July 22, 1996
EXHIBIT 10.5
Mr. Gerald Sokol, Jr.
9255 Ptarmigan Trail
Littleton, CO 80124
Dear Jerry:
I am pleased to extend our, hopefully, final revised offer of
employment to you as Executive Vice President and Chief Financial Officer of NTN
Communications, Inc. ("NTN"). In this capacity you will report directly to me.
All employees of NTN are considered at will employees.
Your starting base salary will be $192,000 per annum, paid bi-weekly.
In addition, you will be eligible for the NTN executive profit sharing plan, the
details of which will be made available to you. You will be eligible for all of
the benefits we normally offer to our executives.
We will also provide you with an automobile allowance of $500 per
month.
It is our current policy to offer three weeks of vacation to
individuals at your level, subject to the policy guidelines.
We will provide you with relocation assistance by reimbursing the
selling costs associated with the sale of your existing home in Littleton,
Colorado and your moving costs to California. Also, NTN will lend you $150,000
toward a down payment on a home in California. This loan will be forgiven by NTN
over a four year period, provided that you remain employed during this period,
or will be forgiven completely in the event of a "change of control" of the
Company or if I and my brother, Dan Downs, are involuntarily terminated or
demoted from our present positions.
It is my intention, subject to Board of Directors approval, to grant to
you, upon reporting, 250,000 stock
Mr. Gerald Sokol, Jr.
July 22, 1996
Page 2
options, of which 50,000 will be vested immediately. The remaining 200,000 will
vest in three equal annual installments. The "strike price" will be the actual
closing price of NTN shares traded on the American Stock Exchange on July 16,
1996. In addition, in each of July 1997, 1998 and 1999 you will be granted
100,000 options at the then market price. We will also grant you an additional
100,000 options at the actual closing price on July 16, 1996 with vesting to be
contingent on the market price of NTN shares being $11 or more within 24 months.
All of your options will fully vest upon a "change of control," or in
the event that I and my brother, Dan, are involuntarily terminated or demoted
from our present positions.
Finally, we are prepared to offer you a severance agreement equal to
eight (8) months base salary during the first twelve (12) months of employment,
increasing to ten (10) months in years two and three. This severance arrangement
will end on the first day of your fourth year of employment. This does not cover
your departure from the Corporation in the event of your voluntary termination
or involuntary termination for acts of fraud, self dealing or bringing discredit
upon the Corporation. However, if your employment is terminated at any time
following a change of control you will receive twelve (12) months base salary as
a severance payment in lieu of the severance described above. Any severance
payments made to you will be made on the same basis as your normal payroll
disbursements and will end upon your accepting other employment prior to the
expiration of the severance payments. You will be required to sign a
confidentiality agreement as well as other currently utilized invention and
intellectual property agreements required of all employees.
As you know, we are quite excited about the prospect of your joining us
and we look forward to receiving a favorable response from you.
Mr. Gerald Sokol, Jr.
July 22, 1996
Page 3
If you are in agreement with the foregoing, I would appreciate your
signing one copy of this letter and returning it to me prior to your reporting
on board.
Very truly yours,
/s/ Patrick J. Downs
Patrick J. Downs
Chairman & CEO
NTN Communications, Inc.
Accepted by:
/s/ Gerald Sokol, Jr.
- ----------------------------
Gerald Sokol, Jr.
- ----------------------------
Date