UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to
Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
| Filed by the Registrant x | Filed by a Party other than the Registrant o |
Check the appropriate box:
| Preliminary Proxy Statement | |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material Pursuant to |
NTN Buzztime,
Brooklyn ImmunoTherapeutics, 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 | |
| (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: | |
and PROXY STATEMENT
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2021 Annual Meeting August 20, 2021 Virtual-only meeting, | Inside CEO’s letter to stockholders Information on three voting proposals:
Election of five directors
Ratification of charter amendment to increase authorized common stock
Approval of Restated 2020 Stock Incentive Plan | |
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Important
| 140 58th Street Building A Suite 2100 Brooklyn, New York 11220 |
July , 2021
Dear Stockholder:
It is my pleasure to invite you to attend the Annual Meeting of Stockholders of Brooklyn ImmunoTherapeutics, Inc. to be held on August 20, 2021, at 9 a.m., Eastern time. This year’s Annual Meeting will be a “virtual meeting” conducted via live audio webcast, consistent with our prior practice and with prudent planning in light of the public health risks attributable to the COVID-19 (Coronavirus) pandemic. Each holder of common stock as of 5 p.m., Eastern time, on the record date of June 21, 2021, will be able to join the Annual Meeting by accessing a live webcast at virtualshareholdermeeting.com/BTX2021 and entering the control number included on the stockholder’s Notice Regarding theof Internet Availability of Proxy Materials or proxy card. Stockholders will also be able to vote their shares and submit questions via the Internet during the meeting by participating in the webcast.
During the Annual Meeting, stockholders will be asked to elect the entire board of directors, to ratify the filing and effectiveness of the certificate of amendment to our restated certificate of incorporation filed with the Delaware Secretary of State on March 25, 2021 with respect to the increase in the number of authorized shares of common stock from 15,000,000 to 100,000,000 shares, and to approve our Restated 2020 Stock Incentive Plan. These matters are important, and we urge you to vote in favor of the election of each of the director nominees, the ratification of the filing and effectiveness of the charter amendment to increase the number of authorized shares of common stock, and the approval of the Restated 2020 Stock Incentive Plan.
We are furnishing proxy materials to our stockholders over the Internet. This process expedites the delivery of proxy materials to our stockholders, lowers our costs and reduces the environmental impact of the Annual Meeting. Today we are sending to each of our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement for the StockholderAnnual Meeting to be Held on June 7, 2019:The Proxy Statement and our 2020 Annual Report to Stockholders, are availableas well as how to vote via proxy either by telephone or over the Internet.
It is important that you vote your shares of common stock virtually or by proxy, regardless of the number of shares you own. You will find the instructions for voting on your Notice of Internet Availability of Proxy Materials or proxy card. We appreciate your prompt attention.
Thank you for your support, and we look forward to joining you at http://buzztime.com/investors/investor-relations-financial-reportsthe Annual Meeting.
Sincerely,
Howard J. Federoff
Chief Executive Officer and President
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GENERAL ANNUALMEETING INFORMATION
To Stockholders of Brooklyn ImmunoTherapeutics, Inc.:
General
NTN Buzztime, Inc. (“NTN Buzztime,” “we,” “us,” “our” or the “Company”) has prepared these materialsThe board of directors is soliciting proxies for use at its 2019 annual meeting of stockholders and any adjournment or postponement thereof (the “Annual Meeting”). Thethe Brooklyn ImmunoTherapeutics, Inc. 2021 Annual Meeting will be a completely virtual meeting conducted via live audio webcast. We continue to embrace the latest technology to provide expanded access, improved communication and cost savings for our stockholders and the Company. As we have experienced, hosting a virtual meeting enables increased stockholder attendance and participation from any location around the world.
The Annual Meeting is scheduled to begin at 9:00 a.m. Pacific Time, on June 7, 2019. As discussed in more detail below, you will be able to attend the Annual Meeting online and submit your questions and vote during the meeting online by visiting www.virtualshareholdermeeting.com/NTN2019.of Stockholders. You are invited to attendreceiving the Annual Meeting online to voteenclosed proxy statement because you were a holder of common stock as of 5 p.m., Eastern time, either on the proposals described in this Proxy Statement during the meeting. However, you may vote your shares by simply following the instructions belowrecord date of June 21, 2021 or on March 25, 2021 and therefore are entitled to vote via the Internet, by telephone or by mail. Even if you intend to attend the Annual Meeting online, we encourage you to vote your shares in advance using onenotice of the methods described in this Proxy Statement to ensure that your vote will be represented at the Annual Meeting.
The proxy materials were first sent or made available to stockholders on or about April 26, 2019. We are soliciting proxies pursuant to this Proxy Statement for use atYou may participate in the Annual Meeting. The mailing address of our principal executive offices has changedMeeting, including casting votes and is now 1800 Aston Avenue, Suite 100, Carlsbad, California 92008.
Notice of Internet Availability of Proxy Materials
In accordance with rules ofsubmitting questions, by accessing a live webcast at virtualshareholdermeeting.com/BTX2021 and then using the Securities and Exchange Commission (“SEC”), we use16-digit control number provided on the Internet as the primary means of furnishing proxy materials to our stockholders. Accordingly, unless a stockholder previously elected to receive printed copies of our proxy materials, a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) has been sentor proxy card being delivered to stockholders instead of mailing printed copies. The Notice of Internet Availability provides instructions on howyou. Online check-in to access our proxy materials via the Internet and how to request a printed set at no charge. In addition, stockholders can elect to receive future proxy materials electronically by email or in printed form by mail, and any such election will remain in effect until terminated by the stockholder. We encourage all stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the cost and environmental impact of our annual meetings.
Attending and Participating in the Virtual Annual Meeting
Only stockholders of record at the close of business on April 10, 2019, the record date for the Annual Meeting and those who hold a valid proxy on their behalf, will be entitled to attend and vote at the Annual Meeting. We expect the audio webcast of the Annual Meeting to begin promptly at 9:00 a.m. Pacific Time. Online check-in will begin at 8:45 a.m. Pacific Time, Eastern time, and we suggest checking-in at thatstockholders are encouraged to allow time to allow ample timelog into the meeting webcast and test their computer audio system. There will be no physical location for the check-in procedures. Please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone or similar companies.
Stockholders of Record. If your shares were registered directly in your name with our transfer agent at the close of business on the record date, you are considered, with respect to those shares, the “stockholder of record.” As the stockholder of record, you may attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/NTN2019 and using your 16-digit control number on your Notice of Internet Availability or your proxy card (if you received a printed copy of our proxy materials) to access the meeting.
Beneficial Owners of Shares Held in Street Name. If your shares were held in an account at a brokerage firm, bank, dealer or other similar organization at the close of business on the record date, then you are a beneficial owner of shares held in “street name,” and the Notice of Internet Availability is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of the Annual Meeting. You are invited to attend the Annual Meeting online. However, because you are not the stockholder of record, you may not vote your shares online at the Annual Meeting unless you request and obtain a legal proxy from your broker or other organization that holds your account. We suggest that you contact your broker or other organization for additional information.
Proposals You Are Asked to Vote on and the Board’s Voting Recommendations
The proposals youAnnual Meeting will be askedheld to consider and vote on and the recommendations of our board of directors are:upon:
| Proposal |
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| 1. |
| Proposal 2. | |||
| Proposal 3. | Approval of Restated 2020 Stock Incentive Plan |
Except for the proposals described above, our board of directors is not aware of any
Any other matters thatbusiness properly presented may be properly presented for a voteacted upon at the Annual Meeting. However, if a matter requiring a vote of our stockholders is properly presented for a vote during the Annual Meeting, the recommended vote of our board of directors will be communicated to stockholders present at the Annual Meeting at that time and the proxy holders intend to vote the shares represented by a proxy submitted by a stockholder in accordance with the recommendation of our board of directors.
Record Date and Voting
Our common stock is the only class of voting stock outstanding. Each share of our common stock is entitled to one vote for each director position and each other proposal.
Under Sections 204 and 205 of the DGCL, when a matter is submitted for ratification at a stockholders meeting, any claim that a defective corporate act ratified under Section 204 is void or voidable due to the failure of authorization or that the Delaware Court of Chancery should determine, in its discretion, that a ratification in accordance with Section 204 of the DGCL not be effective or be effective only on certain conditions, must, in either case, be brought within 120 days from the time a certificate of validation is filed with the secretary of state of the State of Delaware and becomes effective in accordance with the DGCL. We expect to file a certificate of validation for the Share Increase Ratification, if approved by our stockholders, promptly after the adjournment of the Annual Meeting.
Accordingly, if the Share Increase Ratification is approved at the Annual Meeting, any claim that the effectiveness of the increase in the number of authorized shares of common stock as described in the accompanying proxy statement is void or voidable due to a failure of authorization with respect to such increase or that the Delaware Court of Chancery should declare, in its discretion, that such Share Increase Ratification not be effective or be effective only on certain conditions, must, in either case, be brought within 120 days from the time at which the certificate of validation filed with respect to such Share Increase Ratification becomes effective under the DGCL.
In accordance with Securities and Exchange Commission rules, we are providing stockholders with access to proxy materials on the Internet, instead of mailing printed copies. We are mailing to stockholders, commencing on or about July , 2021, a Notice of Internet Availability of Proxy Materials to provide:
| · | directions for accessing and reviewing the proxy materials on the Internet and submitting a proxy over the Internet or by telephone; |
| · | instructions for requesting copies of proxy materials in printed form or by email at no charge; and |
| · | a control number for use in submitting proxies and accessing the Annual Meeting webcast. |
By Order of the Board,
Secretary
July , 2021
When 9 a.m., Eastern time, on on August 20, 2021 Where Webcast only, access at: |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON August 20, 2021: The Notice of 2021 Annual Meeting of Stockholders, the Proxy Statement, the 2020 Annual Report to Stockholders and instructions for voting via the Internet can be accessed at proxyvote.com. |
How to Vote in Advance Your vote is important. Please vote as soon as possible by one of the methods shown below. Your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form should be readily available. Via Internet (Any Web-Enabled Device)
By Telephone (U.S. or Canada only)
By Mail (Pursuant to Printed Materials)
We will maintain a list of stockholders of record as of the record date at our corporate headquarters, 140 58th Street, Building A, Suite 2100, Brooklyn, New York 11220, for a period of ten days prior, and ending at the close of, the Annual Meeting. In order for us to make the list available to you quickly and safety, we recommend that you notify us by emailing [EMAIL] one business day in advance of the day on which you intend to review the list. Beginning 15 minutes prior to, and during, the Annual Meeting, the list of our stockholders of record will be available for viewing by stockholders for any purpose germane to the meeting at virtualshareholdermeeting.com/BTX2021. |
| 140 58th Street Building A Suite 2100 Brooklyn, New York 11220 |
Proxy Statement dated July , 2021
2021 Annual Meeting of Stockholders
Brooklyn ImmunoTherapeutics, Inc., a Delaware corporation, is furnishing this Proxy Statement and related proxy materials in connection with the solicitation by its board of directors of proxies to be voted at its 2021 Annual Meeting of Stockholders and any adjournments thereof. Brooklyn ImmunoTherapeutics, Inc. is providing these materials to holders of record of its common stock, $0.005 par value per share, as of 5 p.m., Eastern time, either on the record date of June 21, 2021 or on March 25, 2021 and is first mailing the materials on or about July , 2021.
| The Annual Meeting is scheduled to be held exclusively by webcast as follows: | |
| Date | Friday, August 20, 2021 |
| Time | 9 a.m., Eastern time |
| Meeting Webcast Address | virtualshareholdermeeting.com/BTX2021 |
Your vote is important.
Please see the detailed information that follows in the Proxy Statement.
Contents
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. References in this Proxy Statement to “Brooklyn ImmunoTherapeutics” and to “we,” “us,” “our” and similar terms refer to Brooklyn ImmunoTherapeutics, Inc.
Annual Meeting of Stockholders
| Time and Date | 9 a.m., Eastern time, on August 20, 2021 |
| Meeting Webcast Address | virtualshareholdermeeting.com/BTX2021 |
| Record Date | 5 p.m., Eastern time, on June 21, 2021 |
| Voting | Stockholders will be entitled to one vote for each outstanding share of common stock that they hold of record as of the record date, subject to the limitations described under “—Explanation of Voting” below. |
| Total Votes Per Proposal | 15,000,000 votes, based on the total number of shares of common stock authorized without giving effect to the certificate of amendment to our restated certificate of incorporation filed with the Delaware Secretary of State on March 25, 2021, or the Share Increase Amendment, which purported to increase the number of shares of authorized common stock and which is the subject of the vote described under “Proposal 2 — Ratification of Charter Amendment to Increase Authorized Common Stock. |
Annual Meeting Agenda
| Proposal | Board Recommendation |
| Election of directors | FOR each nominee |
| Ratification of filing and effectiveness of charter amendment to increase number of authorized shares of common stock | FOR |
| Approval of Restated 2020 Stock Incentive Plan | FOR |
Explanation of Voting
As described under “Proposal 2 — Ratification of Charter Amendment to Increase Authorized Common Stock,” there may be uncertainty regarding the validity or effectiveness of the Share Increase Amendment, which was intended to increase the number of shares of authorized common stock from 15,000,000 to 100,000,000. To eliminate that uncertainty, and to determine whether each proposal has been adopted at the Annual Meeting, we will instruct the inspector of elections to provide a report that subtracts from the votes cast in favor of each proposal, and that treats as not having been outstanding and entitled to vote for purposes of each proposal, the number of shares of common stock cast in excess of 15,000,000. The number of shares subtracted from the votes cast is equal to the number of shares that are listed on our corporate records as outstanding, but which may not be valid because of the irregularities described in Proposal 2. We refer to such shares of common stock so subtracted as putative stock because the board of directors cannot determine with certainty that such shares are valid. Only stockholders of record on the record date are entitled to vote at the Annual Meeting or at any adjournment of the Annual Meeting.
How to Cast Your Vote
You can vote by any of the following methods:
| Until 11:59 p.m., Eastern time, on August 19, 2021 | At the Annual Meeting on August 20, 2021 | |
· Internet: From any web-enabled device at proxyvote.com · Telephone: +1.800.690-6903 · Completed, signed and returned proxy card | · Internet: Joining the Annual Meeting at virtualshareholdermeeting.com/BTX2021 |
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 | Election of Directors |
We are asking stockholders to elect the following five director nominees, each of whom currently serves as a member of the board of directors. The following presents information as of June 21, 2021 with respect to each director nominee:
| Director | Experience/ | Independent | Committee | ||||||||||
| Name | Age | Since | Recent Occupations | Qualifications | Yes | No | Memberships | ||||||
| Charles Cherington | 57 | March 2021 | Ara Partners: Co-founder and managing partner since 2017 Intervale Capital: Co-founder and managing partner, 2006 to 2017 | · Finance · Leadership · Industry | ü | · Audit · Compensation · Nominating and | |||||||
| Howard J. Federoff | 68 | April 2021 | Brooklyn ImmunoTherapeutics, Inc.: Chief Executive Officer and President since April 2021 Aspen Neuroscience, Inc.: Senior Adviser, January to April 2021, and Chief Executive Officer, August 2019 to December 2020 University of California, Irvine, School of Medicine: Professor of Neurology, 2015 to April 2021 University of California, Irvine Health System: Vice Chancellor for Health Affairs and Chief Executive Officer, 2015 to February 2018 | · Industry · Education · Innovation | ü | ||||||||
| Luba Greenwood | 42 | March 2021 | Binney Street Capital, LLC (venture capital fund formed by Dana-Farber Cancer Institute): Managing partner since December 2020 Dana-Farber Cancer Institute: Senior advisor to chief executive officer, April 2019 to December 2020 Brooklyn ImmunoTherapeutics LLC: Consultant, October 2018 to February 2021 Verily Life Sciences LLC (research subsidiary of Alphabet Inc.): Head of strategic business development and corporate ventures, February 2018 to July 2019 F. Hoffmann-La Roche Ltd.: Vice president of global business development and mergers & acquisitions and head of Roche Diagnostics Innovation Center, East Coast, 2015 to February 2018 | · Industry · Leadership · Innovation | ü | ||||||||
| Dennis H. Langer | 69 | May 2021 | Director of several public and private pharmaceutical, biotechnology and diagnostic companies | · Industry · Governance · Education | ü | · Audit (Chair) · Compensation (Chair) | |||||||
| Erich Mohr | 66 | May 2021 | MedGenesis Therapeutix Inc.: Chair and chief executive officer since 2006 Oak Bay Biosciences Inc.: Chair since November 2020 | · Industry · Leadership · Innovation | ü | · Audit · Nominating and | |||||||
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Board Representation
DIVERSITY One of our five director nominees voluntarily self-identifies as having a diverse identity (gender or race). | INDEPENDENCE Four of our five director nominees qualify as independent under regulations of the Securities and Exchange Commission and the NYSE American LLC Company Guide. | TENURE The tenure of our director nominees emphasizes a fresh perspective as a result of the fundamental change in our business that resulted from our acquisition of Brooklyn Immuno-Therapeutics LLC in March 2021. | ||
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Board Governance Practices
| Elections: | Classified Board | No | |
| Frequency of Director Elections | Annual | ||
| Voting Standard | Plurality | ||
| Resignation Policy | No | ||
| Mandatory Retirement Age or Tenure | No | ||
| Chair: | Separate Chair of the Board and CEO | Yes | |
| Robust Responsibilities and Duties Assigned to Independent Chair | Yes | ||
| Meetings: | Independent Directors Meet Without Management Present | Yes | |
| Director Status: | Directors Overboarded per ISS or Glass Lewis Voting Guidelines | None | |
| Standing Board Committee Membership Independence | 100% | ||
| Board Oversight of Company Strategy and Risk | Yes | ||
| Shares Pledged by Directors | None | ||
| Shareholder Rights: | Cumulative Voting | No | |
| Proxy Access Bylaw | Yes |
| 3 |
 | Ratification of Charter Amendment to Increase Authorized Common Stock |
| 4 |
 | Approval of Restated 2020 Stock Incentive Plan |
| Key Amended Plan Provision | Summary Description |
| Shares reserved | The sum of (a) 8,484,936 shares and (b) an annual increase on January 1 of each year beginning in 2022 and ending in (and including) 2031 equal to the lesser of (i) 5% of the shares of Common Stock outstanding (on an as‑converted basis) on December 31 of the immediately preceding year and (ii) such smaller number of shares of Common Stock as may be determined by the board. |
| Multiple award types | Various types of awards may be granted as compensation tools to motivate our workforce, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, and other types of share and cash-based awards. |
| Maximum award terms | Awards may have terms of up to 10 years. |
| No repricing | Awards may not be repriced without stockholder approval. |
| No transferability | Awards generally may not be transferred, except by will or laws of descent and distribution. |
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Participation in the Virtual Annual Meeting
The board of directors considers the appropriate format of our annual meeting of stockholders on an annual basis. This year the board chose a virtual meeting format for the Annual Meeting in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet connected devices, including smart phones and tablets, laptop or desktop computers. We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual meeting format also will allow stockholders to maintain their own personal safety in light of the ongoing public health risks attributable to the COVID-19 (Coronavirus) pandemic. The virtual format allows stockholders to submit questions and comments during the meeting.
The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders. To ensure they can participate, stockholders and proxyholders should visit virtualshareholdermeeting.com/BTX2021 and enter the 16-digit control number included on their Notice of Internet Availability of Proxy Materials or proxy card. If you wish to participate in the meeting and your shares are held in street name, you must obtain, from the broker, bank or other organization that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the Annual Meeting.
Stockholders can vote their shares and submit questions via the Internet during the Annual Meeting by accessing the Annual Meeting website at virtualshareholdermeeting.com/BTX2021. We will answer any timely submitted questions on a matter to be voted on at the Annual Meeting. Only holders of record of our common stock at the close of businessMeeting before voting is closed on the record date, April 10, 2019,matter. Following adjournment of the formal business of the Annual Meeting, we will address appropriate general questions from stockholders regarding our company in the order in which the questions are entitledreceived. Questions relating to noticestockholder proposals or our company may be submitted in the field provided in the web portal at or before the time the questions are to be discussed. All questions received during the Annual Meeting will be presented as submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those questions together and provide a single response to avoid repetition. Additional information regarding the submission of questions during the Annual Meeting can be found in our 2021 Rules of Conduct and Procedure, a copy of which is attached hereto as Appendix D. Any material changes or updates to votethe 2021 Rules of Conduct and Procedure will be posted on our website and disclosed in a periodic report to the Securities and Exchange Commission, or the SEC, on a Current Report on Form 8-K.
Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern time, and you should allow ample time to log in to the meeting webcast and test your computer audio system. During online check-in and continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or at meeting time, you should call the technical support number available at virtualshareholdermeeting.com/BTX2021.
We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, stockholders will be able to communicate with us during the Annual Meeting so they can ask questions. An audio replay of the Annual Meeting will be made publicly available at https://investor.brooklynitx.com/overview/default.aspx until our 2022 annual meeting of stockholders.
This audio replay will include each stockholder question addressed during the Annual Meeting. There were approximately 2,878,096 shares of our common stock outstanding as ofWe are utilizing technology from Broadridge Financial Solutions, Inc., or Broadridge. The Broadridge platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the close of business onplatform technology before going “live” for the record date.Annual Meeting.
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How to Vote
Stockholders of Record.If you are a stockholder of record of shares of our stock, there are four ways to vote:Questions and Answers About the Annual Meeting
| Q: |
| A: | This year the Annual Meeting |
| Q: | Who may join the Annual Meeting? |
| A: | The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders of record as of the record date of June 21, 2021 and holders of valid proxies from such record holders. To ensure they can participate, stockholders and proxyholders should visit virtualshareholdermeeting.com/BTX2021and enter the 16-digit control number |
Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern time, on August 20, 2021. We encourage you to allow ample time to log in to the meeting webcast and test your computer audio system.
| Q: | What materials have been prepared for stockholders in connection with the Annual Meeting? |
| A: | We are furnishing you and other stockholders of record with the following proxy materials: |
| · | our 2020 Annual Report to Stockholders, which we refer to as the 2020 Annual Report and which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2020; |
| · | this Proxy Statement for the 2021 Annual Meeting, which we refer to as this Proxy Statement and which also includes a letter from our Chief Executive Officer and President to stockholders, and a Notice of 2021 Annual Meeting of Stockholders; and |
| · | a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice of Internet Availability and which includes a control number for use in submitting proxies and accessing the Annual Meeting webcast. |
These materials were first mailed or made available to stockholders on or about July , 2021.
If you request, in accordance with the instructions provided in the Notice of Internet Availability, a printed set of proxy materials, you will receive by mail, at no charge, printed copies of the 2020 Annual Report, this Proxy Statement, a proxy card for the Annual Meeting and a postage-paid, pre-addressed envelope to be used to return the completed proxy card. Your proxy card will include a control number for use in accessing the Annual Meeting webcast. If, in accordance with the instructions provided in the Notice of Internet Availability, you request that a set of proxy materials be emailed to you, you will receive by email, at no charge, electronic copies of the 2020 Annual Report and this Proxy Statement.
| Q: | Why was I mailed a Notice of Internet Availability, rather than a printed set of proxy materials? |
| A: | In accordance with rules adopted by the SEC, we are furnishing the proxy materials to stockholders by providing access via the Internet, instead of mailing printed copies. This process expedites the delivery of proxy materials to our stockholders, lowers our costs and reduces the environmental impact of the Annual Meeting. The Notice of Internet Availability tells you how to access and review the proxy materials on the Internet and how to vote on the Internet. It also provides instructions you may follow to request paper or emailed copies of the proxy materials. |
| Q: | Are the proxy materials available via the Internet? |
| A: | You can access and review the proxy materials for the Annual Meeting at https://investor.brooklynitx.com/overview/default.aspx or proxyvote.com. In order to submit your proxies or access the Annual Meeting webcast, however, you will need to refer to the Notice of Internet Availability or proxy card |
| Q: | What is a proxy? |
| A: | The term “proxy,” when used with respect to stockholder, refers to either a person or persons legally authorized to act on the stockholder’s behalf or a format that allows the stockholder to vote without being physically present at the Annual Meeting. |
Because it is important that as many stockholders as possible be represented at the Annual Meeting, the board of directors is asking that you review this Proxy Statement carefully and then vote by following the instructions set forth on the Notice of Internet Availability or proxy card. In voting prior to the Annual Meeting, you will deliver your proxy to the proxy holders, which means you will authorize the proxy holders to vote your shares at the Annual Meeting in the way you instruct. The proxy holders consist of Howard Federoff and Charles Cherington. All shares represented by valid proxies will be voted in accordance with the stockholder’s specific instructions.
| Q: | What matters will the stockholders vote on at the Annual Meeting? |
| A: | Proposal |  | Election of the following five director nominees: | |||||
| · | Charles Cherington | · | Howard J. Federoff | · | Luba Greenwood | |||
| · | Dennis H. Langer | · | Erich Mohr | |||||
 | Ratification of a charter amendment to increase the number of authorized common stock. | |||||||
| Proposal |  | Approval of Restated 2020 Stock Incentive Plan. | ||||||
| Q: | Who can vote at the Annual Meeting? |
| A: | As of 5 p.m., Eastern time, on June 21, 2021, the record date, there were outstanding a total of shares, each of which will be entitled to one vote on each proposal. However, to eliminate uncertainty regarding the validity or effectiveness of the certificate of amendment to our restated certificate of incorporation filed with the Delaware Secretary of State on March 25, 2021, which was intended to increase the number of shares of authorized common stock from 15,000,000 to 100,000,000, and to determine whether each proposal has been adopted at the Annual Meeting, we will instruct the inspector of elections to provide a report that subtracts from the votes cast in favor of each proposal, and that treats as not having been outstanding and entitled to vote for purposes of each proposal, the number of shares cast in excess of 15,000,000. We refer to such shares of common stock as putative stock because the board of directors cannot determine with certainty that such shares are valid. For more information, please see “Proposal 2-Ratification of Charter Amendment to Increase Authorized Common Stock.” Holders of record of shares of common stock as of March 25, 2021 are entitled to receive notice of the Annual Meeting, but are not entitled to vote those shares on any proposal considered at the Annual Meeting unless they were also holders of the shares as of the record date of June 21, 2021. |
| Q: | What is a stockholder of record? |
| A: | A stockholder of record is a stockholder whose ownership of the common stock is reflected directly on the books and records of our transfer agent, American Stock Transfer & Trust Company. |
| Q: | What does it mean for a broker or other nominee to hold shares in “street name”? |
| A: | If you beneficially own shares held in an account with a broker, bank or similar organization, that organization is the stockholder of record and is considered to hold those shares in “street name.” An organization that holds your beneficially owned shares in street name will vote in accordance with the instructions you provide. If you do not provide the organization with specific voting instructions with respect to a proposal, the organization’s authority to vote your shares will, under the rules of the NYSE American LLC Company Guide, depend upon whether the proposal is considered a “routine” or a non-routine matter. |
| · | The organization generally may vote your beneficially owned shares on routine items for which you have not provided voting instructions to the organization. The only routine matter expected to be voted on at the Annual Meeting is the ratification of the charter amendment to increase the number of shares of authorized common stock (Proposal 2). |
| · | The organization generally may not vote on non-routine matters, which, for purposes of the Annual Meeting, consist of Proposals 1 and 3. Instead, it will inform the inspector of election that it does not have the authority to vote on those matters. This is referred to as a “broker non-vote.” |
For the purpose of determining a quorum, we will treat as present at the Annual Meeting any proxies that represent shares entitled to vote on any matter at the meeting.
| Q: | How do I vote my shares if I do not attend the Annual Meeting? |
| A: | If you are a stockholder of record, you may submit your voting instructions prior to the Annual Meeting as follows: |
| · | Via the Internet: | You may submit a proxy via the Internet by going to proxyvote.com, in accordance with the voting instructions on the Notice of Internet Availability or proxy card. You may submit a proxy by Internet 24 hours a day until 11:59 p.m., Eastern time, on August 19, 2021. You will be given the opportunity to confirm that your instructions have been recorded properly. | |
| · | By Telephone: | You may submit a proxy by calling +1.800.690.6903 and following the instructions provided on the telephone line. You may submit a proxy by telephone 24 hours a day until 11:59 p.m., Eastern time, on August 19, 2021. Easy-to-follow voice prompts will allow you to submit your voting instructions and confirm that your instructions have been recorded properly. | |
| · | By Mail | If you obtain a proxy card by mail, you may submit your voting instructions by returning the completed and signed proxy card in a postage-paid return envelope that will be provided with the proxy card. |
If you hold shares in street name, you may have your shares voted by following the voting instructions provided by your bank, broker or other nominee. In general, you may submit a proxy prior to the Annual Meeting as follows:
| · | Via the Internet: | You may | |
| · | By Telephone: | You may submit a proxy by calling +1.800.690.6903 and following the instructions provided on the telephone line. You may submit a proxy by telephone 24 hours a day until 11:59 p.m., Eastern time, on August 19, 2021. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been recorded properly. |
For your information, submitting your voting instructions via the Internet is the least expensive to Brooklyn ImmunoTherapeutics, followed by submitting a proxy by telephone, with mailing a proxy being the most expensive.
| Q: | Can I vote at the Annual Meeting? |
| A: | If you are a stockholder of record as of the record date of June 21, 2021, you may vote virtually at the Annual Meeting, whether or not you previously voted. If your shares are held in street name, you must obtain a written proxy, executed in your favor, from the stockholder of record to be able to vote at the Annual Meeting. |
| Q: | Can I ask questions at the Annual Meeting? |
| A: | You may submit questions via the Internet during the Annual Meeting by |
| Q: | Why is the Annual Meeting being conducted as a virtual meeting? |
| A: | The board considers the appropriate format of our annual meeting of stockholders on an annual basis. This year the board chose a virtual meeting format for the Annual Meeting in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet-connected devices, including smart phones and tablet, laptop or desktop computers. The virtual meeting format also will allow stockholders to maintain their own personal safety in light of the ongoing public health risks attributable to the COVID-19 (Coronavirus) pandemic. |
We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual format allows stockholders to submit questions and comments during the meeting. We are utilizing technology from Broadridge, a leading virtual meeting solution. The Broadridge platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the platform technology before going “live” for the Annual Meeting.
| Q: | If I am unable to participate in the live audio webcast of the Annual Meeting, may I listen at a later date? |
| A: | An audio replay of the Annual Meeting will be posted and publicly available at https://investor.brooklynitx.com/overview/default.aspx following the Annual Meeting and will remain publicly available until our next annual meeting of stockholders in 2022. This audio replay will cover the entire Annual Meeting, including each stockholder question addressed during the Annual Meeting. |
| Q: | May I change my vote or revoke my proxy? |
The proxy holders identified in the proxy card will vote all shares of our stock represented by a properly completed and executed proxy received in time for the Annual Meeting in accordance with the stockholder’s instructions. If you submit your executed proxy but do not fill out the voting instructions on the proxy card, the shares represented by your proxy will be voted for the election of each director nominee nominated by our board of directors, in favor of Proposals 2, 3 and 5 and, with respect to Proposal 4, in favor of holding future advisory votes on the compensation of our named executive officers every three years. If any other matter is properly presented at the Annual Meeting, the proxy holders will vote shares represented by a proxy submitted by a stockholder in accordance with the recommendation of our board of directors.
| A: | If you are a stockholder of record and previously delivered a proxy, you may subsequently change or revoke your proxy at any time before it is exercised by: |
| · | submitting a proxy via the Internet or telephone at a later time; |
| · | submitting a completed and signed proxy card with a later date; or |
| · | voting via the Internet at the Annual Meeting. |
Beneficial Owners of Shares Held in Street Name.If you are a beneficial owner of shares of our stock held in street name, you should have received a notice containing voting instructions from the organization that holdscontact your shares (e.g., the brokerage firm, bank, or dealer). Follow the instructions provided by that organization to ensure that your vote is counted. If you wish to vote online during the Annual Meeting, you must obtain a legal proxy from the brokerage firm, bank, dealerbroker or other similar organization that holds your shares. A legal proxy is a written document that authorizes you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your sharesnominee for instructions regarding obtaining a legalas to whether, and how, you can change or revoke your proxy.
| Q: | What happens if I do not give specific voting instructions? |
What happens if I do not vote or provide voting instructions?
| A: | If you are a stockholder of record and you return a proxy card without giving specific voting instructions, the proxy holders will vote your shares in the manner recommended by the board on the proposal presented in this Proxy Statement and as the proxy holders may determine in their discretion on any other matters properly presented for a vote at the Annual Meeting. |
Stockholders of Record.If you are a stockholder of record and do not vote by telephone, through the Internet, by completing a proxy card or online during the Annual Meeting, your shares will not be voted.
Beneficial Owners of Shares Held in Street Name.If you are a beneficial owner of shares held in street name and if you do not submitprovide specific voting instructions to the brokerage firm,broker, bank dealer or other similar organization that holdsis the stockholder of record of your shares, thatthe organization generally may generally vote your shares in its discretion on proposals designated as “routine” underroutine, but not non-routine, matters. The only routine matter expected to be voted on at the rulesAnnual Meeting is the ratification of the New York Stock Exchange (“NYSE”) but that organization cannot vote on “non-routine” proposals.charter amendment to increase the number of shares of authorized common stock (Proposal 2). If the organization that holds your shares does not receive voting instructions from you on a non-routine proposal, that organization will inform the inspector of elections that it does not have the authority to vote on that proposal with respect to your shares. This is generally referred to as a “broker non-vote.”
Proposal 5 (the proposal to ratify the appointment of Squar Milner LLP as our registered independent public accounting firm for the fiscal year ending December 31, 2019) is considered a routine proposal under NYSE rules. All of the other proposals described in this Proxy Statement are considered non-routine proposals under NYSE rules. Accordingly, if you hold your shares in street name and you do not submit voting instructions to the brokerage firm, bank, dealer or other similar organization that holds your shares, that organization may exercise its discretion to vote your shares on Proposal 5 but will not be permittedhow to vote your shares on Proposals 1 2,or 3, or 4.
Revocability of Proxies
Stockholders of Record.If you are a stockholder of record, you may revoke your proxy instructions at any time before your shares have been voted by:
Any written notice of revocation or later-dated proxy card should be deliveredsubject to the address below so thata broker non-vote and no vote will be cast on those matters. See “Q. What does it is received by our Secretary by the close of business on June 6, 2019.
NTN Buzztime, Inc.
Attention: Secretary
1800 Aston Avenue, Suite 100
Carlsbad, California 92008
Beneficial Owners of Shares Held in Street Name.If your shares are held in street name, you must follow the instructions of yourmean for a broker bank or other nominee to revoke your voting instructions.hold shares in ‘street name’?” above.”
| Q: | What should I do if, during check-in or the meeting, I have technical difficulties or trouble accessing the virtual meeting website? |
| A: | Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern time. You should allow ample time to log in to the meeting webcast and test your computer audio system. During online check-in and continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or at meeting time, you should call the technical support number available at virtualshareholdermeeting.com/BTX2021. |
| Q: | What if other matters are presented at the Annual Meeting? |
| A: | If a stockholder of record provides a proxy by voting in any manner described in this Proxy Statement, the proxy holders will have the discretion to vote on any matters, other than the proposals presented in this Proxy Statement, that are properly presented for consideration at the Annual Meeting. We are not currently aware of any other matters to be presented for consideration at the Annual Meeting. |
Vote Required for Election or Approval
QuorumIntroduction
The presence, in person (including by remote communication via the audio webcastOur only voting securities are outstanding shares of common stock. As of the Annual Meeting)record date, which is 5 p.m., Eastern time, on June 21, 2021, there were outstanding shares of common stock, each of which will be entitled to one vote on each proposal, resulting in a total of votes capable of being cast on each proposal.
As described under “Proposal 2 - Ratification of Charter Amendment to Increase Authorized Common Stock,” there may be uncertainty regarding the validity or by proxy,effectiveness of the holderscertificate of a majorityamendment to our restated certificate of incorporation filed with the Delaware Secretary of State on March 25, 2021, or the Share Increase Amendment, which was intended to increase the number of shares of ourauthorized common stock from 15,000,000 to 100,000,000. To eliminate that uncertainty, and to determine whether each proposal has been adopted at the Annual Meeting, we will instruct the inspector of elections to provide a report that subtracts from the votes cast in favor of each proposal, and that treats as not having been outstanding and entitled to vote for purposes of each proposal, shares cast in excess of 15,000,000. We refer to such shares of common stock as putative stock because the board of directors cannot determine with certainty that such shares are valid. Only stockholders of record on the record date are entitled to vote at the Annual Meeting will constitute a quorum. Abstentions will be counted as present for purposesor at any adjournment of determining the presence of a quorum. If you submit a properly executed proxy via the Internet or by telephone or by mail, regardless of whether you abstain from voting on one or more proposals, your shares will be counted as present at the Annual Meeting for the purpose of determining a quorum. Broker non-votes will also be counted as present for the purpose of determining the presence of a quorum at the Annual Meeting. The inspector of elections will determine whether a quorum is present and will tabulate the votes cast at the Annual Meeting.
Solicitation
We will bear the cost of soliciting proxies pursuant to this Proxy Statement. This Proxy Statement and the accompanying proxy solicitation materials, in addition to being mailed directly toOnly stockholders of record as of the record date will be distributed through brokers, custodians and other nomineesentitled to beneficial owners of shares of our stock. We will reimburse such parties for their reasonable expenses in forwarding our solicitation materials to beneficial owners. In addition to solicitations by mail, our directors, officers, and employees, without additional compensation, may solicit proxies on our behalf in person, by phone, or by electronic communication.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees for Election
As further discussed under “Board of Directors and Corporate Governance—Director Nominations,” below, the nominating and corporate governance/compensation committee (“N&CG/C Committee”) of our board of directors considers new candidates for our board of directors suggested by current members of our board of directors, management and stockholders. There are no differences in the manner in which the N&CG/C Committee evaluates director nominees based on whether the nominee is recommended by a stockholder or by current members of our board of directors or by management. The N&CG/C Committee has established qualifications for directors, including the ability to apply fair and independent judgment in a business situation and the ability to represent the interests of all our stockholders and constituencies.
To determine the appropriate mix of professional experiences, expertise and backgrounds for our board of directors and its committees, the N&CG/C Committee and our entire board of directors discuss the composition of our board of directors during the year. Based upon the recommendation of the N&CG/C Committee, our board of directors selected the nominees identified in the table below for election as directorsvote at the Annual Meeting. These nominees allow us to benefit both fromA quorum for the deep companytransaction of business at the Annual Meeting will be met if at least 7,500,001 shares of common stock are present virtually or represented by proxy, which number represents a majority of the total number of shares of common stock issued and industry knowledgeoutstanding other than shares of our longer-serving directors and the fresh perspectives brought by our newer directors, two of whom joined our board of directors less than two years ago.putative stock.
| Name | Age | Director Since | ||
| Jeff Berg | 59 | 2008 | ||
| Ram Krishnan | 43 | 2014 | ||
| Steve Mitgang | 57 | 2010 | ||
| Richard Simtob | 49 | 2017 | ||
| Gregory Thomas | 58 | 2017 | ||
| Paul Yanover | 52 | 2012 |
 | Election of Directors |
Each nominee identified above is currently servingdirector will be elected by a plurality of the votes cast on our boardthe matter. Broker non-votes will not have any effect on the outcome of directors and each has indicated a willingness to continue to serve as a director if elected. If any of them should decline or be unable to serve as a director, however, the proxy holders will vote for the election of another persondirectors, since broker non-votes are not counted as “votes cast.” Similarly, votes to “withhold” will have no effect on the outcome of the proposal.
Under our boardcertificate of directors recommends. If elected, nominees will holdincorporation, our bylaws and the Delaware General Corporation Law, a director holds office until our 2020 annual meeting of stockholders and until their respective successors are dulya successor is elected and qualified. Proxies may not be voted for a greaterqualified or until his or her earlier resignation or removal. Each of the nominees currently serves as one of our directors.
 | Ratification of Charter Amendment to Increase Authorized Common Stock |
The ratification of the amendment to our certificate of incorporation to effect an increase in the authorized number of persons thanshares of common stock must be approved by the numberaffirmative vote of nominees named herein.the stockholders representing a majority of the outstanding voting power on the matter. Abstentions will count as votes against this proposal. Because this proposal is considered a routine matter, discretionary votes by brokers will be counted.
Jeff Berg has served on our board of directors since August 2008 and as chairman of our board of directors since November 2008. From July 2012 until September 2014, he served as our chief executive officer. Mr. Berg has served as chief executive officer of Surfline/Wavetrack Inc., a digital media business, since May 2015, and as chairman of its board of directors since 2001. Mr. Berg is a private investor currently serving as the managing member
 | Approval of Restated 2020 Stock Incentive Plan |
Ram Krishnan was appointed as our chief executive officer and to our board of directors in September 2014. From November 2011 until March 2014, Mr. Krishnan served as senior vice president of Active Network, a cloud-based activity and participant management solutions provider. From May 2008 to November 2011, Mr. Krishnan served as the global vice president and general manager of GE Healthcare. Mr. Krishnan was chosen to serve on our board of directors because of our boards’ belief that our chief executive officer should serve on our board of directors, as well as Mr. Krishnan’s substantial business development experience, leadership skills and extensive experience in transitioning businesses through changing market and business conditions.
12 |
Steve Mitgang has served on our board of directors since August 2010. Since June 2012, Mr. Mitgang has been serving as chief executive officer of SmartDrive Systems, a company that provides driving intelligence solutions that improve safety, reduce collisions and improve fuel efficiency, and he also has served on SmartDrive’s board of directors since June 2012. From February 2011 until December 2013, he served on the board of directors of MapMyFitness, Inc., an online business featuring fitness-oriented social networks and training applications. From 2007 to 2009, Mr. Mitgang was the president and chief executive officer of Veoh Networks, an Internet television company. Prior to his tenure at Veoh Networks, Mr. Mitgang worked at Yahoo! from 2003 to 2007. Mr. Mitgang joined Yahoo! after its acquisition of Overture Services, where he was the head of the performance marketing group. From 2001 to 2003, Mr. Mitgang was president and chief executive officer of Keylime Software, a web analytics company that was acquired by Overture Services during Mr. Mitgang’s leadership. Mr. Mitgang holds a degree in Architecture from the University of California, Berkeley. Mr. Mitgang was chosen to serve on our board of directors because of his extensive experience in business development, marketing and advertising within the digital media and technology industries, as well as his experience in electronic hardware, firmware and supply chains, and the related infrastructure and processes.Corporate Governance
Richard Simtob was appointed to serve on our board of directorsRecent Change in July 2017. Since January 2001, Mr. Simtob has been serving as president of Simtob Consulting Group Corporation. Mr. Simtob is a minority-owner of Zoup! Holding, LLC, a company that operates and franchises fast-casual soup restaurants and has been serving as vice president since January 2018. Since April 2010, he has served as one of its directors, and served as its president from April 2010 to December 2017. From January 2004 through July 2009, Mr. Simtob was also a partner at Wireless Toyz Franchise, LLC, a cellular service provider, where he also served in various roles such as vice president of development, chief financial officer and chief operating officer. Mr. Simtob owns a Michigan-based driving school and eight swim school locations. Mr. Simtob studied at the University of Western Ontario. Mr. Simtob was chosen to serve on our board of directors because of his extensive experience in the restaurant industry.Control
Gregg ThomasOn March 25, 2021, our wholly owned subsidiary BIT Merger Sub, Inc. merged with and into Brooklyn ImmunoTherapeutics LLC, or Brooklyn LLC, with Brooklyn LLC surviving as our wholly owned subsidiary. This transaction, which we refer to as the Merger, was appointed to serve oncompleted in accordance with the terms of an agreement and plan of merger and reorganization dated August 12, 2020, or the Merger Agreement, among our board of directors in July 2017. In December 1994, Mr. Thomas founded CFO Advisors, LLC, a financial servicescompany, BIT Merger Sub, Inc. and advisory firm for the restaurant and retail industry, and where he has been serving as partner. He began his career at Plante Moran, where he earned his CPA. Mr. Thomas holds a B.S. in accounting from the University of Michigan and a masters in taxation from Walsh College. Mr. Thomas was chosen to serve on our board of directors because of his experience in the restaurant industry and his financial and accounting background.Brooklyn LLC.
Paul Yanoverhas servedIn accordance with the Merger Agreement, on March 25, 2021 we filed amendments to our boardrestated certificate of directors since July 2012. Mr. Yanover currently serves as president of Fandango, LLC, a position he has held since October 2012. From February 2011incorporation in order to September 2012, he served as president of Lookout Interactive Media, a consulting practice focused on strategy, product development, marketing and monetization for digital media, technology and entertainment companies. From June 2006 to January 2011, Mr. Yanover served as executive vice president and managing director of Disney Online. From December 2001 to June 2006, he was senior vice president in charge of Disney’s Parks and Resorts Online and was a founding executive of the Buena Vista Game Entertainment Studio, a startup within Disney. From July 1999 to December 2001, Mr. Yanover was co-founder and chief executive officer of Ceiva Logic, a consumer electronics company. Since June 2011, Mr. Yanover has served on the board of directors of Clarity Media Group, LLC, a media company. Mr. Yanover holds a double honors Bachelor of Science degree in computer science and economics from the University of Western Ontario, and a Master of Computer Science from the University of Southern California. Mr. Yanover was chosen to serve on our board of directors because of his extensive experience in developing and monetizing digital media, marketing and game environments.effect:
| prior to the Merger, (a) a reverse stock split of | ||
PROPOSAL 2APPROVAL OF THE NTN BUZZTIME, INC.
2019 PERFORMANCE INCENTIVE PLAN.
We are asking our stockholders to approve the adoption of the NTN Buzztime, Inc. 2019 Performance Incentive Plan (the “2019 Plan”). We have long had in effect incentive plans that have allowed us to grant various type of incentive awards to our employees (including our executive officers), non-employee directors and consultants. All of these plans, other than our existing 2010 Performance Incentive Plan (as amended, “2010 Plan”), have expired; the 2010 Plan expires in February 2020 and as of April 10, 2019, there were only approximately 11,000 shares available for future awards under the 2010 Plan. The 2019 Plan is intended to be a successor to the 2010 Plan to allow us to continue to grant various type of incentive awards to our employees (including our executive officers), non-employee directors and consultants. If the 2019 Plan is approved by our stockholders, no future grants will be made under the 2010 Plan. A copy of the 2019 Plan is attached as Exhibit A to this proxy statement.
The 2019 Plan was adopted, subject to stockholder approval, by our board of directors, upon the recommendation of our N&CG/C Committee, on April 8, 2019.
Similar to the 2010 Plan, the 2019 Plan will permit the discretionary award of incentive stock options (“ISO”), nonstatutory stock options (“NSO”), restricted stock, stock units, stock appreciation rights (“SARs”) and awards in the form of cash incentive opportunities to employees, non-employee directors and consultants. Such awards may be granted commencing on the date of board approval of the 2019 Plan and continuing through April 7, 2029 or the earlier termination of the 2019 Plan, subject to obtaining stockholder approval. If stockholders do not approve the 2019 Plan by April 8, 2020, the 2019 Plan will terminate and any then-outstanding awards granted thereunder will be forfeited without consideration.
As of April 11, 2019, the fair market value of a share of our common stock (as determined by the closing price on the NYSE American on such date) was $3.91.
Our board of directors encourages stockholders to consider the following when considering whether to approve the 2019 Plan:
Under the terms of the Merger Agreement, at the effective time of the Merger the members of Brooklyn LLC exchanged all of their equity interests in Brooklyn LLC for an aggregate of 39,999,760 shares of common stock, of which 1,067,879 shares were issued as compensation to Maxim Group LLC for its services as financial adviser to Brooklyn LLC in connection with the Merger. The terms of the exchange of Brooklyn LLC equity interests for common stock were determined through our arm’s-length negotiations with Brooklyn LLC in connection with the negotiation of the Merger Agreement.
Immediately after the Merger, there were outstanding:
| • | 41,506,031 shares of common stock, of which 96.37% were held by the former members of Brooklyn LLC and Maxim Group LLC, which received shares as compensation for serving as Brooklyn LLC’s financial advisor in connection with the Merger, and 3.63% were held by holders of common stock as of immediately prior to | |
| 156,112 shares of our Series A | ||
Key FeaturesThe offering and sale of the 2019 Planshares of common stock to the former members of Brooklyn LLC were registered with the SEC on a Registration Statement on Form S-4 (Reg. No. 333-249249), as amended.
Below is a summary of certain key featuresPursuant to the terms of the 2019 Plan:Merger Agreement:
Description of the 2019 Plan
Eligibility to Receive Awards. Our employees, directors and consultants and those of our affiliates (“Awardees”) are eligible to receive awards under the 2019 Plan. The 2019 Plan Committee determines, in its discretion, the individuals who will be granted awards under the 2019 Plan. As of April 10, 2019, approximately 384 full- and part-time employees (including 2 officers and 1 employee director) and 5 non-employee directors would be eligible to participate in the 2019 Plan. Over the past several years, we have not granted awards under our incentive plans to part-time employees and currently do not intend to do so in the future.
Shares Subject to the 2019 Plan. The maximum number of shares of our common stock that can be issued under the 2019 Plan is 240,000. The shares underlying forfeited or terminated awards will become available again for issuance under the 2019 Plan and shares that are withheld to pay an award’s exercise price or tax withholding obligations will not count against the 2019 Plan’s share limit.
Administration of the 2019 Plan. The 2019 Plan will be administered by the N&CG/C Committee, except that the full board of directors will administer the 2019 Plan with respect to all awards granted to non-employee directors. Subject to the terms of the 2019 Plan, the 2019 Plan Committee has the sole discretion, among other things, to:
To the extent permitted by applicable law, our board of directors may also appoint a committee, composed of one or more of our officers, that may authorize awards to employees (who are not Section 16 persons) within parameters specified by, our board of directors and consistent with any limitations imposed by applicable law.
The 2019 Plan Committee may also use the 2019 Plan to issue shares under subplans as may be deemed necessary or appropriate, such as to provide for participation by non-U.S. employees. In addition, awards may be subject to any policy that we may implement on the recoupment of compensation (referred to as a clawback policy). We will indemnify the members of the board of directors, the 2019 Plan Committee and their delegates to the maximum extent permitted by applicable law for actions taken or not taken regarding the 2019 Plan.
Types of Awards
The 2019 Plan permits the grant of the following types of stock-based awards: (1) stock options (which can be either ISOs or NSOs), (2) SARs, (3) restricted stock, and (4) stock units. In addition, awards in the form of cash incentive opportunities may also be granted under the 2019 Plan. Awards will be evidenced by a written agreement between us and the Awardee that will include the specific terms and conditions of the award.
Stock Options. A stock option is the right to acquire shares at a fixed exercise price over a fixed period of time. The 2019 Plan Committee will determine the number of shares covered by each stock option and the exercise price of the shares subject to each stock option, but such per share exercise price cannot be less than the fair market value of our common stock on the date of grant of the stock option.
Stock options granted under the 2019 Plan may be either ISOs or NSOs. As required by the Internal Revenue Code (the “Code”) and applicable regulations, ISOs are subject to various limitations. For example, the exercise price for any ISO granted to any employee owning more than 10% of common stock may not be less than 110% of the fair market value of the common stock on the date of grant and such ISO must expire not later than five years after the grant date. The aggregate fair market value (determined at the date of grant) of common stock subject to all ISOs held by a participant that are first exercisable in any single calendar year cannot exceed $100,000. ISOs may not be transferred other than upon death, or to a revocable trust where the participant is considered the sole beneficiary of the stock option while it is held in trust. The 2019 Plan provides that no more than 240,000 shares may be issued pursuant to the exercise of ISOs.
A stock option granted under the 2019 Plan generally cannot be exercised until it becomes vested. The 2019 Plan Committee establishes the vesting schedule of each stock option at the time of grant. The maximum term life for stock options granted under the 2019 Plan may not exceed ten years from the date of grant.
The exercise price of each stock option granted under the 2019 Plan must be paid in full at the time of exercise, either with cash, by net exercise (an arrangement under which the number of shares issued to the option holder in connection with the exercise of the option will be reduced by the company’s retention of a portion of such shares) or through a broker-assisted “cashless” exercise and sale program, or through another method approved by the 2019 Plan Committee. The optionee must also make arrangements to pay any taxes that we are required to withhold at the time of exercise.
Stock Appreciation Rights. A SAR is the right to receive, upon exercise, an amount equal to the excess of the fair market value of the shares on the date of the SAR’s exercise over the fair market value of the shares covered by the exercised portion of the SAR on the date of grant. The 2019 Plan Committee determines the terms of SARs including the exercise price (provided that such per share exercise price cannot be less than the fair market value of our common stock on the date of grant), the vesting and the term of the SAR. The maximum term life for grants under the 2019 Plan may not exceed ten years from the date of grant. The 2019 Plan Committee may determine that a SAR will only be exercisable if we satisfy performance conditions established by the 2019 Plan Committee. Settlement of a SAR may be in shares of common stock or in cash, or any combination thereof, as the 2019 Plan Committee may determine.
Restricted Stock. Restricted stock awards are awards of shares of common stock that may or may not be subject to vesting and will be subject to such other terms and conditions established by the 2019 Plan Committee. In determining whether a restricted stock award should be made, and/or the vesting schedule for any such award, the 2019 Plan Committee may impose whatever conditions to vesting as it determines to be appropriate. For example, the 2019 Plan Committee may determine that a restricted stock award will vest only if we satisfy performance conditions established by the 2019 Plan Committee. The holder of a restricted stock award (irrespective of whether the shares subject to the award are vested or unvested) will have the same voting, dividend and other rights as our stockholders, however, any dividends received on shares that are unvested (whether such dividends are in the form of cash or shares) may be subject to the same vesting conditions and restrictions as the restricted share award with respect to which the dividends were paid. Shares issued as dividends will not reduce the number of shares available for issuance under the 2019 Plan.
Stock Units. Stock units are the right to receive an amount equal to the fair market value of the shares covered by the stock unit at some future date after the grant. The 2019 Plan Committee will determine the terms of an award of stock units, including the vesting period, and stock units may or may not be subject to vesting. Upon each vesting date of a stock unit, an Awardee will be entitled to receive an amount equal to the then fair market value of the shares on the settlement date. The 2019 Plan Committee may determine that an award of stock units will vest only we satisfy performance conditions established by the 2019 Plan Committee. Payment for vested stock units may be in shares of common stock or in cash, or any combination thereof, as the 2019 Plan Committee may determine. Settlement of stock units shall generally occur within thirty days of vesting unless the Awardee has timely elected to defer such compensation.
Cash Awards. We may also grant awards in the form of cash incentive opportunities that will be subject to such terms and conditions as the 2019 Plan Committee may determine.
Non-Employee Director Fees.Upon the board of directors’ affirmative determination to authorize such a provision, a non-employee director may elect to receive all or a portion of his or her annual retainer fees and/or any other fees in the form of vested stock or stock units granted under the 2019 Plan. The terms of such an arrangement will be determined by the board of directors.
Limited Transferability of Awards. Awards granted under the 2019 Plan generally are not transferrable other than upon death, or pursuant to a court-approved domestic relations order. However, the 2019 Plan Committee may in its discretion permit awards other than ISOs to be transferred. Generally, where transfers are permitted, they will be permitted only by gift to a member of the Awardee’s immediate family or to a trust or other entity for the benefit of the member(s) of the Awardee’s and/or his or her immediate family.
Termination of Employment, Death or Disability.The 2019 Plan Committee will determine the effect of the termination of employment on awards, which determination may be different depending on the nature of the termination, such as terminations due to cause, resignation, death, disability or retirement, and the status of the award as vested or unvested.
Adjustments Upon Changes in Capitalization. In the event of a subdivision of the outstanding shares, stock dividend, dividend payable in a form other than shares in an amount that has a material effect on the price of the shares, consolidation, combination or reclassification of the shares, recapitalization, spin-off, or other similar occurrence, then the number and class of shares issued under the 2019 Plan and subject to each award, along with any exercise prices, as well as the number and class of shares available for issuance under the 2019 Plan, will each be equitably and proportionately adjusted by the 2019 Plan Committee.
Change in Control. In the event that there is a change in control or we are a party to a merger or other acquisition or reorganization, outstanding 2019 Plan awards will be subject to the merger agreement or other applicable transaction agreement. Such agreement may provide, without limitation, that subject to the consummation of the applicable transaction, for the assumption (or substitution) of outstanding awards by the surviving corporation or its parent, for their continuation (if we are the surviving corporation), for accelerated vesting or for their cancellation with or without consideration, or for the mandatory exercise or conversion of awards into shares and/or cash whether by net exercise or otherwise, in all cases without the consent of the participant.
If a change in control occurs and there is no assumption, substitution or continuation of outstanding awards, the 2019 Plan Committee may in its discretion provide that some or all awards will fully vest in connection with the change in control.
For purposes of the 2019 Plan, except as may otherwise be provided in a participant’s employment agreement or award agreement (and in such case the employment agreement or award agreement shall will as to the definition of change in control), “change in control” generally means the occurrence of any one or more of the following:
Messrs. Singer, Denny and Monovoukas resigned from the board effective as of April 16, 2021, May 1, 2021 and May 7, 2021, respectively.
Term
Under our bylaws and the Delaware General Corporation Law, our business and affairs are managed by or under the direction of the 2019 Plan. If approved by stockholders, the 2019 Plan will continue in effect until April 7, 2029 or until earlier terminated by our board of directors.directors, which selectively delegates responsibilities to its standing committees.
The board has adopted and operates under Corporate Governance Guidelines that reflect our current governance practices in accordance with applicable statutory and regulatory requirements, including those of the SEC and the NYSE American LLC Company Guide. The Corporate Governance Guidelines are available on our website at https://investor.brooklynitx.com/overview/default.aspx. Under the Corporate Governance Guidelines, we expect directors to regularly attend meetings of the board and of all committees on which they serve and to review the materials sent to them in advance of those meetings. While we do not maintain a formal policy requiring annual meeting attendance, we expect nominees for election at each annual meeting of stockholders to participate in the Annual Meeting. None of our current directors served on the board in 2020, during which we did not hold an annual meeting of stockholders.
The board generally expects to hold four regular meetings per year and to meet on other occasions when circumstances require. Directors spend additional time preparing for board and committee meetings, and we may call upon directors for advice between meetings. We encourage our directors to attend director education programs. The board held 75 meetings in 2020. Each of the then-serving directors attended at least 75% of the board meetings in 2020, except that Michael Gottlieb attended 69% of the board meetings in 2020.
Governing Law.The 2019 Plan,Corporate Governance Guidelines provide that the board will meet in executive session at least annually without management in attendance.
Prior to the Merger, the board maintained an audit committee and (unless otherwise provided in an award agreement) all awards granted thereunder,a nominating and corporate governance/compensation committee. Following the Merger, the board approved the establishment of a separate compensation committee and nominating and corporate governance committee. The board has adopted a charter for the audit committee, a copy of which is available on our website at https://investor.brooklynitx.com/overview/default.aspx. The board expects to adopt charters for the compensation committee and the nominating and corporate governance committee prior to the Annual Meeting. Immediately following board approval of such charters, we expect to make copies of such charters available on our website at https://investor.brooklynitx.com/overview/default.aspx and to file with the SEC a Current Report on Form 8-K as to such posting of those charters. The audit committee charter is and the compensation committee and the nominative and governance committee charters will be governedreviewed by the lawsboard and the applicable committee on an annual basis.
Independence of the State of Delaware, without regard to its conflict of law provisions. The 2019 Plan Committee may provide that any dispute as to any award will be presented and determined in such forum as the 2019 Plan Committee may specify, including through binding arbitration. Unless otherwise provided in the award agreement, recipients of an award are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware to resolve any and all issues that may arise out of or relate to the 2019 Plan or any related award agreement.Directors
Amendment and Termination of the 2019 Plan.The board of directors generally may amend or terminate the 2019 Plan at any time and for any reason, except that the boardmust consist of a majority of independent directors must obtain stockholder approval to the extent required by applicable laws, regulations or rules. For example, NYSE American rules currently require that a company obtain stockholder approval to amend an equity plan to add shares to the plan or to reprice outstanding options.
Certain Federal Income Tax Information
The following discussion summarizes certain federal income tax consequences associated with certain awards grantednot only under the 2019 Plan to U.S. participants under the law as in effect on the daterequirements of this proxy statement. The summary does not purport to cover federal employment tax or other U.S. federal tax consequences that may be associated with the 2019 Plan, nor does it cover state, local or non-U.S. taxes. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. Tax consequences for any particular individual may be different. This summary is not intended to be exhaustive and does not discuss the tax consequences of a participant’s death or provisions of income tax laws of any municipality, state or other country. We advise participants to consult with their own tax advisors regarding the tax implications of their awards under the 2019 Plan.
ISOs. In general, an optionee realizes no taxable income upon the grant or exercise of an ISO. However, the exercise of an ISO may result in an alternative minimum tax liability to the optionee. With certain exceptions, a disposition of shares purchased under an ISO within two years from the date of grant or within one year after exercise produces ordinary income to the optionee (and a deduction to the company) equal to the value of the shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition is treated as a capital gain for which the company is not entitled to a deduction. If the optionee does not dispose of the shares until after the expiration of these one- and two-year holding periods, any gain or loss recognized upon a subsequent sale is treated as a long-term capital gain or loss for which the company is not entitled to a deduction.
NSOs. In general, in the case of an NSO, the optionee has no taxable income at the time of grant but realizes income in connection with the exercise of the option in an amount equal to the excess (at the time of exercise) of the fair market value of the shares acquired upon exercise over the exercise price; a corresponding deduction is available to the company. Upon a subsequent sale or exchange of the shares, any recognized gain or loss after the date of exercise is treated as a capital gain or loss for which the company is not entitled to a deduction.
In general, an ISO that is exercised by the optionee more than three months after termination of employment is treated as an NSO. ISOs are also treated as NSOs to the extent they first become exercisable by an individual in any calendar year for shares having a fair market value (determined as of the date of grant) in excess of $100,000.
SARs. In general, the grant of a SAR does not itself result in taxable income, nor does taxable income result merely because a SAR becomes exercisable. In general, a participant who exercises a SAR for shares of stock or receives payment in cancellation of a SAR will have ordinary income equal to the amount of any cash and the fair market value of any stock received. A corresponding deduction is generally available to the company.
Restricted Stock Awards. A participant who is awarded restricted stock subject to a substantial risk of forfeiture generally does not have income until the risk of forfeiture lapses. When the risk of forfeiture lapses, the participant has ordinary income equal to the excess of the fair market value of the shares at that time over the purchase price, if any, and a corresponding deduction is generally available to the company. However, a participant may make an election under Section 83(b) of the Code to be taxed on restricted stock when it is acquired rather than later, when the substantial risk of forfeiture lapses. A participant who makes an effective 83(b) election will realize ordinary income equal to the fair market value of the shares as of the time of acquisition less any price paid for the shares. A corresponding deduction will generally be available to the company. If a participant makes an effective 83(b) election, no additional income results by reason of the lapsing of the restrictions.
For purposes of determining capital gain or loss on a sale of shares awarded under the 2019 Plan, the holding period in the shares begins when the participant recognizes taxable income with respect to the transfer. The participant’s tax basis in the shares equals the amount paid for the shares plus any income realized with respect to the transfer. However, if a participant makes an effective 83(b) election and later forfeits the shares, the tax loss realized as a result of the forfeiture is limited to the excess of what the participant paid for the shares (if anything) over the amount (if any) realized in connection with the forfeiture.
Restricted Stock Units. In general, the grant of a restricted stock unit does not itself result in taxable income. Instead, the participant is generally taxed upon vesting (and a corresponding deduction is generally available to the company), unless he or she has made a proper election to defer receipt of the shares (or cash if the award is cash settled) under Section 409A of the Code. If the shares delivered are restricted for tax purposes, the participant will instead be subject to the rules described above for restricted stock.
Certain Change in Control Payments. Under Section 280G of the Code, the vesting or accelerated exercisability of options or the vesting and payments of other awards in connection with a change in control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards may be subject to an additional 20% federal tax and may be non-deductible to the company.
Shares Subject to Outstanding Equity Awards and Available for Grant
The table below provides information as of December 31, 2018 regarding our equity incentive plans. The only awards outstanding under these plans were stock options and RSUs. As of December 31, 2018, the fair market value of a share of our common stock (as determined by the closing price on the NYSE American on that date) was $1.95 per share.LLC Company Guide but also under the Corporate Governance Guidelines.
| Plan | No. of Shares Subject to Outstanding Options | Weighted-Avg Exercise Price of Outstanding Options | Weighted Avg. Remaining Term of Outstanding Options (Years) | No. of Shares Subject to Unvested RSUs | No. of Shares Remaining Available for Future Issuance | |||||||||||||||
| 2014 Inducement Plan* | 85,000 | $ | 20.09 | 5.80 | 0 | 0 | ||||||||||||||
| 2010 Plan | 62,000 | $ | 15.61 | 6.46 | 61,000 | 47,000 | ||||||||||||||
* This plan allows forPursuant to the issuanceNYSE American LLC Company Guide, a listed company that satisfied the definition of non-qualified stock options“smaller reporting company” in Rule 12b-2 under the Securities Exchange Act of 1934, or the Exchange Act, must maintain a board that is comprised of at least 50% independent directors, and an audit committee of at least two independent members. In addition, the NYSE American LLC Company Guide requires that, subject to any prospective employee who has not previously been an employee or directorspecified exceptions, each member of the company or who has not been employed by the company for a bonafide period of time.listed company’s compensation, and nominating and corporate governance committees be independent. Audit committee members must also satisfy additional independence criteria, including those set forth in Rule 10A-3 under
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Equity Compensation Plan Information
The following table sets forth information as of December 31, 2018 regarding our compensation plans authorizing us to issue equity securities and the number of securities.
| Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans, excluding securities reflected in column (a) | |||||||||
| Equity compensation plans approved by security holders | 123,000 | (1) | $ | 15.61 | 47,000 | |||||||
| Equity compensation plans not approved by security holders | 85,000 | (2) | $ | 20.09 | — | |||||||
| 147,000 | 108,000 | |||||||||||
New Plan Benefits
Except as described below. all awards of the 2019 Plan will be granted at the 2019 Plan Committee’s discretion and therefore cannot be determined in advance. To date, the 2019 Plan Committee has not approved any awards under the 2019 Plan and has not determined the number or type of awards that it may grant under the 2019 Plan in the future. However, under our non-employee director compensation policy, each non-employee director who is re-elected for an additional term of service on our board of directors at the Annual Meeting is automatically granted a stock option to purchase 400 shares of our common stock on the date of the Annual Meeting. These stock options will have an exercise price equal to the closing price of our common stock on the date of grant and vest and become exercisable, subject to the director’s continued service on our board of directors, in 12 equal monthly installments thereafter. If the 2019 Plan is approved, these non-employee director stock option grants will be made under the 2019 Plan. The following table sets forth the number of shares that will be subject to the option grants awarded to the director nominees identified in Proposal 1 assuming such nominees are elected as directors at the Annual Meeting:
* In the past, Mr. Berg has waived all stock option grants to which he would otherwise be eligible to receive in his capacity as a non-employee director.
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PROPOSAL 3ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with the requirements of Section 14A of the Exchange Act, and related SEC rules, our stockholders are entitledcompensation committee members must also satisfy additional independence criteria, including those set forth in Section 805 of the NYSE American LLC Company Guide, subject to castcertain exceptions.
Under the NYSE American LLC Company Guide, a director will qualify as an advisory vote on the compensation of our named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules in this Proxy Statement (which disclosure includes the related compensation tables included“independent director” only if, in the “Executive Officer Compensation” sectionopinion of this Proxy Statement). The votethat company’s board, that person does not address any specific item of our compensation program, but rather addresses our overall approach to the compensation of our named executive officers described in this Proxy Statement.
Although the vote on this proposal is advisory, and therefore not binding on the Company or our board of directors, our board of directors and its N&CG/C Committee values input from our stockholders and will consider the outcome of the vote in analyzing our compensation philosophy and when making future executive compensation decisions. The vote will not be construed to create or imply any change to the fiduciary duties of our board of directors, or to create or imply any additional fiduciary duties for our board of directors. The approval or disapproval of this proposal by our stockholders will not require our board of directors to take any action regarding our executive compensation practices and will not alter any contractual obligations between the Company and any of our executive officers or other employees.
As described in more detail below under “Executive Officer Compensation,” our executive compensation programs are designed to attract, retain and motivate talented executives and to reward performance. Our board of directors oversees our executive compensation, including the compensation of our named executive officers. We review our compensation plans and programs on an ongoing basis and periodically make adjustments taking into account competitive conditions and other factors. Please read the section entitled “Executive Officer Compensation” below for additional details about our executive compensation programs, including information about the fiscal year 2018 compensation of our named executive officers. This advisory vote, commonly referred to as the “say-on-pay” vote, gives our stockholders the opportunity to approve or not approve our executive compensation programs and policies by voting on the following resolution:
“RESOLVED,have a relationship that the stockholders of NTN Buzztime, Inc. approve, on an advisory basis, the compensation paid to the company’s named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion.”
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PROPOSAL 4ADVISORY VOTE ON THE FREQUENCY OF THEADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordancewould interfere with the requirementsexercise of Section 14Aindependent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act, and related SEC rules, our stockholders are entitled to casta member of an advisory vote for their preference as to how frequently we should seek future advisory votes on the compensation of our named executive officers. By voting on this, stockholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation every year, every two years or every three years.
After careful consideration of the various arguments supporting each frequency level, our board of directors believes that submitting the advisory vote on executive compensation to stockholders every three years is appropriate for the Company and our stockholders at this time. The advisory vote on executive compensation every three years will allow our stockholders to evaluate executive compensation on a more thorough, long-term basis than a more frequent vote. Too-frequent executive compensation advisory votes may encourage short-term analysis of executive compensation and annual or biennial executive compensation advisory votes also may not allow stockholders sufficient time to evaluate the effect of changes we make to executive compensation.
Stockholders are being asked for their views on the frequency of the advisory vote on executive compensation, and are not voting to approve or disapprove the recommendation of our board of directors. Although the vote on this proposal is advisory, and therefore not binding on the Company or our board of directors, our board of directors values input from our stockholders and will consider the outcome of the vote in determining the frequency of future advisory votes on executive compensation.
Stockholders may cast a vote on the preferred voting frequency by choosing the option of one year, two years, three years (or abstain from voting) when voting on the following resolution:
“RESOLVED, that the stockholders of NTN Buzztime, Inc. determine, on an advisory basis, that the frequency with which the stockholders wish to have an advisory vote on the compensation of the company’s named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules is:
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PROPOSAL 5RATIFICATION OF THE APPOINTMENT OFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our board of directors has appointed Squar Milner LLP as our independent registered public accounting firm for the year ending December 31, 2019. Squar Milner has served as our independent registered public accounting firm since December 2013. Our bylaws doa listed company may not, require that our stockholders ratify the appointment of Squar Milner as our independent registered public accounting firm. However, we are submitting the appointment of Squar Milner to our stockholders for ratificationother than in his or her capacity as a matter of good corporate practice. If our stockholders do not ratify the appointment, the audit committee will reconsider whether or not to retain Squar Milner. Even if the appointment is ratified, the audit committee in its discretion may change the appointment at any time during the year if it determines that such a change would be in our best interests and in the best interests of our stockholders.
Representatives of Squar Milner are expected to be present at the Annual Meeting. They will be given an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from stockholders present at the Annual Meeting.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board of Directors
Our business affairs are managed by and under the direction of our board of directors. During 2018, our board of directors held eight meetings and acted by written consent three times. During 2018, each director attended at least 75% of the aggregate of (i) the total number of board meetings held during such member’s service and (ii) the total number of meetings of committees of our board of directors on which he or she served, during the period of such member’s service. The schedule for regular meetings of our board of directors for each year is submitted and approved by our board of directors in advance.
Our bylaws provide that the number of directors constituting the whole board of directors shall be determined by our board of directors from time to time. The number of directors as determined by our board of directors is currently six, and our board of directors currently consists of six members. Our restated certificate of incorporation provides for the annual election of all our directors. Vacancies on our board of directors (including vacancies created by an increase in the authorized number of directors) may be filled solely by our board of directors. A director appointed by our board of directors to fill a vacancy resulting from the death, resignation, disqualification or removal of a director would hold office for the remainder of the full term of the director whose death, resignation, disqualification or removal created such vacancy, and a director appointed by our board of directors to fill a vacancy resulting from an increase in the authorized number of directors would hold office until the next annual meeting of stockholders and, in each case, until such director’s successor is elected and qualified.
Director Independence
Our board of directors has determined that Jeff Berg, Steve Mitgang, Richard Simtob, Gregory Thomas and Paul Yanover are each “independent directors” under NYSE American rules.
Committees of the Board of Directors
Our board of directors currently has two standing committees: (i) audit and (ii) nominating and corporate governance/compensation. Our board of directors reviews the committees’ duties from time to time and may from time to time form new committees, revise a committee’s structure, or disband committees, depending on the circumstances.
Each committee of our board of directors meets as frequently and for such length of time as it deems necessary to carry out its assigned duties and responsibilities. In addition, the chairman of a committee may call a special meeting of that committee at any time if deemed advisable.
Audit Committee
The rolemember of the audit committee, is to oversee our accounting and financial reporting processes, including our internal control systems, and to oversee the auditboard or any other board committee: (a) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of our financial statements. The responsibilitiesits subsidiaries, other than compensation for board service; or (b) be an affiliated person of the audit committee include the periodic reviewlisted company or any of our accounting and financial reporting and internal control policies and procedures, appointing and providing the compensation of the independent registered public accounting firm of certified public accountantsits subsidiaries.
In order to be retained as ourconsidered independent auditors, reviewing the “Management’s Discussion and Analysisfor purposes of Financial Condition and Results of Operations” disclosure contained in our quarterly and annual reports filed with the SEC and reviewing our quarterly and audited annual financial statements. The audit committee held four meetings during 2018.
The audit committee is currently comprised of three non-employee directors: Mr. Thomas (chair), Mr. Berg and Mr. Simtob, each of whom our board of directors has determined is an independent director under the rulesSection 805 of the NYSE American andLLC Company Guide, each member of the Securities Exchange Actcompensation committee must be a member of 1934. Ourthe board of directorsthe listed company and must otherwise be independent. In determining independence requirements for members of compensation committees, the board must consider all relevant factors specific to determining whether a director has alsoa relationship to the listed company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including: (a) the source of compensation of a member of the board of a listed company, including any consulting, advisory or other compensatory fee paid by the listed company to such member; and (b) whether a member of the board of a listed company is affiliated with the listed company, a subsidiary of the listed company or an affiliate of a subsidiary of the listed company.
Based upon information requested from and provided by each director nominee concerning the director nominee’s background, employment and affiliations, including family relationships, the board has determined that each of Charles Cherington, Dennis Langer and Erich Mohr qualifies as an independent director in accordance with the NYSE American LLC Company Guide and Rule 10A-3 under the Exchange Act. The independent members of the board hold separate regularly scheduled executive session meetings at which only independent directors are present. Mr. Thomas is an “audit committee financial expert,”Cherington, as that term is defined in Item 407(d)(5)Chair of Regulation S-K.
the Board, will preside over each executive session.
Nominating and Corporate Governance/Compensation CommitteeCode of Business Conduct
The N&CG/C Committee administers our benefit and equity incentive plans; determines the amount and form of compensation paid to our chief executive officer; reviews and administers all compensation arrangements for our other executive officers; establishes and oversees all of our general compensation policies and practices applicable to our directors, employees, consultants and advisors; and reviews and recommends to our board of directors the amount and form of compensation for members of our board of directors, including compensation for the chair, committee chairs and committee members. In addition, this committee identifies individuals qualified to serve on our board of directors; selects, or recommends that our board of directors select, nominees for election to our board of directors; and develops and implements policies and procedures that are intended to ensure that our board of directors will be appropriately constituted and organized to meet its fiduciary obligations to the Company and our stockholders. During 2018, the N&CG/C Committee held one meeting and acted by written consent once.
The N&CG/C Committee is currently comprised of three non-employee directors: Mr. Mitgang (chair), Mr. Berg and Mr. Yanover, each of whom our board of directors has determined is an independent director under NYSE American rules.
Committee Charters and Code of Ethics
Our board of directors has adopted charters for the audita Code of Conduct and the N&CG/C Committee, which, among other things, outline the respective duties of the committees. Our board of directors has also adopted a code of conduct and ethicsEthics that applies to all our employees, officers and directors. Our code of conduct and ethics, our corporate governance guidelines and the charter of each active committeeA copy of our boardCode of directorsConduct and Ethics is available on our website at www.buzztime.com/investors/ under the “Corporate Governance” heading.https://investor.brooklynitx.com/overview/default.aspx. We intend to disclose any amendment to, or a waiver from, a provision of our codeCode of conductConduct and ethicsEthics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of Item 406 of Regulation S-K by posting such information on our website.
Employee, Officer and Director Hedging
It is our policy that website. The informationall employees, officers and directors, as well as their family members, are prohibited from participating in hedging or monetization transactions that can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Employees, officers and directors, as well as their family members, are also prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan. These prohibitions on hedging and pledging are included in our Insider Trading and Disclosure Policy, a copy of which is available on our website is not incorporated by reference in this Proxy Statement.at https://investor.brooklynitx.com/overview/default.aspx.
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The board of directors has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and members of senior management to enable the board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations or strategic decisions, management and succession planning, financial policies, and material business and financial decisions.
The compensation committee is responsible for assessing the relationship between our compensation policies and practices applicable to our executive officers and corporate risk management to confirm that those policies and practices do not encourage excessive risk-taking. While each committee is responsible for evaluating certain risks and overseeing the management of such risks , the entire board is regularly informed through committee reports about such risks, as well as through reports directly from officers responsible for oversight of particular risks.
Board Leadership Structure and Role in Risk Oversight
The board of directors recognizes that it is important to determine an optimal board leadership structure to ensure the independent oversight of management as the company continues to grow. We do not maintain a policy on whether the offices of Chair of the Board and Chief Executive Officer should be separate and, if they are to be separate, whether the Chair of the Board should be selected from among the independent directors or should be an employee. The board has determined that it is in our best interests at this time to have a separate Chief Executive Officer and Chair of the Board. The board has appointed Charles Cherington, to serve as Chair of the Board and Howard Federoff to serve as Chief Executive Officer. This structure allows the Chief Executive Officer to focus on the strategic management of our day-to-day business, while allowing the Chair of the Board to focus on leading the board in its fundamental role of providing advice to, and independently overseeing, management. The board recognizes the time, effort, and energy that the Chief Executive Officer is required to devote to the position in the current business environment, as well as the commitment required to serve as the Chair of the Board, particularly as the board’s oversight responsibilities continue to grow.
The board has concluded that our current leadership structure of our board of directors is such that different individuals serve as the chairman of our board of directors and as our principal executive officer. The N&CG/C Committee believes this leadership structure is prudentappropriate at this time and provides appropriate segregation and independence that enhances the effectiveness ofto fit our current needs. The board of directors as a whole. Our board of directors does not require that the roles of chairman and principal executive officer be held by different individuals, butwill continue to periodically review our board of directors believes this leadership structure, ishowever, and may make such changes in the appropriate structure for our company at this time particularly in light of the leadership that our current chairman has demonstrated during his tenurefuture as chairman. Our board of directors may choose its chair in any manner that it deems to be in the best interests of our company and our stockholders.appropriate.
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Our boardThe principal responsibilities of directors provides oversight to the management of our risk profile, including internal controls over financial reporting, cybersecurity risk, credit risk, interest rate risk, liquidity risk, operational risk, reputational risk and compliance risk. Our board of directors monitors and manages these risks through committees in conjunction with management, our independent registered public accounting firm, and other independent advisors. Our executive officers are assigned responsibility for the various categories of risk, with our chief executive officer being ultimately responsible to our board of directors for all risk categories. Our executive officers periodically report to and receive input from our board of directors and the audit committee regarding material risks we face and how we plan to respond to and mitigate these risks.
Director Nominations
Our N&CG/C Committee considers new candidates for our board of directors suggested by current members of our board of directors, management and stockholders. There are no differences in the manner in which N&CG/C Committee evaluates director nominees based on whether the nominee is recommended by a stockholder, by current members of our board of directors, or by management. The N&CG/C Committee has established qualifications for directors, including the ability to apply fair and independent judgment in a business situation and the ability to represent the interests of all our stockholders and constituencies. A director also must be free of any conflicts of interest that would interfere with his or her loyalty to the Company or to our stockholders. In evaluating board candidates, the N&CG/C Committee considers the foregoing qualifications as well as several other factors, including the following:include:
| · | selecting, retaining, compensating, overseeing and terminating, if necessary, any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; | |
| · | ensuring the receipt from the independent auditors of and evaluating the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board, or PCAOB, regarding the independent auditor’s communications with the Committee concerning independence; | |
| · | discussing with the independent auditor other matters required to be discussed under the standards of the PCAOB; | |
| · | instructing management, the independent auditor and the internal auditor (if any) that the audit committee expects to be informed if there are any subjects that require special attention or if any significant deficiencies or material weaknesses to the system of internal control over financial reporting are identified; | |
| · | reviewing with management and the independent auditor any material changes to the system of internal control over financial reporting; | |
| · | instructing the independent auditor to report to the audit committee as to (a) all critical accounting policies, (b) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of the use of such alternative treatments (and the related disclosure) and the treatment preferred by the independent auditor, and (c) other material written communication between the independent auditor and management, and discussing these matters with the independent auditor and management; | |
| · | reviewing and discussing with management the philosophy around providing financial guidance to shareholders, financial analysts, rating agencies and/or | |
| · | reviewing the management letter delivered by the independent auditor in connection with the audit; | |
| · | meeting at least once each year in separate executive sessions with management, the internal auditor, if any, and the independent auditor to | |
| · | reviewing significant changes in | |
| · | reviewing the scope and results of internal audits, if any; | |
| · | evaluating the performance of the internal auditor, if any, and, if so determined by the audit committee, recommend replacement of the internal auditor; | |
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| · | if there is an internal auditor, obtaining and reviewing periodic reports on the internal auditor’s significant recommendations to management and management’s responses; | |
| · | conducting or authorizing such inquiries into matters within the audit committee’s scope of responsibility as the audit committee deems appropriate; | |
| · | reporting to the board on any significant matters regarding its actions and making recommendations to the board as appropriate; | |
| · | at least annually, reviewing and reassess the audit committee charter; | |
| · | preparing the audit committee report required by to be included in the annual proxy statement; | |
| · | establishing a | |
| · | approving, in advance of their performance, all audit and permitted non-audit and tax services to be | |
| · | reviewing, approving and overseeing any transaction with a related person (as defined in Item 404 of |
Other thanOur independent auditor is ultimately accountable to the audit committee. The audit committee has the ultimate authority and responsibility to select, evaluate, approve terms of retention and compensation of, and, where appropriate, replace the independent auditor.
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The principal responsibilities of the compensation committee, and the extent to which it the compensation committee may delegate its compensation-related authority with regard to non-officer employees and consultant to officers and other appropriate supervisory personnel, will be outlined in the nominating and corporate governance committee charter, which we expect the board of directors to approve prior to the Annual Meeting. Immediately following board approval of such charter, we expect to file a copy of such charter with the SEC via a Current Report on Form 8-K and make a copy of such charter available on our website at https://investor.brooklynitx.com/overview/default.aspx.
The current members of the compensation committee are Dennis Langer, who serves as chair, and Charles Cherington. Each of the current members of the compensation committee is standing for re-election at the Annual Meeting. The board has not adopteddetermined that each of the current members of the compensation committee is independent, as defined in the listing standards of the NYSE American LLC Company Guide, is a “non-employee director” as defined in Rule 16b-3 under the Exchange Act and is an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986.
Compensation Committee Interlocks and Insider Participation
During 2020 none of the members of the compensation committee was an officer or employee of our company or any specific policyof our subsidiaries and none of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the issue of considering diversity in identifying nominees for director.board or compensation committee.
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Nominating and Corporate Governance Committee
The principal responsibilities of the nominating and corporate governance committee will be outlined in the nominating and corporate governance committee charter, which we expect the board of directors to approve prior to the Annual Meeting. Immediately following board approval of such charter, we expect to file a copy of such charter with the SEC via a Current Report on Form 8-K and make a copy of such charter available on our website at https://investor.brooklynitx.com/overview/default.aspx.
The current members of the nominating and corporate governance committee are Erich Mohr, who serves as chair, and Charles Cherington. Each of the current members of the nominating and corporate governance committee is standing for re-election at the Annual Meeting. The board has determined that each of the current members of the nominating and corporate governance committee is independent, as defined in the listing standards of the NYSE American LLC Company Guide, is a “non-employee director” as defined in Rule 16b-3 under the Exchange Act and is an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986.
Prior to the Merger, the board maintained a combined nominating and corporate governance/compensation committee. The nominating and corporate governance/compensation committee held eight meetings in 2020, which were attended by all of the then-serving members. Following the Merger, the board approved the establishment of a separate compensation committee and nominating and corporate governance committee.
Our bylaws contain provisions that address the process by which a stockholder may nominate an individual for election to ourthe board of directors at our annual meeting of stockholders. Such nominations may be made only if the stockholder has given timely written notice to our corporate secretary containing the information required by our bylaws. Our bylaws are available from our corporate secretary upon written request and under the “Corporate Governance” section of the “Investor Relations” sectionA copy of our corporate websitebylaws is available athttp:https://www.buzztime.com/investors/investor-relations-corporate-governance/www.sec.gov/Archives/edgar/data/748592/000114036121011095/brhc10022537_ex3-4.htm. To be timely, such notice must be received at our principal executive offices not earlier than the 120th day, nor120 days, or later than the 90th day,90 days, prior to the first anniversary of the date of the preceding year’s proxy statement, except that if no annual meeting was held in the preceding year or the date of the annual meeting is advanced more than 30 days before or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, such notice must be delivered not later than the close of business on the later of the 90thninetieth day before the date of such annual meeting or the 10thtenth day following the date on which public announcement of the date of such meeting is first made. Information on qualifications for nominations to the board and procedures for stockholder nominations to the board is included below under “Proposal 1. Election of Directors—Director Qualifications.”
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Certain Relationships and Related-Person Transactions
Other MattersThe audit committee has the responsibility to review, approve and oversee any transaction between us and a related person (as defined in Item 404 of Regulation S-K) and to develop policies and procedures for the committee’s approval of such transactions.
Since January 1, 2020, there has not been nor are there currently proposed any transactions or series of similar transactions to which we were or are to be a party in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years (which was $89,000) and in which any director, executive officer, holder of more than 5% of the common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
Please see “Director Compensation,” and “Executive Compensation” for discussion of the compensation of our non-employee directors and our executive officers.
We have adopted a policy regarding attendanceentered into indemnification agreements with our directors and executive officers. Under these agreements, we agree to indemnify, to the fullest extent permitted by membersDelaware law (subject to certain limitations), each of our directors and executive officers against, among other things, any expenses incurred or actual damages or losses in connection with proceedings because of his or her status as one of our directors, officers, employees, or agents. We believe that the use of such indemnity agreements is customary and that the terms of the indemnity agreements are reasonable and fair to us, and are in our best interests to attract and retain experienced directors and officers.
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In April 2017 the board of directors atadopted a non-employee director compensation policy, or the 2017 Policy, with respect to the compensation payable to our annual meetingqualified non-employee directors. The 2017 Policy remained in effect until the completion of stockholders. Board members are strongly encouragedthe Merger on March 25, 2021. The board expects to attendadopt a new non-employee director compensation policy prior to the annual meeting. All nominees for election asAnnual Meeting in order to enhance our ability to attract, retain and motivate non-employee directors who were then members of our boardexceptional ability and to promote the common interest of directors attended our 2018 annual meetingand stockholders in enhancing the value of stockholders. Although we encourage our directors to have a meaningful ownership stake in our company, we currently do not require our directors to own a minimum number of shares of ourthe common stock.
Director Compensation
We compensateImmediately following board approval of the new policy, we expect to make a copy of the policy available on our non-employee directors for their service inwebsite at https://investor.brooklynitx.com/overview/default.aspx and to file with the SEC a Current Report on Form 8-K as to such capacity with annual retainers and equity compensation as described below. Directors who are also our employees do not receive any additional compensation for their services as directors. We do not pay fees to anyposting of our directors for meeting attendance. The N&CG/C Committee reviews our non-employeethe policy. Following approval of the new policy, the board will review director compensation practices and policies at least annually and makesbased on recommendations by the compensation committee, which will have the sole authority to engage a recommendationconsulting firm to our board of directors as to the amount, form and terms of non-employee director compensation. Our board of directors, taking the N&CG/C Committee’s recommendation into consideration, sets the amount, form and terms of non-employeeevaluate director compensation.
Annual RetainersUnder the 2017 Policy, each non-employee director was eligible to receive compensation for board and committee service consisting of annual cash retainers and equity awards. Non-employee directors were to receive the following annual cash retainers for their service:
We pay our non-employee directors a $25,000 annual retainer for their services as directors. We pay the chairman of our board of directors, assuming she or he is a non-employee director, an additional $20,000 annual retainer for services in such capacity. We pay our non-employee directors an additional annual retainer for their service on board committees as set forth in the table below.DIRECTOR ANNUAL CASH RETAINERS
| Chairperson | Member | |||||||
| Audit Committee | $ | 10,000 | $ | 5,000 | ||||
| N&CG/C Committee | $ | 10,000 | $ | 5,000 | ||||
| Retainer | ||
| Non-Employee Directors | $25,000 | |
| Independent Chair of the Board | 20,000 | |
| Audit Committee Chair | 10,000 | |
| Other Audit Committee Members | 5,000 | |
| Nominating and Corporate Governance/Compensation Committee Chair | 10,000 | |
| Other Nominating and Corporate Governance/Compensation Committee Members | 5,000 | |
The
Under the 2017 Policy, annual retainers arewere to be paid quarterly in arrears, and are paid no later than 30thirty days following the end of the applicable quarter. Each non-employee director maycould elect that the retainer payment he or she is eligible to receive, or a portion of such retainer, be paid in the form of a restricted stock award under our equity incentive plan rather than cash. Such an election mustcould be made during an open trading window under our insider trading policy and no later than the 15thfifth day of the last month of the quarter for which the retainer iswas to be paid. An election appliesapplied only to the quarter for which it is made. Once an election iswas made with respect to a quarter, it may not be withdrawn or substituted unless ourthe board of directors determines, in its sole discretion, that the withdrawal or substitution is occasioned by an extraordinary or unanticipated event. Restricted stock awards willwould be made on the same date as a cash retainer payment would otherwise be paid willand would vest in full on the date of grant, and the amountnumber of shares subject to suchthe award willwould equal the amount of the applicable cash retainer payment divided by the closing price of our common stock on the last day of the applicable quarter.
Equity Compensation
We granthad granted stock options to our non-employee directors upon the commencement of their service as a directordirectors and upon their re-election to our board of directors.the board. The stock options arewere granted under oura stockholder-approved equity incentive plan.
Inconnection with the commencement of a newnon-employee director’sdirector’s term of service, we grantgranted to such a new director astock option to purchase 600 shares of our common stock.stock. These stock options havehad an exercise price equal to the closing price of our common stock on the date of grant, and arewere fully vested and exercisable on the date of grant as to 50% of the shares and the remaining 50% of the shares vest and become exercisable, subject to the director’s continued service on ourthe board, of directors, in 12 equal monthly installments beginning in the month immediately following the date of grant.
Eachnon-employee non-employee director who iswas re-elected for an additional term of service on ourthe board of directors iswould be automatically granteda stock option to purchase 400 shares of our common stock on the date of ourthe annual stockholder meeting. These stock options havehad an exercise price equal to the closing price of our common stock on the date of grant and vestvested and becomebecame exercisable, subject to the director’s continued service on ourthe board, of directors, in 12 equal monthly installments thereafter.
The stock options described above were to expire on the earlier of 10 years from the date of grant or 90 days from the date the directorceasesto serve on our board of directors.the board. In the event of a change in
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control, as defined inthe Amended2010Performance Incentive Plan,nominating and corporate governance/compensation committee had the N&CG/C Committee may in its discretion to determine that these stock options vest and become fully exercisable as of immediately before such change in control.
The following table shows the total compensation for non-employee directors during 2020. Allen Wolff, one of our directors in 2020, a named executive officer and our former chief executive officer, did not receive any additional compensation for his service as a director in 2020.
2020 DIRECTOR COMPENSATION
| Director | Fees Earned or Paid in Cash($) | Option Awards($)(1) | All Other Compensation($) | Total($) | |||||||||||
| Richard Simtob(2)(3) | $40,000 | — | — | $40,000 | |||||||||||
| Susan Miller(3) | 35,000 | — | — | 35,000 | |||||||||||
| Michael Gottlieb(3) | 25,000 | — | — | 25,000 | |||||||||||
| Gregory Thomas(4) | 20,000 | — | — | 20,000 | |||||||||||
| (1) | No stock option awards were granted during 2020. As of December 31, 2020, our non-employee directors had options outstanding to purchase the following number of shares of common stock: |
| Director | # of Shares Subject to Outstanding Options | |||
| Richard Simtob | 1,400 | |||
| Susan Miller | 600 | |||
| Michael Gottlieb | 600 | |||
| (2) | Chair of a board committee during 2020. |
| (3) | Resigned from the board effective March 25, 2021. |
| (4) | Resigned from the board effective April 30, 2020. |
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Proposal 
— Election of Directors
2018 At the Annual Meeting, stockholders will elect the entire board of directors to serve for the ensuing year and until their successors are elected and qualified. The board has designated as nominees for election the five persons named below, each of whom currently serves as a director.
Shares of common stock that are voted as recommended by the board will be voted in favor of the election as directors of the nominees named below. If any nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not anticipate, the shares represented by a duly completed proxy may be voted in favor of such other person as may be determined by the proxy holders.
The Corporate Governance Guidelines outline factors for the board of directors to consider in evaluating candidates for potential service as directors, as well as in evaluating current directors for continued service on the board. These factors include:
| · | the individual’s ability to apply fair and independent judgment in a business situation and the ability to represent the interests of all our stockholders and constituencies; | |
| · | whether the individual is free of any conflicts of interest that would interfere with his or her loyalty to us or to our stockholders; | |
| · | whether the individual would qualify as an independent director; no individual will qualify as “independent;” | |
| · | depth and breadth of relevant business experience, judgment and savvy; | |
| · | age and gender diversity; | |
| · | existing commitments to other businesses and willingness to devote adequate time to board duties; | |
| · | potential conflicts of interest with other pursuits; | |
| · | personal background, including past involvement in SEC inquiries, legal proceedings, criminal record, or involvement in acts of fraud or dishonesty; | |
| · | accounting, financial reporting and internal control systems knowledge and experience; | |
| · | executive compensation and/or corporate governance background; and | |
| · | interplay of candidate’s experience and skills with those of other board members. |
Although we do not have a formal diversity policy, the nominating and corporate governance committee seeks to identify candidates who will enhance the board’s overall diversity. Directors are strongly encouraged to have a meaningful ownership stake in our company, although the board currently does not require directors to own a minimum number of shares of common stock.
Our bylaws include a procedure that stockholders must follow in order to nominate a person for election as a director at an annual meeting of stockholders. The bylaws require that timely notice of the nomination in proper written form, including all required information, be provided to the Corporate Secretary.
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Information Concerning Nominees for Election as Directors
The information appearing in the following table sets forth, for each nominee for election as a director, as of June 21, 2021:
| · | the nominee’s professional experience for at least the past five years; | |
| · | the year in which the nominee first became one of our directors; | |
| · | each committee of the board of directors on which the nominee currently serves; | |
| · | the nominee’s age as of the record date for the Annual Meeting; | |
| · | the relevant skills the nominee possesses that qualify him or her for nomination to the board; and | |
| · | directorships held by each nominee presently and at any time during the past five years at any public company or registered investment company. | |
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 | CHARLES CHERINGTON Age: 57 Board Service · Tenure: Since March 2021 · Chair of the Board · Committees: ○ Audit ○ Compensation ○ Nominating and Corporate Governance INDEPENDENT |  | HOWARD FEDEROFF Age: 68 Board Service · Tenure: Since April 2021 | |
Professional Experience · Served as one of our directors since March 2021. · Board of Managers of Brooklyn ImmunoTherapeutics, LLC since 2018. · Co-Founder and Managing Partner of Ara Partners, a global private equity firm focused on industrial decarbonization investments, since 2017. · Co-Founder and Managing Partner of Intervale Capital, a middle-market private equity firm focused on investments in energy and infrastructure sectors, from 2006 to 2017. · Founder and Sole Partner of Cherington Capital, a private equity firm, from 2002 to 2006. · Co-Founder and Partner of Paratus Capital Management LLC, a venture capital firm, from 1999 to 2004. · Prior to 1999, Mr. Cherington served in various positions with Lochridge & Company, Inc., a business management consulting firm, and as an investment banker for Credit Suisse First Boston. | Professional Experience · Chief Executive Officer, President and one of our directors since April 2021. · Senior Adviser from January 2021 to April 2021 and as Chief Executive Officer from August 2019 to December 2020 at Aspen Neuroscience, Inc., a biotechnology company developing an autologous neuron replacement program for Parkinson’s disease, as. · Professor of Neurology at the University of California, Irvine, School of Medicine from 2015 to April 2021. · Vice Chancellor for Health Affairs and Chief Executive Officer of the UC Irvine Health System from January 2016 to February 2018 and Vice Chancellor for Health Affairs and Interim Chief Executive Officer of the UC Irvine Health System and Dean of the University of California, Irvine, School of Medicine from June 2015 to January 2016. · Executive Vice President for Health Sciences and Executive Dean of the School of Medicine at Georgetown University from 2007 to 2015. · Has chaired the Recombinant DNA Advisory Committee of the National Institute of Health, the National Heart, Lung, and Blood Institute Gene Therapy Group, and the Board of the Association of Academic Health Centers. · Elected Fellow of the American Association for the Advancement of Science and the National Academy of Inventors. | |||
Education · B.A. in History from Wesleyan University and M.B.A. from University of Chicago. | Education · Ph.D. in Biochemistry and M.D. from Albert Einstein College of Medicine of Yeshiva University. | |||
Relevant Skills · Finance · Leadership · Industry | Relevant Skills · Industry · Education · Innovation | |||
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 | LUBA GREENWOOD Age: 42 Board Service · Tenure: Since March 2021 |  | DENNIS H. LANGER Age: 69 Board Service · Tenure: Since May 2021 · Committees: ○ Audit (Chair) ○ Compensation (Chair) INDEPENDENT | |
Professional Experience · Served as one of our directors since March 2021. · Managing Partner of Binney Street Capital, LLC, the first venture capital fund formed by Dana-Farber Cancer Institute, since December 2020 and was senior advisor to the chief executive officer of Dana-Farber Cancer Institute from April 2019 to December 2020. · Consultant to Brooklyn ImmunoTherapeutics, LLC from October 2018 to February 2021. · Head of strategic business development and corporate ventures for Verily Life Sciences LLC, a research subsidiary of Alphabet Inc. focused on life sciences and healthcare, from February 2018 to July 2019, at which she established and led the Venture Capital Group and Business Development and Strategy teams. · Vice president of global business development and mergers & acquisitions and head of the Roche Diagnostics Innovation Center, East Coast, where she led mergers, acquisitions, investments, and strategic transactions at F. Hoffmann-La Roche Ltd., a multinational healthcare company, from 2015 to February 2018. · Director of Massachusetts Biotechnology Council (MassBio), co-founder and director of LUCA Biologics, Inc., a women’s health and microbiome company, and a co-founder of Inysus, a company focused on pioneering ex-vivo CRISPR applications. · Serves on the Investor Review Committee for the National Cancer Institute. Education · B.A. in Biology and Economics from Brandeis University and J.D. from Northeastern University School of Law. Relevant Skills · Industry · Leadership · Innovation Other Public Board Service | Professional Experience · Served as one of our directors since May 2021. · Has served as a Director of several public and private health care companies, and served in leadership roles in several pharmaceutical, biotechnology and diagnostic companies, including Chairman and Chief Executive Officer of AdvanDx, Inc. from 2013 to 2014; Managing Partner of Phoenix IP Ventures, LLC from 2005 to 2010; President, North America for Dr. Reddy’s Laboratories, Inc. from 2004 to 2005; Senior Vice President, R&D at GlaxoSmithKline and SmithKline Beecham from 1994 to 2004; and Chief Executive Officer, Neose Technologies, Inc. from 1991 to 1994. · Served in research and development and marketing positions at Lilly, Abbott, and Searle. Education · B.A. in Biology from Columbia University, J.D. from Harvard Law School and M.D. from Georgetown University School of Medicine. Relevant Skills · Industry · Governance · Education Other Public Board Service · Myriad Genetics, Inc. 2004-present · Dicerna Pharmaceuticals, Inc. 2007-2019 · Pernix Therapeutics Holdings, Inc. November 2017-May 2019 | |||
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 | ERICH MOHR Age: 66 Brooklyn ImmunoTherapeutics Board Service · Tenure: < 1 month (May 2021) · Committees: ○ Audit ○ Nominating and Corporate Governance (Chair) INDEPENDENT | |||
Professional Experience · Served as one of our directors since May 2021. · Chairman of Oak Bay Biosciences Inc., a developmental biotechnology company focused on treatments for Stargardt disease, since November 2020. · Founder, Chairman and Chief Executive Officer of MedGenesis Therapeutix Inc., a biopharmaceutical company that commercializes treatments for Parkinson’s disease, since 2006. · From 2002 to 2005, served as the Executive Vice President and Chief Scientific Officer of PRA International, a clinical research organization that provided drug development services to pharmaceutical and biotechnology companies. · Founder, Chairman and Chief Executive Officer of CroMedica International from 1995 to 2002, which later merged with PRA International. Education · B.A. and B.Sc. from University of the Pacific and MSc and Ph.D from University of Victoria, British Columbia, Canada. | ||||
Relevant Skills · Industry · Leadership · Innovation | ||||
The board of directors recommends a vote
FOR
each of the five nominees for election as directors.
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Proposal 
— Ratification of Charter
Amendment to Increase Authorized Common Stock
We are asking stockholders to ratify an earlier amendment to our restated certificate of incorporation to increase the number of shares of authorized common stock from 15,000,000 to 100,000,000, which we refer to as the Share Increase Amendment. The Share Increase Amendment was approved at a special meeting of stockholders held on March 15, 2021, or the Special Meeting, and was intended to be effected by the filing of the Share Increase Amendment with the Delaware Secretary of State on March 25, 2021.
Background
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| ● | the Share Increase Amendment is void or voidable due to a failure of authorization or | |
| ● | the Delaware Court of Chancery shall make such orders regarding the ratification as it deems necessary, including that the Share Increase Amendment not be effective or be effective only on certain conditions, | |
| must be brought within 120 days from the effectiveness of the filing of the Certificate of Validation with the Delaware Secretary of State. We intend to file the Certificate of Validation with the Delaware Secretary of State promptly following the Annual Meeting if Proposal 2 is approved and for the Certificate of Validation to become effective upon filing. | ||
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The board of directors recommends a vote
FOR
Ratification of the filing and effectiveness of the certificate of amendment to the restated
certificate of incorporation filed with the Delaware Secretary of State with respect to the
increase in the number of authorized shares of common stock.
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Proposal 
— Approval of
Restated 2020 Stock Incentive Plan
| · | The number of shares of common stock currently reserved under the Restated Plan would be increased by 5,116,132, from 3,368,804 shares to 8,484,936 shares. In connection with this increase, the number of shares of common stock available for issuance pursuant to incentive stock options, or ISOs, under Section 422 of the Internal Revenue Code of 1986, or the Code, would be increased by the same number. | |
| · | On January 1 of each year from 2022 through 2031, the number of shares of common stock reserved under the Restated Plan would increase by the lesser of (a) 5% of the number of shares of common stock outstanding on the immediately preceding December 31 and (b) such smaller number of shares of common stock as may be determined by the board. The shares of common stock available for issuance pursuant to ISOs would correspondingly increase each year, subject to any restrictions under the Code. |
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| · | Shares available. The total number of shares of common stock that may be initially issued pursuant to awards granted under the Restated Plan will be equal to the sum of (a) 8,484,936 and (b) an annual increase on January 1 of each year from 2022 through 2031 equal to the lesser of (i) 5% of the number of shares of common stock outstanding on the immediately preceding December 31 and (ii) such smaller number of shares of common stock as may be determined by the board of directors. | |
| · | Limitation on terms of stock options and stock appreciation rights. The maximum term of each stock option and stock appreciation right, or SAR, will be ten years. | |
| · | No repricing or grant of discounted stock options. The Restated Plan will not permit the repricing of options or SARs. The Restated Plan will prohibit the granting of stock options or SARs with an exercise price less than the fair market value of the common stock on the date of grant. | |
| · | No liberal share recycling. Shares of common stock subject to an award that is cancelled, forfeited or terminated in order to pay the exercise price of a stock option, purchase price or any taxes or tax withholdings on an award will not be available for future awards granted under the Restated Plan. | |
| · | No single-trigger acceleration. Under the Restated Plan, we will not automatically accelerate vesting of awards in connection with a change in control of our company. |
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| · | the excess of the fair market value on the exercise date of one share of common stock over the exercise price, multiplied by | |
| · | the number of shares of common stock covered by the SAR. |
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| 36 |
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Beneficial Ownership of Common Stock
The following table sets forth the compensationnumber of each director, who is not a named executive officer, for service during 2018. This table excludes Mr. Krishnan, who is a named executive officeroutstanding shares of common stock beneficially owned and does not receive any compensation from us for his servicethe percentage beneficially owned, as a director. Seeof the section below entitled “Executive Officer Compensation” for information about Mr. Krishnan’s compensation.record date of June 21, 2021, by:
| 2018 Director Compensation | ||||||||||||||||
| Name | Fees Earned or Paid in Cash (1) | Option Awards (2) | All Other Compensation | Total | ||||||||||||
| Jeff Berg | $ | 55,000 | $ | – | $ | – | $ | 55,000 | ||||||||
| Steve Mitgang | $ | 35,000 | $ | 1,522 | $ | – | $ | 36,522 | ||||||||
| Richard Simtob | $ | 30,000 | $ | 1,522 | $ | – | $ | 31,522 | ||||||||
| Gregory Thomas | $ | 35,000 | $ | 1,522 | $ | – | $ | 36,522 | ||||||||
| Paul Yanover | $ | 30,000 | $ | 1,522 | $ | – | $ | 31,522 | ||||||||
| · | each person known to us to be the beneficial owner of more than five percent of the then-outstanding common stock; | |
| · | each director and NEO; and | |
| · | all of our directors and executive officers as a group. |
(1) The amounts reported in this column represent the sum of the cash retainer payment. No restricted stock awards were issued in lieu of a portion of the cash retainer payment.
(2) The amounts reported in this column represent the aggregate grant date fair value of stock options granted during 2018. These amounts were calculated in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, except that any estimate of forfeitures was disregarded. For a description of the assumptions used in computing the dollar amount recognized for financial statement reporting purposes, see Note 9, Stockholders’ Equity, in the Notes to the Consolidated Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on March 22, 2019. As of December 31, 2018, our non-employee directors had options outstanding to purchase the following number of shares of our common stock:stock beneficially owned by each person is determined under the rules of the SEC. Under these rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares that the individual has the right to acquire by August 20, 2021 (sixty days after June 21, 2021) through the exercise or conversion of a security or other right. Unless otherwise indicated, each person has sole investment and voting power, or shares such power with a family member, with respect to the shares set forth in the following table. The inclusion in this table of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares for any other purpose.
The address for each director and executive officer is c/o Brooklyn ImmunoTherapeutics, Inc., 140 58th Street, Building A, Suite 2100, Brooklyn, New York 11220.
| Series A 10% Convertible Preferred Stock | % of Total Voting | |||||||||||||||||||
| Shares | % | Shares | % | Power(1) | ||||||||||||||||
| Directors and Executive Officers | ||||||||||||||||||||
| Charles Cherington | ||||||||||||||||||||
| Ronald Guido | ||||||||||||||||||||
| Lynn Sadowski Mason | ||||||||||||||||||||
| Sandra Gurrola | ||||||||||||||||||||
| Allen Wolff | ||||||||||||||||||||
| Luba Greenwood | ||||||||||||||||||||
| Howard J. Federoff | ||||||||||||||||||||
| Dennis H. Langer | ||||||||||||||||||||
| Erich Mohr | ||||||||||||||||||||
| All executive officers and directors as a group (8 persons) | ||||||||||||||||||||
| Additional 5% Stockholder | ||||||||||||||||||||
| George P. Denny III P.O. Box 130130 Boston, MA 02113 | ||||||||||||||||||||
| John Halpern 346 Seabreeze Avenue Palm Beach, FL 33480 | ||||||||||||||||||||
| Nicholas J. Singer 1395 Brickell Avenue, Suite 800 Miami, FL 33131 | ||||||||||||||||||||
| * | Less than 1%. |
| (1) | Percentage of total voting power with respect to all shares of common stock and securities convertible into common stock, voting as a single class. Series A 10% convertible preferred stock generally does not have voting rights. |
* To date, Mr. Berg has waivedDelinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors and any persons owning ten percent or more of the common stock to file reports with the SEC to report their beneficial ownership of and transactions in our securities and to furnish us with copies of the reports.
Based solely upon a review of the Section 16(a) reports furnished to us, along with written representations from our executive officers and directors, we believe that all stock option grantsrequired reports were timely filed during 2020, except that (a) Sandra Gurrola, our former Senior Vice President of Finance inadvertently failed to which he would otherwise be eligible to receive in his capacitytimely file one report and, as a non-employee director.result, two transactions were not reported on a timely basis and (b) Allen Wolff, our former Chief Executive Officer, inadvertently failed to timely file one report and, as a result, three transactions were not filed on a timely basis.
EXECUTIVE OFFICERSExecutive Officers
The following table sets forth, certain information regardingas of June 18, 2021, the names of our current executive officers, their ages, their positions and business experience, and the year of their first election as officers. Each executive officer serves at the discretion of April 26, 2019:the board of directors and holds office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.
| Name | Age | Positions and Business Experience | Year First Elected Officer | |||
| Howard J. Federoff | 68 | Please see “Proposal 1. Election of Directors—Information Concerning Nominees for Election as Directors.” | 2021 | |||
| Ronald Guido | 62 | Chief Development Officer of Brooklyn ImmunoTherapeutics, Inc. since March 25, 2021 and of Brooklyn LLC from December 2020 to March 25, 2021; Interim Chief Executive Officer of Brooklyn ImmunoTherapeutics, Inc. from March 25, 2021 to April 2021) and of Brooklyn LLC from December 2020 to March 25, 2021; Chief Executive Officer of Brooklyn LLC from May 2020 to December 2020; Executive Vice-President, Regulatory Affairs and Quality for Brooklyn LLC (and its predecessor, IRX Therapeutics, Inc.) from January 2017 to December 2020; Senior Vice-President Global Regulator and Chief Compliance Officer of Veloxis Pharmaceuticals A/S from 2015 to December 2016; current lecturer in Biology in The Masters of Biotechnology Program at Columbia University; received M.S. in Technical Communications from Polytechnic University and M.S. in Pharmaceutical Medicine from Hibernia College. | 2021 | |||
| Lynn Sadowski Mason | 42 | Executive Vice President, Clinical Operations of Brooklyn ImmunoTherapeutics, Inc. from December 2019 to March 25, 2021 and of Brooklyn LLC since March 25, 2021; Vice President, Clinical Operations of Brooklyn LLC. (and its predecessor, IRX Therapeutics, Inc.) from November 2018 to December 2019; Senior Director, Clinical Operations of Brooklyn LLC (and its predecessor, IRX Therapeutics, Inc.) from June 2017 to November 2018; Director, Global Clinical Operations and Strategy of Bristol-Myers Squibb Company from 2015 to May 2017; Associate Director, Regional Clinical Operations Subregion Manager of Bristol-Myers Squibb Company from 2013 to 2015 at various positions at Bristol-Myers Squibb Company from 2005 to 2013; received B.S. in Biology and Pre-Medicine from Indiana University and M.S. in Regulatory Affairs at Massachusetts College of Pharmacy and Health Sciences. | 2021 |
The following table sets forth the names of the named executive officers, their ages, their positions and business experience with Brooklyn ImmunoTherapeutics, Inc., and the year of their first election as officers. The employment of each of the named executive officers terminated on March 25, 2021, upon the completion of the Merger.
| Name | Age | Positions and Business Experience | Year First Elected Officer | |||
| Allen Wolff | 49 | Chief Executive Officer and director from January 2020, and Chair of the Board from April 2020, to March 25, 2021; Interim Chief Executive Officer from September 2019 to January 2020; Chief Financial Officer and Executive Vice President from January 2016 to September 2019; Chief Financial Officer from December 2014 to January 2016; received B.A. from University of Michigan and M.B.A. from University of Maryland, R.H. Smith School of Business. | 2014 | |||
| Sandra Gurrola | 54 | Senior Vice President of Finance from September 2019 to March 25, 2021; Vice President of Finance from September 2014 to September 2019; various leadership accounting roles, including director of accounting, director of financial reporting | 2009 |
Ram Krishnan has served asThere are no family relationships among any of our chiefdirectors and executive officerofficers. Charles Cherington and Luba Greenwood were appointed to the board pursuant to the terms of the Merger Agreement. There are no other arrangements or understandings with another person under which our directors and officers was or is to be selected as a memberdirector or executive officer. Additionally, none of our boarddirectors or executive officers is involved in any legal proceeding that requires disclosure under Item 401(f) of directors since September 2014. Information regarding Mr. Krishnan can be found under “PROPOSAL 1—ELECTION OF DIRECTORS—Nominees for Election” above.Regulation S-K of the SEC.
Allen Wolff was appointed as our chief financial officer and executive vice president in January 2016 and has served as chief financial officer since December 2014.From July 2013 until December 2014, Mr. Wolff served as the chief financial strategist of PlumDiggity, a privately-heldfinancial and marketing strategy firm that he co-founded. From October 2012 to July 2013, Mr. Wolff served as the chief financial officer of 365 RetailMarkets, a privately-held company in the self-checkout point of sale technology industry, where he also served on its board of directors during such period. From July 2011 to April 2013,simultaneouswith his role at 365 Retail Markets, Mr. Wolff held the leadership role of “Game Changer” at Crowdrise, an online fundraising platform company. Mr. Wolff joined Crowdrise after serving as the chief operating officer and chief financial officer from January 2011 to July 2011 of RetailCapital, LLC, a small business specialty finance company. Mr. Wolff co-founded PaySimple in January 2006 and held various roles including president, chief financial officer, executive vice president and director, from 2006 until he left the company in January 2011. From September 1998 until August 2012, Mr. Wolff was a principal for a casual dining restaurant. Mr. Wolff holds a B.A. from the University of Michigan and an MBA, from the University of Maryland, R.H. Smith School of Business.
Sandra Gurrola was appointed as our vice president of finance in September 2014, and from November 2009 through September 2014, Ms. Gurrola served in various leadership accounting roles including director of accounting, director of financial reporting and compliance, and controller.From July 2007 until April 2009, Ms. Gurrola served as senior manager of financial reporting for Metabasis Therapeutics, Inc., a biotechnology company, and served as a consultant to Metabasis from September 2009 to November 2009. Ms. Gurrola holds a B.A. in English from San Diego State University.
EXECUTIVE OFFICER COMPENSATION
Compensation Processes and Procedures
The N&CG/C Committee isFor 2020 the nominating and corporate governance/compensation committee was responsible for determining the amount and form of compensation paid to our executive officers, including our chief executive officer.Chief Executive Officer. Our chief executive officer presentsChief Executive Officer presented compensation recommendations to the N&CG/C Committeenominating and corporate governance/compensation committee with respect to the executive officers who reportreported to him. The N&CG/C Committee maynominating and corporate governance/compensation committee then could accept or adjust such recommendations. The N&CG/C Committee isnominating and corporate governance/compensation committee was solely responsible for determining the compensation of our executive officers. OurThe full board of directors participatesparticipated in evaluating the performance of our executive officers, except that Mr. Krishnan,Allen Wolff, our chief executive officerChief Executive Officer and a member of ourthe board, of directors, does not participate when ourthe board of directors evaluatesevaluated his performance and he iswas not present during voting or deliberations regarding his performance or compensation matters. The corporate governance/compensation committee did not engage any outside advisors or experts to assist or advise the corporate governance/compensation committee on any matters relating to executive compensation during 2020 or the hiring of any executive officers during 2020.
For 2021 the compensation committee is responsible for the actions taken by the nominating and corporate governance/compensation committee in 2020. When determining executive officer compensation, and the various components that comprise it, the N&CG/C Committee evaluatescompensation committee will evaluate and considersconsider publicly available executive officer compensation survey data to present a competitive compensation package to attract and retain top talent, including an appropriate level of salary, performance-based bonus and/orand equity incentives. Typically, the N&CG/C Committee evaluatescompensation committee will evaluate between three and five different sources of compensation data to provide relevant market benchmark data for a given executive role. Additionally, the N&CG/C Committee iscompensation committee will be authorized to engage outside advisors and experts to assist and advise the N&CG/C Committeecompensation committee on matters relating to executive compensation. The N&CG/C Committee did not engage any outside advisors or experts to assist or advise the N&CG/C Committee on any matters relating to executive compensation during 2018 or the hiring of any executive officers.
Under applicable SEC rules and regulations, all individuals who served as our principal executive officer during 2018,2020, our two most highly compensated executive officers (other than our principal executive officer) who were serving as executive officers at the end of 2018,2020, and up to two additional individuals who would have been one of our top two most highly compensated executive officer had they been serving as an executive officer at the end of 20182020 are referred to as our “named executive officers.” Our named executive officers for 20182020 were:
| Name | Title | ||
| Chief Executive Officer | |||
| Sandra Gurrola | Senior Vice President of Finance |
2018 Named Executive OfficersOfficer Compensation Overview
During 2018,2020 our named executive officers received an annual base salary. As discussedsalary and performance bonus as described below there was no incentive compensation awarded to our named executive officers for 2018. Noneunder “—2020 Incentive Plan.” Neither of our named executive officers receive or are eligible forreceived any perquisites or benefits, other than benefits that are available to our other full-time employees. The employment of each of our named executive officers iswas at-will. During 2018,2020 we had written employment agreements with Mr. Krishnan and Mr. Wolff.each of our named executive officers as described below under “—Employment Agreements with Named Executive Officers.” Each of the components of our 20182020 executive compensation program is discussed below under the Summary Compensation Table.
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The following table sets forth information concerning compensation during the years ended December 31, 20182020 and 20172019 awarded to, earned by or paid to our named executive officers.
| 2018 Summary Compensation Table | ||||||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus | Stock (1) | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | ||||||||||||||||||||||||
| Ram Krishnan | 2018 | $ | 350,000 | $ | – | $ | 151,000 | $ | – | $ | – | $ | – | $ | 501,000 | |||||||||||||||||
| Chief Executive Officer | 2017 | $ | 350,000 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 350,000 | |||||||||||||||||
| Allen Wolff | 2018 | $ | 265,000 | $ | – | $ | 90,600 | $ | – | $ | – | $ | – | $ | 355,600 | |||||||||||||||||
| Chief Financial Officer and Executive Vice President | 2017 | $ | 265,000 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 265,000 | |||||||||||||||||
| Sandra Gurrola | 2018 | $ | 175,000 | $ | – | $ | 18,120 | $ | – | $ | – | $ | – | $ | 193,120 | |||||||||||||||||
| Vice President of Finance | 2017 | $ | 170,753 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 170,753 | |||||||||||||||||
| Name and Principal Position | Year | Salary($) | Bonus($) | Stock Awards ($)(1) | Non-equity Incentive Plan Compensation ($)(2) | Total($) | |||||||
| Allen Wolff | 2020 | $322,213 | $19,591 | (3) | $202,250 | $49,985 | $594,040 | ||||||
| Former Chief Executive Officer | 2019 | 265,000 | — | 37,200 | — | 302,200 | |||||||
| Sandra Gurrola | 2020 | 190,000 | 110,833 | (4) | 60,750 | 12,663 | 374,246 | ||||||
| Former Senior Vice President of Finance | 2019 | 179,356 | — | 26,040 | — | 205,396 | |||||||
| (1) | The amounts reported in this column | |
| (2) | Represents performance bonuses earned by the applicable named executive officer for 2020 based on our achievement of performance objectives, as determined by the nominating and corporate governance/compensation committee. For additional information regarding 2020 performance bonuses, see the discussion under the caption entitled “—Narrative Explanation of the Summary Compensation Table—2020 Incentive Plan.” | |
| (3) | Represents a cash retention bonus that was paid in shares of common stock to help us conserve cash. For additional information, see the discussion under the caption “Stay Bonus” in “Employment Agreements with Named Executive Officers—Allen Wolff.” | |
| (4) | Represents a cash retention bonus. For additional information, see the discussion of our retention bonus and general release of all claims agreement with Ms. Gurrola described under “Employment Agreements with Named Executive Officers—Sandra Gurrola.” | |
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Narrative Explanation of the Summary Compensation Table
Salaries.Salaries
Each of our named executive officers receives a base salary. The base salary is the fixed cash compensation component of our executive compensation program and it recognizes individual performance, time in role, scope of responsibility, leadership skills and experience. The base salary compensates an executive for performing his or her job responsibilities on a day-to-day basis. Generally, base salaries are reviewed annually company-wide and adjusted (upward or downward) when appropriate based upon individual performance, expanded duties, changes in the competitive marketplace and, with respect to upward adjustments, if we are, financially and otherwise, able to pay it. We try to offer competitive base salaries to help attract and retain executive talent.
Non-Equity2019 Interim CEO Performance Incentive Plan Compensation. In 2018, the N&CG/C Committee determined not to adopt an executive incentive plan for 2018. Instead, our management team, including our named executive officers, were eligible to receive a spot bonus in an amount to would be determined by our board of directors (or the N&CG/C Committee) in its sole discretion. Our board of directors determined not to award a spot bonus to any of our named executive officers for 2018 in order to invest any amounts that would have otherwise been paid in strategic initiatives.
ForIn connection with his appointment as interim chief executive officer in September 2019, Allen Wolff was eligible to participate in the N&CG/C Committee2019 Interim CEO Performance Incentive Plan, under which, for the achievement of each of the performance goals thereunder, we agreed to grant to Mr. Wolff a number of shares of common stock equal to $20,000 divided by the closing price per share of common stock on the date of grant. Upon grant, such shares would be fully vested. The performance goals were related to: (1) the retainment of certain key employees determined by the nominating and corporate governance/compensation committee through at least March 17, 2020; (2) having a target amount of unrestricted cash, as determined and approved by nominating and corporate governance/compensation committee, as of March 17, 2020; and (3) meeting target sales for the Buzztime Basic product offering, as determined and approved by the nominating and corporate governance/compensation committee, by March 31, 2020. In March 2020, the nominating and corporate governance/compensation committee determined that the performance goal related to the retainment of key employees was achieved, and we issued 9,506 shares to Mr. Wolff, representing $20,000 worth of shares of common stock, net of withholding taxes. The value of these shares is reflected in Mr. Wolff’s 2020 compensation in the “Stock Awards” column in the Summary Compensation Table above.
2020 Incentive Plan
On June 1, 2020, the nominating and corporate governance/compensation committee approved the NTN Buzztime, Inc. Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2019 (the “20192020, or the 2020 Incentive Plan”).Plan. The 20192020 Incentive Plan permitspermitted the payout of any incentive compensation earned under the plan to be paid, at the discretion and in the sole determination of the N&CG/C Committee,nominating and corporate governance/compensation committee, either in (i)(a) cash, (ii)(b) shares of our common stock issued under the NTN Buzztime, Inc. Amended 20102019 Performance Incentive Plan or any successor long-term incentive plan, or (iii)(c) any combination of (i)(a) and (ii)(b). If incentive compensation iswere paid in shares, the number of shares issued iswas to be determined by dividing the amount earned by the closing price of our common stock on the date on which the N&CG/C Committee approvesnominating and corporate governance/compensation committee approved the amount of incentive compensation earned.
Participants in Payments under the 20192020 Incentive Plan, earn incentive compensation basedif any, were contingent on the level of achievement ofapplicable participant’s continued employment with us on the following performance measures:payout date.
Each 20192020 Incentive Plan participant will havehad a target payout amount based on a percentage of his or her annual base salary (excluding benefits) as of December 31, 2019, that is assigned according to such participant’s position and job level. The table below sets forth the target payout amounts for the named executive officers for 2019,under the 2020 Incentive Plan, assuming all performance measures arewere achieved at a rate of 100%, are::
| Name | Target Percentage of Base Salary | Target Payment Amount | ||||||
| Ram Krishnan | 75 | % | $ | 262,500 | ||||
| Allen Wolff | 50 | % | $ | 132,500 | ||||
| Sandra Gurrola | 10 | % | $ | 17,500 | ||||
| Name | Target Payment Amount | |
| Allen Wolff | $150,000 | |
| Sandra Gurrola | $38,000 |
Employment AgreementsThe performance targets were established by the nominating and corporate governance/compensation committee in June 2020 and fell into three categories, the achievement of which was to be determined following each quarter or year, as applicable: strategic, financial and operational. All incentive-based compensation payable to Mr. Wolff and Ms. Gurrola was subject to any clawback policy that we may establish.
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Under the terms of the 2020 Incentive Plan, any performance-based bonuses were to be paid as follows: 16.66% if the applicable performance targets for each of our first, second and third fiscal quarters were achieved; and 50% if the applicable performance targets for the applicable fiscal year were achieved. To preserve cash, we did not pay any amounts in respect of the performance targets for either of the first, second or third fiscal quarters despite the applicable performance targets being achieved at certain levels.
During 2018, we had written employment agreementsEmployment Agreements with Mr. Krishnan and Mr. Wolff. As previously reported, in March 2018, we entered into an amendment to the employment agreement dated August 21, 2014 that we entered into with our chief executive officer, Mr. Ram Krishnan, and weNamed Executive Officers
Allen Wolff
We entered into an employment agreement with our chief financial officer, Mr. Allen Wolff.Wolff dated March 19, 2018, which was amended in each of September 2019, January 2020, March 2020 and September 2020. The following is a summary of the material terms of Mr. Krishnan’sthe employment agreement, as amended,amended.
Base Salary. Mr. Wolff’s base salary was $325,000 and could increase to $350,000 effective July 1, 2021. However, in an effort to help preserve cash, up to 20% of Mr. Wolff’s employment agreement.base salary could be paid in shares of common stock at Mr. Wolff’s discretion. Mr. Wolff elected to receive 20% of his base salary in shares of common stock from January 2020 through March 2020.
Base Salary. Messrs. Krishnan’s andIncentive Bonus. The target payout amount of Mr. Wolff’s base salary will be $350,000 and $265,000, respectively,incentive performance-based bonus for 2019, and 2020 is $150,000. See “—Narrative Explanation of the same amounts as in 2017 and 2018.Summary Compensation Table—2020 Incentive Plan” above for additional information.
Incentive Bonus. Each of Messrs. Krishnan and Stay Bonus. Mr. Wolff are eligiblewas entitled to receive an annual incentivea $30,000 cash bonus if he were to remain employed with us for at least 180 days from September 17, 2019, the date on which he was appointed as interim chief executive officer. To preserve cash, we agreed to issue to him a number of shares of common stock equal to a pro rata amount of the $30,000 bonus (determined by multiplying $30,000 by a fraction, the numerator of which was the number of days lapsed between September 17, 2019 and January 14, 2020, the effective date of the amendment to his employment agreement appointing him as Chief Executive Officer, and the denominator of which was 180) divided by the closing price of common stock on January 14, 2020. As a result, we issued 5,102 shares of common stock to Mr. Wolff in anrespect of this bonus, the value of which was net of withholding taxes on the amount of bonus earned. The value of these shares issued is reflected in Mr. Wolff’s 2020 compensation in the “Bonus” column in the Summary Compensation Table above.
Change-in-Control Bonus. Under the terms of the amendment to his employment agreement we entered into with Mr. Wolff in September 2020, if Mr. Wolff were to be determined by our board of directors (or its N&CG/C Committee) in its sole discretion, based on the achievement of performance objectives established by our board of directors (or its N&CG/C Committee). Messrs. Krishnan’s and Wolff’s target potential incentive bonus amount for 2019 and 2020 will be 75% and 50% of their respective base salary, respectively, the same target amounts as in 2017 and 2018. Their performance objectives are anticipated to fall into three categories: strategic, financial and operational. The incentive bonus will not be deemed earned and will not be paid unless the executive iscontinuously employed by us onthrough the applicable payment date. In lieuconsummation of the foregoing bonus arrangement, if our chief executive officera change in control (as defined in his employment agreement) and chief financial officer and the N&CG/C Committee agree, our management team, including these executives, will insteadsuch transaction were to be consummated before March 31, 2021, then he would be eligible to receive a spotcash bonus of $162,500, subject to tax withholding and other authorized deductions and subject to his delivering a general release of claims in an amountour favor, and we would be obligated to pay his COBRA premiums for up to six months following the termination of his employment with us or, if earlier, until he becomes eligible for medical insurance coverage in connection with new employment. Mr. Wolff agreed that he would not be determined by our boardeligible for his severance payments or benefits under the terms of directors (or its N&CG/C Committee)his employment agreement upon the consummation of a qualifying change in its sole discretion, which wascontrol because his employment with us would automatically terminate upon the case for 2018.consummation of such qualifying change in control due to his resignation without good reason.
Equity Grants.Grant. Under the terms of theirhis employment agreements,agreement, in March 2018, Messrs. KrishnanJanuary 2020 Mr. Wolff was granted a stock unit award of 75,000 shares of common stock. The award was made under, and Wolff werewas subject to, our 2019 Performance Incentive Plan and vested quarterly beginning three months after the grant date, subject to Mr. Wolff’s continued service with us as of the applicable vesting date.
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Sandra Gurrola
We entered into an employment agreement with Sandra Gurrola dated September 17, 2010, which was amended in each of January 2020 and May 2020. The following is a summary of the material terms of the employment agreement, as amended.
Base Salary. Ms. Gurrola’s base salary was $190,000.
Incentive Bonus. The target payout amount of Ms. Gurrola’s incentive performance-based bonus for 2020 is $38,000. See “—Narrative Explanation of the Summary Compensation Table—2020 Incentive Plan” above for additional information.
Equity Grant. Under the terms of her employment agreement, in January 2020 Ms. Gurrola was granted a stock unit award of 25,000 and 15,000 shares of our common stock, respectively.stock. The awards wereaward was made under, and arewas subject to, our Amended 20102019 Performance Incentive Plan and vest as to 16.67% of the shares subject to the award on the 6 month anniversary ofvested quarterly beginning three months after the grant date, and the remaining 83.33% of the shares vest in 30 substantially equal monthly installments beginning on the 7-month anniversary of the grant date, in each case, subject to the executive’sMs. Gurrola’s continued service towith us as of the applicable vesting date.
In connection with entering into the amendment to Ms. Gurrola’s employment agreement in May 2020, we entered into a retention bonus and general release of all claims agreement with Ms. Gurrola, pursuant to which, in exchange for the reduction in her severance compensation from nine months of her base salary to two months of her base salary, and subject to Ms. Gurrola signing and not revoking a general release of claims in our favor, we agreed to pay her a retention bonus of $110,833, which was equivalent to seven months of her monthly salary, and which was payable in three installments, the last of which was made on June 19, 2020. If, prior to August 31, 2020, Ms. Gurrola’s employment was terminated by us for cause or by her without good reason, she agreed to return to us 50% of the amount of the retention bonus paid to her on or before such termination of employment and we would have had no obligation to pay any unpaid retention bonus.
Employment Agreements with Current Executive Officers
Howard J. Federoff
We entered into an executive employment agreement, dated April 1, 2021 and effective as of April 16, 2021, with Howard Federoff with respect to terms of his employment as our Chief Executive Officer and President. The compensatory terms of the executive employment agreement, including equity awards, were approved by the compensation committee of the board of directors, which consists of two disinterested members of the board. Dr. Federoff’s hiring, and his executive employment agreement, were approved by the board.
The executive employment agreement provides for our at-will employment of Dr. Federoff as our Chief Executive Officer and President for a term commencing on April 16, 2021 and continuing until terminated by us or Dr. Federoff.
Under the terms of the executive employment agreement, we will pay Dr. Federoff an annual base salary of $450,000, which amount is subject to annual review by the board or the compensation committee and subject to adjustment to reflect market practices among our peers in the sole discretion of the board or the compensation committee.
Dr. Federoff will be eligible to receive an annual cash bonus award in an amount up to 50% of his base salary upon achievement of reasonable performance targets set by the board or the compensation committee, each in its sole discretion. The bonus will be determined by the board or the compensation committee and paid annually in March in the year following the performance year on which such bonus is based.
In accordance with the terms of the executive employment agreement, we will grant to Dr. Federoff, effective as of April 16, 2021, equity awards consisting of:
| • | a time-based nonqualified stock option covering 2,627,915 shares of common stock, eligible to vest over four years, which we refer to as the Time-Based Option; and | |
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| • | a performance-based stock option grant covering 597,253 shares of common stock, eligible to vest upon the occurrence of the first approval (clearance) by the Food and Drug Administration of an investigational new drug application in connection with our license with Factor Biosciences Therapeutics Limited and Novellus Therapeutics Limited, which we refer to as the Milestone Option. |
In each case, vesting generally requires Dr. Federoff’s continued employment through the relevant vesting date. Consistent with the employment inducement grant rules set forth in Section 711(a) of the NYSE American LLC Company Guide, the equity award to Dr. Federoff was made as an inducement material to his entering into employment with us and was approved by the compensation committee without need for stockholder approval.
If Dr. Federoff’s employment is terminated by us without Cause or by Dr. Federoff for Good Reason (each such capitalized term as defined in the executive employment agreement), the portion of the Time-Based Option that would have vested during the twelve months following the date of termination will vest, and we will be required to pay to Dr. Federoff an amount equal to twelve months of his base salary and a pro rata bonus amount, each with respect to the year in which the termination occurs. Dr. Federoff will also receive an extension of the post-termination exercise period of the Time-Based Option and Milestone Option of up to eighteen months. If the termination occurs prior to April 16, 2024, Dr. Federoff will receive accelerated vesting of the Milestone Option equal to one-thirty-sixth of the shares subject to such option multiplied by the number of full months between April 16, 2021 and the date of such termination. Notwithstanding the foregoing, if a termination without Cause or for Good Reason occurs within three months before or twelve months after a Change in Control (as defined in the executive employment agreement), Dr. Federoff would become entitled to vesting in full of his equity awards based on assumptions set forth in the executive employment agreement. Any such severance benefits under the executive employment agreement are contingent on Dr. Federoff entering into and not revoking a general release of claims in favor of our company.
The executive employment agreement provides for (a) reimbursement of reasonable business expenses, (b) participation in our benefit plans and (c) thirty paid vacation days per year.
The executive employment agreement contains customary covenants related to non-competition and non-solicitation for one year following termination of employment, as well as customary covenants related to confidentiality, inventions and intellectual property rights.
Ronald Guido
On March 30, 2021, we entered into an Assignment and Assumption of Employment Agreement with Ronald Guido whereby we agreed to assume all of the obligations under Mr. Guido’s existing Employment Agreement with Brooklyn LLC dated as of October 30, 2018. Mr. Guido’s employment agreement provides for our at-will employment of Mr. Guido for a term commencing on October 30, 2018 and continuing until terminated by us or Mr. Guido.
Under the terms of his employment agreement, we will pay Mr. Guido an annual base salary of $275,000, which amount is subject to annual review by the board or the compensation committee and subject to adjustments. Mr. Guido will be eligible to receive an annual performance bonus, targeted at 25% of his annual salary rate. Mr. Guido was granted 500 common units of Brooklyn LLC upon his employment with Brooklyn LLC.
In the event that Mr. Guido’s employment is terminated for any reason, we will pay to him his base salary through the last day of his employment, as well as any documented expenses properly incurred by him on our behalf prior to any such termination and not yet reimbursed.
In the event that Mr. Guido’s employment is terminated without Cause (as defined in the employment agreement) and provided Mr. Guido (a) enters into, does not revoke and complies with the terms of a separation agreement in a form provided by us, which shall include a general release of claims against us and related persons and entities within 60 days after the date of termination; (b) resigns from any and all positions, including, without implication of limitation, as a manager, director, trustee or officer, that he holds with us; and (c) returns all our property and complies with any instructions related to deleting and purging duplicates of such property, we will provide him with
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severance payments in the form of a continuation of his base salary for a nine month period that immediately follows the date of termination.
In the event that Mr. Guido’s employment is terminated as a result of his (i) death, (ii) disability, (iii) resignation, (iv) termination for Cause, or (v) any other termination of your employment that is not otherwise defined in his employment agreement, Mr. Guido will be entitled to his base salary through the last day of his employment, plus expenses, but will not be entitled to any severance payments.
Lynn Sadowski Mason
On March 30, 2021, we entered into an Assignment and Assumption of Employment Agreement with Lynn Sadowski Mason whereby we agreed to assume all of the obligations under Ms. Sadowski Mason’s existing Employment Agreement with Brooklyn LLC dated as of October 30, 2018, and as amended on March 12, 2020. Ms. Sadowski Mason’s employment agreement provides for our at-will employment of Ms. Sadowski Mason for a term commencing on October 30, 2018 and continuing until terminated by us or Ms. Sadowski Mason.
Under the terms of her employment agreement, we will pay Ms. Sadowski Mason an annual base salary of $250,000, which amount is subject to annual review by the board or the compensation committee and subject to adjustments. Ms. Sadowski Mason will be eligible to receive an annual performance bonus, targeted at 25% of her annual salary rate. Ms. Sadowski Mason was granted 500 common units of Brooklyn LLC upon her employment with Brooklyn LLC.
In the event that Ms. Sadowski Mason’s employment is terminated for any reason, we will pay her base salary to her through the last day of her employment, as well as any documented expenses properly incurred by him on our behalf prior to any such termination and not yet reimbursed.
In the event that Ms. Sadowski Mason’s employment is terminated without Cause (as defined in the employment agreement) and provided Ms. Sadowski Mason (a) enters into, does not revoke and complies with the terms of a separation agreement in a form provided by us, which shall include a general release of claims against us and related persons and entities within 60 days after the date of termination; (b) resigns from any and all positions, including, without implication of limitation, as a manager, director, trustee or officer, that he holds with us; and (c) returns all our property and complies with any instructions related to deleting and purging duplicates of such property, we will provide her with severance payments in the form of a continuation of her base salary for a nine month period that immediately follows the date of termination.
In the event that Ms. Sadowski Mason’s employment is terminated as a result of her (i) death, (ii) disability, (iii) resignation, (iv) termination for Cause, or (v) any other termination of your employment that is not otherwise defined in her employment agreement, Ms. Sadowski Mason will be entitled to her base salary through the last day of her employment, plus expenses, but will not be entitled to any severance payments.
Termination of Employment and Change-in-Control Arrangements
Each of the employment agreementagreements of Messrs. KrishnanAllen Wolff and Wolff providesSandra Gurrola provided for certain benefits upon termination of employment under specified circumstances. If the executive’s employment iswere to be terminated by us or by the named executive office, we willwould be obligated to pay him or her any accrued and unpaid base salary and reimburse him or her for expenses incurred through the date of termination of employment. We refer to the foregoing as the “accrued obligations.”
In addition to the accrued obligations, if the executive’sMr. Wolff’s employment with us iswere to be terminated by us without cause or by the executivehim for good reason, subject to the executivehim delivering to us a general release of claims in our favor, we willwould be obligated to pay him as severance an amount equal to nine months, with respect to Mr. Krishnan, and six months, with respect to Mr. Wolff,one month of his base salary rate in effect on the date hisfor every full year of full-time employment, terminates,subject to a minimum of six months and a maximum of nine months, payable in substantially equal installments on a bi-weekly basis over ninethe applicable severance period, and we would be obligated to reimburse him for COBRA insurance premiums for a period of months equal to the number of months paid in severance. Mr. Wolff was employed with us for six years. Mr. Wolff was not entitled to receive any such severance payment or sixbenefits
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upon the consummation of a qualifying change in control because his employment with us would automatically terminate upon the consummation of such qualifying change in control due to his resignation without good reason.
In addition to the accrued obligations, if Ms. Gurrola’s employment with us were to be terminated by us without cause or by her for good reason, subject to her delivering to us a general release of claims in our favor, we would be obligated to pay her as severance an amount equal to two months as applicable,of her base salary, payable in one lump sum, plus the incentive compensation she is eligible to receive under the 2020 Incentive Plan, and provided that he timely elects continuedif so paid, she will waive payment of such incentive compensation under the 2020 Incentive Plan. We also would be obligated to reimburse her for COBRA insurance coverage pursuant to COBRA, we will reimburse himpremiums for a period of nine months, with respect to Mr. Krishnan, and six months, with respect to Mr. Wolff, an amount equal to the difference between the amount of the COBRA premiums he actually paid each such month and the amount of the most recent premium he paid immediately prior to the date his employment terminates for company-offered health insurance benefits. Mr. Krishnan’s employment agreement, before it was amended, had the same severance arrangement, except the severance pay was six months of base salary and the reimbursement benefit was for six-months.months.
In the event of a change in control and if the named executive isofficer were to be employed by us through the effective date of the change in control, then 100% of the then unvestedthen-unvested portion of the stock units and stock options we granted to each of Messrs. KrishnanMr. Wolff and WolffMs. Gurrola then outstanding willwould vest and, as applicable, become exercisable as of immediately before such effective date.
The executive employment agreement with Dr. Federoff provides that if a termination without Cause or for Good Reason (each as defined in his employment agreement) occurs within three months before or twelve months after a Change in Control (as defined in his executive employment agreement), Dr. Federoff would become entitled to vesting in full of his equity awards based on assumptions set forth in the executive employment agreement. Any such severance benefits under the executive employment agreement are contingent on Dr. Federoff entering into and not revoking a general release of claims in favor of our company.
Other than our employment agreements with Messrs. Krishnan and Wolffas described above and the agreements that govern their equity awards, we do not have any contract, agreement, plan or arrangement, whether written or unwritten, that provides for payment to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control or a change in the named executive officer’s responsibilities following a change in control.
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Outstanding Equity Awards at Fiscal Year-EndDecember 31, 2020
The following table sets forth information concerning equity awardsregarding each unexercised option held by theeach of our named executive officers that were outstanding as of December 31, 2018:2020.
2018 Outstanding Equity Awards at Fiscal Year-End
| 2020 Outstanding Equity Awards at Fiscal Year-End Option Awards | Stock Awards | ||||||||||||||||||||||||||
| Name | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units have not Vested | Market Value of Shares or Units of Stock that have not Vested ($) | ||||||||||||||||||||
| Allen Wolff | 01/19/20 | (1) | – | – | $ | – | – | 46,875 | $ | 105,000 | |||||||||||||||||
| 03/19/19 | (2) | – | – | $ | – | – | 4,167 | $ | 9,334 | ||||||||||||||||||
| 03/19/18 | (2) | – | – | $ | – | – | 1,250 | $ | 2,800 | ||||||||||||||||||
| 03/23/15 | (3) | 10,000 | – | $ | 27.50 | 03/22/25 | – | – | |||||||||||||||||||
| 12/29/14 | (3) | 5,000 | – | $ | 22.50 | 12/28/24 | – | – | |||||||||||||||||||
| Sandra Gurrola | 01/19/20 | (1) | – | – | $ | – | – | 15,625 | $ | 35,000 | |||||||||||||||||
| 03/19/19 | (2) | – | – | $ | – | – | 2,917 | $ | 6,534 | ||||||||||||||||||
| 03/19/18 | (2) | – | – | $ | – | – | 250 | $ | 560 | ||||||||||||||||||
| 05/25/16 | (3) | 500 | – | $ | 8.50 | 05/24/26 | – | – | |||||||||||||||||||
| 03/23/15 | (3) | 4,000 | – | $ | 27.50 | 03/22/25 | – | – | |||||||||||||||||||
| 09/08/14 | (3) | 1,000 | – | $ | 22.50 | 09/07/24 | – | – | |||||||||||||||||||
| 04/08/13 | (3) | 200 | – | $ | 12.00 | 04/07/23 | – | – | |||||||||||||||||||
| (1) | The restricted stock units vest at a rate of 12.50% of the shares subject to the award in eight substantially equal quarterly installments beginning on the three-month anniversary of the grant date. |
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Name | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested ($) | |||||||||||||||||||||
| Ram Krishnan | 03/19/18 | (1) | – | – | $ | – | – | 18,750 | $ | 36,563 | ||||||||||||||||||
| 01/20/16 | (2) | 10,931 | 4,069 | $ | 6.50 | 01/19/26 | – | – | ||||||||||||||||||||
| 04/15/15 | (3) | 14,687 | 313 | $ | 20.50 | 04/14/25 | – | – | ||||||||||||||||||||
| 09/15/14 | (2) | 70,000 | – | $ | 20.00 | 09/14/24 | – | – | ||||||||||||||||||||
| Allen Wolff | 03/19/18 | (1) | – | – | $ | – | – | 11,250 | $ | 21,938 | ||||||||||||||||||
| 03/23/15 | (2) | 9,373 | 627 | $ | 27.50 | 03/22/25 | – | – | ||||||||||||||||||||
| 12/29/14 | (2) | 5,000 | – | $ | 22.50 | 12/28/24 | – | – | ||||||||||||||||||||
| Sandra Gurrola | 03/19/18 | (1) | – | – | $ | – | – | 2,250 | $ | 4,388 | ||||||||||||||||||
| 05/25/16 | (2) | 314 | 186 | $ | 8.50 | 05/24/26 | – | – | ||||||||||||||||||||
| 03/23/15 | (2) | 3,748 | 252 | $ | 27.50 | 03/22/25 | – | – | ||||||||||||||||||||
| 09/08/14 | (2) | 1,000 | – | $ | 22.50 | 09/07/24 | – | – | ||||||||||||||||||||
| 04/08/13 | (2) | 200 | – | $ | 12.00 | 04/07/23 | – | – | ||||||||||||||||||||
| 06/02/10 | (4) | 400 | – | $ | 27.00 | 11/09/19 | – | – | ||||||||||||||||||||
| (2) | The restricted stock units vest at a rate of 16.67% of the shares subject to the award on the six-month anniversary of the grant date and the remaining units vest in 30 substantially equal monthly installments thereafter. |
| (3) | The option vests and becomes exercisable at the rate of 25% of the shares underlying the option on the first anniversary of the option grant date, and the remaining shares underlying the option vest in 36 substantially equal monthly installments thereafter. | |
We account for stock-based payments including equity awards under our equity incentive plans in accordance with the requirements of FASB ASC No.Financial Accounting Standards Board Accounting Standards Codification Topic 718,, Compensation – Stock Compensation. For a discussion regarding the effect of a change in control on certain equity awards held by Messrs. KrishnanMr. Wolff and Wolff,Ms. Gurrola, please see “Termination of Employment and Change-in-Control Arrangements,”Arrangements” above.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Equity Compensation Plan Information
The following table sets forth the number and percentage ownership of common stockprovides information as of MarchDecember 31, 2019 by:
Except as otherwise indicated in the footnotes to the table below: (i) each of the persons named has sole voting and investment power2020 with respect to the shares of common stock shown, subject to applicable community propertythat may be issued under our equity plans and similar laws; and (ii) the address for each director and named executive officer is c/o NTN Buzztime, Inc., 1800 Aston Avenue, Suite 100, Carlsbad, California 92008.standalone option grants:
| Name | Number of Shares Beneficially Owned (1) | Percent of Common Stock (1) | ||||||
| Directors and Named Executive Officers: | ||||||||
| Jeffrey A. Berg (2) | 435,346 | 15.1 | % | |||||
| Ram Krishnan (3) | 155,821 | 5.2 | % | |||||
| Allen Wolff (4) | 58,945 | 2.0 | % | |||||
| Richard Simtob (5) | 53,209 | 1.8 | % | |||||
| Paul Yanover (6) | 8,229 | * | ||||||
| Sandra Gurrola (7) | 7,082 | * | ||||||
| Steve Mitgang (8) | 5,579 | * | ||||||
| Gregory Thomas (9) | 3,303 | * | ||||||
| All of our executive officers and directors as a group (8 persons) (10) | 727,514 | 24.2 | % | |||||
| 5% Stockholders: | ||||||||
| Matador Capital Partners, L.P. (2) | 423,000 | 14.7 | % | |||||
| Pincus Reisz (11) | 231,241 | 8.0 | % | |||||
| Sean Gordon (12) | 200,000 | 6.9 | % | |||||
| Ram Krishnan (3) | 155,821 | 5.2 | % | |||||
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(1) (c) | |||||||||
| Equity compensation plans approved by stockholders | 117,000 | (2) | $21.76 | 100,000 | ||||||||
| Equity compensation plans not approved by stockholders(3) | — | — | 85,000 | (4) | ||||||||
| Totals | 117,000 | 185,000 | ||||||||||
| (1) | Excludes securities reflected in column (a). |
| Includes (a) 33,000 shares issuable upon exercise of options and vesting of restricted stock units granted pursuant to the 2010 Performance Incentive Plan, as amended, and (b) 84,000 shares issuable upon exercise of options and vesting of restricted stock units granted pursuant to the 2019 Performance Incentive Plan. Both of those plans are broad-based incentive plans, which allow for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights and cash awards to employees, consultants and non-employee directors. |
| Excludes 1,500,000 shares of common stock | ||
| Entity or Person | Shares Beneficially Owned | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | |||||||||||||||
| BFK Investments LLC (“BFK”) | 423,000 | – | 423,000 | – | 423,000 | |||||||||||||||
| Jeffrey A. Berg | 433,600 | 12,346 | 423,000 | 12,346 | 423,000 | |||||||||||||||
| Matador Capital Partners, L.P. (“Matador”) | 423,000 | – | 423,000 | – | 423,000 | |||||||||||||||
Mr. Berg is the managing member of BFK. BFK is the general partner of Matador. Each of BFK and Mr. Berg disclaims beneficial ownership in shares of common stock beneficially owned by the other party or by Matador except to the extent of its or his pecuniary interest therein. The address for each of BFK, Mr. Berg and Matador is 603 N. Indian River Dr., Ste. 300, Ft. Pierce, FL 34950.
| (4) | |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 2017, there has not been nor are there currently proposed any transactions or series of similar transactions to which we were or are to be a party in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years (which was $157,170) and in which any director, executive officer, holder of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
Company Policy Regarding Related Party Transactions
Pursuant to its charter, our audit committee has the responsibility to review, approve and oversee any transaction between the Company and a related person (as defined in Item 404 of Regulation S-K) and to develop policies and procedures for the committee’s approval of such transactions.
Indemnity Agreements
We have entered into indemnity agreements with each of our directors and executive officers. The indemnity agreements provide that we will indemnify these individuals under certain circumstances against certain liabilities and expenses they may incur in their capacities as our directors or officers. We believe that the use of such indemnity agreements is customary and that the terms of the indemnity agreements are reasonable and fair to us, and are in our best interests to attract and retain experienced directors and officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and officers and persons who own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% stockholders also are required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of the copies of Section 16(a) reports furnished to us from such persons for their 2018 transactions and on the written representations that no Forms 5 were required, all reports required by Section 16(a) to be filed during 2018 were filed on a timely basis.
AUDIT COMMITTEE REPORT
The audit committee operates pursuant to a written charter adopted by our board of directors and reviewed by the audit committee annually. As set forth in its charter, the purpose of the audit committee is to oversee our accounting and financial reporting processes and oversee the audits of our financial statements. The responsibilities of the audit committee include appointing, providing for the compensation of, retaining, evaluating and overseeing the work of our independent registered public accounting firm. Each of the members of the audit committee is an independent director under the NYSE American and SEC rules.
Our management is primarily responsible for the preparation, presentation and integrity of our financial statements, our accounting and financial reporting principles, and internal controls designed to assure compliance with accounting standards and applicable laws and regulations. Our independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with generally accepted accounting principles.
In the performance of its oversight function and in connection with the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, the audit committee:
Audit Committee of the BoardAccounting Matters
Gregory Thomas (Chairman)
Jeff Berg
Richard Simtob
Notwithstanding anything to the contrary set forth in any our filings and other documents that might incorporate by reference this Proxy Statement, in whole or in part, the foregoing report of the audit committee shall not be incorporated by reference into any such filings or documents.
PRINCIPAL ACCOUNTING FIRM FEESPrincipal Independent Auditor Fees
The following table presents the aggregate fees billed for each of the last two fiscal years for professional audit services rendered by Squar Milner LLP for the audit of our annual financial statements for the years ended December 31, 2018 and 2017 and for fees billed during the years ended December 31, 2018 and 2017 for other services.its successor Baker Tilly US, LLP:
| 2018 | 2017 | |||||||
| Audit Fees | $ | 166,000 | $ | 152,000 | ||||
| Audit-Related Fees (1) | 19,000 | – | ||||||
| Tax Fees | – | – | ||||||
| All Other Fees | – | – | ||||||
| $ | 185,000 | $ | 152,000 | |||||
| 2020 | 2019 | ||
| Audit Fees | $230,000 | $176,000 | |
| Audit-related Fees | — | — | |
| Tax Fees | — | — | |
| All Other Fees | — | — | |
| Total | $230,000 | $176,000 |
Audit Committee Pre-Approval Policies and Procedures
The audit committee has adopted a policy whereby all engagements of our independent auditor must be pre-approved by the audit committee. The audit committee has delegated to its chairman the authority to evaluate and approve engagements on behalf of the audit committee in the event that a need arises for pre-approval between committee meetings. If the chairman approves any such engagements, the chairman reports that approval to the full audit committee at the next audit committee meeting.
All audit and permitted non-audit and tax services must be pre-approved by the audit committee except for certain services other than audit, review or attest services that meet the “de minimis exception” under 17 CFR Section 210.2-01, namely:
| the aggregate amount of fees paid for all such services is not more than 5% of the total fees paid by |
| such services were not recognized by the Company at the time of the engagement to be non-audit services; and |
| such services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit. |
During fiscal years 20182020 and 2017,2019, there were no such services that were performed pursuant to the “de minimis exception.”
The audit committee of the board of directors consists entirely of members who meet the independence requirements of the listing standards of the NYSE American LLC Company Guide and the rules and regulations of the SEC, as determined by the board. The Audit Committee is responsible for providing independent, objective oversight of the financial reporting processes and internal controls of Brooklyn ImmunoTherapeutics, Inc., or Brooklyn. The Audit Committee operates under a written charter approved by the board. A copy of the current charter is available at COMMUNICATIONS WITH DIRECTORShttps://investor.brooklynitx.com/overview/default.aspx.
Management is responsible for Brooklyn’s system of internal control and financial reporting processes, for the preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles and for the annual report on Brooklyn’s internal control over financial reporting. The independent auditor is responsible for performing an independent audit of Brooklyn’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or PCAOB, and for issuing a report on the financial statements and the effectiveness of Brooklyn’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relied on the work and assurances of management, the internal audit group, and the independent auditor. Audit committee members do not serve as professional accountants or auditors for Brooklyn, and their functions are not intended to duplicate or certify the activities of Brooklyn’s management or independent auditor.
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The audit committee received from Baker Tilly the written communication that is required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence,” and the audit committee discussed with Baker Tilly that firm’s independence.
Management completed the documentation, testing and evaluation of Brooklyn’s system of internal control over financial reporting as of December 31, 2020 as required by Section 404 of the Sarbanes-Oxley Act of 2002. The audit committee received periodic updates from management and Baker Tilly at audit committee meetings throughout the year and provided oversight of the process. Baker Tilly’s report included in the 2020 Form 10-K related to its audit of Brooklyn’s consolidated financial statements.
Based upon the audit committee’s discussions with management and Baker Tilly and the audit committee’s review of the information provided by, and the representations of, management and Baker Tilly, the audit committee approved the inclusion of Brooklyn’s audited consolidated financial statements as of and for the year ended December 31, 2020 in the 2020 Form 10-K.
Respectfully submitted by the members of the audit committee:
Dennis Langer (Chair)
Charles Cherington
Erich Mohr
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Stockholders may communicate directly with ourthe board of directors or an individual director in writing by sending a letter to ourthe board of directors or an individual director c/oin care of our corporate secretaryCorporate Secretary at: NTN Buzztime,Brooklyn ImmunoTherapeutics, Inc., Corporate Secretary c/o Board of Directors, 1800 Aston Avenue,140 58th Street, Building A, Suite 100, Carlsbad, California 92008.2100, Brooklyn, New York 11220. In general, our corporate secretary will promptly forward the communication to the chairmanChair of our board of directorsthe Board or the director identified in the communication. However, we reserve the right not to forward any abusive, threatening or otherwise inappropriate materials.
STOCKHOLDER PROPOSALS FOR 2020 ANNUAL MEETINGStockholder Proposals for 2022 Annual Meeting
StockholderIn order for stockholder proposals for our 2022 Annual Meeting of Stockholders to be eligible for inclusion in the proxy statement and form of proxy card for that meeting, we must receive the proposals at our corporate headquarters, 140 58th Street, Building A, Suite 2100, Brooklyn, New York 11220, directed to the attention of our Corporate Secretary, no later than March , 2022. In addition, all proposals will need to comply with Rule 14a-8 of the Exchange Act, which sets forth the requirements for the inclusion of stockholder proposals in our sponsored proxy materials.
Our bylaws set forth the procedures you must follow in order to nominate a director for election or present any other proposal at an annual meeting of our stockholders, other than proposals intended to be included in our sponsored proxy statement relating to our 2020 annual meeting of stockholders must be received at our principal executive offices by December 28, 2019, which is 120 days before the first anniversary of the date this Proxy Statement was released to stockholders.materials. In addition to be includedany other applicable requirements, for a stockholder to properly bring business before the 2022 Annual Meeting of Stockholders, the stockholder must give us notice thereof in proper written form, including all required information, at our proxy statement for our 2020 annual meeting, stockholder proposals must comply withcorporate headquarters, 140 58th Street, Building A, Suite 2100, Brooklyn, New York 11220, directed to the requirements of Rule 14a-8 under the Securities Exchange Act of 1934 and the requirementsattention of our bylaws.
Our bylaws provide that in order for a matter of business to be brought before our 2020 annual meeting of stockholders by a stockholder without including the matter in our proxy statement relating to such meeting, a stockholder’s notice thereof must be delivered to or mailed and received at our principal executive offices no earlier than December 28, 2019 and not later than January 27, 2020, which dates are 120 days and 90 days, respectively, in advance of the anniversary of the date of this Proxy Statement. Our bylaws also provide the information that must be set forth in such stockholder notice. Our bylaws also provide that in the event that no annual meeting was held in the previous year or the date of the annual meeting is advanced by more than 30 days or delayed by more than 30 days after the anniversary of the previous year’s annual meeting, this advance notice must be receivedCorporate Secretary, no later than the close of business on May 22, 2022, nor earlier than the laterclose of the 90th day before such annual meeting or the 10th day following the daybusiness on which public announcementApril 22, 2022. A copy of the date of such meetingour bylaws is first made.available at https://www.sec.gov/Archives/edgar/data/748592/000114036121011095/brhc10022537_ex3-4.htm.
Stockholders are advisedDelivery of Documents to review applicable SEC rules and our bylaws, which contain additional requirements with respect to submitting stockholder proposals. Our bylaws are available from our corporate secretary upon written request and under the “Corporate Governance” section of the “Investor Relations” section of our corporate website athttp://www.buzztime.com//investors/investor-relations-corporate-governance/.Security Holders Sharing an Address
ELIMINATING DUPLICATIVE PROXY MATERIALS
We have adopted an SEC-approved procedure called “householding.” This procedure potentially means extra convenience for stockholders and cost savings for companies. Under this procedure, we send onlySEC rules permit us to deliver one copy of the proxy materials, or one Notice of Internet Availability, to two or more stockholders who share an address, unless we have received contrary instructions from one or more of Proxy Materials,the stockholders. This delivery method, which is known as “householding,” can reduce our expenses for printing and if applicable, Notice of Annual Meeting of Stockholders, Proxy Statement and Annual Report, to stockholdersmailing. Any stockholder of record who share the same address and last name, unless one of those stockholders notifies us that the stockholder would like a separate copy of such documents. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of the Notice of Internet Availability of Proxy Materials, and if applicable, Notice of Annual Meeting of Stockholders, Proxy Statement and Annual Report, from the other stockholder(s) sharing your address, please direct your written request to NTN Buzztime, Inc., Attention: Corporate Secretary, 1800 Aston Avenue, Suite 100, Carlsbad, California 92008 or contact us by phone at (760) 438-7400. We undertake to deliver promptly, upon any such oral or written request, a separate copy of the Notice of Internet Availability of Proxy Materials, and if applicable, Notice of Annual Meeting of Stockholders, Proxy Statement and Annual Report, to a stockholder at a shared address to which a single copy of these documents was delivered. Similarly, if stockholders of record sharing the same address are receiving multiple copies of theproxy materials or Notice of Internet Availability, was delivered may request a separate copy of Proxy Materials,the proxy materials, or if applicable, Notice of Annual MeetingInternet Availability, as applicable, by (a) sending a letter to Shareholder Services at Brooklyn ImmunoTherapeutics, Inc., 140 58th Street, Building A, Suite 2100, Brooklyn, New York 11220, to the attention of our Corporate Secretary, or (b) sending us an email at [EMAIL ADDRESS]. Stockholders Proxy Statement and Annual Report, and such stockholders would like a single copyof record who wish to be delivered to themreceive separate copies of these documents in the future such stockholders may make suchalso contact us as stated above. Stockholders of record who share an address and receive two or more copies of the proxy materials or Notice of Internet Availability may contact us as stated above to request delivery of a request by contacting us by the means described above.
If you wish to update your participation in householding and you are a beneficial ownersingle copy. A stockholder who holds shares in “street name” with a broker, bankand who wishes to obtain copies of proxy materials should follow the instructions on the stockholder’s voting instruction form or other nominee, you mayshould contact your broker, bank, or other nominee or our mailing agent, Broadridge Investor Communications Solutions, at 800-542-1061.the holder of record.
ANNUAL REPORT ON FORM 10-KOther Matters
At your request, weWe will furnish, without charge,pay all expenses of preparing, printing and mailing the Annual Meeting proxy materials, as well as all other expenses of soliciting proxies for the Annual Meeting on behalf of the board of directors.
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| A-1 |
| Resolved: | The Putative Stock Increase and the Putative Stock Issuances may each constitute a “defective corporate act” within the meaning of clause (h)(1) of DGCL Section 204; |
| Resolved: | The nature of the potential “failures of authorization” within the meaning of clause (h)(2) of DGCL Section 204 with respect to the Putative Stock Increase is that (a) the proxy statement/prospectus/consent solicitation statement dated February 8, 2021 with respect to the Special Meeting failed to set forth accurately the treatment of votes of shares of Common Stock with respect to the approval of the Stock Increase Certificate of Amendment that were received from brokers who did not receive voting instructions from the beneficial owners of such shares and (b) if the standard for treatment of such uninstructed or discretionary broker votes had been applied to the proposal to approve the Stock Increase Certificate of Amendment, such proposal would not have received the number of votes of Common Stock required for approval; |
| Resolved: | The date of such defective corporate act with respect to the Putative Stock Increase is March 25, 2021; |
| Resolved: | With respect to the Putative Stock Issuances, (a) the number and type of putative shares issued and the dates upon which such putative shares were issued are, as of the date of this meeting, the putative issuance of (i) 39,999,760 shares of Common Stock on March 25, 2021 under the terms of Merger Agreement, (ii) the issuance of 56,041 shares of Common Stock on April 26, 2021, (iii) the issuance of 700 shares of Common Stock on May 1, 2021, and (iv) the issuance of an aggregate of 1,071,695 shares of Common Stock between May 14, 2021 and May 19, 2021, and (b) there may be additional putative shares issued following the date of this meeting upon authorization from the Board or its committees, in which case the number and type of putative shares issued and the dates upon which such putative shares are issued shall be set forth in a certificate of validation referenced below. |
| Resolved: | Pursuant to DGCL Section 204 and the common law, the Board approves and ratifies (a) the Putative Stock Increase effective as of the time of filing of the Certificate of Amendment with the Delaware Secretary of State on March 25, 2021, and (b) the Putative Stock Issuances as of the date of issuance as described in the immediately preceding resolution; |
| Resolved: | The Board recommends that the stockholders of the Company approve the ratification of the Putative Stock Increase and the Putative Stock Issuance; and that, pursuant to DGCL Section 204, the Chief Executive Officer and President is authorized and directed, for and on behalf of the Company, to take all action deemed necessary or appropriate to solicit the approval of the stockholders of the Company of these resolutions and any other matters related to the Putative Stock Increase and the Putative Stock Issuance necessary to be submitted to the stockholders for approval and adoption; |
| Resolved: | Pursuant to subsection (f) of DGCL Section 204, from and after the validation effective time (within the meaning of DGCL Section 204), (a) the Putative Stock Increase shall no longer be deemed void or voidable as a result of the defective authorization identified above, retroactive to the time of the related defective corporate acts identified above, and (b) each such share of putative stock shall be deemed to be an identical share of outstanding valid stock as of the time it was purportedly issued; |
| Resolved: | Upon approval of these resolutions by the stockholders of the Company entitled to vote pursuant to Section 204, the officers of the Company are severally authorized and directed, for and on behalf of the Company, to file (or cause to be filed) a certificate or certificates of validation with the Delaware Secretary of State with such exhibits thereto as are necessary to give effect to the foregoing resolutions, and to make such other filings, execute such other documents, and perform such other acts as may be deemed necessary or appropriate to carry out the purposes of the foregoing resolutions. |
| Resolved: | At any time before the effectiveness of an applicable certificate of validation, notwithstanding adoption of the foregoing or similar ratifying resolutions by the Company’s stockholders, the Board may abandon the resolutions without further action of the stockholders. |
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OTHER MATTERS
Aseach case as in effect as of the time of preparationthe defective corporate act, would have required a larger number or portion of directors or of specified directors for a quorum to be present or to approve the defective corporate act, such larger number or portion of such directors or such specified directors shall be required for a quorum to be present or to adopt the resolutions to ratify the defective corporate act, as applicable, except that the presence or approval of any director elected, appointed or nominated by holders of any class or series of which no shares are then outstanding, or by any person that is no longer a stockholder, shall not be required.
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EXHIBIT A
NTN BUZZTIME, INC.
2019 PERFORMANCE INCENTIVE PLAN
The Company’s Board
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| 1. | ESTABLISHMENT, EFFECTIVE DATE AND TERM |
15(k) hereof, the Plan shall terminate on the tenth anniversary of the Effective Date. Capitalized terms used herein are defined in Appendix A attached hereto.
| 2. | PURPOSE |
| 3. | ELIGIBILITY |
The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute Incentive Stock Options or Nonstatutory Stock Options), Stock Appreciation Rights, Restricted Stock Grants, Stock Units, Other Equity Awards and/or Cash Awards.
Capitalized terms shall have the meaning provided in Section 2 unless otherwise provided in this Plan or any related Award Agreement.
ADMINISTRATION |
If a Participant’s employment agreement or Award Agreement (or other written agreement executed by and between Participant and the Company) expressly includes defined terms that expressly are different from and/or conflict with the defined terms contained in this Plan then the defined terms contained in the employment agreement or Award Agreement (or other written agreement executed by and between Participant and the Company) shall govern and shall supersede the definitions provided in this Plan.
| (a) | ||
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| (c) | Designation of Advisors. The Committee may designate professional advisors to assist the Committee in the administration of the Plan. The Committee may employ such legal counsel, consultants, and agents as it may deem desirable for the administration of the Plan and may rely upon any advice and any computation received from any such counsel, consultant, or agent. The Company shall pay all expenses and costs incurred by the Committee for the engagement of any such counsel, consultant, or agent. |
| (d) | Participants Outside the U.S. In order to conform with the provisions of local laws and regulations of foreign countries which may affect the Awards or the Participants, the Committee shall have the sole discretion to (i) modify the terms and conditions of the Awards granted under the Plan to Eligible Individuals located outside the United States; (ii) establish subplans with such modifications as may be necessary or advisable under the circumstances present by local laws and regulations; and (iii) take any action which it deems advisable to comply with or otherwise reflect any necessary governmental regulatory procedures, or to obtain any exemptions or approvals necessary with respect to the Plan or any subplan established hereunder. |
| (e) | Liability and Indemnification. No Covered Individual shall be liable for any action or determination made in good faith with respect to the Plan, any Award granted hereunder or any Award Agreement |
| 5. | SHARES OF COMMON STOCK SUBJECT TO THE PLAN |
| (a) | Shares Available for Awards. The Common Stock that may be issued pursuant to Awards granted under the Plan shall be treasury shares or authorized but unissued shares of the Common Stock. The total number of shares of Common Stock that may be initially issued pursuant to Awards granted under the Plan shall be equal to the sum of (i) |
| (b) | Certain Limitations on Specific Types of Awards. The granting of Awards under this Plan shall be subject to the following limitations: |
| i. | With respect to the shares of Common Stock reserved pursuant to this Section, a maximum of |
| ii. | With respect to the shares of Common Stock reserved pursuant to this Section, a maximum of |
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| (c) | Reduction of Shares Available for Awards. Upon the granting of an Award, the number of shares of Common Stock available for issuance under this Section for the granting of further Awards shall be reduced as follows: |
| i. | In connection with the granting of an Option or Stock Appreciation Right, the number of shares of Common Stock shall be reduced by the number of shares of Common Stock subject to the Option or Stock Appreciation Right; |
| ii. | In connection with the granting of an Award that is settled in Common Stock, other than the granting of an Option or Stock Appreciation Right, the number of shares of Common Stock shall be reduced by the number of shares of Common Stock subject to the Award; and |
| iii. | Awards settled in cash or property other than Common Stock shall not count against the total number of shares of Common Stock available to be granted pursuant to the Plan. |
| (d) | Cancelled, Forfeited or Surrendered Awards. Notwithstanding anything to the contrary in this Plan, if any Award is cancelled, forfeited or terminated for any reason prior to exercise, delivery or becoming vested in full, the shares of Common Stock that were subject to such Award shall, to the extent cancelled, forfeited or terminated, immediately become available for future Awards granted under this Plan, as if said Awards had never been granted; provided, however, that any shares of Common Stock subject to an Award which is cancelled, forfeited or terminated in order to pay the exercise price of a stock option, purchase price or any taxes or tax withholdings on an Award shall not be available for future Awards granted under this Plan. |
| (e) | Recapitalization. If the outstanding shares of Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities by reason of any recapitalization, reclassification, reorganization, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock of the Company or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, an appropriate and proportionate adjustment shall be made by the Committee including to: (i) the limits with respect to number and kind of shares (including, but not limited to, the limits of the number of shares of Common Stock described in Section 5(a)), (ii) the calculation of the reduction of shares of Common Stock available under the Plan, (iii) the number and kind of shares of Common Stock issuable pursuant to outstanding Awards granted under the Plan and/or (iv) the Exercise Price of outstanding Options or Stock Appreciation Rights granted under the Plan. No fractional shares of Common Stock or units of other securities shall be issued pursuant to any such adjustment under this Section 5(e), and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share or unit. Any adjustments made under this Section 5(e) with respect to any Incentive Stock Options must be made in accordance with |
| 6. | OPTIONS |
| (a) | Grant of Options. Subject to the terms and conditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee may determine, Options to purchase such number of shares of Common Stock and on such terms and conditions as the Committee shall determine in its sole and absolute discretion. Each grant of an |
| (b) | Type of | |
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| (c) | Exercise Price. Subject to the limitations set forth in the Plan relating to Incentive Stock Options, the Exercise Price of an Option shall be fixed by the Committee and stated in the respective Award Agreement, provided that the Exercise Price of the shares of Common Stock subject to such Option may not be less than Fair Market Value of such Common Stock on the Grant Date, or if greater, the par value of the Common Stock. |
| (d) | Limitation on Option Period. Subject to the limitations set forth in the Plan relating to Incentive Stock Options, Options granted under the Plan and all rights to purchase Common Stock thereunder shall terminate no later than the tenth anniversary of the Grant Date of such Options, or on such earlier date as may be stated in the Award Agreement relating to such Option. In the case of Options expiring prior to the tenth anniversary of the Grant Date, the Committee may in its discretion, at any time prior to the expiration or termination of said Options, extend the term of any such Options for such additional period as it may determine, but in no event beyond the tenth anniversary of the Grant Date thereof. |
| (e) | Limitations on Incentive Stock Options. Notwithstanding any other provisions of the Plan, the following provisions shall apply with respect to Incentive Stock Options granted pursuant to the Plan. |
| i. | A maximum of |
| ii. | Limitation on Grants. Incentive Stock Options may only be granted to Section 424 Employees. The aggregate Fair Market Value (determined at the time such Incentive Stock Option is granted) of the shares of Common Stock for which any individual may have Incentive Stock Options which first become vested and exercisable in any calendar year (under all incentive stock option plans of the Company) shall not exceed $100,000. Options granted to such individual in excess of the $100,000 limitation, and any Options issued subsequently which first become vested and exercisable in the same calendar year, shall automatically be treated as Non-Qualified Stock Options. |
| iii. | Minimum Exercise Price. In no event may the Exercise Price of a share of Common Stock subject an Incentive Stock Option be less than 100% of the Fair Market Value of such share of Common Stock on the Grant Date. |
| iv. | Ten Percent Stockholder. Notwithstanding any other provision of the Plan to the contrary, in the case of Incentive Stock Options granted to a Section 424 Employee who, at the time the Option is granted, owns (after application of the rules set forth in Code Section 424(d)) stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company, such Incentive Stock Options (i) must have an Exercise Price per share of Common Stock that is at least 110% of the Fair Market Value as of the Grant Date of a share of Common Stock, and (ii) must not be exercisable after the fifth anniversary of the Grant Date. |
| (f) | Vesting Schedule and Conditions. No Options may be exercised prior to the satisfaction of the conditions and vesting schedule provided for in the Plan and in the Award Agreement relating thereto. Except as otherwise provided by the Committee, Options covered by any Award under this Plan that are subject solely to a future service requirement shall vest, subject to Sections 10, 12 and 13 of the Plan, as follows: (i) 20% of the Options subject to an Award shall vest immediately upon the Grant Date; and (ii) the remaining 80% of the Options subject to an Award shall vest over the four-year period immediately following the Grant Date in equal annual increments of 20%, with one increment vesting on each anniversary date of the Grant Date. |
| (g) | Exercise. When the conditions to the exercise of an Option have been satisfied, the Participant may exercise the Option only in accordance with the following provisions. The Participant shall deliver to the Company a written notice stating that the Participant is exercising the Option and specifying the number of shares of Common Stock which are to be purchased pursuant to the Option, and such notice shall be accompanied by payment in full of the Exercise Price of the shares for which the Option is being exercised, by one or |
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| (h) | Payment. Payment of the Exercise Price for the shares of Common Stock purchased pursuant to the exercise of an Option shall be made by one of the following methods: |
| i. | by cash, certified or |
| ii. | through the delivery to the Company of |
| iii. | by any other method which the Committee, in its sole and absolute discretion and to the extent permitted by applicable law, may permit, including, but not limited to through a “cashless exercise sale and remittance procedure” pursuant to which the Participant shall concurrently provide irrevocable instructions (1) to a brokerage firm approved by the Committee to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable federal, state and local income, employment, excise, foreign and other taxes required to be withheld by the Company by reason of such exercise and (2) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. |
| (i) | Termination of Employment. Unless otherwise provided in an Award Agreement, upon the termination of the employment and other service of a Participant with the Company Group for any reason, all of the Participant’s outstanding Options (whether vested or unvested) shall be subject to the rules of this paragraph. Upon such termination, the Participant’s unvested Options shall expire. Notwithstanding anything in this Plan to the contrary, the Committee may provide, in its sole and absolute discretion, that following the termination of employment and other service of a Participant with the Company Group for any reason (i) any unvested Options held by the Participant that vest solely upon a future service requirement shall vest in whole or in part, at any time subsequent to such termination of employment and other service, and/or (ii) a Participant or the Participant’s estate, devisee or heir at law (whichever is applicable), may exercise an Option, in whole or in part, at any time subsequent to such termination of employment and other service and prior to the termination of the Option pursuant to its terms that are unrelated to termination of service. Unless otherwise determined by the Committee, temporary absence from employment and other service because of illness, vacation, approved leaves of absence or military service shall not constitute a termination of employment or other service. |
| i. | Termination for Reason other than Cause, Disability or Death. If a Participant’s termination of employment and other service is for any reason other than death, Disability, Cause and other service by the Company for Cause, any Option held by such Participant may be exercised, to the extent exercisable at termination, by the Participant at any time within a period not to exceed ninety (90) days from the date of such termination, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service. |
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| ii. | Disability. If a Participant’s termination of employment and other service with the Company is by reason of a Disability of such Participant, any Option held by such Participant may be exercised, to the extent exercisable at termination, by the Participant at any time within a period not to exceed one (1) year after such termination, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service; provided, however, that if the Participant dies within such period, any vested Option held by such Participant upon death shall be exercisable by the Participant’s estate, devisee or heir at law (whichever is applicable) for a period not to exceed one (1) year after the Participant’s death, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service. |
| iii. | Death. If a Participant dies while in the employment or other service of the Company, any Option held by such Participant may be exercised, to the extent exercisable at termination, by the Participant’s estate or the devisee named in the Participant’s valid last will and testament or the Participant’s heir at law who inherits the Option, at any time within a period not to exceed one (1) year after the date of such Participant’s death, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service. |
| iv. | Termination for Cause. In the event the termination is for Cause, any Option held by the Participant at the time of such termination shall be deemed to have terminated and expired upon the date of such termination. |
| 7. | STOCK APPRECIATION RIGHTS |
| (a) | Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee may determine, Stock Appreciation Rights, in such amounts and on such terms and conditions, as the Committee shall determine in its sole and absolute discretion. Each grant of a Stock Appreciation Right shall satisfy the requirements as set forth in this Section. |
| (b) | Terms and Conditions of Stock Appreciation Rights. Unless otherwise provided in an Award Agreement, the terms and conditions (including, without limitation, the limitations on the Exercise Price, exercise period, repricing and termination) of the Stock Appreciation Right shall be substantially identical (to the extent possible taking into account the differences related to the character of the Stock Appreciation Right) to the terms and conditions that would have been applicable under Section 6 above were the grant of the Stock Appreciation Rights a grant of an Option. |
| (c) | Exercise of Stock Appreciation Rights. Stock Appreciation Rights shall be exercised by a Participant only by written notice delivered to the Chief Executive Officer or |
| (d) | Payment of Stock Appreciation Right. Unless otherwise provided in an Award Agreement, upon exercise of a |
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| 8. | RESTRICTED STOCK |
| (a) | Grant of Restricted Stock. Subject to the terms and conditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee may determine, Restricted Stock, in such amounts and on such terms and conditions as the Committee shall determine in its sole and absolute discretion. Each grant of Restricted Stock shall satisfy the requirements as set forth in this Section. |
| (b) | Restrictions. The Committee shall impose such restrictions on any Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, time-based vesting restrictions or the attainment of Performance Goals. Except as otherwise provided by the Committee in its sole and absolute discretion and subject to Sections 10, 12 and 13 of the Plan, Restricted Stock covered by any Award under this Plan that are subject solely to a future service requirement shall vest over the four-year period immediately following the Grant Date in equal annual increments of 25%, with one increment vesting on each anniversary date of the Grant Date. |
| (c) | Certificates and Certificate Legend. With respect to a grant of Restricted Stock, the Company may issue a certificate evidencing such Restricted Stock to the Participant or issue and hold such shares of Restricted Stock for the benefit of the Participant until the applicable restrictions expire. The Company may legend the certificate representing Restricted Stock to give appropriate notice of such restrictions. In addition to any such legends, each certificate representing shares of Restricted Stock granted pursuant to the Plan shall bear the following legend: |
“Shares of stock represented by this certificate are subject to certain terms, conditions, and restrictions on transfer as set forth in the Brooklyn Immuno Therapeutics, Inc. Restated 2020 Stock Incentive Plan (the “Plan”), and in an agreement entered into by and between the registered owner of such shares and Brooklyn Immuno |
| (d) | Removal of Restrictions. Except as otherwise provided in the Plan or the Award Agreement, shares of Restricted Stock shall become freely transferable by the Participant upon the lapse of the applicable restrictions. Once the shares of Restricted Stock are released from the restrictions, the Participant shall be entitled to have the legend required by paragraph (c) above removed from the share certificate evidencing such Restricted Stock and the Company shall pay or distribute to the Participant all dividends and distributions held in escrow by the Company with respect to such Restricted Stock, if any. |
| (e) | Stockholder Rights. Unless otherwise provided in an Award Agreement, until the expiration of all applicable restrictions, (i) the Restricted Stock shall be treated as outstanding, (ii) the Participant holding shares of Restricted Stock may exercise full voting rights with respect to such shares, and (iii) the Participant holding shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such shares while they are so held. All dividends and distributions shall be held in escrow by the Company (subject to the same restrictions on forfeitability) until all restrictions on the respective Restricted Stock have lapsed. If any such dividends or distributions are paid in shares of Common Stock, such shares shall be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. |
| (f) | Termination of Service. Unless otherwise provided in an Award Agreement, if a Participant’s employment and other service with the Company terminates for any reason, all unvested shares of Restricted Stock held by the Participant and any dividends or distributions held in escrow by the Company with respect to such Restricted Stock shall be forfeited immediately and returned to the Company. Notwithstanding this paragraph, all grants of Restricted Stock that vest solely upon the attainment of Performance Goals shall be treated pursuant to the terms and conditions that would have been applicable under Section 9 as if such grants of Restricted Stock were Awards of Performance Shares, to the extent such terms and conditions are applicable to shares of Restricted Stock. Notwithstanding anything in this Plan to the contrary, the Committee may provide, in its sole and absolute discretion, that following the termination of employment and other service of a Participant with the Company for any reason, any unvested shares of Restricted Stock held by the Participant that vest solely upon a future service requirement shall vest in whole or in part, at any time subsequent to such termination of employment and other service. |
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| 9. | PERFORMANCE SHARES, PERFORMANCE UNITS AND RSUs |
| (a) | Grant of Performance Shares, Performance Units and RSUs. Subject to the |
| (b) | Performance Goals. Performance Goals will be based on one or more of the following criteria, as determined by the Committee in its absolute and sole discretion: (i) the attainment of certain target levels of, or a specified increase in, the Company’s enterprise value or value creation targets; (ii) the attainment of certain target levels of, or a percentage increase in, the Company’s after-tax or pre-tax profits including, without limitation, that attributable to the Company’s continuing and/or other operations; (iii) the attainment of certain target levels of, or a specified increase relating to, the Company’s operational cash flow or working capital, or a component thereof; (iv) the attainment of certain target levels of, or a specified decrease relating to, the Company’s operational costs, or a component thereof; (v) the attainment of a certain level of reduction of, or other specified objectives with regard to limiting the level of increase in all or a portion of bank debt or other of the Company’s long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee; (vi) the attainment of a specified percentage increase in earnings per share or earnings per share from the Company’s continuing operations; (vii) the attainment of certain target levels of, or a specified percentage increase in, the Company’s net sales, revenues, net income or earnings before income tax or other exclusions; (viii) the attainment of certain target levels of, or a specified increase in, the Company’s return on capital employed or return on invested capital; (ix) the attainment of certain target levels of, or a percentage increase in, the Company’s after-tax or pre-tax return on stockholder equity; (x) the attainment of certain target levels in the fair market value of the Company’s Common Stock; (xi) the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends; (xii) the attainment of certain target levels of, or a specified increase in, EBITDA (earnings before income tax, depreciation and amortization); and/or attainment of synergies and cost reductions in connection with mergers, acquisitions and similar corporate transactions involving the Company. In addition, Performance Goals may be based upon the attainment by a subsidiary, division or other operational unit of the Company of specified levels of performance under one or more of the measures described above. Further, the Performance Goals may be based upon the attainment by the Company (or a subsidiary, division, facility or other operational unit of the Company) of specified levels of performance under one or more of the foregoing measures relative to the performance of other corporations. Performance Goals may include a threshold level of performance below which no Award will be earned, levels of performance at which an Award will become partially earned and a level at which an Award will be fully earned. |
| (c) | Terms and Conditions. |
| i. | Performance Shares and Performance Units. The applicable Award Agreement shall set forth (A) the number of Performance Shares or the dollar value of Performance Units granted to the Participant; (B) the Performance Period and Performance Goals with respect to each such Award; (C) the threshold, target and maximum shares of Common Stock or dollar values of each Performance Share or Performance Unit and corresponding Performance Goals; and (D) any other terms and conditions as the Committee determines in its sole and absolute discretion. The Committee shall establish, in its sole and absolute discretion, the Performance Goals for the applicable Performance Period for each Performance Share or Performance; Unit granted hereunder. Performance Goals for different Participants |
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| ii. | RSUs. The applicable Award Agreement shall set forth such terms and conditions with respect to the RSUs as the Committee may impose, including restrictions on transferability, risk of forfeiture and other restrictions, if any, which restrictions may lapse separately or |
| (d) | Determination and Payment. |
| i. | Performance Shares or Performance Units Earned. Following the end of a Performance Period, the Committee shall determine the extent to which Performance Shares or Performance Units have been earned on the basis of the Company’s actual performance in relation to the established Performance Goals as set forth in the applicable Award Agreement and shall certify these results in writing. Unless otherwise provided in the Award Agreement, the payment with respect to Performance Shares or Performance Units shall be |
| ii. | RSUs. Unless provided otherwise in the Award Agreement, Restricted Stock Units shall be paid within 60 days following the date on which the restrictions on the RSUs lapse. |
| (e) | Termination of Employment. Unless otherwise provided in an Award Agreement, if a Participant’s |
| i. | Termination for Reason Other Than Death or Disability. If a Participant’s employment or other service with the Company terminates prior to the expiration of a Performance Period with respect to any Performance Units or Performance Shares held by such Participant for any reason other than death or Disability, the outstanding Performance Units or Performance Shares held by such Participant for which the Performance Period has not yet expired shall terminate upon such termination and the Participant shall have no further rights pursuant to such Performance Units or Performance Shares. |
| ii. | Termination of Employment for Death or Disability. If a Participant’s employment or other service with the Company terminates by reason of the Participant’s death or Disability prior to the end of a Performance Period, the Participant, or the Participant’s estate, devisee or heir at law (whichever is applicable) shall be entitled to a payment of the Participant’s outstanding Performance Units and Performance Shares, pursuant to the terms of the Plan and the Participant’s Award Agreement; provided, however, that the Participant shall be deemed to have |
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| 10. | VESTING OF AWARD GRANTS TO NON-EMPLOYEE DIRECTORS |
| 11. | OTHER AWARDS |
| 12. | CHANGE IN CONTROL |
| 13. | CHANGE IN STATUS OF PARENT OR SUBSIDIARY |
| 14. | REQUIREMENTS OF LAW |
| (a) | Violations of Law. The Company shall not be required to make any payments, sell or issue any shares of Common Stock under any Award if the sale or issuance of such shares would |
| C-10 |
| (b) | Registration. At the time of any exercise or receipt of any Award, the Company may, |
| (c) | Withholding. The Committee may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes that the Company is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign, to withhold in connection with the grant or exercise of an Award, or the removal of restrictions on an Award including, but not limited to: (i) the withholding of delivery of shares of Common Stock until the holder reimburses the Company for the amount the Company is required to withhold with respect to such taxes; (ii) the canceling of any number of shares of Common Stock issuable in an amount sufficient to reimburse the Company for the amount it is required to so withhold; (iii) withholding the amount due from any such person’s wages or compensation due to such person; or (iv) requiring the Participant to pay the Company cash in the amount the Company is required to withhold with respect to such taxes. |
| (d) |
| 15. | GENERAL PROVISIONS |
| (a) | Award Agreements. All Awards granted pursuant to the Plan shall be |
| (b) | Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of any Awards to or other transaction by |
| (c) | Purchase Price. To the extent the purchase price of any Award granted hereunder is less than par value of a share of Common Stock and such purchase price is not permitted by applicable law, the per share purchase price shall be deemed to be equal to the par value of a share of Common Stock. |
| (d) | Deferral of Awards. The Committee may from time to time establish procedures pursuant to which a Participant may elect to defer, until a time or times later than the vesting of an Award, receipt of all or a portion of the shares of Common Stock or cash subject to such Award and to receive Common Stock or cash at such later time or times, all on such terms and conditions as the Committee shall determine. The Committee shall not permit the deferral of an Award unless counsel for the Company determines that such action will not result in adverse tax consequences to a Participant under Section 409A of the Code. If any such deferrals are permitted, then notwithstanding anything to the contrary herein, a Participant who elects to defer receipt of Common Stock shall not have any rights as a stockholder with respect to deferred shares of Common Stock unless and until shares of Common Stock are actually delivered to the Participant with respect thereto, except to the extent otherwise determined by the Committee. |
| (e) | Prospective Employees. Notwithstanding anything to the contrary, any Award granted to a Prospective Employee shall not become vested prior to the date the Prospective Employee first becomes an employee of the Company. |
| (f) | Stockholder Rights. Except as expressly provided in the Plan or an Award Agreement, a Participant shall not have any of the rights of a stockholder with respect to Common Stock subject to the Awards prior to satisfaction of all conditions relating to the issuance of such Common Stock, and no adjustment shall be made for dividends, distributions or other rights of any kind for which the record date is prior to the date on which all such conditions have been satisfied. |
| (g) | Transferability of Awards. A Participant may not Transfer an Award other than by will or the laws of descent and distribution. Awards may be exercised during the Participant’s lifetime only by the Participant. No Award shall be liable for or subject to the debts, contracts, or liabilities of any Participant, nor shall any Award be subject to legal process or attachment for or against such person. Any purported Transfer of an Award in contravention of the provisions of the Plan shall have no force or effect and shall be null and void, and the purported transferee of such Award shall not acquire any rights with respect to such Award. Notwithstanding anything to the contrary, the Committee may in its sole and absolute discretion permit the Transfer of an Award to a Participant’s “family member” as such term is defined in the Form S-8 Registration Statement under the Securities Act of 1933, as amended, under such terms and conditions as specified by the Committee; provided, however, that the Participant will not directly or indirectly receive any payment of value in connection with the transfer of the Award. In such case, such Award shall be exercisable only by the transferee approved of by the Committee. To the extent that the Committee permits the Transfer of an Incentive Stock Option to a “family member”, so that such Option fails to continue to satisfy the requirements of an incentive stock option under the Code such Option shall automatically be re-designated as a Non-Qualified Stock Option. |
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| (h) | Buyout and Settlement Provisions. Except as prohibited hereunder, the Committee may at any time on behalf of the Company offer to buy out any Awards previously granted based on such terms and conditions as the Committee shall determine which shall be communicated to the Participants at the time such offer is made. |
| (i) | Use of Proceeds. The proceeds received by the Company from the sale of Common Stock pursuant to Awards granted under the Plan shall constitute general funds of Company. |
| (j) | Modification or Substitution of an Award. |
| i. | Generally. Subject to the terms and conditions of the Plan, the Award Agreement and applicable law (including the Code), the Committee may modify outstanding Awards, provided that, except as permitted in the Plan or the applicable Award Agreement, no modification of an Award shall materially adversely affect any rights or obligations of the Participant under the applicable Award Agreement without the Participant’s consent. Nothing in the Plan shall limit the right of the Company to pay compensation of any kind outside the terms of the Plan. |
| ii. | Limitation on Repricing. Unless such action is approved by the Company’s shareholders in accordance with applicable law: (i) no outstanding Option or Stock Appreciation Right granted under the Plan may be amended to provide an Exercise Price that is lower than the then-current Exercise Price of such outstanding Option or Stock Appreciation Right (other than adjustments to the Exercise Price pursuant to Sections 5(e) and 12); (ii) the Committee may not cancel any outstanding Option or Stock Appreciation Right when its Exercise Price is equal to or greater than the Fair Market Value of the underlying Common Stock and grant in substitution therefore new Awards, equity, cash or other property (other than adjustments pursuant to Section 12); (iii) the Committee may not authorize the repurchase of an outstanding Option or Stock Appreciation Right which has an Exercise Price that is higher than the then-current fair market value of the Common Stock (other than adjustments pursuant to Section 12); (iv) the Committee may not cancel any outstanding Option or Stock Appreciation Right and grant in substitution therefore new Awards as part of a strategy to materially enhance the position of the holder of such Options or Stock Appreciation Rights with respect to their value as of the time of such substitution (other than adjustments pursuant to Section 12), and (v) the Committee may not take any other action that is treated as a repricing under generally accepted accounting principles (other than adjustments pursuant to Sections 5(e) and 12). A cancellation and exchange or substitution described in clauses (ii) and (iv) of the preceding sentence will be considered a repricing regardless of whether the Option, Restricted Stock or other equity is delivered simultaneously with the cancellation, regardless of whether it is treated as a repricing under generally accepted accounting principles, and regardless of whether it is voluntary on the part of the Participant. |
| (k) | Amendment and Termination of Plan. The Board may, at any time and from time to time, amend, suspend or terminate the Plan as to any shares of Common Stock as to which Awards have not been granted; provided, however, that the approval of the stockholders of the Company in accordance with applicable law and the Articles of Incorporation and Bylaws of the Company shall be required for any amendment (other than those permitted under Section 5 or 12): (i) that changes the class of individuals eligible to receive Awards under the Plan; (ii) that increases the maximum number of shares of Common Stock in the aggregate that may be subject to Awards that are granted under the Plan (except as permitted under Section 5 or Section 12 hereof); (iii) the approval of which is necessary to comply with federal or state law (including without limitation Rule 16b-3 under the Exchange Act) or with the rules of |
| C-13 |
| (l) | Section 409A of the Code. The Award Agreement for any Award that the Committee reasonably determines to constitute “nonqualified” deferred compensation plan” under Code Section 409A (a “Section 409A Plan”), and the provisions of the Plan applicable to that Award, shall be construed in a manner consistent with the applicable requirements of Code Section 409A, and the Committee, in its sole discretion and without the consent of any Participant, may amend any Award Agreement (and the provisions of the Plan applicable thereto) if and to the extent that the Committee determines that such amendment is necessary or appropriate to comply with the requirements of Code Section 409A. If any Award constitutes a Section 409A Plan, then the Award shall be subject to the following additional requirements, if and to the extent required to comply with Code Section 409A: |
| i. | Payments under the Section 409A Plan may not be made earlier than (A) the Participant’s “separation from service”, (B) the date the Participant becomes “disabled”, (C) the Participant’s death, (D) a “specified time (or pursuant to a fixed schedule)” specified in the Award Agreement at the date of the deferral of such compensation, (E) a “change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets: of the corporation, or (F) the occurrence of an “unforeseeable emergency”; |
| ii. | The time or schedule for any payment of the deferred compensation may not be accelerated, except to the extent provided in applicable Treasury Regulations or other applicable guidance issued by the Internal Revenue Service; |
| iii. | Any elections with respect to the deferral of such compensation or the time and form of distribution of such deferred compensation shall comply with the requirements of Code Section 409A(a)(4); and |
| iv. | In the case of any Participant who is a “specified employee”, a distribution on account of a “separation from service” may not be made before the date which is six months after the date of the Participant’s “separation from service” (or, if earlier, the date of the Participant’s death). |
| v. | For purposes of the foregoing, the terms in quotations shall have the same meanings as those terms have for purposes of Code Section 409A, and the limitations set forth herein shall be applied in such manner (and only to the extent) as shall be necessary to comply with any requirements of Code Section 409A that are applicable to the Award. |
| (m) | Notification of 83(b) Election. If in connection with the grant of any Award, any Participant makes an election permitted under Code Section 83(b), such Participant must notify the Company in writing of such election within ten days of filing such election with the Internal Revenue Service. |
| (n) | Detrimental Activity. All Awards shall be subject to cancellation by the Committee in accordance with the terms of this Section 15(n) if the Participant engages in any Detrimental Activity. To the extent that a Participant engages in any Detrimental Activity at any time prior to, or during the one year period after, any exercise or vesting of an Award but prior to a Change in Control, the Company shall, upon the recommendation of the Committee, in its sole and absolute discretion, be entitled to (i) immediately terminate and cancel any Awards held by the Participant that have not yet been exercised, and/or (ii) with respect to Awards of the Participant that have been previously exercised, recover from the Participant at any time within two years after such exercise but prior to a Change in Control (and the Participant shall be obligated to pay over to the Company with respect to any such Award previously held by such Participant): (A) with respect to any Options exercised, an amount equal to the excess of the Fair Market Value of the Common Stock for which any Option was exercised over the Exercise Price paid (regardless of the form by which payment was made) with respect to such Option; (B) with respect to any Award other than an Option, any shares of Common Stock granted and vested pursuant to such Award, and if such shares are not still owned by the Participant, the Fair Market Value of such shares on the date they were issued, or if later, the date all vesting restrictions were satisfied; and (C) any cash or other property (other than Common Stock) received by the Participant from the Company pursuant to an Award. Without limiting the generality of the foregoing, in the event that a Participant engages in any Detrimental Activity at any time prior to any exercise of an Award and the Company exercises its remedies pursuant to this Section 15(n) following the exercise of such Award, such exercise shall be treated as having been null and void, provided that the Company will nevertheless be entitled to recover the amounts referenced above. |
| C-14 |
| (o) | Disclaimer of Rights. No provision in the Plan, any Award granted hereunder, or any Award Agreement entered into pursuant to the Plan shall be construed to confer upon any individual the right to remain in the employ of or other service with the Company or to interfere in any way with the right and authority of the Company either to increase or decrease the compensation of any individual, including any holder of an Award, at any time, or to terminate any employment or other relationship between any individual and the Company. The grant of an Award pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets. |
| (p) | Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments as to which a Participant has a fixed and vested interest but which are not yet made to such Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. |
| (q) | Nonexclusivity of Plan. The adoption of the Plan shall not be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or individuals) as the Board in its sole and absolute discretion determines desirable. |
| (r) | Other Benefits. No Award payment under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or any agreement between a Participant and the Company, nor affect any benefits under any other benefit plan of the Company now or subsequently in effect under which benefits are based upon a Participant’s level of compensation. |
| (s) | Headings. The section headings in the Plan are for convenience only; they form no part of this Agreement and shall not affect its interpretation. |
| (t) | Pronouns. The use of any gender in the Plan shall be deemed to include all genders, and the use of the singular shall be deemed to include the plural and vice versa, wherever it appears appropriate from the context. |
| (u) | Successors and Assigns. The Plan shall be binding on all successors of the Company and all successors and permitted assigns of a Participant, including, but not limited to, a Participant’s estate, devisee, or heir at law. |
| (v) | Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. |
| (w) | Notices. Any communication or notice required or permitted to be given under the Plan shall be in writing, and mailed by registered or certified mail or delivered by hand, to the Company, to its principal place of business, attention: Chief Financial Officer and if to the holder of an Award, to the address as appearing on the records of the Company. |
| C-15 |
| (a) | any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of common stock of the Company is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of |
| (b) | during any period of two (2) consecutive years, individuals who at the |
| (c) | a | |
| (d) | complete liquidation of the Company or the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets other than (x) the sale or disposition of all or substantially all of the assets of the Company to a person or | |
Any question as to the existence of the Participant’s physical or mental incapacitation as to which the Participant or Participant’s representative and the Company cannot agree shall be determined in writing by a qualified independent physician selected by the Company. The physician’s determination of Disability shall be made in writing to the Company and the determination shall be final and conclusive for all purposes of the Participant’s Awards.
| C-16 | ||
| C-17 | ||
| C-18 | ||
| C-19 |
BROOKLYN IMMUNOTHERAPEUTICS, INC.
2021 Annual Meeting of Stockholders
Rules of Conduct and Procedures
Welcome to the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Brooklyn ImmunoTherapeutics, Inc. (the “Company”). In the interest of providing a fair and informative Annual Meeting, participants are required to honor the following Rules of Conduct and Procedures:
| The Company’s bylaws describe requirements for meetings of our stockholders, and the |
| 2. | The Chair of the Company’s Board of Directors will serve as the chair of the Annual Meeting (the “Chair”) and will have the authority and discretion necessary to preside over the Annual Meeting, including following adjournment of the formal business of the Annual Meeting. In the event of disorder, technical malfunction or any other issue that disrupts the Annual Meeting, the Chair may adjourn, recess or expedite the Annual Meeting or take such other action that he determines is appropriate in light of the circumstances. In the event of any question of conduct or procedures that is not addressed expressly and clearly by these Rules of Conduct and Procedure, the Chair is authorized to address the question in such manner as he determines, in his reasonable judgment, to be in the best interest of conducting a fair and informative Annual Meeting consistent with the purposes of the Annual Meeting. |
| 3. | |
| Each stockholder of record as of 5 p.m., Eastern time, on June 21, 2021 may log into the webcast by entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials or proxy card received from the Company. If you have voted your shares prior to the start of the Annual Meeting, your vote has been received by the Company’s inspector of elections and there is no need to vote those shares during the Annual Meeting, unless you wish to revoke or change your vote. |
| The Meeting will begin at 9:00 a.m., Eastern time, on August 20, 2021. The only business to be conducted at the | ||
| D-1 |
| 8. | Following adjournment of the formal business of the Annual Meeting, the Company’s management will give a presentation about the Company’s business. At the conclusion of this presentation, the Company will address appropriate general questions from stockholders regarding the Company. The following rules will apply to this process: |
| a. | To ensure that as many stockholders as possible are able to ask questions, each stockholder will be permitted to submit no more than two questions. Questions must be succinct and cover a single topic. All questions will be presented as submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. |
| b. | We will answer questions in the order received, except that: |
| i. | Questions from multiple stockholders related to the same topic or that are otherwise related may be grouped and answered together. | |||
| ii. | ||||
| iii. |
| c. | The views, questions and constructive comments of all stockholders are valued and welcomed. The purpose of the Annual Meeting must be observed, however, and the Company will not permit questions that: |
| are not relevant or pertinent to the | ||||
| ii. | ||||
| iii. | ||||
| v. | ||||
| viii. |
| 9. | If there are any matters of individual concern to a stockholder and not of general concern to all stockholders, or if a question posed was not otherwise answered, such matters may be raised separately after the Annual Meeting by contacting Investor Relations at [email]. |
| 10. | ||
THANK YOU FOR YOUR COOPERATION AND FOR JOINING THE ANNUAL MEETING.
| D-2 | |
To record the adoption of the Plan by the Board, the Company has caused its duly authorized Officer to execute this Plan on behalf of the Company.
