (the "Agreement") pursuant to which
Company agreed, inter alia, to execute and deliver this Release to D. Downs.
----------
In consideration of the promises made herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as set forth below.
3. General Release. Except as to Company's rights under the Agreement,
---------------
Company for itself, its employees, agents, attorneys, joint venturers,
successors and assigns, hereby discharges and releases D. Downs and his
employees, agents, joint venturers, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature, at
law or in equity, known or unknown, matured or unmatured, foreseeable or
unforeseeable which Company now has, ever had, or may have, against D. Downs by
reason of any matter whatsoever occurring or existing up to the date of this
Release, and except insofar as may be necessary for Company to enforce its
rights pursuant to the Agreement. Company hereby covenants with D. Downs that
it will forever refrain from instituting, pursuing, or in any way aiding any
claim or demand arising out of, in any way related to, or hereafter to arise out
of, any matters hereinbefore referred to and that this Release may be pleaded as
a full and complete defense to any claim, demand, action or other proceeding
which may be brought by, or on behalf of, Company against D. Downs.
4. Unknown Claims. It is understood and agreed that this Release extends
--------------
to all claims of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, and all rights under Section 1542 of the California Civil Code
are hereby expressly waived.
Section 1542 of the California Civil Code, referred to above, reads as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
5. Enforcement of Release. If any action at law or in equity, including
----------------------
an action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this Release, the prevailing party shall be entitled
to costs in bringing and prosecuting said action, including a reasonable amount
for attorneys' fees.
6. Governing Law. California law will govern this Release.
-------------
1.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto affixed our signatures
this _____ day of February 1997.
NTN COMMUNICATIONS, INC.
By:
---------------------------------
------------------------------------
Daniel C. Downs
2.
<PAGE>
SETTLEMENT TERMS
----------------
DAN DOWNS (Remains a Director)
- ---------
1. Pay out 3 year term of contract over 36 months ($18,164.16 per month in
1997, $20,616.32 in 1998 and $23,399.53 in 1999) (based on raises of 13-
1/2% per year).
2. Pay out accrued vacation of $152,761.69 payable 1/3 on signing; 1/3 on
1/1/98 and 1/3 on 1/1/99
3. Pay out lump sum of $121,387.35 for deferred compensation.
4. Provide medical insurance - 3 years.
5. Provide life insurance - 3 years.
6. Provide $500 per month car allowance - 3 years.
7. Compensate as outside Director, if applicable.
8. Return the following options to NTN for cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
50,000 $7.25 8/11/98
185,000 $8.00 11/28/99
200,000 $7.25 8/11/98
15,000 $8.00 11/28/99
184,000 $4.75 1/15/98
</TABLE>
9. Vest and extend the following options and warrants:
<TABLE>
<CAPTION>
From To
---- --
<S> <C> <C>
50,000 options @ $4.75 1/15/98 1/15/03
200,000 warrants @ $2.00 6/15/97 6/15/02
</TABLE>
10. Keep intact the following options, Company to waive provision requiring
exercise within specified period of time following termination:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
200,000 $4.50 8/04/03
200,000 $3.50 11/04/06
150,000 $4.75 1/15/98
</TABLE>
11. Forgive tax note $629,140.54
12. Mutual release.
3.
<PAGE>
Exhibit 4.3
GENERAL RELEASE
---------------
1. Parties. The parties to this General Release ("Release") are NTN
Communications, Inc. ("Company") and Ronald E. Hogan, an individual ("R.
Hogan").
2. Background and Consideration. Company and R. Hogan entered into a
----------------------------
Resignation and General Release Agreement (the "Agreement") pursuant to which
Company agreed, inter alia, to execute and deliver this Release to R. Hogan.
----------
In consideration of the promises made herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as set forth below.
3. General Release. Except as to Company's rights under the Agreement,
---------------
Company for itself, its employees, agents, attorneys, joint venturers,
successors and assigns, hereby discharges and releases R. Hogan and his
employees, agents, joint venturers, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature, at
law or in equity, known or unknown, matured or unmatured, foreseeable or
unforeseeable which Company now has, ever had, or may have, against R. Hogan by
reason of any matter whatsoever occurring or existing up to the date of this
Release, and except insofar as may be necessary for Company to enforce its
rights pursuant to the Agreement. Company hereby covenants with R. Hogan that
it will forever refrain from instituting, pursuing, or in any way aiding any
claim or demand arising out of, in any way related to, or hereafter to arise out
of, any matters hereinbefore referred to and that this Release may be pleaded as
a full and complete defense to any claim, demand, action or other proceeding
which may be brought by, or on behalf of, Company against R. Hogan.
4. Unknown Claims. It is understood and agreed that this Release extends
--------------
to all claims of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, and all rights under Section 1542 of the California Civil Code
are hereby expressly waived.
Section 1542 of the California Civil Code, referred to above, reads as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
5. Enforcement of Release. If any action at law or in equity, including
----------------------
an action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this Release, the prevailing party shall be entitled
to costs in bringing and prosecuting said action, including a reasonable amount
for attorneys' fees.
1.
<PAGE>
6. Governing Law. California law will govern this Release.
-------------
IN WITNESS WHEREOF, the undersigned have hereunto affixed our signatures
this _____ day of February 1997.
NTN COMMUNICATIONS, INC.
By: _____________________________
_________________________________
RONALD E. HOGAN
2.
<PAGE>
SETTLEMENT TERMS
----------------
RON HOGAN (Complete Termination)
- ---------
1. Pay out 3 year term of contract over 36 months ($14,204.24 per month in
1997, $16,121.81 in 1998 and $18,298.26 in 1999) (based on raises of 13-
1/2% per year).
2. Pay out accrued vacation of $134,475.39 over 18 months @ $7,470.86.
3. Pay out lump sum of $138,729.00 for deferred compensation.
4. Provide medical insurance - 3 years.
5. Provide life insurance - 3 years.
6. Return the following options to NTN for cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
30,000 $7.250 8/11/98
20,000 $3.500 11/4/06
120,000 $7.250 8/11/98
50,000 $5.750 4/1/99
25,000 $6.375 7/5/01
</TABLE>
7. Vest and extend the following options and warrants:
<TABLE>
<CAPTION>
From To
---- --
<S> <C> <C>
90,000 options @ $4.75 1/15/98 1/15/03
73,000 options @ $4.75 1/15/98 1/15/03
200,000 warrants @ $2.00 6/15/97 6/15/02
</TABLE>
8. Keep intact and vest the following options:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
50,000 $4.50 8/04/02
</TABLE>
9. Forgive tax note $445,383.97
10. Mutual release.
3.
<PAGE>
Exhibit 4.4
GENERAL RELEASE
---------------
1. Parties. The parties to this General Release ("Release") are NTN
-------
Communications, Inc. ("Company") and Gerald P. McLaughlin, an individual
("McLaughlin").
2. Background and Consideration. Company and McLaughlin entered into a
----------------------------
Resignation and General Release Agreement (the "Agreement") pursuant to which
Company agreed, inter alia, to execute and deliver this Release to McLaughlin.
----------
In consideration of the promises made herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as set forth below.
3. General Release. Except as to Company's rights under the Agreement,
---------------
Company for itself, its employees, agents, attorneys, joint venturers,
successors and assigns, hereby discharges and releases McLaughlin and his
employees, agents, joint venturers, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature, at
law or in equity, known or unknown, matured or unmatured, foreseeable or
unforeseeable which Company now has, ever had, or may have, against McLaughlin
by reason of any matter whatsoever occurring or existing up to the date of this
Release, and except insofar as may be necessary for Company to enforce its
rights pursuant to the Agreement. Company hereby covenants with McLaughlin that
it will forever refrain from instituting, pursuing, or in any way aiding any
claim or demand arising out of, in any way related to, or hereafter to arise out
of, any matters hereinbefore referred to and that this Release may be pleaded as
a full and complete defense to any claim, demand, action or other proceeding
which may be brought by, or on behalf of, Company against McLaughlin.
4. Unknown Claims. It is understood and agreed that this Release extends
--------------
to all claims of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, and all rights under Section 1542 of the California Civil Code
are hereby expressly waived.
Section 1542 of the California Civil Code, referred to above, reads as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
5. Enforcement of Release. If any action at law or in equity, including
----------------------
an action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this
1.
<PAGE>
Release, the prevailing party shall be entitled to costs in bringing and
prosecuting said action, including a reasonable amount for attorneys' fees.
6. Governing Law. California law will govern this Release.
-------------
IN WITNESS WHEREOF, the undersigned have hereunto affixed our signatures
this _____ day of February 1997.
NTN COMMUNICATIONS, INC.
By: _____________________________
_________________________________
Gerald P. McLaughlin
2.
<PAGE>
SETTLEMENT TERMS
----------------
JERRY McLAUGHLIN (Complete Termination)
- ----------------
1. Pay out 3 year term of contract over 36 months ($19,788.53 per month in
1997, $22,459.93 per month in 1998 and $25,492.08 per month in 1999) (based
on raises of 13-1/2% per year).
2. Pay out accrued vacation of $93,671.34 over 18 months @ $5,203.96 per
month.
3. Pay out lump sum of $233,535.60 for deferred compensation.
4. Provide medical insurance - 3 years.
5. Provide life insurance - 3 years.
6. Provide $500 per month car allowance - 3 years.
7. Forgive tax note $492,690.23
8. Mutual Release
9. Return the following options to NTN for cancellation:
No. of Shares Exercise Price
------------- --------------
30,000 $7.25
75,000 $6.375
95,000 $7.25
10. NTN to issue a new fully vested option for 150,000 shares at an exercise
price of $3.875 per share expiring on December 31, 2001.
11. Vest the following options:
75,000 options @ $4.50 to 8/4/03
25,000 options @ $3.50 to 11/4/06
3.
<PAGE>
Exhibit 4.5
GENERAL RELEASE
---------------
1. Parties. The parties to this General Release ("Release") are NTN
-------
Communications, Inc. ("Company") and Michael J. Downs, an individual ("M.
Downs").
2. Background and Consideration. Company and M. Downs entered into a
----------------------------
Resignation and General Release Agreement (the "Agreement") pursuant to which
Company agreed, inter alia, to execute and deliver this Release to M. Downs.
----------
In consideration of the promises made herein and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as set forth below.
3. General Release. Except as to Company's rights under the Agreement,
---------------
Company for itself, its employees, agents, attorneys, joint venturers,
successors and assigns, hereby discharges and releases M. Downs and his
employees, agents, joint venturers, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature, at
law or in equity, known or unknown, matured or unmatured, foreseeable or
unforeseeable which Company now has, ever had, or may have, against M. Downs by
reason of any matter whatsoever occurring or existing up to the date of this
Release, and except insofar as may be necessary for Company to enforce its
rights pursuant to the Agreement. Company hereby covenants with M. Downs that
it will forever refrain from instituting, pursuing, or in any way aiding any
claim or demand arising out of, in any way related to, or hereafter to arise out
of, any matters hereinbefore referred to and that this Release may be pleaded as
a full and complete defense to any claim, demand, action or other proceeding
which may be brought by, or on behalf of, Company against M. Downs.
4. Unknown Claims. It is understood and agreed that this Release extends
--------------
to all claims of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, and all rights under Section 1542 of the California Civil Code
are hereby expressly waived.
Section 1542 of the California Civil Code, referred to above, reads as
follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
5. Enforcement of Release. If any action at law or in equity, including
----------------------
an action for declaratory or injunctive relief, is brought to enforce or
interpret the provisions of this Release, the prevailing party shall be entitled
to costs in bringing and prosecuting said action, including a reasonable amount
for attorneys' fees.
1.
<PAGE>
6. Governing Law. California law will govern this Release.
-------------
IN WITNESS WHEREOF, the undersigned have hereunto affixed our signatures
this _____ day of February 1997.
NTN COMMUNICATIONS, INC.
By:
----------------------------------
-------------------------------------
MICHAEL J. DOWNS
2.
<PAGE>
SETTLEMENT TERMS
----------------
MIKE DOWNS (Complete Termination)
- ----------
1. Pay out remainder of term of contract through October 31, 1998 over 22
months ($12,500.00 per month in 1997, and $12,500 per month through October
31, 1998).
2. Pay out accrued vacation of $19,352 over 22 months @ $879.67 per month.
3. Pay COBRA coverage through April 30, 1997.
4. Mutual Release
5. Return the following options to NTN for cancellation:
<TABLE>
<CAPTION>
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
<S> <C> <C>
30,000 $7.25 8/11/98
35,000 $4.75 1/5/98
70,000 $7.25 8/11/98
50,000 $5.75 4/1/99
25,000 $6.375 7/5/01
</TABLE>
6. Keep the following warrants:
25,000 warrants @ $4.75 to 1/15/98
3.
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact:
Kristi Nichols, NTN Investor Relations Manager, 619/438-7400
Judy Piercey, NTN Director of Communications, 619/930-3099
NTN Communications Reports Major Executive Reorganization:
Chairman & CEO Pat Downs Resigns; President Dan Downs Resigns;
Gerald Sokol, COO & CFO, is Named President
CARLSDAD, Calif - March 5, 1997 - NTN Communications, Inc. (AMEX: NTN) today
announced the resignations of Patrick J. Downs as Chairman and Chief Executive
Officer, and Daniel C. Downs as President. Both will continue to serve on NTN's
Board of Directors.
Ed Frazier, a Director of NTN and former President and Chief Executive Officer
of Liberty Sports, has been named Acting Chairman. Gerald Sokol, Jr., currently
Chief Financial Officer and Chief Operating Officer, has also been named
President of the company.
In making the announcement, Patrick J. Downs, outgoing Chairman, said, "Both Dan
and I have been working this past year to bring in new management to take the
company to the next "level". It is time for the founders to leave the day-to-day
management to others. We are delighted with the vote of confidence the Board has
given Gerald Sokol by naming him President."
NTN further announced the formation of an executive committee comprising Acting
Chairman Ed Frazier and Robert M. Bennett, former President of Metromedia
Broadcasting. One of the committee's responsibilities will be to search for a
new NTN Chairman and CEO.
NTN's Board of Directors has approved contract settlement agreements reached
with Patrick J. Downs, Daniel C. Downs and several other senior management
personnel. Substantial reserves for the settlements have been established and
will be reflected along with other significant reserves in the Company's 1996
fourth quarter results.
NTN Communications, Inc., a leading producer and programmer of two-way
(interactive) television, online and Internet entertainment, broadcasts to a
variety of delivery platforms 24 hours a day, NTN's content is among the most
popular destinations on computer online and interactive cable services. In
addition, the NTN Entertainment Network(R) distributes programming to more than
15 million participants per month at restaurants, sports bars, hotel lounges,
military bases, colleges and other group viewing locations throughout North
America.
[LETTERHEAD OF NTN COMMUNICATIONS APPEARS HERE]
<PAGE>
EXHIBIT 99.2
[LETTERHEAD OF NTN COMMUNICATIONS, INC.]
FOR IMMEDIATE RELEASE
Contact: Kristi Nichols, 619/438-7400, NTN Communications, Inc.
NTN Expects Fourth Quarter Loss
CARLSBAD, Calif. - March 20, 1997 - Leading interactive producer and programmer
NTN Communications, Inc. (AMEX: NTN) announced today that it expects to report a
fourth quarter loss of approximately $16 million. The Company also reported it
anticipates recording charges of approximately $5 million in the first quarter
of 1997 related to recent executive management resignations. In connection with
such resignations, NTN reported that it received approximately 2.1 million
options back from officers who left the company.
Gerald Sokol, Jr., NTN President and Chief Operating Officer, noted that the
expected fourth quarter loss of $16 million will include $4.3 million relating
to cancellation of indebtedness as a result of recent executive management
resignations and other charges related to litigation costs, expenses as a
consequence of the buyback of equipment in connection with its discontinuance of
certain sale-leaseback transactions, and charges required under Financial
Accounting Standards Board Statement No. 123 in connection with the issuance of
warrants to purchase the company's common stock.
Sokol added that the company expects to incur a loss from continuing operations
in the first three months, and possibly the first six months, of 1997 as a
result of the delay in receiving FCC approval for its Playmaker(R) keypad, an
unusually large number of seasonal disconnects, hardware related costs, further
expenses related to the management reorganization, and charges required under
Financial Accounting Standards Board Statement No. 123 related to the issuance
of additional warrants. The company recently began new shipments of Playmakers
following FCC approval in mid-January.
"As a management team, we are totally committed to the Company and believe
wholeheartedly in its future. Changes have been made, and more changes will be
necessary to produce a vibrant and successful company. Management is working
diligently to streamline operations, reduce costs and develop an executable
strategic plan," said Sokol. "NTN has a unique market opportunity before it,
and we certainly appreciate our shareholders' patience."
NTN Communications, Inc. a leading producer and programmer of two-way
(interactive) television, online and Internet entertainment, broadcasts to a
variety of delivery platforms 24 hours a day. NTN's content is a popular
destination on computer online and interactive cable services. In addition, the
NTN Entertainment Network(R) distributes programming to more than 15 million
participants per month at restaurants, sports bars, hotel lounges, military
bases, colleges and other group viewing locations, throughout North America.
# # #
Except for the historical information contained herein, the matters discussed in
this release are forward looking statements that involve risks and uncertainties
including changing economic conditions, product demand and market acceptance
risks, the impact of competitive products and pricing and other risk factors
detailed in the Company's Securities and Exchange Commission filings, including
the Company's most recent Report on Form 10-Q for the quarter ending September
30, 1996.
