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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 [ ]
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-12
</TABLE>
NTN Communications, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
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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 JULY 31, 2000
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the
"Annual Meeting") of NTN Communications, Inc. will be held at La Costa Resort
and Spa, 2100 Costa Del Mar Road, Carlsbad, California, at 10:00 A.M. local
time, on July 31, 2000, for the following purposes, as more fully described in
the attached Proxy Statement:
1. To elect two directors to hold office until the 2003 annual
meeting of stockholders;
2. To vote upon a proposal to approve the transfer and
contribution of certain of the company's assets to its
wholly-owned subsidiary, BUZZTIME.com, Inc.; and
3. To consider and act upon such other matters as may properly
come before the Annual Meeting and any adjournments thereof.
The Board of Directors fixed the close of business on June 1, 2000 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
/s/ Kendra Berger
----------------------------------
Kendra Berger
Secretary
Carlsbad, California
June 26, 2000
<PAGE> 3
NTN COMMUNICATIONS, INC.
5966 La Place Court
Carlsbad, California 92008
------------
PROXY STATEMENT
ANNUAL MEETING TO BE HELD JULY 31, 2000
------------
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") for use at the annual meeting of stockholders to be held at La Costa
Resort and Spa, 2100 Costa Del Mar Road, Carlsbad, California, at 10:00 A.M.,
local time, on July 31, 2000, 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 June 30, 2000.
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 "FOR" the proposal to approve NTN's transfer and contribution of
certain of its assets to BUZZTIME.com, Inc., NTN's wholly-owned subsidiary, as
described in this Proxy Statement. 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 than the
accompanying proxy, or by attending the Annual Meeting and voting in person. If,
however, your shares of record are held 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 ("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 1, 2000 are entitled to notice of and to vote at the Annual Meeting.
There were 33,435,875 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.
The approval of Proposal 2 will require the affirmative vote of the
holders of a majority of the
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outstanding shares of Common Stock entitled to vote on the Proposal. Abstentions
and so-called broker non-votes will be counted for purposes of determining the
presence of a quorum. Abstentions and broker non-votes will not affect the
outcome of Proposal 1, but will have the same effect as votes against Proposal
2.
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 reasonable 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 2001 ANNUAL MEETING
Stockholder proposals intended to be included in NTN's proxy materials
for the 2001 annual meeting of stockholders of NTN must be received by January
2, 2001. Such proposals should be addressed to the Secretary of NTN.
With respect to any stockholder proposals to be presented at the 2001
annual meeting which are not included in the 2001 proxy materials, management
proxy holders for the 2001 annual 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 May 16, 2001.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION FOR TERM EXPIRING IN 2003
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. The Board of Directors
currently consists of six members.
Until June 2000, the Board of Directors consisted of seven members. On
June 7, 2000, Donald C. Klosterman, a director of the Company (or its
predecessor) since 1985, passed away. Mr. Klosterman served as Chairman of the
Board of the Company from 1985 until April 1994. From 1990 until December 1999,
he also acted as a consultant to the Company.
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.
Two 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
2003 and until their respective successors are duly elected and qualified.
GARY ARLEN, age 55, was appointed to the board of directors in August
1999. Since 1980, he has been president of Arlen Communications, Inc., a
research and consulting firm specializing in interactive and
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Internet information, transactions, telecommunications and entertainment. In
1981, Mr. Arlen founded the Internet Alliance, which represents the interest of
online content and service suppliers.
VINCENT A. CARRINO, age 44, was appointed as a director in September
1999. Mr. Carrino is president of Brookhaven Capital Management, LLC, a private
investment firm focusing on technology companies, founded by him in 1985. Prior
to the establishment of Brookhaven Capital Management, LLC, Mr. Carrino was an
analyst with Alliance Capital. Mr. Carrino serves on the Board of Directors of
Rent-Way, Inc., Cash Technologies, Intrenet, and Showpower.
The nominees have indicated a willingness to serve as directors. If
either 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.
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 73, has been a director since August 1996. Since
1989, Mr. Bennett has been Chairman of the Board of Bennett Productions, Inc., a
production company with experience in virtually all areas of production
including syndicated sports and specialty programming, music videos, commercial
productions, home video, corporate communications and feature films.
ESTHER L. RODRIGUEZ, age 58, was appointed as a director of the Company
in September 1997. She retired as a vice president of Next Level Systems, Inc.
(formerly General Instrument), a telecommunications company, in November 1996,
after having served in various executive capacities since joining General
Instrument 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. Ms. Rodriguez has over 25 years'
experience in general management, business development and marketing, including
17 years' experience in worldwide telecommunications.
DIRECTORS WHOSE TERM EXPIRES IN 2002
BARRY BERGSMAN, age 63, has been a director since August 1998. From
1985 to the present, Mr. Bergsman has been president of Intertel Communications,
Inc., a company that pioneered the use of the 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.
STANLEY B. KINSEY, age 46, 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
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Entertainment, a high-technology entertainment company. Mr. Kinsey was Chairman
and Chief Executive Officer of IWERKS Entertainment from inception until 1995,
when he resigned.
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, 1999 the Board
met on thirteen 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
Company intends to comply with new American Stock Exchange rules regarding Audit
Committee structure and membership requirements by June 2001. The Audit
Committee met twice in 1999.
In June 2000, the Board of Directors adopted a formal Audit Committee
Charter intended to comply with new American Stock Exchange rules. The Audit
Committee 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 Charter will be reviewed
and its adequacy assessed annually by the Audit Committee.
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. Mr. Klosterman served on the
Compensation Committee until his passing in June 2000. Ms. Rodriguez is
currently the sole member of the Compensation Committee. The Compensation
Committee met on four occasions in 1999.
During 1999, 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 2001 Annual Meeting."
PROPOSAL 2
CONTRIBUTION OF ASSETS TO BUZZTIME.COM, INC.
At the Annual Meeting, the stockholders will be asked to consider and
approve NTN's proposed contribution of certain of its assets to BUZZTIME.com,
Inc. ("BUZZTIME"), NTN's wholly-owned subsidiary. The assets consist primarily
of NTN's extensive trivia game show library and its interactive play-along
sports games, including QB1, NTN's most popular game, and related intangible
assets. NTN currently makes these assets available to BUZZTIME on an informal
basis.
The Company believes that the contribution of assets to BUZZTIME will
facilitate more effective marketing and operation of its Internet and
interactive television business and may enhance its ability to raise additional
financing at the BUZZTIME level to expand this business.
If approved by the shareholders, the contribution of assets to BUZZTIME
will be made by means of a Contribution Agreement, substantially in the form
attached as Appendix A to this Proxy Statement.
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The particular assets expected to be contributed to BUZZTIME are identified in
more detail on Schedule 1 to the form of Contribution Agreement. This Schedule 1
is subject to change prior to execution of the Contribution Agreement.
The Board of Directors of NTN has unanimously approved the contribution
of assets to BUZZTIME and recommends that the shareholders also approve the
contribution. Under Delaware corporate law, an exchange of all or substantially
all of the assets of a Delaware corporation such as NTN must be approved by the
holders of a majority of the outstanding stock of the corporation. What
constitutes "substantially all" of NTN's assets for this purpose depends upon
the value of the assets to be transferred as a percentage of the Company's total
assets, as well as subjective factors such as the importance of the assets to
NTN's overall business and revenues.
The Company believes the trivia library, sports games, related
equipment and other intangible assets that it proposes to contribute to BUZZTIME
do not comprise substantially all of its assets. These assets were carried on
NTN's books for financial reporting purposes at a value of approximately
$115,000 as of March 31, 2000 compared to total assets of $17,855,000 as of that
date. The Company has not commissioned an appraisal or other valuation to
confirm the value of all of the Company's assets, including the intangible
assets to be contributed to BUZZTIME. In order to save the expense and time of
commissioning such an appraisal, the Board determined to seek stockholder
approval as a precautionary measure to ensure that the contribution of assets is
properly authorized.
If the proposal is approved, it is expected that BUZZTIME will license
back to The NTN Network certain of the assets for use by The NTN Network in its
hospitality businesses. The nature of the license and the applicable terms and
conditions have not yet been determined. As a result, it is expected that The
NTN Network will retain the right to use these assets in its hospitality
businesses.
If the proposal is not approved at the Annual Meeting, NTN will
continue to make its trivia library, interactive sports games and related
intangible assets available to BUZZTIME on an informal basis. The Company also
may determine to contribute the same or similar assets to BUZZTIME at some
future date. If the Company decides in the future to contribute assets to
BUZZTIME, NTN would seek shareholder approval if necessary.
NTN COMMUNICATIONS, INC.
The NTN Network is North America's largest "out-of-home" interactive
television network. NTN's unique private network broadcasts a variety of
multi-player sports and trivia games 365 days a year to hospitality venues such
as restaurants, sports bars, hotels, clubs and military bases totaling
approximately 3,300 locations in North America ("Locations") as of May 1, 2000.
A unique feature of The NTN Network's interactive programming is that all
players compete in real-time within each Location and are ranked at the end of
each game against players in all Locations throughout North America. This
enables each Location to create on-premises promotions to increase patron
loyalty as well as allowing us to capture national sponsors who want to use the
competitions as a promotional tool.
BUZZTIME.com, INC.
BUZZTIME.com, Inc. is NTN's wholly-owned subsidiary. BUZZTIME was
formed by us in December 1999 to exploit the strong revenue possibilities
involved with Internet and interactive television use. These opportunities
include advertising and sponsorship; direct marketing partnerships geared toward
BUZZTIME's unique membership rewards program; pay-to-play subscriptions; and
consumer research services for advertisers.
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SEPARATE MARKETING DECISIONS
The Company believes that the contribution of assets to BUZZTIME will
also allow BUZZTIME to pursue individualized marketing strategies. The
flexibility that control of significant assets provides may also be important to
making marketing decisions suitable to BUZZTIME's distinct situation.
For example, BUZZTIME recently completed an agreement with WebTV
Networks, Inc. ("WebTV Networks" or "WebTV"), a wholly-owned subsidiary of
Microsoft Corp., that makes use of BUZZTIME's services and provides BUZZTIME
with significant marketing opportunities. WebTV Networks and BUZZTIME have
agreed that BUZZTIME is to be the featured provider of trivia content and the
exclusive provider of a daily trivia question within the primary Games and
Sports category offerings on the WebTV service. BUZZTIME is scheduled to begin
delivering its daily trivia content when WebTV updates its primary Games and
Sports category offerings in summer 2000. WebTV Networks will provide BUZZTIME
with a permanent branded presence for its daily trivia questions on the entry
screens of the WebTV Networks' primary Games and Sports category offerings.
Users of WebTV who click to find the correct answer to the promotional question
or who click on the BUZZTIME promotional button will be linked directly to the
BUZZTIME.com Web site. As part of the relationship, BUZZTIME will provide a
custom-designed game site that is optimized for the WebTV platform and the TV
screen. WebTV Networks will also promote BUZZTIME via advertising throughout the
WebTV service. In addition, the companies will team up to offer and promote
monthly trivia games and live event contests to users of WebTV with associated
prizes to be furnished by BUZZTIME.
SEPARATE PARTNERSHIPS AND TECHNOLOGICAL STRATEGIES
The popularity of the Company's programming has generated recent
agreements by BUZZTIME with America Online, AT&T Interactive Offerings Group,
FOXSports.com, Midway Games and others. BUZZTIME continues to develop a broad
network of partnerships with other Internet and interactive TV distribution
partners for the delivery and promotion of its branded interactive games.
BUZZTIME's ownership of its own programming will allow it to forge
distinct relationships between loyal players and advertising and marketing
partners.
SEPARATE FINANCING AND INVESTMENT POSSIBILITIES
The Company expects BUZZTIME to function both as a developer and a
distributor of game content. As a developer, BUZZTIME will continue to augment
our interactive game library. As a distributor, BUZZTIME intends to broadcast
live play-along game shows to a broad array of interactive networks and
platforms, including the Internet and online services, interactive television
and hand-held devices.
The Company's strategy is to develop and take the BUZZTIME brand beyond
the Internet and online services to multiple consumer interactive platforms.
BUZZTIME's financial needs and strategies may differ, in important respects,
from those of The NTN Network. Specifically, BUZZTIME will face different
technological trends in its market, changing consumer needs and distinct product
and service offerings. Investors who may be interested in investing in the new,
rapidly evolving Internet and interactive television sectors may be interested
in an investment in BUZZTIME, however, investors who may be interested in
investing in wireless, out-of-home connectivity and not content may be
interested in an investment in The NTN Network. The Company believes these
divergent investment preferences can be accommodated if BUZZTIME has a distinct
identity. In turn, the Company
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believes the development of a distinct identity requires that BUZZTIME have the
assets necessary to effectively grow as a concern.
There is no present plan or arrangement to engage in any financing
transaction by BUZZTIME, and there also can be no assurance that the
contribution of assets to BUZZTIME will facilitate such a financing in the
future.
The operation of BUZZTIME as a separate business with its own assets
may also enhance NTN's ability to spin-off BUZZTIME in the future. NTN has no
present plan or arrangement, however, with respect to a possible spin-off.
SPECIAL CONSIDERATIONS REGARDING TRANSFER
There is no assurance that BUZZTIME's ownership of the assets to be
contributed by NTN will result in more effective exploitation of these assets or
achieve any of the other benefits foreseen.
The transfer of ownership of the assets to BUZZTIME will remove those
assets from certain protective provisions of Delaware corporation law including
making it possible for NTN to spin-off those assets or engage in similar
transactions without the need to obtain any further stockholder approval. NTN
has no current plan or intention to do so, however.
CONTRIBUTION AGREEMENT
NTN will transfer and contribute the assets to BUZZTIME by means of a
Contribution Agreement approved by NTN's Board of Directors, the form of which
is attached as Appendix A to this Proxy Statement. You are urged to read the
Contribution Agreement before returning the enclosed proxy.
The Contribution Agreement contains only minimal representation and
warranties from NTN with respect to such matters as NTN's ownership of the
assets being contributed. The Contribution Agreement contains no significant
covenants or representations by BUZZTIME.
CERTAIN TAX CONSIDERATIONS
The contribution of assets to BUZZTIME will have no federal income tax
consequences for NTN, BUZZTIME or the NTN stockholders.
DISSENTER'S RIGHTS
NTN stockholders will have no dissenter's or appraisal rights in
connection with the contribution of assets.
REGULATORY APPROVAL
The contribution of assets to BUZZTIME does not require any regulatory
approvals.
VOTE REQUIRED
The affirmative vote of a majority of the shares of Common Stock
entitled to vote at the Annual Meeting is required to approve the contribution
of assets to BUZZTIME. For this purpose, abstentions and broker non-votes will
have the same effect as votes against the proposal.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
CONTRIBUTION OF ASSETS TO BUZZTIME. PROXIES WILL BE VOTED "FOR" THE PROPOSAL IF
NO DIRECTION IS GIVEN IN THE PROXIES.
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 46 Chief Executive Officer and Chairman of the Board
Kendra Berger 33 Chief Financial Officer and Secretary
V. Tyrone Lam 38 President, BUZZTIME.com, Inc.
Robert L. Anderson 43 President & General Manager, The NTN Network
</TABLE>
See "Board of Directors" for Mr. Kinsey's biography. The following
biographical information is furnished with respect to the other executive
officers of NTN:
KENDRA BERGER has served as the Company's Chief Financial Officer and
Corporate Secretary since February 1999. She joined the Company in July 1998 as
Vice President, Finance, and Controller. 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, certified public accountant,
held key positions with the public accounting firm, Price Waterhouse LLP.
V. TYRONE LAM was appointed President of BUZZTIME.com, Inc. in December
1999, after serving as Executive Vice President of NTN since September 1998. He
was appointed Vice President and General Manager of The NTN Network in September
1997. Prior to this 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 and has held other sales and
marketing management positions in the computer software industry.
ROBERT L. ANDERSON was appointed President of The NTN Network, the
Company's hospitality division, in September 1999. From 1997 until that time, he
previously led Anderson Management Consultants, offering strategic marketing and
general management services to the consumer products segment of the hospitality
industry. From 1987 through 1997 he held positions with United Distillers and
Vintners, the largest global marketer of adult beverages. Prior to that time,
Mr. Anderson held management positions with E.J. Gallo Winery and the Proctor
and Gamble Company.
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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 1999 and the three other most
highly compensated executive officers of NTN who were serving as executive
officers at the end of fiscal year 1999 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) 1999 $ 286,835 $32,500(3) --(4) 500,000
Chief Executive Officer and 1998 63,577 -- -- 1,300,000
Chairman of the Board 1997 -- -- -- --
V. Tyrone Lam(5) 1999 175,000 -- -- --
President, BUZZTIME.com, Inc. 1998 147,115 2,959 -- 285,000
1997 105,367 -- $ 4,575(6) 165,000
Kendra Berger(7) 1999 138,000 -- -- 100,000
Chief Financial Officer 1998 42,307 1,233 -- 50,000
1997 -- -- -- --
Bennett Letwin(8) 1999 120,000 -- -- --
Vice President, Business 1998 -- -- -- 75,000
Systems and Technologies 1997 -- -- -- --
</TABLE>
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(1) Includes amounts, if any, deferred under the Company's 401(k) Plan.
(2) Mr. Kinsey was appointed Chief Executive Officer of the Company in
October 1998.
(3) Represents value of vested options granted October 7, 1999 at below
market exercise price, pursuant to the Employment Agreement and related
bonus program between Mr. Kinsey and the Company.
(4) Mr. Kinsey has waived compensation for serving as a director of the
Company.
(5) In December 1999, Mr. Lam was appointed President of the Company's
wholly-owned subsidiary, BUZZTIME.com, Inc.
(6) Includes group medical insurance premiums.
(7) Ms. Berger joined the Company in 1998 and was appointed Chief Financial
Officer in February 1999.
(8) Mr. Letwin resigned as Vice President, Business Systems and
Technologies in March 2000.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning grants of stock options
during fiscal 1999 with respect to the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO MARKET PRICE VALUE OF GRANT
OPTIONS EMPLOYEES EXERCISE ON DATE OF EXPIRATION AT DATE OF
NAME GRANTED IN FISCAL YEAR PRICE GRANT DATE GRANT(1)
---- ---------- -------------- -------- ------------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stanley B. Kinsey............. 500,000(2) 16% $0.98 $1.50 10/06/09 $575,000
V. Tyrone Lam................. -- -- -- -- -- --
Kendra Berger................. 100,000(3) 3% $0.625 $0.625 04/22/09 50,400
Bennett Letwin................ -- -- -- -- -- --
</TABLE>
------------
(1) The value of grant at date of grant was estimated using the Black
Scholes option-pricing model with the following weighted average
assumptions: dividend yield 0%, risk-free interest rates 5.455%,
expected volatility 129.34%, and expected option lives of 2.58 years.
(2) Represents options granted under NTN's 1995 Option Plan pursuant to Mr.
Kinsey's Employment Agreement with the Company, which become
exercisable as to 1/24 of the total shares on the last business day of
each calendar month immediately following the date of grant, subject to
Mr. Kinsey's continuous employment by the Company. The options were
granted to Mr. Kinsey at a preferred price in lieu of a cash bonus. The
options are subject to immediate vesting upon the occurrence of a
"Change of Control Event". See "Compensation Committee Report on
Executive Compensation".
(3) 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 on the last day of each of the 36 calendar
months immediately following the first anniversary of the grant date.
FISCAL YEAR-END OPTION VALUES
The following table contains information concerning stock options which were
unexercised at the end of fiscal 1999 with respect to the Named Executive
Officers. No stock options were exercised in 1999 by any Named Executive
Officer.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Stanley B. Kinsey................... 562,500 1,337,500 $ 1,535,885 $3,736,615
V. Tyrone Lam....................... 140,521 359,479 382,267 964,108
Kendra Berger....................... 16,667 133,333 44,793 395,832
Bennett Letwin...................... 20,313 54,687 54,591 146,971
</TABLE>
------------
(1) Represents the amount by which the aggregate market price on December
31, 1999 of the shares of the Company's Common Stock subject to such
options exceeded the respective exercise prices of such options.
DIRECTOR COMPENSATION
During 1999, directors were entitled to receive compensation of $2,100 per
month for their services as directors, payable in either cash or shares of
Common Stock. Further, directors who serve on either the audit or compensation
committees or the board of directors of BUZZTIME.com, Inc. were entitled to
receive an additional $3,000 annually. In April 1999, the Board elected to pay
the first quarter 1999 fees in shares of Common Stock which were valued for this
purpose at $.50 per share. Compensation for the remaining three calendar
quarters of 1999 was 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.
11
<PAGE> 13
Upon joining the Board in August 1999 and September 1999, respectively,
Messrs. Arlen and Carrino were each granted options to purchase 100,000 shares
of Common Stock at an exercise price of $1.125 per share. These options will
become vested as to one-third of the shares covered thereby on the first
anniversary of grant date 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 Messrs. Arlen and Carrino remaining
as directors. The options provide for immediate vesting in full in the event of
a "Change of Control Event" as defined.
OTHER EXECUTIVE COMPENSATION MATTERS
All compensation determinations for 1999 for NTN's executives were made by
the Board of Directors of NTN as a whole upon the recommendation of the
Compensation Committee of the Board. During the entire fiscal year 1999, Ms.
Rodriguez and Mr. Klosterman served as members of the Compensation Committee.
None of the directors or executive officers of NTN have 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.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1999, the Compensation Committee established policies and practices
relating to matters of executive compensation for action by the Board of
Directors as a whole. The Company'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:
NTN has established a 401(k) Plan. NTN may, at the Board's discretion, make
annual contributions to the 401(k) Plan, subject to applicable limitations, but,
to date, it has never made any such contributions.
Short-term cash compensation to executives for 1999 consisted primarily of
salaries, subject to any written employment agreement between the Company and
any executive.
Equity compensation, in the form of stock options, constitutes the principal
element of long-term compensation for the Company'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. 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
also will consider repricing previously granted stock options if necessary so
that the options continue to afford realistic incentives to executives. No
repricings occurred in 1999.
In October 1998, the Company entered into a written Employment Agreement
with Mr. Kinsey pursuant to which Mr. Kinsey is to receive a bonus under a bonus
program that was to be agreed upon by and between Mr. Kinsey and the
Compensation Committee of the Board of Directors. On October 7, 1999, the
Company and Mr. Kinsey entered into an Addendum to the Employment Agreement
setting forth the terms of the bonus program ("Bonus Program"). Pursuant to the
Bonus Program, the options granted to Mr. Kinsey in October 1999 were granted at
a preferred, below market, price of $0.98 per share, the average closing price
of the Company's Common Stock during the three calendar quarters immediately
prior to the grant date. The 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.
12
<PAGE> 14
In April 1999, the Board granted Ms. Berger options to purchase 100,000
shares of Common Stock at an exercise price of $0.625 per share and, in
September 1999, granted Mr. Anderson options to purchase 432,000 shares of
Common Stock at an exercise price of $1.1875 per share.
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 1999, 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.
The foregoing report on executive compensation is provided by the entire Board
of Directors: Gary Arlen, Robert M. Bennett, Barry Bergsman, Vincent A. Carrino,
Stanley B. Kinsey and Esther L. Rodriguez.
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 1, 2000 the number and percentage
ownership of Common Stock by (i) all persons known to the Company 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 of the Company, (iii) each of the Named
Executive Officers, and (iv) all of the executive officers and directors of the
Company 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
BENEFICIALLY PERCENT OF
NAME OWNED COMMON STOCK(1)
---- ---------------- ---------------
<S> <C> <C>
Gary Arlen................................................................ 1,000 *
Robert M. Bennett(2)...................................................... 192,000 *
Barry Bergsman(3)......................................................... 108,333 *
Vincent A. Carrino(4)..................................................... 4,419,089 13.2%
Donald C. Klosterman(5)................................................... 903,749 2.7%
Esther L. Rodriguez(6).................................................... 108,100 *
Stanley B. Kinsey(7)...................................................... 776,167 2.3%
V. Tyrone Lam(8).......................................................... 298,334 *
Kendra Berger(9).......................................................... 47,917 *
Bennett Letwin(10)........................................................ 25,000 *
All executive officers and directors of the Company as a
Group (11 persons)(11).................................................. 6,879,689 19.6%
</TABLE>
------------
(1) Included as outstanding for purposes of this calculation are 33,435,875
shares of Common Stock outstanding as of June 1, 2000 plus, in the case
of each particular holder, any 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 1, 2000) held by
that person, which shares 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 100,000 shares subject to currently exercisable options held
by Mr. Bennett.
13
<PAGE> 15
(3) Includes 33,333 shares subject to currently exercisable options and
36,000 shares subject to currently exercisable warrants held by Mr.
Bergsman.
(4) Includes 111,500 shares owned directly by Mr. Carrino. All remaining
shares are owned, directly or indirectly, by investment advisory
clients of Brookhaven Capital Management, LLC, which in some cases has
sole voting and investment discretion over such shares. Mr. Carrino is
the sole owner and the Manager of Brookhaven Capital Management, LLC
and, as such, in some cases he may be deemed to beneficially own such
shares. Mr. Carrino disclaims such beneficial ownership. Brookhaven
Capital Management is located at 3000 Sand Hill Road, Menlo Park, CA
94205.
(5) Includes 200,000 shares subject to currently exercisable warrants and
150,000 shares subject to currently exercisable options held by Mr.
Klosterman.
(6) Includes 66,667 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.
(7) Includes 687,500 shares subject to currently exercisable options held
by Mr. Kinsey.
(8) Represents shares subject to currently exercisable options held by Mr.
Lam.
(9) Represents shares subject to currently exercisable options held by Ms.
Berger.
(10) Mr. Letwin resigned as Vice President, Business Systems and
Technologies in March 2000.
(11) Includes 1,383,751 shares subject to currently exercisable options and
236,000 shares subject to currently exercisable warrants held by
executive officers and directors, including those described in notes
(2) through (10) above.
14
<PAGE> 16
PERFORMANCE GRAPH
The following graph sets forth a comparison of cumulative total
returns for NTN, the American Stock Exchange Index and an index consisting of
companies sharing NTN's Standard Industrial Classification Code ("SIC Code").
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG NTN COMMUNICATIONS, INC.,
AMEX MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NTN Communications 100.00 75.00 63.54 16.67 9.38 61.46
Sic Code Index 100.00 115.45 93.86 157.19 302.58 541.57
Amex Market Index 100.00 128.90 136.01 163.66 161.44 201.27
</TABLE>
Notwithstanding anything to the contrary set forth in any of NTN's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement in
whole or in part, the foregoing Board Compensation Report and Performance Graph
shall not be incorporated by reference into any such filings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CONSULTING ARRANGEMENTS
On February 1, 1999, NTN entered into a Consulting Agreement with Barry
Bergsman pursuant to which Mr. Bergsman was engaged to actively provide
consulting services to the Company under the direction of the Company's Chief
Executive Officer. For Mr. Bergsman's services under the Consulting Agreement,
NTN 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, Mr. Bergsman will receive cash compensation of
$3,500 per month. The Consulting Agreement expired on January 31, 2000.
15
<PAGE> 17
On March 14, 1997, the Company entered into a Consulting Agreement with
Donald Klosterman pursuant to which Mr. Klosterman was engaged to perform
consulting services for the Company regarding the Company's marketing plans and
the Company's relationship with the National Football League. The Consulting
Agreement expired on December 31, 1999. In lieu of compensation for Mr.
Klosterman's services pursuant to the Consulting Agreement, the Company extended
the expiration date of warrants previously granted to Mr. Klosterman from June
15, 1997 to June 15, 2002. In further consideration, the Company repriced
options to purchase 100,000 shares at $8.25 per share and 50,000 options at
$5.75 per share held by Mr. Klosterman so as to be exercisable at $4.00 per
share and the terms of all such options were extended to January 1, 2002.
TERMINATION OF EMPLOYMENT
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.
As provided by the Resignation Agreement, 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, was modified to provide him with the fully vested right and
option to purchase those shares that had vested as of the effective date of the
Resignation Agreement. These 125,000 options were exercisable by Mr. Sokol at
any time prior to 12 months after the January 19, 1999 termination of Mr.
Sokol's employment with the Company. In November 1999, Mr. Sokol exercised his
option to purchase all 125,000 shares at $1.00 per share.
INDEMNITY AGREEMENTS
The Company has entered into indemnity agreements with each of its
directors and executive officers. The indemnity agreements provide that the
Company will indemnify these individuals under certain circumstances against
certain liabilities and expenses they may incur in their capacities as directors
or officers of the Company. The Company believes that the use of such indemnity
agreements is customary among corporations and that the terms of the indemnity
agreements are reasonable and fair to the Company, and are in its best interests
to retain experienced directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company's directors and officers and
any persons holding more than 10% of the Company's Common Stock are required to
report their ownership of the Company's Common Stock and any changes in that
ownership to the Securities and Exchange Commission. Specific due dates for
these reports have been established, and the Company is required to report any
failure to file by these dates. During 1999, its directors, officers and 10%
stockholders satisfied all of these filing requirements except as follows:
In October 1999, Mr. Bergsman filed an amendment to a previously filed Form
4, Statement of Changes in Beneficial Ownership for August 1999, to include an
August transaction not reported on the document when originally filed. In making
these statements, the Company has relied upon a review of Forms 3, 4 and 5 and
amendments thereto furnished to the Company pursuant to Rule 16a-3 under the
Exchange Act during fiscal 1999 and the written representations of its directors
and officers.
16
<PAGE> 18
INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG LLP as its independent
accountants of NTN for the fiscal year ending December 31, 2000.
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, 1999. A KPMG LLP representative will be present at
the Annual Meeting and will 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 NTN's Annual
Report for the fiscal year ended December 31, 1999.
NTN WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON TO WHOM THIS PROXY
STATEMENT IS BEING SENT A COMPLETE COPY OF NTN'S FORM 10-K (OTHER THAN EXHIBITS)
FOR FISCAL 1999. WRITTEN REQUESTS FOR THE FORM 10-K SHOULD BE DIRECTED TO MS.
KENDRA BERGER, CORPORATE SECRETARY, AT NTN'S CORPORATE 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 thereon in accordance with their best judgment.
By Order of the Board of Directors
/s/ Kendra Berger
----------------------------------
Kendra Berger
Secretary
Carlsbad, California
June 26, 2000
17
<PAGE> 19
APPENDIX A
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
___________, 2000 by and between NTN Communications, Inc., a Delaware
corporation ("NTN"), and BUZZTIME.com, Inc., a Delaware corporation
("BUZZTIME"), with reference to the following facts:
A. BUZZTIME is a wholly-owned subsidiary of NTN.
B. The respective Boards of Directors of NTN and BUZZTIME have approved
NTN's assignment and contribution to the capital of BUZZTIME of all of NTN's
interest in the tangible and intangible assets listed on Schedule 1 to this
Agreement (collectively, the Contributed Assets").
C. NTN's contribution of the Contributed Assets to BUZZTIME also has
been approved by the stockholders of NTN.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
CONTRIBUTION OF CONTRIBUTED ASSETS
1.1 Contribution. Concurrently herewith, NTN shall assign,
convey and contribute to the capital of BUZZTIME all of NTN's right, title and
interest in and to the Contributed Assets, including the associated goodwill of
NTN.
1.2 Acceptance. BUZZTIME hereby accepts the foregoing
assignment and contribution of the Contributed Assets.
1.3 Representation and Warranty. NTN hereby represents and
warrants to BUZZTIME that it has good and marketable title to the Contributed
Assets and has not previously transferred or assigned all or any portion of the
Contributed Assets or any interest therein. BUZZTIME acknowledges and agrees
that, except for the foregoing warranty of title, the Contributed Assets are
being contributed and assigned by NTN on an "as is, where is" basis, without any
other representation or warranty, express or implied.
ARTICLE 2
MISCELLANEOUS
2.1 Further Assurances. At and after the date hereof, each
party shall, from time-to-time, at the request of any other party and without
further cost or expense to such other party, execute and deliver such documents
and instruments of conveyance, transfer and assumption, and take such other
actions, as such other party may reasonably request in order to give effect to
the transactions contemplated hereby.
18
<PAGE> 20
2.2 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors
and assigns.
2.3 Entire Agreement. This Agreement, together with the
exhibits attached hereto and any documents specifically referred to herein and
therein, constitute the entire agreement and understanding of the parties and
supersede any prior oral or written agreement, understanding, representations,
warranty, promise or document relating to the subject matter of this Agreement.
2.4 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first set forth above.
NTN COMMUNICATIONS, INC.
By:
------------------------------------------
Stanley B. Kinsey, Chief Executive Officer
BUZZTIME.COM, INC.
By:
------------------------------------------
V. Tyrone Lam, President
19
<PAGE> 21
SCHEDULE 1
TO
CONTRIBUTION AGREEMENT
----------
DESCRIPTION OF CONTRIBUTED ASSETS
REGISTERED TRADEMARKS:
Brain Buster(R)
Countdown(R)
HIT(R)
Hoops(R)
Link Up Live And Play The World(R)
NTN(R)
NTN Communications, Inc.(R)
NTN DiamondBall(R)
NTN Network(R)
NTN Powerplay(R)
Nightside(R)
Playmaker(R)
PlayersPlus(R)
QB1(R)
Showdown(R)
Sports Trivia(R)
Sports Trivia Challenge(R)
Triviaoke(R)
Undercover(R)
Uppercut(R)
Viewer's Revue(R)
PENDING TRADEMARKS:
Abused News(TM)
American Trivia Network(TM)/AmericanTriviaNetwork.com(TM)
Buzztime(TM)
Digital Interactive TV(TM)
Duh!(TM)
Fling(TM)
I-mercial(TM)
Kids Only Games(TM)/KidsOnlyGames.com(TM)
Kids Only Trivia(TM)/KidsOnlyTrivia.com(TM)
LiveSports(TM)/LivesSports.com(TM)
National Trivia League(TM)
National Trivia Network(TM)
NTN Kids/NTNKids.com(TM)
One Track Mind(TM)
Opposites Attack(TM)
PlaymakerTV(TM)
Predict the Play(TM)
Public Portal(TM)/PublicPortal.com(TM)
The Lame Game(TM)
The World is Your Game Show(TM)
Trivia Show(TM)/TriviaShow.com(TM)
Trivia Channel(TM)/TriviaChannel.com(TM)
Trivia Network(TM)/TriviaNetwork.net(TM)
20
<PAGE> 22
SCHEDULE 1
TO
CONTRIBUTION AGREEMENT
----------
DESCRIPTION OF CONTRIBUTED ASSETS
(CONTINUED)
PENDING TRADEMARKS:
(continued)
Spotlight(TM)
World Trivia League(TM)
PENDING TRADEMARKS, CANADA:
NTN ChronoQuiz
NTN's Slapshot Trivia
NTN's Countdown Trivia
NTN's Screen Test Trivia
Defi Hockey
Abused News
Opposites Attack
Fling
NTN's Fantasy Face-Off
National Trivia League
World Trivia League
The World is Our Game Show
Predict the Play and Win
PENDING TRADEMARKS, UNITED KINGDOM:
NTN Network
REGISTERED COPYRIGHTS:
Football Challenge
Passport
Playback
QB1
QB1 Official Playbook
QB1 on AOL
QB1 on EON
Showdown
So You Think You're Good at Trivia
Sports Trivia
Spotlight
Survivor
Wipeout
REGISTERED DOMAIN NAMES:
AmericanTriviaLeague.com
AmericanTriviaLeague.net
AmericanTriviaNetwork.com
AmericanTriviaNetwork.net
AmericanTriviaNetwork.org
BigTrivia.com
BigTrivia.net
21
<PAGE> 23
SCHEDULE 1
TO
CONTRIBUTION AGREEMENT
----------
DESCRIPTION OF CONTRIBUTED ASSETS
(CONTINUED)
REGISTERED DOMAIN NAMES
(continued)
BigTrivia.org
BigTriviaShow.com
BigTriviaShow.net
BuzzTime.com
BuzzTime.net
BuzzTime.org
BuzzTimeGames.net
BuzzTimeGames.com
BuzzTimeGames.org
BuzzTimeKids.net
BuzzTimeKids.com
BuzzTimeNetwork.com
BuzzTimeNetwork.org
BuzzTimeNetwork.net
BuzzTimeSports.com
BuzzTimeSports.net
BuzzTimeSports.org
BuzzTimeTrivia.com
BuzzTimeTrivia.net
BuzzTimeTrivia.org
BuzzTimeTV.net
BuzzTimeTV.org
BuzzTimeTV.com
e-Bert.com
e-Bert.net
e-Bertmail.com
e-Bertmail.net
Gamation.com
Gamation.net
Gamation.org
GameCoast.com
GameCoast.net
GameCoast.org
I-mercial.com
KidsOnlyGames.com
KidsOnlyGames.net
KidsOnlyTrivia.com
KidsOnlyTrivia.net
LiveSports.com
NationalTriviaLeague.com
NationalTriviaLeague.net
NationalTriviaNetwork.com
NTN.com
NTNKids.com
22
<PAGE> 24
SCHEDULE 1
TO
CONTRIBUTION AGREEMENT
----------
DESCRIPTION OF CONTRIBUTED ASSETS
(CONTINUED)
REGISTERED DOMAIN NAMES
(continued)
NTNKids.net
NTNTrivia.com
NTNTrivia.net
PlayMakerTV.com
PlayMakerTV.net
PlayTV.net
QB1.com
TheBigTriviaShow.com
TheTriviaChannel.com
TheTriviaChannel.net
TheTriviaNetwork.net
TheTriviaShow.com
TriviaChannel.net
TriviaChannel.org
TriviaNetwork.net
TriviaNetwork.org
TriviaShow.com
WorldTriviaLeague.com
WorldTriviaLeague.net
TRIVIA GAME SHOW LIBRARY INTERACTIVE PLAY-ALONG SPORTS GAMES
------------------------- -----------------------------------
NTN PREMIUM TRIVIA GAMES: NTN PLAY-ALONG GAMES:
Passport QB1
Playback NTN PowerPlay
Showdown Brackets
SportsIQ Football Challenge
Sports Trivia Challenge Survivor
Spotlight NTN Draft Show
Glory Daze Predict the Play
NTN TRIVIA GAMES:
Brain Buster
Countdown
Topix
Wipeout
Nightside
Sports Trivia
Retroactive
Football Weekend Roundup
Abused News
Appeteasers
Jukebox
Triviaoke
NTN Awards Show
BROADCAST CENTER OPERATING EQUIPMENT
------------------------------------
23
<PAGE> 25
NTN COMMUNICATIONS, INC.
5966 LA PLACE CT.
SUITE 100
CARLSBAD, CALIFORNIA 92006
-----------------------------------------------------------------
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 or her 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 1, 2000, at the annual
meeting of stockholders to be held on July 31, 2000 or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE> 26
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
NTN COMMUNICATIONS, INC.
JULY 31, 2000
o Please Detach and Mail in the Envelope Provided o
-------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Please mark your
A [X] votes as in this
example.
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to vote for all nominees
to the contrary below) listed at right
1. Election
of [ ] [ ] Nominees: Gary Arien
Director Vincent A. Carrino
(Instructions: To withhold authority to vote for any
individual nominee, draw a line through such
nominee's name in the list at right.)
FOR AGAINST ABSTAIN
2. Proposal to approve the transfer and
contribution of certain of the Company's [ ] [ ] [ ]
assets to its wholly-owned subsidiary,
BUZZTIME.com Inc. set forth in Proposal 2 of the accompanying
Proxy Statement
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.
</TABLE>
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