<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
June 30, 1996 1-13906
BALLANTYNE OF OMAHA, INC.
-------------------------
(Exact name of Registrant as specified in its charter)
Delaware 47-0587703
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4350 McKinley Street, Omaha, Nebraska 68112
-------------------------------------------
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code:
(402) 453-4444
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date:
Class Outstanding as of June 30, 1996
- ------------------ -------------------------------
Common Stock, $.01 4,399,995
par value
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BALLANTYNE OF OMAHA, INC.
-------------------------
INDEX
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Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 2 - 3
Consolidated Statements of Income
for the Six Months
ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows
for the Six months ended
June 30, 1996 and 1995 5 - 6
Notes to Consolidated Financial
Statements 7 - 8
Item 2. Management's Discussion and Analysis
of Results of Operations and
Financial Condition 9 - 10
Part II. Other Information 11
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
Signatures
Exhibit Index
Page 2
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PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
BALLANTYNE OF OMAHA, INC.
CONSOLIDATED BALANCE SHEETS
A S S E T S
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
Current
Cash $ 211,030 204,172
Accounts receivable (less
allowance of $108,682 in 1996
and $118,033 in 1995) 7,139,825 5,713,141
Inventories 10,112,844 9,306,157
Deferred income taxes 515,926 515,926
Other current assets 122,763 51,873
----------- ----------
18,102,388 15,791,269
Net property, plant and equipment 3,286,381 2,934,619
Goodwill, other intangibles and
other assets, net 1,066,150 1,102,314
----------- ----------
$22,454,919 19,828,202
=========== ==========
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED BALANCE SHEETS
L I A B I L I T I E S
June 30, December 31,
1996 1995
------------ -----------
(Unaudited)
Current
Intercompany payable to parent $ 112,236 $ 135,588
Current portion of long-term debt 879,860 839,508
Accounts payable 4,546,898 3,680,020
Accrued expenses 1,407,680 1,444,937
Income taxes 252,994 1,066,532
---------- ----------
7,199,668 7,166,585
Deferred income taxes 386,472 386,472
Long-term debt 7,846,282 7,219,930
S T O C K H O L D E R S ' E Q U I T Y
Preferred stock, par value
$.01 per share; authorized
1,000,000 shares - -
Common stock, par value
$.01 per share; authorized
10,000,000 shares; 4,399,995
in 1996 and 4,400,000 in 1995
shares outstanding 44,000 44,000
Additional paid-in capital 5,011,215 5,011,215
Retained earnings 1,967,282 -
----------- -----------
7,022,497 5,055,215
----------- -----------
$22,454,919 $19,828,202
=========== ===========
Page 4
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Six Months Ended June 30,
1996 1995
Net sales $23,857,860 $18,065,803
Cost of sales 17,075,185 12,790,689
----------- -----------
Gross profit 6,782,675 5,275,114
Total operating expense 3,152,602 2,801,317
----------- -----------
Income from operations 3,630,073 2,473,797
Interest expense 381,771 41,415
----------- -----------
Income before income taxes 3,248,302 2,432,382
Income taxes 1,281,020 981,551
----------- -----------
Net income $ 1,967,282 $ 1,450,831
=========== ===========
Net income per share $0.41 $0.28
=========== ===========
Weighted average shares outstanding 4,781,318 4,400,000
=========== ===========
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
1996 1995
Cash flows from operating
activities:
Net income $ 1,967,282 $ 1,450,831
Depreciation and amortization 247,906 273,799
Changes in assets and liabilities
Trade receivables (1,426,684) (1,808,909)
Other current assets (70,890) (54,170)
Inventories (806,687) (103,372)
Accounts payable 866,878 833,961
Accrued expenses (37,257) 64,403
Income taxes (813,538) (16,839)
Goodwill, other intangibles
and other assets 10,010 22,963
----------- -----------
Net cash provided by (used in)
operating activities (62,980) 662,667
----------- -----------
Cash flows from
financing activities
Change in intercompany payable to parent (23,352) (34,406)
Repayment of long-term debt (245,549) (485,943)
Net proceeds from revolving credit facility 530,000 -
----------- -----------
Net cash provided by (used in) financing activities 261,099 (520,349)
----------- -----------
Page 6
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
1996 1995
Cash flows from investing
activities:
Capital expenditures (191,261) (89,470)
---------- --------
Net increase in cash 6,858 52,848
Cash at beginning of period 204,172 260,006
---------- --------
Cash at end of period $ 211,030 $312,854
========== ========
Supplemental disclosure of
cash flow information:
Interest payments $ 379,290 $ 41,415
========== ========
Income tax payments $2,094,558 $981,551
========== ========
Other noncash activities in 1996 include approximately $382,300 of additional
capital lease obligations in exchange for equipment.
Page 7
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BALLANTYNE OF OMAHA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
1. General
Ballantyne of Omaha, Inc. ("Ballantyne" or the "Company") and its wholly-owned
subsidiaries, Strong International Inc. and Flavor-Crisp of America Inc.,
design, develop, manufacture and distribute commercial motion picture projection
equipment, follow spotlights and restaurant equipment. The Company's products
are distributed worldwide through a domestic and international dealer network
and are sold to major movie exhibition companies, sports arenas, auditoriums,
amusement parks, special venues, restaurants, supermarkets and convenience food
stores. A majority of the Company's common stock is owned by Canrad of
Delaware, Inc. ("Canrad Delaware"), which is an indirect wholly-owned subsidiary
of ARC International Corporation.
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation. The consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles and include all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results for the periods presented. All
such adjustments are, in the opinion of management, of a normal, recurring
nature. These consolidated financial statements should be read in connection
with the consolidated financial statements and related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
2. Inventories
Inventories consist of the following
June 30, December 31,
1996 1995
------------ ------------
Raw Material $ 7,299,451 6,708,016
Work-in-process 1,526,420 1,167,433
Finished goods 1,286,973 1,430,708
----------- ---------
$10,112,844 9,306,157
=========== =========
Page 8
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3. Net Income Per Share
Net income per share is based on the weighted average number of common shares
outstanding. The effects of the assumed exercise of outstanding stock options
and warrants have been included in the income per share calculation for the
period that the shares were assumed issued using the treasury stock method.
Weighted average shares outstanding amounted to 4,781,318 for the six months
ended June 30, 1996 and 4,400,000 for the three months ended June 30, 1995.
Prior to the Company's initial public offering in September 1995, the Company
was a wholly-owned subsidiary of Canrad Delaware.
Net income per share has been calculated to reflect the effects of the interest
expense less related income tax effects of the $8,000,000 borrowing pursuant to
the Norwest Bank revolving credit facility which is assumed to be outstanding as
of the beginning of each period presented, with no repayment being made during
such period, and the 400,000-to-1 common stock exchange. The Company's Board of
Directors declared a 10% stock distribution on January 23, 1996, which issued on
March 8, 1996, to shareholders of record on February 9, 1996. This stock
distribution resulted in the issuance of approximately 400,000 shares of common
stock. Per share data have been restated to reflect these stock distributions as
of the earliest period presented. The stock distribution is not considered a
distribution of earnings except to the extent that the Company has retained
earnings, but rather had the effect of increasing the number of outstanding
shares.
4. Related Party Transactions
Canrad Inc., the parent of Canrad Delaware, provides services to its
subsidiaries on a corporate basis. Such services include strategic planning,
acquisition assistance, procurement of capital and debt arrangements, securing
health and business insurance coverages and payment of medical claims, audit and
income tax planning and other matters. Fees charged for these services amounted
to $150,000 for the six month periods ended June 30, 1996 and 1995.
Page 9
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
- -------------
The following discussion and analysis relates to the accompanying unaudited
consolidated financial statements and presents a current assessment of material
changes in financial condition and results of operations. A detailed discussion
and analysis for the preceding years appears in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.
Liquidity and Capital Resources
- -------------------------------
The Company's borrowings (including long and short-term) of approximately
$8.7 million reflect an increase of approximately $666,700 as compared to
December 31, 1995. The principal reasons for the increase were $530,000 from
borrowings under the Company's revolving credit facility with Norwest Bank
Nebraska, N.A. (the "Norwest Facility") and a capital lease for the purchase of
manufacturing equipment in the amount of $382,300. These increases were offset
by a payment of $94,100 pursuant to a non-compete agreement with Optical
Radiation Corporation, $95,600 of payments made pursuant to the 7.9% Industrial
Development Revenue Bond and $55,900 of payments on capital lease obligations.
The Company's intercompany payable to parent reflects a decrease of
approximately $23,400 at June 30, 1996 as compared to the end of the prior year.
The Company anticipates that internally generated funds and borrowings under
the Norwest Facility will be sufficient to meet its working capital needs. Net
cash provided (used) by operating activities for the years ended December 31,
1993, 1994, and 1995 and the six months ended June 30, 1996 was $3.1 million,
$3.4 million, $2.4 million and $(63,000), respectively. For the six months
ended June 30, 1995, net cash provided by operating activities was approximately
$662,700. The decrease in net cash provided by operating activities were
primarily due to increases in net income, inventory and trade receivables, and
decreases in income taxes payable. Prior to its initial public offering, the
Company did not pay quarterly estimated taxes and therefore the Company had
significantly higher cash tax payments during the six months ended June 30,
1996. The Company expects that it will have capital expenditures on equipment
of approximately $900,000 in 1996. The Company does not engage in any currency
hedging activities in connection with its foreign operations and sales.
Results of Operations
- ---------------------
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1995
Net sales for the six months ended June 30, 1996 (the "1996 Period") increased
32.1% to approximately $23.9 million from approximately $18.1 million for the
six months ended June 30, 1995 (the "1995 Period"). The following table sets
forth net sales of theatre products and restaurant products for the respective
periods:
Page 10
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SIX MONTHS ENDED JUNE 30,
-------------------------
1995 1996
------------ -----------
Theatre Products..... $16,467,600 $22,698,900
Restaurant Products.. 1,598,200 1,159,000
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Total Net Sales...... $18,065,800 $23,857,900
=========== ===========
Net sales of theatre products increased approximately $6.2 million or 37.8%
for the 1996 Period as compared to the 1995 Period. Net sales of commercial
motion picture projection equipment increased approximately $6.1 million or
39.9%, and net sales of follow spotlights increased approximately $ 102,000 or
10.9%. The majority of the increase in net sales of commercial motion picture
projection equipment was attributable to increased sales of such equipment to
foreign customers and to domestic customers for end users expanding into foreign
markets. Net sales of replacement parts increased approximately $400,000 or
17.0% for the 1996 Period as compared to the 1995 Period.
Net sales of restaurant products decreased approximately $439,200, due in part
to a loss of one customer account by one of the Company's major restaurant
products customers.
Gross profit as a percentage of net sales decreased to 28.4% for the 1996
Period from 29.2% for the 1995 Period. The decrease is primarily attributable to
a greater percentage of lower margin theatre products sold in the 1996 Period as
compared to the 1995 Period.
Operating expenses increased approximately $351,300 or 12.5% for the 1996
Period as compared to the 1995 Period. However, as a percentage of net sales,
such expenses decreased to 13.2% for the 1996 Period from 15.5% for the 1995
Period as a result of an increase in net sales of theatre products without a
proportional significant increase in selling costs (which include advertising,
travel and personnel expenses).
Interest expense was approximately $381,800 for the 1996 Period as compared to
approximately $41,400 for the 1995 Period. This increase reflects the interest
expense attributable to the incurrence of $8.0 million of indebtedness in
September 1995 under the Norwest Facility in connection with the Company's
initial public offering. See "--Liquidity and Capital Resources."
The effective tax rate was 39.4% for the 1996 Period as compared to the
statutory rate of 34.0%. The difference relates to the effect of state income
taxes and the non-deductibility of certain intangible expenses, principally
goodwill.
PART II. OTHER INFORMATION
Item 4. Submission of Matter to a Vote of Security Holders
--------------------------------------------------
The Company's regular Annual Meeting of Stockholders was held on June 11, 1996
for the purpose of electing two nominees as directors and approving an amendment
to the Company's 1995 Outside Directors' Stock Option Plan (the "Amendment")
which (i) changed the vesting schedule
Page 11
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of options granted thereunder (including outstanding options) and (ii) provides
for the granting of additional options for non-employee directors at specified
times. With respect to the election of directors, both director nominees were
re-elected. With respect to the Amendment, 3,933,876 shares were voted in favor
of the Amendment, 26,613 shares were voted against the Amendment, 10,705 shares
abstained from voting and there were no broken non-votes.
Page 12
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Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
EXHIBIT
NO. DESCRIPTION
- -- -----------
3.1 Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to
the Registration Statement on Form S-1, File No. 33-93244 (the "IPO
Registration Statement")).
3.2 By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the
IPO Registration Statement).
4.1 Trust Indenture dated as of September 1, 1988 by and between the County of
Douglas, Nebraska and FirstTier Bank, National Association, Omaha
(incorporated by reference to Exhibit 4.1 to the IPO Registration
Statement).
4.2 Loan Agreement dated August 30, 1995, as amended as of November 24, 1995,
between the Company and Norwest Bank Nebraska, N.A. (incorporated by
reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995).
10.8 1995 Outside Directors Stock Option Plan, as amended as of July 8, 1996.
10.14 Stock Option Agreement dated as of September 19, 1995 between the
Company and Jaffoni & Collins Incorporated.
10.15 Stock Option Agreement dated as of December 22, 1995 between the
Company and Geller & Friend Capital Partners, Inc.
10.16 Extension Agreement to Employment Agreement between the Company and
John Wilmers dated July 8, 1996.
11.1 Computation of net earnings per share (included in Consolidated Financial
Statements).
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the period April 1,
1996 to June 30, 1996.
Page 13
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be filed on its behalf by the undersigned,
thereunto duly authorized.
BALLANTYNE OF OMAHA, INC.
Date: July 10, 1996 By: /s/ Ronald H. Echtenkamp
------------------------------
Ronald H. Echtenkamp
President and Chief Executive Officer
Date: July 10, 1996 By: /s/ Brad French
------------------------------
Brad French, Secretary, Treasurer, and
Chief Financial Officer
Page 14
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- -- -----------
3.1 Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to
the Registration Statement on Form S-1, File No. 33-93244 (the "IPO
Registration Statement")).
3.2 By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the
IPO Registration Statement).
4.1 Trust Indenture dated as of September 1, 1988 by and between the County of
Douglas, Nebraska and FirstTier Bank, National Association, Omaha
(incorporated by reference to Exhibit 4.1 to the IPO Registration
Statement).
4.2 Loan Agreement dated August 30, 1995, as amended as of November 24, 1995,
between the Company and Norwest Bank Nebraska, N.A. (incorporated by
reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995).
10.8 1995 Outside Directors Stock Option Plan, as amended as of July 8, 1996.
10.14 Stock Option Agreement dated as of September 19, 1995 between the
Company and Jaffoni & Collins Incorporated.
10.15 Stock Option Agreement dated as of December 22, 1995 between the
Company and Geller & Friend Capital Partners, Inc.
10.16 Extension Agreement to Employment Agreement between the Company and
John Wilmers dated July 8, 1996.
11.1 Computation of net earnings per share (included in Consolidated Financial
Statements).
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the period April 1,
1996 to June 30, 1996.
Page 15
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EXHIBIT 10.8
BALLANTYNE OF OMAHA, INC.
1995 OUTSIDE DIRECTORS
STOCK OPTION PLAN, AS AMENDED
1. NAME.
The name of this Plan is the Ballantyne of Omaha, Inc. 1995 Outside
Directors Stock Option Plan.
2. DEFINITIONS.
For the purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any partnership, corporation, firm, joint
venture, association, trust, limited liability company,
unincorporated organization or other entity (other than a
Subsidiary) that, directly or indirectly through one or more
intermediaries, is controlled by the Company, where the term
"controlled by" means the possession, direct or indirect, of the
power to cause the direction of the management and policies of
such entity, whether through the ownership of voting interests or
voting securities, as the case may be, by contract or otherwise.
(b) "Board" means the board of directors of the Company.
(c) "Chairman" means the individual appointed by the Board to serve
as the chairman of the Committee.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury regulations promulgated
thereunder.
(e) "Committee" means the committee appointed by the Board to
administer the Plan as provided in Section 4(a).
(f) "Common Stock" means the common stock, $.01 par value per share,
of the Company or any security of the Company identified by the
Committee as having been issued in substitution or exchange
therefor or in lieu thereof.
<PAGE>
(g) "Company" means Ballantyne of Omaha, Inc., a Delaware corporation.
(h) "Effective Date" means September 6, 1995.
(i) "Employee" means an individual whose wages are subject to the
withholding of federal income tax under Section 3401 of the Code.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute.
(k) "Fair Market Value" of a Share as of a specified date means the
average of the highest and lowest market prices of a Share on the
American Stock Exchange on such date as reported in the Eastern
Edition of The Wall Street Journal or, if no trading of Common
--- ---- ------ -------
Stock is reported for that day, the next preceding day on which
trading was reported. In the event the Common Stock is not then
traded on the American Stock Exchange, the Fair Market Value of a
Share shall be determined by reference to the principal market or
exchange on which the Shares are then traded.
(l) "Non-Employee Director" means an individual who: (i) is now, or
hereafter becomes, a member of the Board; (ii) is neither an
Employee nor an Officer of the Company or of any Subsidiary or
Affiliate on the date of the grant of the NQSO; and (iii) has not
elected to decline to participate in the Plan pursuant to the
immediately succeeding sentence. A director otherwise eligible
to participate in the Plan may make an irrevocable, one-time
election, by written notice to the Corporate Secretary of the
Company and the Chairman within thirty days after his initial
election or appointment to the Board to decline to participate in
the Plan.
(m) "NQSO" means an option that is not qualified under Section 422 of
the Code.
(n) "Officer" means an individual elected or appointed by the Board
or by the board of directors of a Subsidiary, or chosen in such
other manner as may be prescribed by the by-laws of the Company
or a Subsidiary, as the case may be, to serve as such.
-2-
<PAGE>
(o) "Participant" means a Non-Employee Director who is granted a NQSO
under the Plan.
(p) "Plan" means this 1995 Outside Directors Stock Option Plan.
(q) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor or
replacement rule adopted by the Securities and Exchange
Commission.
(r) "Share" means one share of Common Stock, adjusted in accordance
with Section 9(b), if applicable.
(s) "Stock Option Agreement" means the written agreement between the
Company and the Participant that contains the terms and
conditions pertaining to the NQSO.
(t) "Subsidiary" means any corporation or entity of which the
Company, directly or indirectly, is the beneficial owner of fifty
percent (50%) or more of the total voting power of all classes of
its stock having voting power, unless the Committee shall
determine that any such corporation or entity shall be excluded
hereunder from the definition of the term Subsidiary.
3. PURPOSE.
The purpose of the Plan is to enable the Company to provide
incentives, which are linked directly to increases in stockholder value, to Non-
Employee Directors in order that they will be encouraged to serve on the Board
and exert their best efforts on behalf of the Company.
4. ADMINISTRATION.
(a) Composition of the Committee.
----------------------------
The Plan shall be administered by a Committee appointed by the Board
consisting of no less than two individuals. Members of the Committee need not
be members of the Board, Officers or Employees of the Company. Members of the
Committee shall not be entitled to participate in the Plan. The Board may from
time to time remove members from, or add members to, the Committee. Vacancies
on the Committee, however caused, shall be filled by the
-3-
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Board. The Board shall appoint one of the members of the Committee as Chairman.
(b) Actions by the Committee.
------------------------
The Committee shall hold meetings at such times and places as it may
determine. Acts approved by a majority of the members of the Committee present
at a meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.
(c) Powers of the Committee.
-----------------------
The Committee shall have the authority to administer the Plan in its
sole and absolute discretion; provided, however, that the Committee shall have
-------- -------
no authority to grant NQSOs, to determine the number of Shares subject to NQSOs
or the price at which each Share covered by a NQSO may be purchased pursuant to
the Plan, all of which shall be automatic as described in Section 8. To this
end, the Committee is authorized to construe and interpret the Plan and to make
all other determinations necessary or advisable for the administration of the
Plan. Subject to the foregoing, any determination, decision or action of the
Committee in connection with the construction, interpretation, administration or
application of the Plan shall be final, conclusive and binding upon all
Participants and any person validly claiming under or through a Participant.
(d) Liability of Committee Members.
------------------------------
No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any grant or exercise of a NQSO thereunder.
(e) NQSO Accounts.
-------------
The Committee shall maintain a journal in which a separate account for
each Participant shall be established. Whenever NQSOs are granted to or
exercised by a Participant, the Participant's account shall be appropriately
credited or debited. Appropriate adjustment shall also be made in the journal
with respect to each account in the event of an adjustment pursuant to Section
9(b).
-4-
<PAGE>
5. EFFECTIVE DATE AND TERM OF THE PLAN.
(a) Effective Date of the Plan.
--------------------------
The Plan was adopted by the Board and became effective on September 6,
1995, subject to approval by the stockholders of the Company at a meeting duly
called and held within twelve months following such date.
(b) Term of Plan.
------------
No NQSO shall be granted pursuant to the Plan on or after September 6,
2005, but NQSOs theretofore granted may extend beyond that date.
6. SHARES SUBJECT TO THE PLAN.
The maximum aggregate number of Shares which may be subject to NQSOs
granted to Non-Employee Directors under the Plan shall be 100,000. The
limitation on the number of Shares which may be subject to NQSOs under the Plan
shall be subject to adjustment as provided in Section 9(b).
If any NQSO granted under the Plan expires or is terminated for any
reason without having been exercised in full, the Shares allocable to the
unexercised portion of such NQSO shall again become available for grant pursuant
to the Plan. At all times during the term of the Plan, the Company shall
reserve and keep available for issuance such number of Shares as the Company is
obligated to issue upon the exercise of all then outstanding NQSOs.
7. SOURCE OF SHARES ISSUED UNDER THE PLAN.
Common Stock issued under the Plan shall be authorized and unissued
Shares. No fractional Shares shall be issued under the Plan.
-5-
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8. NON-QUALIFIED STOCK OPTIONS.
(a) Grant of NQSOs.
--------------
On the next succeeding business day after the Effective Date, NQSOs to
purchase 16,500 Shares (adjusted for 10% stock distribution effected March 8,
1996) shall be granted automatically to each Non-Employee Director. With
respect to any Non-Employee Director who first becomes a member of the Board
after the Effective Date, NQSOs to purchase 16,500 Shares shall be granted
automatically on the next succeeding business day following his election to the
Board. In addition to such initial NQSO grants, NQSOs to purchase 16,500 Shares
shall be granted automatically to each Non-Employee Director on the next
succeeding business day after the third consecutive annual meeting of the
shareholders following his initial NQSO grant, and on the next succeeding
business day after every third consecutive annual meeting of the shareholders
thereafter during the term of the Plan, provided that said Non-Employee Director
continues to be a member of the Board on the date of each such additional grant.
NQSOs shall be granted in the aforesaid manner until the date on which the
Shares available for grant shall no longer be sufficient to permit grants of
NQSOs covering 16,500 Shares to be made to each Non-Employee Director entitled
to a grant as of such date, in which event the Shares then available for grant
shall be allocated on a pro rata basis among the Non-Employee Directors entitled
to a grant of NQSOs as of such date. The provisions of this Section shall not
be amended more than once every six months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules thereunder.
(b) Exercise Price.
--------------
Each Share covered by a NQSO granted on the business day next
succeeding the Effective Date may be purchased at a purchase price equal to the
initial public offering price of a Share. Each Share covered by a NQSO granted
after the business day next succeeding the Effective Date may be purchased at a
purchase price equal to the Fair Market Value of a Share on the date of the NQSO
grant. The provisions of this Section shall not be amended more than once every
six months, other than to comport with changes in the Code, ERISA, or the rules
thereunder.
(c) Terms and Conditions.
--------------------
All NQSOs granted pursuant to the Plan shall be evidenced by a Stock
Option Agreement (which need not be the same for each Participant or NQSO),
approved by the Committee which shall be sub-
-6-
<PAGE>
ject to the following express terms and conditions and to the other terms and
conditions specified in this Section 8, and to such other terms and conditions
as shall be determined by the Committee in its sole and absolute discretion
which are not inconsistent with the terms of the Plan:
(i) Except as set forth in Section 10, all NQSOs granted to a
Participant shall vest and become first exercisable as
follows:
i.i 5,500 shares (adjusted for the 10% stock distribution
effected March 8, 1996) on the next succeeding business day
following the Participant's initial election to the Board.
i.ii Thereafter, 5,500 shares on the next succeeding
business day following each annual meeting of the
Stockholders of the Company.
(ii) the failure of a NQSO to vest for any reason whatsoever
shall cause the NQSO to expire and be of no further force or
effect;
(iii) unless terminated earlier pursuant to Sections 8(f) or 10,
the term of each NQSO shall be five years from the date of
grant;
(iv) NQSOs shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the Participant
only by him or by his guardian or legal representative;
(v) no NQSO or interest therein may be transferred, assigned,
pledged or hypothecated by the Participant during his
lifetime whether by operation of law or otherwise, or be
made subject to execution, attachment or similar process;
and
(vi) payment for the Shares to be received upon exercise of a
NQSO may be made in cash, in Shares (determined with
reference to their Fair Market Value on the date of
exercise) or any combination thereof.
-7-
<PAGE>
(d) Additional Means of Payment.
---------------------------
Any Stock Option Agreement may, in the sole and absolute discretion of
the Committee, permit payment by any other form of legal consideration
consistent with applicable law and any rules and regulations relating thereto,
including, but not limited to, the execution and delivery of a full recourse
promissory note (bearing interest at a rate not less than the prime rate
announced as then being in effect by the Company's principal lender and whose
maturity date shall not exceed beyond ten years) by the Participant to the
Company.
(e) Exercise.
--------
The holder of a NQSO may exercise the same by filing with the
Corporate Secretary of the Company and the Chairman a written election, in such
form as the Committee may determine, specifying the number of Shares with
respect to which such NQSO is being exercised. Such notice shall be accompanied
by payment in full of the exercise price for such Shares. Notwithstanding the
foregoing, the Committee may specify a reasonable minimum number of Shares that
may be purchased on any exercise of an Option, provided that such minimum number
will not prevent the holder from exercising the Option with respect to the full
number of Shares as to which the Option is then exercisable.
(f) Termination of NQSOs.
--------------------
NQSOs granted under the Plan shall be subject to the following events
of termination:
(i) in the event a Participant is removed from the Board for
cause (as contemplated by the Company's by-laws), all
unexercised NQSOs held by such Participant on the date of
such removal (whether or not vested) will expire
immediately;
(ii) in the event a Participant is no longer a member of the
Board, other than by reason of removal for cause, all NQSOs
which remain unvested at the time the Participant is no
longer a member of the Board shall expire immediately, and
all NQSOs which have vested prior to such time shall expire
twelve months thereafter unless by their terms they expire
sooner; and
-8-
<PAGE>
(iii) in the event a Participant becomes an Officer or Employee of
the Company or a Subsidiary (whether or not such Participant
remains a member of the Board) all NQSOs which remain
unvested at the time such Participant becomes an Officer or
Employee of the Company shall expire immediately, and all
NQSOs which have vested prior to such time shall expire
twelve months thereafter unless by their terms they expire
sooner.
9. RECAPITALIZATION.
(a) Corporate Flexibility.
---------------------
The existence of the Plan and the NQSOs granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
stockholders of the Company, in their sole and absolute discretion, to make,
authorize or consummate any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of bonds, debentures, common stock,
preferred or prior preference stocks ahead of or affecting the Company's capital
stock or the rights thereof, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
grant of rights, issuance of securities, transaction, corporate act or
proceeding and notwithstanding the fact that any such activity, proceeding,
action, transaction or other event may have, or be expected to have, an impact
(whether positive or negative) on the value of any NQSO.
(b) Adjustments Upon Changes in Capitalization.
------------------------------------------
Except as otherwise provided in Section 10 below and subject to any
required action by the stockholders of the Company, in the event of any change
in capitalization affecting the Common Stock of the Company, such as a stock
dividend, stock split or recapitalization, the Committee shall make
proportionate adjustments with respect to: (i) the aggregate number of Shares
available for issuance under the Plan; (ii) the number of Shares subject to each
grant under the Plan; (iii) the number and exercise price of Shares subject to
outstanding NQSOs; and (iv) such other matters as shall be appropriate in light
of the circumstances; provided, however, that the number of Shares subject to
-------- -------
any NQSO shall always be a whole number and that no such adjustment shall be
made if the adjustment would cause the Plan to fail to comply with the "formula
award" exception, as set forth in Rule 16b-3(c)(2)(ii)
-9-
<PAGE>
of the Exchange Act, for grants of NQSOs to non-employee directors.
10. CHANGE OF CONTROL.
In the event of a Change of Control (as defined below), all Options
not vested on or prior to the effective time of any such Change of Control shall
immediately vest as of such effective time. The Committee in its discretion may
make provisions for the assumption of outstanding Options, or the substitution
for outstanding Options of new incentive awards covering the stock of a
successor corporation or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices so as to prevent
dilution or enlargement of rights; provided, however, that no such adjustment
shall be made if the adjustment would cause the Plan to fail to comply with the
"formula award" exception, as set forth in Rule 16b-3(c)(2)(ii) of the Exchange
Act, for grants of NQSOs to non-employee directors.
A "Change of Control" will be deemed to occur on the date any of the
following events occur:
(a) any person or persons acting together which would constitute a
"group" for purpose of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary and any entity beneficially owned by any of the
foregoing), beneficially own (as defined in Rule 13d-3 under the Exchange Act)
without Board approval, directly or indirectly, at least 30% of the total voting
power of the Company entitled to vote generally in the election of the Board;
(b) either (i) the Current Directors (as herein defined) cease for any
reason to constitute at least a majority of the members of the Board (for these
purposes, a "Current Director" means any member of the Board as of the Effective
Date, and any successor of a Current Director whose election, or nomination for
election by the Company's shareholders, was approved by at least a majority of
the Current Directors then on the Board) or (ii) at any meeting of the
stockholders of the Company called for the purpose of electing directors, a
majority of the persons nominated by the Board for election as directors fail to
be elected;
(c) the stockholders of the Company approve (i) a plan of complete
liquidation of the Company, or (ii) an agreement providing for the merger or
consolidation of the Company (A) in which the Company is not the continuing or
surviving corporation (other than consolidation or merger with a wholly-owned
subsidiary of the Company in which all Shares outstanding immediately prior to
the effectiveness thereof are changed into or exchanged for the
-10-
<PAGE>
same consideration) or (B) pursuant to which the Shares are converted into cash,
securities or other property, except a consolidation or merger of the Company in
which the holders of the Shares immediately prior to the consolidation or merger
have, directly or indirectly, at least a majority of the common stock of the
continuing or surviving corporation immediately after such consolidation or
merger or in which the Board immediately prior to the merger or consolidation
would, immediately after the merger or consolidation, constitute a majority of
the board of directors of the continuing or surviving corporation; or
(d) the stockholders of the Company approve an agreement (or
agreements) providing for the sale or other disposition (in one transaction or a
series of transactions) of all or substantially all of the assets of the
Company.
11. SECURITIES LAW REQUIREMENTS.
No Shares shall be issued under the Plan unless and until: (i) the
Company and the Participant have taken all actions required to register the
Shares under the Securities Act of 1933, as amended, or perfect an exemption
from the registration requirements thereof; (ii) any applicable requirement of
Nasdaq or any stock exchange on which the Common Stock is listed has been
satisfied; and (iii) any other applicable provision of state or federal law has
been satisfied. The Company shall be under no obligation to register the Shares
under the Securities Act of 1933, as amended, or to effect compliance with the
registration or qualification requirements of any state securities laws.
12. AMENDMENT AND TERMINATION.
(a) Modifications to the Plan.
-------------------------
The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to NQSOs, suspend or terminate the
Plan or, subject to Sections 8(a) and 8(b), revise or amend the Plan in any
respect whatsoever. However, unless the Board specifically otherwise provides,
any revision or amendment that would cause the Plan to fail to comply with Rule
16b-3 or any other requirement of applicable law or regulation if such amendment
were not approved by the stockholders of the Company shall not be effective
unless and until such approval is obtained.
(b) Rights of Participant.
---------------------
No amendment, suspension or termination of the Plan that would
adversely affect the right of any Participant with respect to
-11-
<PAGE>
a NQSO previously granted under the Plan will be effective without the written
consent of the affected Participant.
13. MISCELLANEOUS.
(a) Stockholders' Rights.
--------------------
No Participant and no beneficiary or other person claiming under or
through such Participant shall acquire any rights as a stockholder of the
Company by virtue of such Participant having been granted a NQSO under the Plan.
No Participant and no beneficiary or other person claiming under or through such
Participant will have any right, title or interest in or to any Shares,
allocated or reserved under the Plan or subject to any NQSO except as to Shares,
if any, that have been issued or transferred to such Participant. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date of exercise.
(b) Other Compensation Arrangements.
-------------------------------
Nothing contained in the Plan shall prevent the Board from adopting
other compensation arrangements, subject to stockholder approval if such
approval is required. Such other arrangements may be either generally
applicable or applicable only in specific cases.
(c) Treatment of Proceeds.
---------------------
Proceeds realized from the exercise of NQSOs under the Plan shall
constitute general funds of the Company.
(d) Costs of the Plan.
-----------------
The costs and expenses of administering the Plan shall be borne by the
Company.
(e) No Right to Continue as Director.
--------------------------------
Nothing contained in the Plan or in any instrument executed pursuant
to the Plan will confer upon any Participant any right to continue as a member
of the Board or affect the right of the Company, the Board or the stockholders
of the Company to terminate the directorship of any Participant at any time with
or without cause.
-12-
<PAGE>
(f) Severability.
------------
The provisions of the Plan shall be deemed severable and the validity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(g) Binding Effect of Plan.
----------------------
The Plan shall inure to the benefit of the Company, its successors and
assigns.
(h) No Waiver of Breach.
-------------------
No waiver by any party hereto at any time of any breach by another
party hereto of, or compliance with, any condition or provision of the Plan to
be performed by such other party shall be deemed a waiver of the same, any
similar or any dissimilar provisions of conditions at the same or at any prior
or subsequent time.
(i) Governing Law.
-------------
The Plan and all actions taken thereunder shall be enforced, governed
and construed by and interpreted under the laws of the State of Delaware
applicable to contracts made and to be performed wholly within such State
without giving effect to the principles of conflict of laws thereof.
(j) Headings.
--------
The headings contained in the Plan are for reference purposes only and
shall not affect in any way the meaning or interpretation of the Plan.
-13-
<PAGE>
14. EXECUTION.
To record the adoption of the Plan to read as set forth herein, the
Company has caused the Plan to be signed by its President and attested by its
Secretary on July 8, 1996.
BALLANTYNE OF OMAHA, INC.
By: /s/ Ronald H. Echtenkamp
------------------------------------
Ronald H. Echtenkamp
President
ATTEST:
By: /s/ Brad French
---------------------------
Brad French
Secretary
-14-
<PAGE>
EXHIBIT 10.14
STOCK OPTION AGREEMENT
This Agreement made as of the 19th day of September, 1995, between
BALLANTYNE OF OMAHA, INC., a Delaware corporation, having its principal office
at 4350 McKinley Street, Omaha, Nebraska 68112 (the "Company"), and JAFFONI &
COLLINS INCORPORATED of 215 Park Avenue South, New York, New York 10003, (the
"Optionee"), WITNESSETH:
WHEREAS, the Optionee has agreed to provide certain services to the
Company, pursuant to a letter of agreement dated September 19, 1995, and
WHEREAS, in partial consideration of the services to be rendered by
Optionee, the Company has agreed to grant Optionee an option to purchase up to
25,000 shares of common stock of the Company.
NOW, THEREFORE, in consideration of the mutual promises,
representations and agreements herein contained, and other good and valuable
consideration, it is agreed by and between the parties, as follows:
1. Grant of Option. The Company hereby grants to Optionee the right
---------------
to purchase, on the terms and conditions hereinafter set forth, all or any part
of an aggregate of 25,000 shares of common stock of the Company at a purchase
price of $7.00 per share.
2. Time of Exercise. The options granted to Optionee under this
----------------
Agreement vest and become exercisable, on a pro-rata basis over twelve (12)
months (2083 1/3 shares per month), commencing September 19, 1995, and on the
19th day of each month thereafter, through and including August 19, 1996, but
must be exercised no later than 5:00 P.M. (Central Standard Time) on October 7,
1999, at which time said options shall expire.
3. Method of Exercise. The aforesaid option, or any part thereof,
------------------
shall be exercised by giving a Notice of Exercise to the Secretary of the
Company specifying the number of shares to be
<PAGE>
purchased and accompanied by payment of the aggregate option price for the
number of shares purchased.
4. Capital Adjustments. If, at any time after the date hereof, (a)
-------------------
the common shares of the Company shall be consolidated, subdivided, converted,
exchanged, re-classified, or in any way substituted for, (b) the Company merges
or consolidates with any other corporation, or (c) the Company declares a stock
dividend or distribution, the Company will make appropriate adjustments to the
option with reference to the number of shares and the price thereof, to insure
the continuance of the Optionee's unexercised rights thereunder, and to prevent
a dilution or enlargement.
5. Liquidation or Dissolution. If the Company proposes to liquidate,
--------------------------
dissolve or wind-up its affairs, the Company shall give written notice thereof
to the Optionee, and permit the Optionee to exercise the unexercised portion of
the options to which the Optionee is entitled at such time, within the forty-
five (45) day period next following the giving of such notice, failing which all
rights of the Optionee with respect to the Option, or to exercise the same,
shall terminate and cease and have no further force or effect.
6. Rights of Optionee Before Exercise of Option. The Optionee shall
--------------------------------------------
not have any rights whatsoever as a shareholder in respect to the Optioned
Shares covered by the Option until the Option is exercised, in whole or in part,
and payment for the Optioned Shares thereby purchased has been made.
7. Restrictions on Exercise, Etc. If at any time the Company shall
-----------------------------
determine, in its sole discretion, that it is necessary or desirable to comply
with any legal requirements or the requirements of any stock exchange or other
regulatory authority or to obtain any approval or consent from any such stock
exchange or other regulatory authority as a condition of, or in connection with,
the exercise of the Option or the issue of the Optioned Shares upon the exercise
of the Option, then in any such event such
-2-
<PAGE>
exercise or issue shall not be effective unless such compliance shall have been
effected or such approval or consent shall have been obtained on conditions
satisfactory to the Company. In addition, the shares shall be subject to an
initial lock-up period of thirteen (13) months from September 7, 1995.
8. Disputes. Any controversy or claim arising out of or relating to
--------
this agreement, its validity or the breach thereof, shall be determined by
arbitration in New York, New York, before a single arbitrator in accordance with
the rules of the American Arbitration Association, and judgment upon the award
rendered may be entered in any court having jurisdiction.
9. Withholding. Upon the exercise of the option, the Optionee shall
-----------
make arrangements satisfactory to the Company regarding payment of any federal
or local taxes of any kind required by law to be withheld with respect to the
exercise of the option. In addition, the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind due to the
Optionee any federal or local taxes of any kind required by law to be withheld
with respect to the exercise of the Option.
10. Governing Law. This Agreement shall be construed, interpreted
-------------
and enforced in accordance with, and the respective rights and obligations of
the parties, shall be governed by, the laws of the State of Delaware, without
regard to principles of conflicts of law.
11. Notice. Any notice to be given to the Company shall be addressed
------
to the Secretary of the Company at its principal office, 4350 McKinley Street,
Omaha, Nebraska 68112, and any notice given to the Optionee shall be addressed
to the Optionee at 215 Park Avenue South, New York, New York 10003, or at such
other address as either party may hereafter designate in writing to the other.
-3-
<PAGE>
12. Binding Agreement. This Agreement shall be binding upon and
-----------------
enure to the benefit of the parties hereto, and their respective successors and
assigns.
EXECUTED this 2nd day of July, 1996, as of the 19th day of September,
1995.
JAFFONI & COLLINS, INCORPORATED,
By: /s/ Joseph N. Jaffoni
------------------------------
President
BALLANTYNE OF OMAHA, INC.,
By: /s/ Ronald H. Echtenkamp
------------------------------
President
-4-
<PAGE>
EXHIBIT 10.15
STOCK OPTION AGREEMENT
This Agreement made as of the 22nd day of December, 1995, between
BALLANTYNE OF OMAHA, INC., a Delaware corporation, having its principal office
at 4350 McKinley Street, Omaha, Nebraska 68112 (the "Company"), and GELLER &
FRIEND CAPITAL PARTNERS, INC. of 1875 Century Park East, Suite 1770, Los
Angeles, California 90067, (the "Optionee"), WITNESSETH:
WHEREAS, the Optionee has agreed to provide certain services to the
Company, pursuant to a letter of agreement dated December 22, 1995, and
WHEREAS, in consideration of the services to be rendered by Optionee,
the Company has agreed to grant Optionee an option to purchase up to 50,000
shares of common stock of the Company.
NOW, THEREFORE, in consideration of the mutual promises,
representations and agreements herein contained, and other good and valuable
consideration, it is agreed by and between the parties, as follows:
1. Grant of Option. The Company hereby grants to Optionee the right
---------------
to purchase, on the terms and conditions hereinafter set forth, all or any part
of an aggregate of 50,000 shares of common stock of the Company at a purchase
price of $7.25 per share.
2. Time of Exercise. All options granted to Optionee under this
----------------
Agreement shall immediately vest and become exercisable, but must be exercised
no later than 5:00 P.M. (Central Standard Time) on December 22, 2000, at which
time said options shall expire.
3. Method of Exercise. The aforesaid option, or any part thereof,
------------------
shall be exercised by giving a Notice of Exercise to the Secretary of the
Company specifying the number of shares to be purchased and accompanied by
payment of the aggregate option price for the number of shares purchased.
4. Registration Right. If, upon the exercise of any or all of the
------------------
options pursuant to the terms hereof, the Optionee
<PAGE>
advised the Company in writing of its desire to have the shares purchased upon
the exercise of the option registered under the Securities Act of 1993, as
amended, the Company shall, within thirty (30) days of receipt thereof, file a
registration statement with the Securities and Exchange Commission covering such
shares, and will use its best efforts to have the registration statement
promptly declared effective and maintained effective for a period of at least
ninety (90) days thereafter, subject to reasonable blackout periods.
Notwithstanding the foregoing, the Company shall not be required to file more
than two (2) such registration statements.
5. Capital Adjustments. If, at any time after the date hereof, (a)
-------------------
the common shares of the Company shall be consolidated, subdivided, converted,
exchanged, re-classified, or in any way substituted for, (b) the Company merges
or consolidates with any other corporation, or (c) the Company declares a stock
dividend or distribution, the Company will make appropriate adjustments to the
option with reference to the number of shares and the price thereof, to insure
the continuance of the Optionee's unexercised rights thereunder, and to prevent
a dilution or enlargement.
6. Liquidation or Dissolution. If the Company proposes to liquidate,
--------------------------
dissolve or wind-up its affairs, the Company shall give written notice thereof
to the Optionee, and permit the Optionee to exercise the unexercised portion of
the options to which the Optionee is entitled at such time, within the forty-
five (45) day period next following the giving of such notice, failing which all
rights of the Optionee with respect to the Option, or to exercise the same,
shall terminate and cease and have no further force or effect.
7. Rights of Optionee Before Exercise of Option. The Optionee shall
--------------------------------------------
not have any rights whatsoever as a shareholder in respect to the Optioned
Shares covered by the Option until the Option is exercised, in whole or in part,
and payment for the Optioned Shares thereby purchased has been made.
-2-
<PAGE>
8. Restrictions on Exercise, Etc. If at any time the Company shall
-----------------------------
determine, in its sole discretion, that it is necessary or desirable to comply
with any legal requirements or the requirements of any stock exchange or other
regulatory authority or to obtain any approval or consent from any such stock
exchange or other regulatory authority as a condition of, or in connection with,
the exercise of the Option or the issue of the Optioned Shares upon the exercise
of the Option, then in any such event such exercise or issue shall not be
effective unless such compliance shall have been effected or such approval or
consent shall have been obtained on conditions satisfactory to the Company.
9. Disputes. Any dispute or disagreement which shall arise under or
--------
as a result of, or in any way related to, the interpretation, construction or
application of this Agreement, including any adjustments required to be made
pursuant to Section 5, shall be determined by the Board of Directors of the
Company. Any such determination shall be final, binding and conclusive for all
purposes.
10. Withholding. Upon the exercise of the option, the Optionee shall
-----------
make arrangements satisfactory to the Company regarding payment of any federal
or local taxes of any kind required by law to be withheld with respect to the
exercise of the option. In addition, the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind due to the
Optionee any federal or local taxes of any kind required by law to be withheld
with respect to the exercise of the Option.
11. Governing Law. This Agreement shall be construed, interpreted
-------------
and enforced in accordance with, and the respective rights and obligations of
the parties, shall be governed by, the laws of the State of Delaware, without
regard to principles of conflicts of law.
12. Notice. Any notice to be given to the Company shall be addressed
------
to the Secretary of the Company at its principal office, 4350 McKinley Street,
Omaha, Nebraska 68112, and any notice
-3-
<PAGE>
given to the Optionee shall be addressed to the Optionee at 1875 Century Park
East, Suite 1770, Los Angeles, California 90067, or at such other address as
either party may hereafter designate in writing to the other.
13. Binding Agreement. This Agreement shall be binding upon and
-----------------
enure to the benefit of the parties hereto, and their respective successors and
assigns.
EXECUTED this 27th day of June, 1996, as of the 22nd day of December,
1995.
BALLANTYNE OF OMAHA, INC.,
By: /s/ Ronald H. Echtenkamp
------------------------------------
President
GELLER & FRIEND CAPITAL PARTNERS, INC.
By: /s/ Marshall Geller
------------------------------------
President
-4-
<PAGE>
EXHIBIT 10.16
EXTENSION AGREEMENT
-------------------
WHEREAS, Ballantyne of Omaha, Inc. ("Ballantyne"), an Omaha corporation
with offices at 4350 McKinley Road, Omaha, Nebraska 68112, and John Wilmers, an
individual, then residing at 15505 Howard Circle, Omaha, Nebraska 68154 (now
residing at 17116 S Street, Omaha, Nebraska 68135) ("Employee"), entered into an
Agreement pursuant to which Ballantyne employed Wilmers for a term of five years
commencing on October 15, 1991, and
WHEREAS, Ballantyne and Wilmers desire to extend such contract for an
additional one year period,
NOW, THEREFORE, it is agreed by and between the parties as follows:
1. The term of said Employment Agreement is hereby extended for an
additional one year period from and after October 15, 1996.
2. All other terms, provisions and conditions of said Employment
Agreement shall remain in full force and effect.
Dated this 8th day of July, 1996.
BALLANTYNE OF OMAHA, INC.
By: /s/ Ronald H. Echtenkamp
------------------------------
President
/s/ John Wilmers
------------------------------
John Wilmers
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INTERIM
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 211,030
<SECURITIES> 0
<RECEIVABLES> 7,139,825
<ALLOWANCES> 108,682
<INVENTORY> 10,112,844
<CURRENT-ASSETS> 18,102,388
<PP&E> 3,286,381
<DEPRECIATION> 2,390,877
<TOTAL-ASSETS> 22,454,919
<CURRENT-LIABILITIES> 7,199,668
<BONDS> 7,846,282
0
0
<COMMON> 44,000
<OTHER-SE> 7,022,497
<TOTAL-LIABILITY-AND-EQUITY> 22,454,919
<SALES> 23,857,860
<TOTAL-REVENUES> 23,857,860
<CGS> 17,075,185
<TOTAL-COSTS> 17,075,185
<OTHER-EXPENSES> 3,138,592
<LOSS-PROVISION> 14,010
<INTEREST-EXPENSE> 381,771
<INCOME-PRETAX> 3,248,302
<INCOME-TAX> 1,281,020
<INCOME-CONTINUING> 1,967,282
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,967,282
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
