<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NTN Communications, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
NTN COMMUNICATIONS, INC.
5966 La Place Court
Carlsbad, California 92008
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 27, 1999
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the
"Annual Meeting") of NTN Communications, Inc. will be held at the offices of NTN
Communications, Inc., 5966 La Place Court, Carlsbad, California, at 10:00 A.M.
local time, on August 27, 1999, for the following purposes, as more fully
described in the attached Proxy Statement:
1. To elect three directors to hold office until the 2002 annual
meeting of stockholders;
2. To vote upon a stockholder proposal submitted pursuant to Rule
14a-8 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), urging the Board of Directors to
arrange for the prompt sale of the Company to the highest bidder;
and
3. To consider and act upon such other matters as may properly come
before the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on June 30, 1999
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting or at any adjournment thereof.
You are cordially invited to attend the Annual Meeting in person. In
order to ensure your representation at the meeting, however, please promptly
complete, date, sign, and return the enclosed proxy in the accompanying
envelope. The prompt return of your proxy will help to save expenses involved in
further communication. Your proxy can be revoked as described in the Proxy
Statement and will not affect your right to vote in person should you decide to
attend the Annual Meeting.
By Order of the Board of Directors
Kendra Berger
Secretary
Carlsbad, California
July 19, 1999
<PAGE> 3
NTN COMMUNICATIONS, INC.
5966 La Place Court
Carlsbad, California 92008
--------------
PROXY STATEMENT
ANNUAL MEETING TO BE HELD AUGUST 27, 1999
--------------
SOLICITATION AND VOTING
GENERAL
The accompanying proxy is solicited by the Board of Directors
(sometimes hereinafter referred to as the "Board") of NTN Communications, Inc.
("NTN" or the "Company") for use at the annual meeting of stockholders to be
held at the offices of NTN, 5966 La Place Court, Carlsbad, California, at 10:00
A.M., local time, on August 27, 1999, and at any adjournment or postponement
thereof (the "Annual Meeting"). The accompanying proxy names V. Tyrone Lam and
Kendra Berger as proxies for purposes of the Annual Meeting. This Proxy
Statement, together with the accompanying proxy, is first being mailed to
stockholders on or about July 30, 1999.
All shares of common stock of NTN represented by a properly completed
proxy received in time for the Annual Meeting will be voted by the proxy holders
as directed in the proxy. If no direction is given in the proxy, it will be
voted "FOR" the election as directors of the nominees named in this Proxy
Statement and "AGAINST" the proposal submitted under Rule 14a-8 promulgated
under the Securities Exchange Act of 1934, as amended, urging the Board of
Directors to arrange for the prompt sale of the Company to the highest bidder.
With respect to any other item of business that may come before the Annual
Meeting, the proxy holders will vote the proxy in accordance with their best
judgment.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it has been exercised by
giving written notice of revocation to the Secretary of NTN, by executing and
delivering to the Secretary a proxy dated as of a later date, or by attending
the Annual Meeting and voting in person. If, however, your shares are held of
record by a broker, bank or other nominee and you wish to vote in person at the
Annual Meeting, you must obtain from the record holder a proxy issued in your
name. Attendance at the Annual Meeting, by itself, will not serve to revoke a
proxy.
VOTING SECURITIES
NTN has one class of voting stock outstanding, designated common stock,
$.005 par value per share ("Common Stock"). Each share of Common Stock is
entitled to one vote for each director to be elected and each other matter to be
voted on at the Annual Meeting. Only holders of record of Common Stock at the
close of business on June 30, 1999 (the "Record Date") are entitled to notice of
and to vote at the Annual Meeting. There were 28,406,472 shares of Common Stock
outstanding as of the Record Date. The presence, in person or by proxy, at the
Annual Meeting of stockholders entitled to cast at least a majority of the votes
entitled to be cast by all stockholders will constitute a quorum for the
transaction of business at the Annual Meeting. All votes will be tabulated by
the inspector of election appointed for the Annual Meeting, who will separately
tabulate the affirmative and negative votes, abstentions and broker non-votes.
1.
<PAGE> 4
Directors are elected by a plurality vote. All other matters submitted
for stockholder approval at the Annual Meeting will be decided by the cumulative
vote of a majority of shares present in person or represented by proxy and
entitled to vote on each such matter. Abstentions will be counted for purposes
of determining the presence of a quorum and will have the same effect as
negative votes. Broker non-votes also will count towards establishing a quorum,
but will not count for purposes of determining whether a matter has been
approved.
SOLICITATION
The cost of soliciting proxies will be borne by NTN. This Proxy
Statement and the accompanying materials, in addition to being mailed directly
to stockholders, will be distributed through brokers, custodians and other
nominees to beneficial owners of shares of Common Stock. NTN may reimburse such
parties for their expenses in forwarding solicitation materials to beneficial
owners. Directors, officers or regular employees of NTN may follow up the
mailing to stockholders by telephone, telegram or personal solicitations, but no
special or additional compensation will be paid to directors, officers or
employees for doing so.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals intended to be included in NTN's proxy materials
for the 2000 annual meeting of stockholders of NTN must be received by April 1,
2000. Such proposals should be addressed to the Secretary of NTN.
With respect to any stockholder proposals to be presented at the 2000
annual meeting which are not included in the 2000 proxy materials, management
proxies for the 2000 meeting will be entitled to exercise their discretionary
authority to vote on such proposals notwithstanding that they are not discussed
in the proxy materials unless the proponent notifies NTN of such proposal by not
later than June 15, 2000.
PROPOSAL 1
ELECTION OF DIRECTORS
The Bylaws of NTN provide that the Board of Directors is to consist of
not less than five nor more than thirteen directors, with the exact number of
directors within such range to be specified by the Board. Prior to February
1999, there were six authorized directors. In February 1999, Gerald Sokol, Jr.
resigned as a director. The Board of Directors currently consists of five
members.
The Bylaws of NTN provide that the Board is to be classified into
three classes, as nearly equal in number as possible, with each class having a
three-year term. Vacancies on the Board (including vacancies created by an
increase in the authorized number of directors) may be filled by the Board. A
director appointed by the Board to fill a vacancy would serve for the remainder
of the full term of the directors of the class in which the vacancy occurs and
until his or her successor is elected and qualified.
NOMINEES FOR ELECTION FOR TERM EXPIRING IN 2002
Three directors are subject to election at the Annual Meeting. The
Board of Directors has selected the following nominees for election as directors
of the class of directors to be elected at the Annual Meeting. If elected, the
following nominees will hold office until the annual meeting of stockholders in
2002 and until their respective successors are duly elected and qualified.
BARRY BERGSMAN, age 62, has been a director since August 1998. From
1985 to the present, Mr. Bergsman has been president of Intertel Communications,
Inc., a company that focused on uses of the
2.
<PAGE> 5
telephone and interactive technology for promotion, entertainment and
information. Prior to 1985, Mr. Bergsman held positions as president of a
television production and syndication company and as an executive with CBS
Corporation.
STANLEY B. KINSEY, age 45, was appointed as a director in November
1997. Mr. Kinsey was appointed Chairman and Chief Executive Officer of the
Company in October 1998. From 1980 to 1985, Mr. Kinsey was a senior executive
with the Walt Disney Company. In 1985, Mr. Kinsey left his position as senior
vice president of operations and new technologies for the Walt Disney Studio to
co-found IWERKS Entertainment, a high-technology entertainment company. Mr.
Kinsey was chairman and Chief Executive Officer at IWERKS from its inception
until 1995, when he resigned.
DONALD C. KLOSTERMAN, age 69, has been a director of the Company or its
predecessor since 1985. He served as president of Pacific Casino Management, a
private company engaged in the operation of the Hollywood Park Casino from June
1994 to November 1995. Mr. Klosterman is currently a director of Aldila, Inc., a
public company engaged in the business of designing, manufacturing and marketing
graphite golf club shafts and a director of National Registry, Inc., a public
company that develops electronic identification systems and services for
personal computers. Mr. Klosterman served as Chairman of the Board of the
Company from 1985 until April 1994. Since 1990, he also has acted as a
consultant to the Company.
The nominees have indicated a willingness to serve as directors. If
any of them should decline or be unable to act as a director, however, the proxy
holders will vote for the election of another person as the Board of Directors
recommends.
Nominees receiving the highest number of affirmative votes cast at the
Annual Meeting, up to the number of directors to be elected, will be elected as
directors. Proxies may not be voted for a greater number of persons than the
number of nominees named herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED. PROXIES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES NAMED
IF NO DIRECTION IS GIVEN IN THE PROXIES.
3.
<PAGE> 6
The following biographical information is furnished with respect to
the other current directors of NTN:
DIRECTORS WHOSE TERM EXPIRES IN 2001
ROBERT M. BENNETT, age 72, has been a director since August 1996. From
1991 to the present, Mr. Bennett has been president of Trans Atlantic
Entertainment, a film distribution company. Since 1989, Mr. Bennett also has
been president of Bennett Productions, Inc., a film and video production
company.
ESTHER RODRIGUEZ, age 57, was appointed as a director of the Company
in September 1997. She retired as a vice president of General Instrument Corp.,
a publicly held provider of integral and interactive broadcast access solutions
in November 1996, after having served in various executive capacities since
joining General Instrument Corp. in 1987. For the two years prior to her
retirement, Ms. Rodriguez served as head of worldwide business development and
sales teams for private commercial business and educational network systems.
Following her retirement, she founded and has served as Chief Executive Officer
of Rodriguez Consulting Group, a private management consulting firm.
MEETINGS AND ORGANIZATION
The business affairs of NTN are managed by and under the direction of
the Board of Directors. During the fiscal year ended December 31, 1998, the
Board met on sixteen occasions.
The Board has standing Audit and Compensation Committees. The primary
functions of the Audit Committee are to periodically review NTN's accounting and
financial reporting and control policies and procedures, to recommend to the
Board the firm of certified public accountants to be retained as NTN's
independent auditors, and to review NTN policies and procedures relating to
business conduct and conflicts of interest. The Audit Committee is currently
composed of two non-employee directors: Messrs. Bennett and Bergsman. The Audit
Committee met once in 1998.
In July of 1999, the Audit Committee proposed a formal written
charter, subject to full Board approval at the next regular meeting of
directors. The formal written charter specifies the scope of the Audit
Committee's responsibilities, including, but not limited to, structure, process
and membership requirements, and how these responsibilities will be carried out.
The primary functions of the Compensation Committee are to review and
advise the Board on salaries, bonuses and awards of stock options to NTN's
officers and other executive compensation matters. The Compensation Committee is
currently composed of two non-employee directors: Ms. Rodriguez and Mr.
Klosterman. The Compensation Committee met on three occasions in 1998.
During 1998, each director attended at least 75% of the meetings of the
Board and of each Committee of the Board on which he or she served.
BOARD NOMINATIONS
The Board has no standing Nominating Committee. The Board in its
entirety acts upon matters that would otherwise be the responsibility of such a
committee. The Board will consider as prospective nominees for election as
directors persons recommended by NTN's stockholders. Any such recommendations
should be in writing and should be mailed or delivered to NTN, marked for the
attention of the Secretary of NTN, on or before the date for timely submission
of stockholder proposals. See "Stockholder Proposals for 2000 Annual Meeting."
4.
<PAGE> 7
EXECUTIVE OFFICERS
The following table lists the names of the executive officers of NTN,
along with their respective ages, positions and offices held with NTN:
<TABLE>
<CAPTION>
Name Age Position(s) Held
- ---- --- ----------------
<S> <C> <C>
Stanley B. Kinsey 45 Chief Executive Officer and Chairman of the Board
Kendra Berger 32 Chief Financial Officer and Corporate Secretary
V. Tyrone Lam 37 Executive Vice President
Bennett Letwin 33 Vice President, Interactive Technologies and
Business Systems
</TABLE>
See "Election of Directors" for Mr. Kinsey's biography. The following
biographical information is furnished with respect to the other executive
officers of NTN:
KENDRA BERGER was appointed Vice President, Finance and Controller in
July 1998. In February 1999, she was appointed Chief Financial Officer and
Corporate Secretary of the Company. Ms. Berger previously served as a controller
for FPA Medical Management, Inc., a public national healthcare company. From
August 1989 to July 1996, Ms. Berger, a certified public accountant, held
positions with the public accounting firm of Price Waterhouse LLP.
V. TYRONE LAM has served as Executive Vice President of the Company
since September 1998. He was appointed Vice President and General Manager of the
NTN Network in September 1997. Prior to that time, he served as Associate Vice
President of Marketing from February 1997. Mr. Lam joined NTN in December 1994
in a marketing position. From April 1992 to December 1994, Mr. Lam managed the
interactive television sports and games development for the EON Corporation.
BENNETT LETWIN joined NTN in November 1998 as Vice President of
Interactive Technologies and Business Systems. Prior to that time, Mr. Letwin
was the architect for some of the earliest electronic malls, electronic software
distribution systems, and live Internet video broadcast platform for Global 2000
clients at General Electric Information Services.
5.
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows the compensation paid
or accrued as of each of the last three fiscal years to all individuals who
served as the Chief Executive Officer of NTN during any portion of 1998 and the
other most highly compensated executive officers of NTN who were serving as
executive officers at the end of fiscal year 1998 whose total annual salary and
bonus exceeded $100,000 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary(1) Bonus Compensation Options
- --------------------------- ---- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Stanley B. Kinsey(2) 1998 $ 63,577 -- -- 1,300,000
Chief Executive Officer and 1997 -- -- -- --
Chairman of the Board 1996 -- -- -- --
Gerald Sokol, Jr.(3)............ 1998 $265,528 $231,791 $153,775(4) 500,000
Chief Executive Officer, 1997 240,662 335,500(5) 16,749(6) 600,000
President and Chief Financial 1996 87,423 -- 14,480(7) 875,000
Officer
V. Tyrone Lam (8)............... 1998 $147,115 $2,959 -- 285,000
Executive Vice President 1997 105,367 -- $4,575(9) 165,000
1996 75,177 -- 4,319(9) --
</TABLE>
- -----------------
(1) Includes amounts, if any, deferred under the Company's 401(k) Plan.
(2) Mr. Kinsey was appointed Chief Executive Officer in October 1998.
(3) Mr. Sokol resigned as a director and officer of the Company in January 1999.
(4) Includes compensation for directors fees of $24,000 and insurance premium
payments, adjusted for taxes, totaling $129,775 paid by the Company.
(5) Includes a $150,000 home loan made to Mr. Sokol in August 1996, which in
accordance with its terms was forgiven in March 1997, and bonuses
aggregating $185,500.
(6) Includes group insurance premiums and compensation of $12,000 for director's
fees. See "Director Compensation."
(7) Represents moving expenses paid or reimbursed by NTN in connection with Mr.
Sokol's joining NTN.
(8) Mr. Lam was an employee of NTN in previous years but was not an executive
officer until 1997.
(9) Represents group medical insurance premiums.
6.
<PAGE> 9
STOCK OPTION GRANTS
The following table contains information concerning grants of stock
options during fiscal 1998 with respect to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------------------------------
% of Total
Number of Shares Options Granted
Underlying to Employees Exercise Expiration Value of Grant
Name Options Granted In Fiscal Year Price Date At Date of Grant(1)
----------------------------- --------------- ---------------- -------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Stanley B. Kinsey............ 650,000(2) 19.76% $0.625 10/06/08 $377,891
650,000(2) 19.76% 1.00 10/06/98 $383,793
Gerald Sokol, Jr............. 500,000(2)(3) 15.2% 1.00 02/01/08 $502,250
V. Tyrone Lam................ 150,000(4) 4.56% 0.625 09/03/08 $ 92,735
215,000(4)(5) 6.53% 1.00 04/07/08 $159,244
135,000(4) 4.10% 1.375 04/07/08 $ 99,772
</TABLE>
- -------------
(1) The value on the date of grant was estimated using the Black Sholes
option-pricing model with the following assumptions: dividend yield 0%,
risk-free interest rates ranging from 4.15% to 5.26%, expected volatility
of 188% and expected option lives ranging from 3 years to 7 years.
(2) Represents options granted under NTN's 1995 Option Plan which become
exercisable in three equal installments on each of the first, second and
third anniversaries of the dates of grant.
(3) These options were subsequently canceled pursuant to the Resignation
Agreement entered into with Mr. Sokol in January 1999. In lieu of the
options canceled upon Mr. Sokol's resignation, he was granted an
immediately vested option to purchase 125,000 shares, with an expiration
date of January 18, 2000. See "Employment Agreements and Termination of
Employment and Change in Control Arrangements".
(4) Represents options granted under NTN's 1995 Option Plan which become
exercisable as to 25% of the total shares on the first anniversary of the
date of grant and will become exercisable as to an additional 1/36 of the
remaining shares at the end of each of the thirty-six calendar months
immediately following the first anniversary of the date of grant. All of
the options shown are subject to accelerated vesting in the event of a
change of control of the Company.
(5) Represents options issued in exchange for various previously granted
options with exercise prices ranging from $2.00 to $4.50.
7.
<PAGE> 10
STOCK OPTION EXERCISES AND OPTION VALUES
The following table contains information concerning stock options
exercised during 1998 and stock options which were unexercised at the end of
fiscal 1998 with respect to the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options At In-the-Money Options
Fiscal Year-End at Fiscal Year-End (1)
Shares Acquired Value ------------------------- -----------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ---------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanley B. Kinsey....... -- -- 33,333 1,366,667 * *
Gerald Sokol, Jr........ -- -- 1,175,000 800,000 * *
V. Tyrone Lam........... -- -- -- 500,000 * *
</TABLE>
- ----------------
(1) Represents the amount by which the aggregate market price on December 31,
1998 of the shares of NTN's Common Stock subject to such options exceeded
the respective exercise prices of such options. An asterisk denotes that
the respective exercise prices of the options shown exceeded the market
price of the underlying shares of Common Stock at December 31, 1998.
OPTION REPRICINGS
In April 1998, the Board approved the amendment of certain stock
options previously granted to the Company's employees, including Mr. Lam, to
reduce the exercise price of such options to $1.00 per share. The option
repricing was approved by the Board in light of the precipitous decline in the
market value of the Common Stock that had occurred since the options were
originally granted. The Board believed that the drop was due to conditions and
factors beyond the control or responsibility of the employees affected,
including Mr. Lam, and the result of the drop in the market price was that the
options were no longer affording an appropriate incentive to them to deal with
these preexisting factors and conditions. The Board may consider additional
repricings as appropriate to afford NTN's executive officers and other employees
incentives to continue to work to improve the performance of NTN.
The following table sets forth certain information with respect to the
repricing of Mr. Lam's options and other repricings of options held by the named
executive officers over the past ten years.
TEN YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Length of
Number of Exercise Original
Securities Market Price Price at Option Term
Underlying of Stock at Time of Remaining at
Options Time of Repricing New Date of
Repriced or Repricing or Or Exercise Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) Price ($) Amendment
- --------------------------------- ----------- ------------- ---------------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
V. Tyrone Lam 04/08/98 65,000 $0.75 $3.25 $1.00 9 years
Executive Vice President 04/08/98 40,000 0.75 2.81 1.00 9 years
04/08/98 5,000 0.75 4.50 1.00 5 years
04/08/98 5,000 0.75 3.50 1.00 9 years
04/08/98 100,000 0.75 2.00 1.00 10 years
Gerald Sokol, Jr................. 05/14/97 221,260 $2.81 $5.00 $2.81 9 years
Chief Executive Officer, 05/14/97 400,000 2.81 5.00 2.81 9 years
President and Chief 05/14/97 78,740 2.81 5.08 2.81 9 years
Financial Officer 05/14/97 175,000 2.81 3.50 2.81 10 years
05/14/97 600,000 2.81 4.00 2.81 10 years
</TABLE>
8.
<PAGE> 11
DIRECTOR COMPENSATION
During 1998, directors were entitled to receive compensation of $2,000
per month for their services as directors. In December 1997, the Board elected
to pay the 1998 fees in shares of treasury stock which were valued for this
purpose at $1.125 per share, the market price of the Common Stock at that time.
In 1999, the directors' compensation was increased to $2,100 per month. In April
1999, the Board elected to pay fees for the period ending March 31, 1999 in
shares of treasury stock which were valued for this purpose at $0.50 per share.
It is anticipated that compensation for the remainder of 1999 will be paid in
cash. Directors are also eligible for the grant of options or warrants to
purchase Common Stock from time to time for services in their capacity as
directors.
Upon joining the Board in August 1998, Mr. Bergsman was granted an
option to purchase 100,000 shares of Common Stock at an exercise price of
$0.8125 per share. This option will become vested as to one-third of the shares
covered thereby on the first anniversary of the date of grant and will become
vested and exercisable as to the balance of the covered shares in two equal
installments on the second and third anniversaries of the grant date, subject to
Mr. Bergsman remaining as a director. The option provides for immediate vesting
in full in the event of a "Change of Control Event" as defined in the option
agreement.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
In January 1999, Gerald Sokol, Jr., the Company's President and Chief
Financial Officer, resigned as an executive officer and director of the Company.
The Company entered into a Resignation and General Release Agreement
("Resignation Agreement") with Mr. Sokol pursuant to which Mr. Sokol's
Employment Agreement, dated July 1, 1998, was terminated. Pursuant to the
Resignation Agreement, the Company paid $205,850 to Mr. Sokol in settlement of
his prior Employment Agreement and in consideration of his agreement not to
compete with the Company for a period of one year. In further consideration, the
Company paid Mr. Sokol an earned 1998 bonus of $128,500. In consideration of the
cancellation of Mr. Sokol's February 2, 1998 Option Agreement which granted him
the option, vesting over a period of four years, to purchase an aggregate of
500,000 shares of Common Stock at an exercise price of $1.00, the Company
granted Mr. Sokol the fully vested right and option to purchase 125,000 shares
of Common Stock at an exercise price of $1.00 per share, exercisable at any time
prior to 12 months after the January 19, 1999 termination of Mr. Sokol's
employment with the Company.
In October 1998, the Company entered into an Employment Agreement with
Stanley B. Kinsey under which Mr. Kisney agreed to serve as Chairman and Chief
Executive Officer of the Company for a period of three years ending October 6,
2001. Under his Employment Agreement, Mr. Kinsey is to receive an initial annual
salary of $285,000, which will increase in proportion to any increase in the
consumer price index on the anniversary date each year during the term of his
employment. Mr. Kinsey also is entitled to an annual bonus pursuant to a bonus
program to be agreed upon by Mr. Kinsey and the Compensation Committee of the
Board of Directors. NTN also has agreed pursuant to the Employment Agreement to
provide Mr. Kinsey and his dependents certain medical insurance and to maintain
$1,000,000 of term life insurance ($2,000,000 in the event of accidental death
or dismemberment) on Mr. Kinsey payable to his beneficiaries.
Mr. Kinsey's Employment Agreement may be terminated by NTN in the
event of his disability, in which event Mr. Kinsey or his representatives will
be entitled to be paid severance in an amount equal to 75% of his compensation
(including the annual bonus calculated pursuant to the bonus program) for the
remainder of the term of the Employment Agreement. The Employment Agreement also
may be terminated by NTN in the event of Mr. Kinsey's personal dishonesty,
willful misconduct or breach of fiduciary duty, or if he breaches the Employment
Agreement and fails to cure the breach within 30 days. In the event NTN
terminates the Employment Agreement without cause, attempts to reassign Mr.
Kinsey's duties or to change his duties without cause, Mr. Kinsey will be
entitled to a liquidated amount equal to his entire compensation under the
Employment Agreement for the remainder of its term.
9.
<PAGE> 12
Either Mr. Kinsey or NTN may terminate the Employment Agreement at any
time following a "Change of Control Event" as defined in his Employment
Agreement. In the event Mr. Kinsey or NTN terminates Mr. Kinsey's employment
following a Change of Control Event, he will be entitled to receive severance in
an amount equal to one year's salary, a pro rata portion of the bonus earned to
the date of termination of employment and continuation of employee benefits for
a period of one year.
In connection with his agreeing to join NTN as its Chief Executive
Officer, Mr. Kinsey was granted options to purchase an aggregate of up to
1,300,000 shares of Common Stock. The exercise price of options to purchase
650,000 shares is $.625 per share and the exercise price of options to purchase
650,000 shares is $1.00 per share. On October 7, 1999, the Company will grant
Mr. Kinsey an option to purchase 500,000 shares of the Company's common stock at
the closing price as of the issue date. The Company will not be obligated to
grant such 500,000 share option to the extent a Change of Control Event has
occurred before such date. All options were granted to Mr. Kinsey pursuant to
the NTN 1995 Stock Option Plan and are subject to immediate vesting upon the
occurrence of a Change of Control Event.
BOARD COMPENSATION REPORT
Executive Compensation Policy
During 1998, as it has in prior years, the Board of Directors as a
whole acted on matters of executive compensation and makes the following report:
NTN's executive compensation policy is intended to foster job
satisfaction and encourage continuous service by NTN's executive officers by
providing reasonable short-term cash compensation and long-term stock-based
incentives. NTN's policies apply equally to its Chief Executive Officer and
other executives. A summary of NTN's executive compensation policy is described
below:
o In connection with the reorganization of its management in early
1997, NTN discontinued its prior profit-sharing program (the "Plan"), which
provided for NTN's establishment of an annual profit-sharing pool based on the
achievement of certain specified pre-tax income levels to be allocated among
NTN's executive officers and other employees. NTN consistently failed to achieve
the specified income levels and, thus, the Plan was not affording real
incentives to executive officers or other employees. In 1998, NTN adopted a cash
bonus plan for calendar 1998 applicable to all employees, including executive
officers (the "Employee Bonus Plan"). Cash bonuses were payable under the
Employee Bonus Plan on a quarterly basis to the extent that NTN achieved
specific revenue, expense and cash flow objectives. The maximum quarterly amount
payable if all objectives were achieved was $37,500. NTN awarded $92,500 during
1998 under the Employee Bonus Plan.
o NTN has established a 401(k) Plan. NTN may, in the Board's
discretion, make annual contributions to the 401(k) Plan, subject to applicable
limitations, but it has never made any such contributions and the Board
anticipates that it will not do so until NTN achieves consistent, profitable
operations.
o Short-term cash compensation to executives for 1998 consisted
primarily of salaries, subject to any written employment agreement between NTN
and any executive.
o In October 1998, NTN entered into a written Employment Agreement
with Mr. Kinsey as Chief Executive Officer and Chairman of the Board, the terms
of which are described elsewhere in this Proxy Statement (see "Employment
Agreements and Termination of Employment and Change in Control Arrangements").
The terms of Mr. Kinsey's employment, which provide for an annual salary and an
annual cash bonus based on the results of operations of NTN, as well as the
grant of certain stock options also described elsewhere in this Report, were
determined by arm's-length negotiations between NTN and Mr. Kinsey. Among the
criteria the Board considered in approving the terms of Mr. Kinsey's Employment
Agreement were the compensation then being paid to NTN's other executive
officers and the scope of Mr. Kinsey's responsibilities at NTN.
10.
<PAGE> 13
o Equity compensation, in the form of stock options, constitutes the
principal element of long-term compensation for NTN's executive officers. The
grant of stock options increases management's potential equity ownership in the
Company with the goal of ensuring that the interests of management remain
closely aligned with those of the Company's stockholders. Accordingly,
commensurate with Mr. Kinsey's appointment as Chief Executive Officer of NTN in
October 1998, the Board granted him options to purchase 1,300,000 shares of
Common Stock at an original exercise price of $0.625 per share for 650,000
shares and $1.00 per share for the second 650,000 shares. Attaching vesting
requirements to stock options also creates an incentive for executive officers
to remain with NTN for the long term. In appropriate circumstances, the Board
may consider repricing previously granted stock options if necessary so that the
options continue to afford realistic incentives to executives.
o Compensation to NTN's executive officers is subject to a $1,000,000
compensation deduction cap pursuant to Section 162(m) of the Internal Revenue
Code, as amended. In 1998, no executive officer received aggregate compensation
of $1,000,000 or more. However, the Board is aware that the grant of stock
options to the executive officers may subject NTN to the deduction cap in
subsequent years. With respect to incentive stock options, the Board does not
anticipate NTN taking a deduction in the absence of a disqualifying disposition
by an executive officer. With respect to nonqualified options, the Board is
aware that any deduction that NTN may have at the time of exercise will be
subject to the $1,000,000 cap. The Board does not anticipate that the
compensation deduction cap will significantly affect its executive compensation
policies.
Chief Executive Officer Compensation
As indicated above, subject to any written employment agreement, the
factors and criteria upon which the compensation of NTN's Chief Executive
Officer is based are identical to the criteria used in evaluating the
compensation packages of the other executive officers of the Company.
Notwithstanding anything to the contrary set forth in any of NTN's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement in whole or in part, the foregoing Board
Compensation Report and the following Performance Graph shall not be
incorporated by reference into any such filings.
11.
<PAGE> 14
PERFORMANCE GRAPH
The following graph sets forth a comparison of cumulative total
returns for NTN, the American Stock Exchange Index, and the relevant SIC Code
Index for 1998. The SIC Code Index consists of all companies (i) that are listed
in the same industry group as NTN in the Cable, Other Pay TV Services Stock
Index, and (ii) whose securities have been registered under Section 12 of the
Exchange Act during the period covered by the performance graph.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG NTN COMMUNICATIONS, INC.,
AMEX MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NTN 100.00 60.00 45.00 38.13 10.00 5.63
SIC 100.00 72.50 83.70 68.04 113.96 219.36
MARKET 100.00 88.33 113.88 120.15 144.57 142.61
</TABLE>
The current composition of SIC Code 4841 - Cable, Other Pay TV
Services is as follows:
5th AVENUE CHANNEL CORP LODGNET ENTERTAINMENT
@ENTERTAINMENT INC MATAV-CABLE SYS MEDIA
ADELPHIA COMMUNICATION A NATIONAL WIRELESS HLDGS
ADVANCED RADIO TELECOM NETWORK EVENT THEATER
ASCENT ENTERTAINMENT GR INC NETWORKS NORTH INC
CABLEVISION SYSTEMS CL A NTL COMMUNICATIONS CORP
CENTURY COMMUNICATIONS ON COMMAND CORPORATION
COMCAST CORP CL A SHAW COMMUNICATIONS CL B
COMCAST SPECIAL STOCK SPEEDUS.COM INC
COX COMMUNICATIONS INC TCA CABLE TV INC
DIGITALA TELEKABL AG ADR TELEWEST COMM PLC ADR
GLOBO CABO SA ADR TV GUIDE INC CL A
INTERNAT FIBERCOM INC UNITEDGLOBALCOM
JONES INTERCABLE INC
JONES INTERCABLE INC A
12.
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All compensation determinations for 1998 for NTN's executives were made
by the Board of Directors of NTN as a whole upon the advice of the Compensation
Committee of the Board. None of the directors or executive officers of NTN has
served on the Board of Directors or the compensation committee of any other
company or entity, any of whose officers served either on the Board of Directors
or on the Compensation Committee of the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 30, 1999 the number and
percentage ownership of Common Stock by (i) all persons known to NTN to own
beneficially more than 5% of the outstanding shares of Common Stock based upon
reports filed by each such person with the Securities and Exchange Commission
("Commission"), (ii) each director and nominee for director of NTN, (iii) each
of the Named Executive Officers, and (iv) all of the executive officers and
directors of NTN as a group. Except as otherwise indicated, and subject to
applicable community property and similar laws, each of the persons named has
sole voting and investment power with respect to the shares of Common Stock
shown. An asterisk denotes beneficial ownership of less than 1%.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Common Stock(1)
---- ------------------ ---------------
<S> <C> <C>
Stanley B. Kinsey(2) ........................ 124,666 *
Gerald Sokol, Jr. (3)........................ 1,362,000 4.9%
Robert M. Bennett(4)......................... 207,000 *
Barry Bergsman(5)............................ 68,333 *
Donald C. Klosterman(6)...................... 849,082 3.0%
Esther L. Rodriguez(7)....................... 55,666 *
V. Tyrone Lam................................ -- *
All executive officers and directors of
NTN as a group (8 persons)(8)............... 2,679,247 9.4%
</TABLE>
- ---------------
(1) Included as outstanding for purposes of this calculation are 28,406,472
shares of Common Stock (the amount outstanding as of June 30, 1999) plus,
in the case of each particular holder, the shares of Common Stock subject
to currently exercisable options, warrants, or other instruments
exercisable for or convertible into shares of Common Stock (including such
instruments exercisable within 60 days after June 30, 1999) held by that
person, which instruments are specified by footnote. Shares issuable as
part or upon exercise of outstanding options, warrants, or other
instruments other than as described in the preceding sentence are not
deemed to be outstanding for purposes of this calculation.
(2) Includes 33,333 shares subject to currently exercisable options held by Mr.
Kinsey.
(3) Includes 1,300,000 shares subject to currently exercisable options held by
Mr. Sokol. Mr. Sokol resigned as a director and officer of the Company in
January 1999.
(4) Includes 100,000 shares subject to currently exercisable options held by
Mr. Bennett.
(5) Includes 18,000 shares subject to currently exercisable warrants and 33,333
shares subject to currently exercisable options held by Mr. Bergsman.
(6) Includes 200,000 shares subject to currently exercisable warrants and
150,000 shares subject to currently exercisable options held by Mr.
Klosterman.
(7) Includes 33,333 shares subject to currently exercisable options held by Ms.
Rodriguez. Also includes 1,000 shares owned by the Rodriguez Family Trust,
of which Ms. Rodriguez is a co-trustee with members of her immediate
family. As co-trustee, Ms. Rodriguez shares voting and investment power
with respect to the shares.
(8) Includes 362,499 shares subject to currently exercisable options and
218,000 shares subject to currently exercisable warrants held by executive
officers and directors, including those described in notes (2) through (7)
above. Also includes 12,500 shares subject to currently exercisable options
held by Ms. Berger.
13.
<PAGE> 16
PROPOSAL 2
STOCKHOLDER PROPOSAL
Jay Chozen, 4321 Colony Plaza, Newport Beach, California, claiming
ownership of 100,000 shares of Common Stock of the Company for more than one
year and representing that he will continue to hold the same through the date of
the Annual Meeting, has submitted the following resolution for inclusion in this
Proxy Statement and stated his intention to have the same presented at the
Annual Meeting. The text of the proposal is as follows:
MAXIMIZE VALUE RESOLUTION
Resolved that the shareholders of NTN Communications, Inc. urge the
Board of Directors to arrange for the prompt sale of NTN Communications, Inc. to
the highest bidder.
The purpose of the Maximize Value Resolution is to give all NTN
shareholders the opportunity to send a message to the NTN Communications, Inc.
Board that they support the prompt sale of NTN to the highest bidder. A strong
and/or majority vote by the shareholders would indicate to the Board the
displeasure felt by the shareholders of the shareholder returns over many years
and the drastic action that should be taken. Even if it is approved by the
majority of the NTN shares represented and entitled to vote at the annual
meeting, the Maximize Value Resolution will not be binding on the NTN
Communications Board. The proponent, however, believes that if this resolution
receives substantial support from the shareholders, the Board may choose to
carry out the request set forth in the resolution.
The prompt auction of NTN Communications, Inc. should be accomplished
by any appropriate process the Board chooses to adopt including a sale to the
highest bidder whether in cash, stock, or a combination of both. It is expected
that the Board will uphold its fiduciary duties to the utmost during the
process.
The proponent further believes that if this resolution is adopted, the
management and the Board will interpret such adoption as a message from the
company's shareholders that it is no longer acceptable for the Board to continue
with its current management plan and strategies.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION
JAY CHOZEN, TRUSTEE
OPPOSITION TO STOCKHOLDER PROPOSAL
The Board of Directors is aware of its fiduciary obligations to act in
the best interests of the Company's stockholders and is open to all types of
initiatives to build stockholder value. However, the Board does not believe that
putting the Company on the auction block is likely to result in maximizing
stockholder value as the title of the stockholder proposal suggests. Moreover,
the uncertain atmosphere that could result from the adoption of a proposal that
urges such action might result in damage to customer, partner and vendor
relationships, the possible loss of such relationships, and the loss of key
employees, each of which might jeopardize stockholder value.
The Board of Directors and management are committed to increasing
stockholder value and, at the present time, management is implementing
strategies for future growth which, if successful, would cause stockholder value
to exceed that which would be realized in a near-term sale of the Company. These
actions include, among other things, the launch of the new Digital Interactive
Network, the introduction of Internet stations and the initial implementation of
the Company's Internet strategy. The Board believes that these actions will
transform the Company into a company with higher growth potential and higher
stockholder value.
14.
<PAGE> 17
For the foregoing reasons, the Board of Directors believes that the
stockholder proposal is contrary to the best interests of the stockholders.
Accordingly, the Board of Directors recommends a vote "AGAINST" the foregoing
stockholder proposal. Proxies solicited by the Board of Directors will be so
voted unless stockholders specify otherwise.
The foregoing opposition contains forward-looking statements, including
statements relating to future growth, which are subject to risks and
uncertainties including product demand and market acceptance of risks, the
impact of competitive products and pricing and other risk factors detailed in
the Company's periodic filings with the Securities and Exchange Commission
(including the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1998 and the Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 1999).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1999, Gerald Sokol, Jr. resigned as a director and officer
of the Company. See "Executive Compensation - Employment Agreements and
Termination of Employment and Change in Control Arrangements."
CONSULTING ARRANGEMENTS
In April 1997, the Company entered into Consulting Agreement with
Frazier/King Media Holding Co. ("Frazier/King"), a media consulting firm, to
review and consult with the Company's management regarding the Company's
strategic business plan, current operations and future development. For
Frazier/King's services under this agreement, the Company granted Frazier/King a
warrant to purchase 1,000,000 shares of Common Stock at an exercise price of
$2.81 per share, the approximate market value of the Common Stock on the date of
the Consulting Agreement, and agreed to reimburse Frazier/King for expenses
(other than normal operating expenses) incurred by it in performing its
consulting services. Frazier/King's warrant was immediately vested and
exercisable as to 200,000 shares of Common Stock and was to become vested and
exercisable as to the balance of 800,000 covered shares in quarterly
installments of 100,000 shares as of the 15th day of each July, October, January
and April commencing July 15, 1997 and ending April 15, 1999, provided that the
Board has determined that Frazier/King was performing satisfactorily under the
Consulting Agreement.
In January, 1998, the Board and Frazier/King agreed to terminate the
Consulting Agreement and the number of warrants granted was reduced to 500,000,
which were immediately vested. In connection with the warrant granted to
Frazier/King, NTN recorded a charge pursuant to SFAS No. 123 of $1,401,000, in
1997.
On February 1, 1999, the Company entered into a Consulting Agreement
with Barry Bergsman, who has been one of the Company's directors since August
1998, pursuant to which Mr. Bergsman was engaged to actively provide the Company
with consulting services under the direction of the Company's Chief Executive
Officer. For Mr. Bergsman's services under the Consulting Agreement, the Company
granted Mr. Bergsman a warrant to purchase 36,000 shares of Common Stock at an
exercise price of $0.6875 per share. The warrant is exercisable as to 3,000
shares on the first day of each of the twelve consecutive months commencing
March 1, 1999. In addition, the Company agreed to pay Mr. Bergsman cash
compensation of $3,500 per month. The Consulting Agreement expires on January
31, 2000.
INDEMNITY AGREEMENTS
The Company has entered into indemnity agreements with each of the
Company's directors and executive officers. Pursuant to such indemnity
agreements, the Company has agreed to indemnify these individuals under certain
circumstances against certain liabilities and expenses they may incur in their
capacities as directors or officers. The Company believes that the use of such
indemnity
15.
<PAGE> 18
agreements is customary among corporations and that the terms of the indemnity
agreements are reasonable and fair to the Company, and are in the Company's best
interests to retain experienced directors and officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
Directors, executive officers and any persons holding more than 10% of the
issued and outstanding Common Stock are required to report their initial
ownership of Common Stock, any subsequent changes in that ownership and, in
certain instances, an annual statement of changes in ownership to the Securities
and Exchange Commission. Specific due dates for these reports have been
established and the Company is required to identify those persons who failed to
file these reports in a timely manner. In making this disclosure, the Company
has relied solely upon the written representations of its Directors and
executive officers and copies of the reports that have been filed with the SEC.
Based upon the Company's review of such representations and reports, the Company
believes that all such reports were filed on a timely basis for the year ended
December 31, 1998.
INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG LLP independent accountants
of NTN for the fiscal year ending December 31, 1999.
KPMG LLP is a nationally recognized firm of independent accountants
and has audited NTN's financial statements for the fiscal years ended December
31, 1989 through December 31, 1998. A KPMG LLP representative is expected to be
present at the Annual Meeting and to be available to make a statement, if he or
she desires to do so, and to respond to appropriate questions.
OTHER MATTERS
Accompanying this Proxy Statement is a letter to stockholders from Mr.
Kinsey, NTN's Chairman and Chief Executive Officer, together with selected
information derived from NTN's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. These accompanying materials constitute NTN's Annual
Report to Stockholders.
NTN WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON TO WHOM THIS PROXY
STATEMENT IS BEING SENT A COMPLETE COPY OF NTN'S ANNUAL REPORT ON FORM 10-K
(OTHER THAN EXHIBITS) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998. WRITTEN
REQUESTS FOR THE FORM 10-K SHOULD BE DIRECTED TO MS. KENDRA BERGER, CORPORATE
SECRETARY, AT NTN'S OFFICES. TELEPHONE REQUESTS MAY BE DIRECTED TO MS. BERGER AT
(760) 438-7400.
Management of NTN does not know of any matter to be acted upon at the
Annual Meeting other than the matters described above. If any other matter
properly comes before the Annual Meeting, however, the proxy holders will vote
the proxies in the enclosed form thereon in accordance with their best judgment.
By Order of the Board of Directors
Kendra Berger
Secretary
Carlsbad, California
July 19, 1999
16.
<PAGE> 19
NTN COMMUNICATIONS, INC.
5966 La Place Ct.
Suite 100
Carlsbad, California 92008
----------------------------------------------------------------
This Proxy is Solicited on Behalf of the Board of Directors.
----------------------------------------------------------------
The undersigned hereby appoints V. Tyrone Lam and Kendra Berger, and each or
either of them, as proxy holders with power to appoint his substitute, and
hereby authorizes the proxy holders to represent and vote, as designated on the
reverse side, all shares of Common Stock of NTN Communications, Inc. (the
"Company") held of record by the undersigned on June 30, 1999, at the annual
meeting of stockholders to be held on August 27, 1999 or any adjournment
thereof.
(Continued and to be signed on the reverse side)
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as in this
example.
<TABLE>
<CAPTION>
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to vote for all nominees
to the contrary below.) listed at right.
<S> <C> <C> <C>
1. Election / / / / Nominees: Barry Bergsman
of Stanley B. Kinsey
directors: Donald C. Klosterman
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Stockholder Proposal set forth in / / / / / /
Proposal 2 of the accompanying Proxy
Statement:
</TABLE>
Instructions: To withhold authority to vote for any
nominee, draw a line through such nominee's
name.
SIGNATURE(S) DATE SIGNATURE(S) DATE
---------------- ------- -------------- -----
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by
authorized partner.
