<PAGE>
As filed with the Securities and Exchange Commission on May 16, 1996
Registration No. 33303849
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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 Identification No.)
incorporation or organization)
4350 MCKINLEY STREET, OMAHA, NE 68112
---------------------------------------------------
(Address of Principal Executive Offices) (ZIP Code)
1995 STOCK OPTION PLAN (1)
-------------------------------------------
(Full title of the plan or written contract)
STEPHEN E. GEHRING
CLINE, WILLIAMS, WRIGHT, JOHNSON & OLDFATHER
1125 SOUTH 103RD STREET, SUITE 720
OMAHA, NE 68124
---------------------------------------
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (402) 397-1700
--------------------
(1) Ballantyne of Omaha, Inc. (the "Company") originally filed an S-8 to
register 440,000 shares of Common Stock (File No. 33303849). Subsequent to that
filing the Company effected a 3 for 2 stock split which increased the shares
under the Stock Option Plan to 660,000. The Company is now registering an
additional 400,000 shares.
<PAGE>
ITEM 8. EXHIBITS
- --------------------------------------------------------------------------------
EXHIBIT
NUMBER EXHIBIT
- --------------------------------------------------------------------------------
5. Opinion of Counsel
- --------------------------------------------------------------------------------
23.1 Independent Auditors Consent
- --------------------------------------------------------------------------------
23.2 Consent of Counsel (included in Exhibit 5)
- --------------------------------------------------------------------------------
99.1 Amendment to 1995 Stock Option Plan
- --------------------------------------------------------------------------------
99.2 Reoffer Prospectus for 1995 Stock Option Plan
- --------------------------------------------------------------------------------
99.3 Reoffer Prospectus for 1995 Outside Directors Stock Option Plan
- --------------------------------------------------------------------------------
The contents of the S-8 Registration Statement (File No. 33303849) are
hereby incorporated by reference.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Omaha, State of Nebraska on October 3, 1997.
BALLANTYNE OF OMAHA, INC.
BY: /s/ Brad French, Secretary, Treasurer, Chief
Financial Officer and Principal Accounting
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Arnold S. Tenny Chairman and Director 10/3/97
- ------------------------------
/s/ Ronald H. Echtenkamp Vice Chairman and Director 10/3/97
- ------------------------------
/s/ John P. Wilmers President, Chief Executive
- ------------------------------ Officer and Director 10/3/97
/s/ Jeffrey D. Chelin Director 10/3/97
- ------------------------------
Director 10/__/97
- ------------------------------
Director 10/__/97
- ------------------------------
Director 10/__/97
- ------------------------------
<PAGE>
[Letterhead]
October 3, 1997
Mr. John P. Wilmers
President and Chief Executive Officer
Ballantyne of Omaha, Inc.
4350 McKinley Street
Omaha, NE. 68112
Re: Registration of 400,000 Additional Shares on Form S-8
Dear Mr. Wilmers:
We have acted as legal counsel for Ballantyne of Omaha, Inc., a Delaware
corporation, (the "Company") in connection with the Company's preparation of the
above-referenced registration of additional shares on Form S-8 (the "Form S-8")
being filed with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended, (the "Act") and the prospectus which is
not filed, but is included as a part of the Form S-8 (the "Prospectus"). The
registration of additional shares on the Form S-8 and the Prospectus relate to
the Company's 1995 Stock Option Plan (the "Plan"). All of the shares are to be
offered and sold by the Company pursuant to the Plan and in the manner set forth
in the Plan, Form S-8 and Prospectus.
In connection herewith, we have examined: (i) the Form S-8 and the
Prospectus; (ii) the Certificate of Incorporation, as amended, and the Bylaws,
as amended, of the Company; (iii) the corporate minutes and proceedings of the
Company applicable to filing of the Form S-8; and (iv) such other proceedings,
documents and records as we deemed necessary or appropriate for the purposes of
making this opinion. In making such examinations, we have assumed the
genuineness of all signatures on all documents and conformed originals to all
copies submitted to us as conformed or photocopies. In addition to such
examination, we have ascertained or verified such additional facts as we deemed
necessary or appropriate for purposes of this opinion. However, as to various
questions of fact material to our opinion, we have relied upon
EXHIBIT 5
<PAGE>
representations, statements or certificates of officers, directors, or
representatives of the Company or others.
Based upon the foregoing, we are of the opinion that: (i) the Company has
been legally incorporated and is validly existing under the laws of the state of
Delaware; and (ii) the shares issued pursuant to the Plan, upon issuance and
payment therefor, as contemplated by the Plan, Form S-8 and the Prospectus, will
be validly issued, fully paid and non-assessable common stock of the Company.
We hereby consent to the filing of the opinion as an exhibit to the Form
S-8 and to any references to our firm in the Prospectus. In giving this
consent, we do not admit that we come within the category of persons whose
consent is required under Section 7 of the Act or the Rules and Regulations of
the Commission promulgated thereunder.
Very truly yours,
Cline, Williams, Wright, Johnson &
Oldfather
<PAGE>
KPMG Peat Marwick LLP
Two Central Park Plaza Telephone 402 348 1450 Telefax 402 348 0152
Suite 1501
Omaha, NE. 68102
233 South 13th Street, Telephone 402 476 1216 Telefax 402 476 1944
Suite 1600
Lincoln, NE. 68508-2041
ACCOUNTANTS' CONSENT
The Board of Directors
Ballantyne of Omaha, Inc.
We consent to incorporation by reference in the registration statement (No. 333-
03849) on Form S-8 of Ballantyne of Omaha, Inc. of our report, dated January 10,
1997, relating to the consolidated balance sheets of Ballantyne of Omaha and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, retained earnings and cash flows for each of the years in
the three-year period ended December 31, 1996, and related schedule, which
report appears in the December 31, 1996 annual report on Form 10-K of Ballantyne
of Omaha, Inc.
KPMG Peat Marwick LLP
Omaha, Nebraska
October 3, 1997
EXHIBIT 23.1
<PAGE>
AMENDMENT TO THE
BALLANTYNE OF OMAHA, INC.
1995
STOCK OPTION PLAN
EFFECTIVE APRIL 2, 1997
This Amendment is hereby made as of April 2, 1997 to the Ballantyne of
Omaha, Inc. 1995 Stock Option Plan (the "Plan").
1. AMENDMENT TO SECTION 6 OF THE PLAN. The second paragraph of Section
6 of the Plan is hereby amended in its entirety as follows:
The maximum aggregate number of Shares that may be issued under the Plan is
1,060,000 Shares; PROVIDED, HOWEVER, that no more than 75,000 Shares shall
be awarded to any participant in any calendar year. The limitations on the
number of Shares which may be subject to Options under the Plan shall be
subject to adjustment as provided in Section 10(b).
2. AUTHORITY FOR AMENDMENT. This Amendment to the Plan is effected
pursuant to Section 13(a) of the Plan.
3. APPROVAL OF STOCKHOLDERS. This Amendment to the Plan shall only
become operative and effective upon approval of the Amendment by the holders
of a majority of the outstanding Common Stock of the Company at the 1997
Annual Meeting of Stockholders.
4. OTHER PROVISIONS UNCHANGED. All other provisions of the Plan remain
in full force and effect and shall not be changed, altered or amended by this
Amendment.
5. EXECUTION. To record the adoption and effectiveness of this Amendment
to read as set forth herein, the Company has caused this Amendment to be signed
by its President and attested by its Secretary on June ____, 1997.
EXHIBIT 99.1
<PAGE>
REOFFER PROSPECTUS
BALLANTYNE OF OMAHA, INC.
This Reoffer Prospectus relates to the reoffering or resale by certain
"affiliates" as set forth herein on Page 7 (the "Selling Stockholders") of
277,500 shares of common stock of Ballantyne of Omaha, Inc. (the "Company"),
par value $0.01 (the "Common Stock"). Each Selling Stockholder holds stock
options ("Stock Options") issued pursuant to the Company's 1995 Stock Option
Plan. The shares issuable pursuant to the 1995 Stock Option Plan were registered
on Form S-8 (File No. 33303849). The exercise price of the Stock Options and the
number of securities issuable upon exercise of the Stock Options have been
adjusted and are subject to further adjustment as a result of the application of
certain anti-dilution provisions contained therein.
The Common Stock of the Company is listed on the American Stock Exchange
("AMEX") under the symbol "BTN". On September 15, 1997, the last reported sale
price of the Common Stock as quoted on AMEX was $19.00 per share.
The Company will not receive any of the proceeds from the resale of the
shares of Common Stock being sold by the Selling Stockholders. See "Use of
Proceeds".
All expenses relating to the filing of this post-effective amendment and
the registration of securities covered by this Reoffer Prospectus, estimated to
be approximately $6,150.00 are to be borne by the Company.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS", BEGINNING ON PAGE 3 OF THIS REOFFER PROSPECTUS.
-------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS REOFFER PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------
The date of this Reoffer Prospectus is October 3, 1997.
EXHIBIT 99.2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at Room 1024 of the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Commission's Regional Offices in New York (Room 1228, 75 Park Place, New York,
New York 10007), and Chicago (Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60621-2511), and copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other materials that are filed through the Commission's Electronic Data
Gathering Analysis and Retrieval (EDGAR) System. This Web site can be accessed
at http:\\www.sec.gov. This Reoffer Prospectus does not contain all information
set forth in the Registration Statement of which this Reoffer Prospectus forms a
part and exhibits thereto which the Company has filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act") and to which
reference is hereby made.
DOCUMENTS INCORPORATED BY REFERENCE
The Company has provided, without charge, to each recordholder a copy of
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996. The Company will also provide, without charge, to each person to whom a
copy of this Reoffer Prospectus is delivered, upon the written or oral request
of such person, a copy of any or all of the other documents incorporated by
reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that the Reoffer
Prospectus incorporates). Requests should be directed to:
Ballantyne of Omaha, Inc.
4350 McKinley Street
Omaha, Nebraska 68112
Attention: Brad French, Chief Financial Officer
Phone: (402) 453-4444
The following documents filed with the Commission by the Company are hereby
incorporated by reference into this Reoffer Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1997.
(3) Certificate of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 and 3.3 to the Registration Statement on Form S-1 (File
No. 33-93244) and recent amendment incorporated by reference to
Exhibit 3.1.1 to the 10-Q filed for the period ended June 30, 1997).
All documents filed with the Commission by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent on the date of this
Reoffer Prospectus and
-2-
<PAGE>
prior to the termination of the offering registered hereby shall be deemed to be
incorporated by reference into this Reoffer Prospectus and to be a part hereof
from the date of the filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Reoffer Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Reoffer Prospectus.
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS REOFFER PROSPECTUS, THE
FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN
INVESTMENT IN THE COMPANY BEFORE PURCHASING THE SHARES OF COMMON STOCK OFFERED
HEREBY.
DEPENDENCE ON MOTION PICTURE SCREEN GROWTH
Because the Company's commercial motion picture projectors have an
estimated useful life of approximately 20 years, the Company's net sales and
profitability are dependent primarily upon growth in the number of motion
picture screens and the renovation and replacement of commercial motion picture
projection equipment in existing theatres. For 1994, 1995 and 1996,
approximately 80%, 87% and 91%, respectively, of the Company's total net sales
were derived from sales of its commercial motion picture projection equipment.
Although industry analysts foresee continued growth in the number of motion
picture screens as a result of the trend toward multiplexing and megaplexing and
the introduction of new forms of motion picture-based entertainment, there can
be no assurance that this expectation will prove accurate. In addition, growth
in the number of new motion picture screens may be adversely affected by the
availability of home entertainment systems and recent trends toward industry
consolidation, which may also have an adverse effect on the Company's customer
base. A lack of motion picture screen growth would have a material adverse
effect on the Company's business, financial condition and results of operations.
UNCERTAINTIES REGARDING INTERNATIONAL SALES: FOREIGN CURRENCY FLUCTUATIONS
For 1994, 1995 and 1996, the Company generated net sales to foreign
customers of $6.4 million, $11.3 million and $14.1 million, respectively, which
accounted for approximately 22%, 29% and 27% of the Company's total net sales
for each of such years, respectively. These amounts include net sales of
Westrex Company, Asia ("Westrex") which was acquired in December 1994, but
exclude sales to domestic export dealers of both theatre and restaurant products
and domestic theatre chains of products which are ultimately exported. The
Company is seeking to expand its share of international sales, which it expects
will continue to account for a substantial portion of its revenues.
International sales may be subject to political and economic risks, including
political instability, currency controls, fluctuating exchange rates with
respect to sales not denominated in U.S. dollars and changes in import/export
regulations, tariffs and freight rates. To date, all of the Company's
international sales have been denominated in U.S. dollars, exclusive of Westrex
sales ($2.8 million in 1996) which are denominated in Hong Kong dollars. A
weakening in the value of foreign currencies relative to the U.S. dollar could
have an adverse impact on the Company by increasing the effective price of the
Company's products in its international markets. In addition, there can be no
assurance that the Company's international customers will continue to accept
orders denominated in U.S. dollars. To the extent that orders are denominated
in foreign currencies, the Company's reported sales and earnings are more
directly subject to foreign exchange fluctuations. There can be no assurance
that these factors will not adversely affect the Company's international sales
in the future.
-3-
<PAGE>
COMPETITION
The market for commercial motion picture projection equipment is highly
competitive. In the international market, where the Company has a smaller
market share than in the domestic market, the Company believes that its largest
competitor has significantly greater market share than the Company. In addition
to existing commercial motion picture projection equipment manufacturers, the
Company may also encounter competition from new competitors, as well as from new
types of equipment. No assurance can be given that the commercial motion
picture projection equipment manufactured by the Company will not become
obsolete as technology advances. In addition, the markets for the Company's
long-range follow spotlight and other illumination and restaurant products are
highly competitive. Competitors of the Company may also have significantly
greater financial resources than the Company which may impede the ability of the
Company to compete effectively.
DEPENDENCE ON KEY MANAGEMENT
The Company's success depends, in substantial part, on the efforts and
abilities of John P. Wilmers, the Company's President and Chief Executive
Officer, and Ray F. Boegner, the Company's Senior Vice President. In January
1997, Mr. Wilmers entered into a new employment contract with the Company which
provides for an initial term of five years. In November 1996, Mr. Boegner
entered into a new employment contract with the Company which provides for an
initial term of five years. Failure to retain the services of Messrs. Wilmers
and Boegner could have a material adverse effect on the Company. The Company
does not maintain key man life insurance on the life of Mr. Wilmers or Mr.
Boegner.
LIMITED SOURCES FOR CERTAIN COMPONENTS
The Company does not manufacture certain of its components, including film
platters, lenses and intermittent movement components for its commercial motion
picture projection equipment and the aluminum kettles for its pressure fryers.
Each such component is sourced by the Company from a single contract
manufacturer. Although to date the Company has not experienced any significant
difficulty in obtaining these components, there can be no assurance that
shortages will not arise in the future. The loss of one or more of the current
suppliers of any such components would have an adverse effect on the Company's
business until alternative supplies could be secured.
ENVIRONMENTAL MATTERS
The Company's operations involve the handling and use of substances that
are subject to Federal, state and local environmental laws and regulations that
impose limitations on the discharge of pollutants into the soil, air and water
and establish standards for their discharge and disposal. Although the Company
believes it is in material compliance with these laws, the violation of these
laws could have a material adverse effect on the Company. There can be no
assurance that additional environmental or remediation obligations will not be
incurred in the future, that existing or future environmental liabilities could
not have a material adverse effect on the Company, or that currently unknown
matters, new laws and regulations or stricter interpretations of existing laws
or regulations will not have a material adverse effect on the Company's
business.
SIGNIFICANT STOCKHOLDER
ARC, through its ownership of Canrad Delaware, is the beneficial owner of
22.8% of the outstanding shares of Common Stock. As a result of the level of
its beneficial ownership of the Common Stock, ARC is in a position to exercise
substantial influence over all corporate matters requiring stockholder approval,
including the election of directors and merger and consolidation
-4-
<PAGE>
proposals. In addition, two members of the Board of Directors (the "Board") of
the Company are directors and employees of ARC or its affiliates (other than the
Company), and one of such directors has substantial shareholdings in ARC.
SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON MARKET PRICE
Future sales of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the market price of the Common
Stock of the Company's ability to raise additional capital through sales of its
equity securities. The Company has : (i) 2,056,411 shares of Common Stock
outstanding owned by Canrad Delaware, (ii) 6,961,908 shares of Common Stock
outstanding owned by others, (iii) 920,950 shares of Common Stock reserved for
issuance under the Company's stock option plans, of which 404,950 shares are
issuable pursuant to currently outstanding options thereunder, (iv) 264,150
shares of Common Stock issuable pursuant to an outstanding warrant and other
outstanding options to purchase Common Stock and (v) 140,305 shares of Common
Stock reserved for issuance pursuant to the Company's employee stock purchase
plan. Of the shares outstanding or subject to outstanding options or the
outstanding warrant, 6,973,294 are immediately eligible for resale in the
public market without restriction under the Securities Act and substantially all
of the remaining shares will be eligible for resale in the public market subject
to compliance with the applicable provisions of Rule 144 under the Securities
Act. The Company is unable to predict the effect that sales made under Rule
144, or otherwise, may have on the then prevailing market price of the Common
Stock.
All of the shares of Common Stock owned by Canrad Delaware, 89,564 shares
owned by certain officers and directors of the Company, 304,000 shares issuable
to certain officers and directors of the Company pursuant to the Company's stock
option plans, and 264,150 shares issuable pursuant to an outstanding warrant and
other options to purchase Common Stock are subject to "lock-up" agreements under
which the holders thereof have agreed not to sell or otherwise dispose of such
securities without the prior written consent of Cowen & Company, on behalf of
the Underwriters, until September 26, 1997.
All of the shares of Common Stock owned by Canrad Delaware, as well as
the stock of certain other subsidiaries of ARC (including Cabletel
Communications Corp. ("Cabletel")), have been pledged to BNY Financial
Corporation and BNY Financial Corporation--Canada (collectively, "BNY") to
secure indebtedness incurred by certain subsidiaries of ARC, including Canrad
Delaware and ARC Ice, under two revolving credit facilities (collectively,
the "BNY Credit Facility"). The Company has been advised by ARC, Canrad
Delaware and ARC Ice that, as of September 15, 1997, the principal amount of
indebtedness outstanding under the BNY Credit Facility was approximately
$7.53 million. In the event of a default under the BNY Credit Facility, BNY
has certain rights as a secured creditor under the terms of the BNY Credit
Facility to vote and to sell or otherwise dispose of all or a portion of the
pledged shares, including the Common Stock pledged by Canrad Delaware.
Although such shares of Common Stock are subject to "lock-up" agreements,
Cowen & Company has agreed to consent to sales hereof by BNY in the event of
default under the BYN Credit Facility.
UNCERTAINTY OF FUTURE ACQUISITIONS
Although the Company does not currently have any specific acquisition under
consideration, the Company may make acquisitions in the future. The significant
uncertainties which accompany any acquisition and its integration into the
Company's existing operations could have an adverse effect on the Company.
There can be no assurance that the Company will be able to locate appropriate
acquisition candidates, that any identified candidates will be acquired or that
acquired operations will be effectively integrated or prove profitable. The
Company's revolving credit facility (the "Norwest Facility") with Norwest Bank
Nebraska N.A. ("Norwest Bank") currently prohibits the Company from making
acquisitions without the consent of Norwest Bank.
-5-
<PAGE>
CERTAIN ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation provides for, among other
things, the issuance of 1,000,000 shares of preferred stock, par value $0.01 per
share ("Preferred Stock"). The Board is authorized, without stockholder
approval, to cause the Company to issue such preferred stock in one or more
series and to fix the voting powers and the designations, preferences and
relative, participating, optional or other rights and restrictions thereof.
Accordingly, the Company may issue a series of preferred stock in the future
that will have preference over the Common Stock with respect to the payment of
dividends and upon the Company's liquidation, dissolution or winding up or have
voting or conversion rights that could adversely affect the voting power and
ownership percentages of the holders of Common Stock. The Company's Certificate
of Incorporation also provides for the affirmative vote of at least 66 2/3% of
all outstanding shares of capital stock entitled to vote generally in the
election of directors, voting as a single class, to change certain provisions
of such Certificate of Incorporation and the Company's By-Laws, and to change
the authority of the Board, without further action by stockholders, to cause
the Company to issue shares of preferred stock. The Company's Certificate of
Incorporation further provides for the division of the Board into three classes.
One class of directors is elected at each annual meeting of stockholders for
three-year terms. The Company's By-Laws contain certain advance notice
requirements relating to stockholder proposals and stockholder nomination of
directors. These provisions may have the effect of making more difficult or
discouraging transactions that could give stockholders of the Company the
opportunity to realize a premium over the then prevailing market price for their
shares of Common Stock.
POSSIBLE VOLATILITY OF STOCK PRICE; LIMITED TRADING VOLUME
The trading price of the Common Stock may be highly volatile and could be
subject to significant fluctuations in response to variations in the Company's
quarterly operating results, general conditions in the industries in which the
Company operates and other factors. In addition, the stock market is subject to
price and volume fluctuations affecting the market price for the stock of many
companies generally, which fluctuations often are unrelated to operating
performance. Although the Common Stock is listed on the AMEX, daily trading
volume of the Common Stock has generally been limited and accordingly the
trading price is more vulnerable to significant fluctuations.
USE OF PROCEEDS
The Company will receive no proceeds from the reoffer or resale of Common
Stock.
DIVIDEND POLICY
The Company intends to retain its earnings to assist in financing its
business and does not anticipate paying any dividends on its Common Stock in the
foreseeable future. The Norwest Facility contains certain prohibitions on the
payment of cash dividends. In addition, the underwriting agreement relating to
the Company's initial public offering restricts the payment of cash dividends
until September 1997. The declaration and payment of dividends by the Company
are also subject to the discretion of the Board. Any determination by the Board
as to the payment of dividends in the future will depend upon, among other
things, business conditions and the Company's financial condition and capital
requirements, as well as any other factors deemed relevant by the Board.
-6-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock of
the Company for the Selling Stockholders as of September 15 , 1997, (assuming
the Options had been exercised in full) and as adjusted to reflect the sale of
shares offered hereby by the Selling Stockholders (assuming 100% of the shares
offered hereby are sold).
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Name of Amount of Beneficial Number Beneficial Ownership of Common
Beneficial Ownership of Common of Shares Stock After Offering(1)
Owner Stock Prior to to be
Offering (1) Offered
---------------------------- --------------------------------
Number of Percentage of Number of Percentage of
Shares Outstanding Shares Outstanding
Shares Shares
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Arnold S. Tenny 100,975 (2) 1.1 % 52,000 48,975 *
- --------------------------------------------------------------------------------------------------------------
John P. Wilmers 105,989 (3) 1.2 % 100,000 5,989 *
- --------------------------------------------------------------------------------------------------------------
Ray F. Boegner 62,989 (4) * 50,000 12,989 *
- --------------------------------------------------------------------------------------------------------------
Brad J. French 43,971 (5) * 39,000 4,971 *
- --------------------------------------------------------------------------------------------------------------
Jeffrey Chelin 12,750 (6) * 12,750 0 *
- --------------------------------------------------------------------------------------------------------------
Ronald Echtenkamp 46,673(7) * 23,750 22,923 *
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Based upon 9,018,319 shares of Common Stock outstanding as of
September 15, 1997. A person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the
date of this Reoffer Prospectus upon exercise of options or warrants.
Each beneficial owner's percentage ownership is determined by assuming
that options or warrants that are held by such person and that are
exercisable within 60 days from the date of this Reoffer Prospectus
have been exercised. However, the shares of Common Stock so issuable
upon such exercise by any such person are not included in calculating
the percentage of Common Stock beneficially owned by any other
stockholder.
(2) Consists of 30,000 shares of Common Stock held indirectly by Mr.
Tenney through Arnmart Investments Limited, a corporation controlled
by Mr. Tenney and members of his family, 16,500 shares of Common Stock
owned directly by Mr. Tenney, 2,475 shares of Common Stock owned
indirectly by Mr. Tenney through his wife and 52,000 shares of Common
Stock underlying presently exercisable options. Does not include
2,056,411 shares of Common Stock owned beneficially by ARC.
(3) Consists of 5,989 shares of Common Stock owned directly by Mr. Wilmers
and 100,000 shares of Common Stock underlying presently exercisable
options.
(4) Consists of 12,989 shares of Common Stock owned directly by Mr.
Boegner and 50,000 shares of Common Stock underlying presently
exercisable options.
-7-
<PAGE>
(5) Consists of 4,971 shares of Common Stock owned directly by Mr. French
and 39,000 shares of Common Stock underlying presently exercisable
options.
(6) Consists of 12,750 shares of Common Stock underlying presently
exercisable options.
(7) Consists of 22,923 shares of Common Stock owned directly by Mr.
Echtenkamp and 23,750 shares of Common Stock received upon exercise of
certain stock options.
PLAN OF DISTRIBUTION
The distribution of shares of Common Stock by the Selling Stockholders may
be effected in one or more transactions that may take place in ordinary broker
transactions, privately negotiated transactions or through sales to one or more
dealers for resale of such securities as principals, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Stockholders in connection with
such sales of securities.
In order to comply with certain state securities laws, if applicable,
the securities offered hereby will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and complied with.
DESCRIPTION OF CAPITAL STOCK
The total number of shares the Company is authorized to issue is
26,000,000, consisting of 25,000,000 shares of Common Stock, par value $.01 per
share, and 1,000,000 shares of Preferred Stock, par value $.01 per share. As of
September 15, 1997, there were 9,018,319 shares of Common Stock outstanding and
no shares of Preferred Stock outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by the stockholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of a majority of the shares of Common Stock voting for the
election of directors can elect all of the directors then up for election. The
holders of Common Stock are entitled to receive dividends, subject to the senior
rights of preferred stockholders, when, as and if declared by the Board out of
funds legally available therefor. In the event of liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining which are available for distribution to them
after payment of liabilities and after provision has been made for each class of
stock having preference over the Common Stock. Holders of shares of Common
Stock, as such, have no conversion, preemptive or other subscription rights, and
there are no redemption provisions applicable to the Common Stock. All of the
outstanding shares of Common Stock are, and, upon completion of the offering,
all shares of Common Stock offered hereby will be, duly authorized, fully paid
and non-assessable.
The Delaware General Corporation Law provides that stockholders may take
action without the holding of a meeting by written consent or consents signed by
the holders of a majority of the outstanding shares of the capital stock of the
Company entitled to vote thereon. Prompt notice of the taking of any action
without a meeting by less than unanimous consent of the stockholders will be
given to those stockholders who do not consent in writing to the action. The
purposes of this provision are to facilitate action by stockholders and to
reduce the corporate expense associated with annual and special meetings of
stockholders. Pursuant to the rules and regulations of the Commission, if
stockholder action is taken by written consent, the Company
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<PAGE>
will be required to send each stockholder entitled to vote on the matter voted
on, but whose consent was not solicited, an information statement containing
information substantially similar to that which would have been contained in a
proxy statement.
PREFERRED STOCK
The Board is authorized, without further approval or action by the
stockholders, to issue shares of Preferred Stock in one or more series and to
determine the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and number of shares
constituting any series of Preferred Stock or the designation of such series.
The rights of the holders of Common Stock will generally be subject to the
prior rights of the holders of any outstanding shares of Preferred Stock with
respect to dividends, liquidation preferences and other matters. Among other
things, the Preferred Stock could be issued by the Company to raise capital or
finance acquisitions. The Preferred Stock could have certain anti-takeover
effects under certain circumstances. The issuance of shares of Preferred Stock
could enable the Board to render more difficult or discourage an attempt to
obtain control of the Company by means of a merger, tender offer or other
business combination transaction directed at the Company by, among other things,
placing shares of Preferred Stock with investors who might align themselves with
the Board, issuing new shares to dilute stock ownership of a person or entity
seeking control of the Company or creating a class or series of Preferred Stock
with class voting rights.
The Company has no current plans to issue any shares of its Preferred
Stock.
WARRANT AND OPTIONS TO PURCHASE COMMON STOCK
As partial consideration for providing certain financial assistance in
connection with the Company's acquisition of the Cinema Products Division of
ORC, on September 12, 1995, the Company issued to Merita Bank Ltd. a warrant
(the "Merita Warrant") to purchase up to 323,400 shares of Common Stock at a per
share exercise price equal to $3.94 of which 108,000 shares has been purchased.
The Merita Warrant first became exercisable on October 12, 1996 and expires on
September 12, 2000. The Company has granted Geller & Friend an option, expiring
on December 22, 2000, to purchase 82,500 shares of Common Stock at an exercise
price of $4.39 per share as consideration for strategic financial services
provided to the Company by Geller & Friend. At September 15, 1997, the option
had been exercised to the extent of 75,000 shares of Common Stock. The Company
has granted to Jaffoni & Collins Incorporated an option to purchase 41,250
shares of Common Stock at an exercise price of $4.24 per share as consideration
for investor relations and financial relations services provided to the Company.
The option is currently exercisable and terminates on October 7, 1999. A
registration statement filed under the Securities Act registering the resale of
all of the shares of Common Stock underlying the Merita Warrant and each of the
aforesaid options was declared effective on March 6, 1997.
DELAWARE ANTI-TAKEOVER LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. Section 203 provides, with certain exceptions, that a
Delaware corporation may not engage in certain business combinations with a
person or affiliate or associate of such person who is an "interested
stockholder" for a period of three years from the date such person became an
interested stockholder unless: (i) the transaction resulting in the acquiring
person's becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquires 85% or more
of the outstanding voting stock of the corporation in the same transaction which
makes it an interested stockholder (excluding shares owned by directors who
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<PAGE>
are also officers, and excluding certain employee stock option plans); and (iii)
on or after the date the person becomes an interested stockholder, the business
combination is approved by the corporation's board of directors and by the
holders of at least 66 2/3% of the corporation's outstanding voting stock at an
annual or special meeting, excluding shares owned by the interested stockholder.
Except as otherwise specified in Section 203, an "interested stockholder" is
defined as (a) any person that is the owner of 15% or more of the outstanding
voting stock of the corporation, (b) any person that is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three year period
immediately prior to the date on which it is sought to be determined whether
such person is an interested stockholder, or (c) the affiliates and associates
of any such person. By restricting the ability of the Company to engage in
business combinations with an interested person, the application of Section 203
to the Company may provide a barrier to hostile or unwanted takeovers. Under
Delaware law, the Company could have opted out of Section 203 but elected to be
subject to its provision.
CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS
CLASSIFIED BOARD OF DIRECTORS. The Company's Certificate of
Incorporation and By-Laws provide that the Board shall be divided into three
classes of directors serving staggered terms. One class of directors will be
elected at each annual meeting of stockholders for a three-year term. Thus,
at least two annual meetings of stockholders, instead of one, generally will
be required to change the majority of the Board. Directors can be removed
from office only for cause and only by the affirmative vote of at least
66 2/3% of the then outstanding shares of capital stock entitled to vote
generally in the election of directors, voting as a single class. Vacancies
on the Board may be filled only by the remaining directors and not the
stockholders. The foregoing provisions may have the effect of making it more
difficult to acquire control of the Company by means of a hostile tender
offer, open market purchases, a proxy contest or otherwise.
REQUIREMENT FOR ADVANCE NOTIFICATION OF STOCKHOLDER NOMINATION AND
PROPOSALS. The Company's By-Laws require 60 to 90 days' notice to the
Company with regard to stockholder proposals and the nomination, other than
by or at the direction of the board or a committee thereof, of candidates for
election as directors. Such notice must provide specified information,
including information regarding the ownership of Common Stock by the person
giving the notice, information regarding the proposal or the nominees and
information regarding the interest of the proponent in the proposal or the
nominations.
SPECIAL MEETINGS OF STOCKHOLDERS. The Company's Certificate of
Incorporation and By-Laws provide that special meetings of stockholders of the
Company may only be called by the Chairman of the Board, the President or a
majority of the then authorized number of directors. This provision precludes
stockholders from calling a special meeting and taking actions opposed by the
Board.
LIMITATION OF DIRECTOR LIABILITY. The Company's Certificate of
Incorporation limits the liability of directors to the Company or its
stockholders to the fullest extent permitted by Delaware law. Specifically,
under current Delaware law, a director will not be personally liable for
monetary damages for breach of the director's fiduciary duty or care as a
director, except liability (i) for a breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions by a director not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law) or
(iv) for any transaction from which the director derived an improper personal
benefit. The inclusion of this provision in the Company's Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care.
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<PAGE>
SUPERMAJORITY PROVISIONS. The Company's Certificate of Incorporation
provides that the vote of the Board or the affirmative vote of at least
66 2/3% of the then outstanding shares of capital stock entitled to vote
generally in the election of directors, voting as a single class, is required
to amend, repeal or alter any of the Company's By-Laws or the foregoing
provisions contained in the Company's Certificate of Incorporation.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, LLC whose address is 85 Challenger Road, Overpeck Center,
Ridgefield Park, NJ 07660.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Cline, Williams, Wright, Johnson and Oldfather, Omaha,
Nebraska.
-11-
<PAGE>
REOFFER PROSPECTUS
BALLANTYNE OF OMAHA, INC.
This Reoffer Prospectus relates to the reoffering or resale by certain
"affilliates" as set forth herein on Page 7 (the "Selling Stockholders") of
50,250 shares of common stock of Ballantyne of Omaha, Inc. (the "Company"), par
value $0.01 (the "Common Stock"). Each Selling Stockholder holds stock options
("Stock Options") issued pursuant to the Company's 1995 Outside Directors Stock
Option Plan. The shares issuable pursuant to the 1995 Outside Directors Stock
Option Plan were registered on Form S-8 (File No. 33303849). The exercise price
of the Stock Options and the number of securities issuable upon exercise of the
Stock Options have been adjusted and are subject to further adjustment as a
result of the application of certain anti-dilution provisions contained therein.
The Common Stock of the Company is listed on the American Stock Exchange
("AMEX") under the symbol "BTN". On September 15, 1997, the last reported sale
price of the Common Stock as quoted on AMEX was $19.00 per share.
The Company will not receive any of the proceeds from the resale of the
shares of Common Stock being sold by the Selling Stockholders. See "Use of
Proceeds".
All expenses relating to the filing of this post-effective amendment and
the registration of securities covered by this Reoffer Prospectus, estimated to
be approximately $6,150.00 are to be borne by the Company.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. SEE ARISK FACTORS", BEGINNING ON PAGE 3 OF THIS REOFFER PROSPECTUS.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS REOFFER PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------------
The date of this Reoffer Prospectus is October 3, 1997.
EXHIBIT 99.3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at Room 1024 of the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Commission's Regional Offices in New York (Room 1228, 75 Park Place, New York,
New York 10007), and Chicago (Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60621-2511), and copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other materials that are filed through the Commission's Electronic Data
Gathering Analysis and Retrieval (EDGAR) System. This Web site can be accessed
at http:\\www.sec.gov. This Reoffer Prospectus does not contain all information
set forth in the Registration Statement of which this Reoffer Prospectus forms a
part and exhibits thereto which the Company has filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act") and to which
reference is hereby made.
DOCUMENTS INCORPORATED BY REFERENCE
The Company has provided, without charge, to each recordholder a copy of
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996. The Company will also provide, without charge, to each person to whom a
copy of this Reoffer Prospectus is delivered, upon the written or oral request
of such person, a copy of any or all of the other documents incorporated by
reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that the Reoffer
Prospectus incorporates). Requests should be directed to:
Ballantyne of Omaha, Inc.
4350 McKinley Street
Omaha, Nebraska 68112
Attention: Brad French, Chief Financial Officer
Phone: (402) 453-4444
The following documents filed with the Commission by the Company are hereby
incorporated by reference into this Reoffer Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1997.
(3) Certificate of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 and 3.3 to the Registration Statement on Form S-1 (File
No. 33-93244) and recent amendment incorporated by reference to
Exhibit 3.1.1 to the 10-Q filed for the period ended June 30, 1997).
All documents filed with the Commission by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent on the date of this
Reoffer Prospectus and
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<PAGE>
prior to the termination of the offering registered hereby shall be deemed to be
incorporated by reference into this Reoffer Prospectus and to be a part hereof
from the date of the filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Reoffer Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Reoffer Prospectus.
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS REOFFER PROSPECTUS, THE
FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN
INVESTMENT IN THE COMPANY BEFORE PURCHASING THE SHARES OF COMMON STOCK OFFERED
HEREBY.
DEPENDENCE ON MOTION PICTURE SCREEN GROWTH
Because the Company's commercial motion picture projectors have an
estimated useful life of approximately 20 years, the Company's net sales and
profitability are dependent primarily upon growth in the number of motion
picture screens and the renovation and replacement of commercial motion picture
projection equipment in existing theatres. For 1994, 1995 and 1996,
approximately 80%, 87% and 91%, respectively, of the Company's total net sales
were derived from sales of its commercial motion picture projection equipment.
Although industry analysts foresee continued growth in the number of motion
picture screens as a result of the trend toward multiplexing and megaplexing and
the introduction of new forms of motion picture-based entertainment, there can
be no assurance that this expectation will prove accurate. In addition, growth
in the number of new motion picture screens may be adversely affected by the
availability of home entertainment systems and recent trends toward industry
consolidation, which may also have an adverse effect on the Company's customer
base. A lack of motion picture screen growth would have a material adverse
effect on the Company's business, financial condition and results of operations.
UNCERTAINTIES REGARDING INTERNATIONAL SALES: FOREIGN CURRENCY FLUCTUATIONS
For 1994, 1995 and 1996, the Company generated net sales to foreign
customers of $6.4 million, $11.3 million and $14.1 million, respectively, which
accounted for approximately 22%, 29% and 27% of the Company's total net sales
for each of such years, respectively. These amounts include net sales of
Westrex Company, "sia ("Westrex") which was acquired in December 1994, but
exclude sales to domestic export dealers of both theatre and restaurant products
and domestic theatre chains of products which are ultimately exported. The
Company is seeking to expand its share of international sales, which it expects
will continue to account for a substantial portion of its revenues.
International sales may be subject to political and economic risks, including
political instability, currency controls, fluctuating exchange rates with
respect to sales not denominated in U.S. dollars and changes in import/export
regulations, tariffs and freight rates. To date, all of the Company's
international sales have been denominated in U.S. dollars, exclusive of Westrex
sales ($2.8 million in 1996) which are denominated in Hong Kong dollars. A
weakening in the value of foreign currencies relative to the U.S. dollar could
have an adverse impact on the Company by increasing the effective price of the
Company's products in its international markets. In addition, there can be no
assurance that the Company's international customers will continue to accept
orders denominated in U.S. dollars. To the extent that orders are denominated
in foreign currencies, the Company's reported sales and earnings are more
directly subject to foreign exchange fluctuations. There can be no assurance
that these factors will not adversely affect the Company's international sales
in the future.
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<PAGE>
COMPETITION
The market for commercial motion picture projection equipment is highly
competitive. In the international market, where the Company has a smaller
market share than in the domestic market, the Company believes that its largest
competitor has significantly greater market share than the Company. In addition
to existing commercial motion picture projection equipment manufacturers, the
Company may also encounter competition from new competitors, as well as from new
types of equipment. No assurance can be given that the commercial motion
picture projection equipment manufactured by the Company will not become
obsolete as technology advances. In addition, the markets for the Company's
long-range follow spotlight and other illumination and restaurant products are
highly competitive. Competitors of the Company may also have significantly
greater financial resources than the Company which may impede the ability of the
Company to compete effectively.
DEPENDENCE ON KEY MANAGEMENT
The Company's success depends, in substantial part, on the efforts and
abilities of John P. Wilmers, the Company's President and Chief Executive
Officer, and Ray F. Boegner, the Company's Senior Vice President. In January
1997, Mr. Wilmers entered into a new employment contract with the Company which
provides for an initial term of five years. In November 1996, Mr. Boegner
entered into a new employment contract with the Company which provides for an
initial term of five years. Failure to retain the services of Messrs. Wilmers
and Boegner could have a material adverse effect on the Company. The Company
does not maintain key man life insurance on the life of Mr. Wilmers or Mr.
Boegner.
LIMITED SOURCES FOR CERTAIN COMPONENTS
The Company does not manufacture certain of its components, including film
platters, lenses and intermittent movement components for its commercial motion
picture projection equipment and the aluminum kettles for its pressure fryers.
Each such component is sourced by the Company from a single contract
manufacturer. Although to date the Company has not experienced any significant
difficulty in obtaining these components, there can be no assurance that
shortages will not arise in the future. The loss of one or more of the current
suppliers of any such components would have an adverse effect on the Company's
business until alternative supplies could be secured.
ENVIRONMENTAL MATTERS
The Company's operations involve the handling and use of substances that
are subject to Federal, state and local environmental laws and regulations that
impose limitations on the discharge of pollutants into the soil, air and water
and establish standards for their discharge and disposal. Although the Company
believes it is in material compliance with these laws, the violation of these
laws could have a material adverse effect on the Company. There can be no
assurance that additional environmental or remediation obligations will not be
incurred in the future, that existing or future environmental liabilities could
not have a material adverse effect on the Company, or that currently unknown
matters, new laws and regulations or stricter interpretations of existing laws
or regulations will not have a material adverse effect on the Company's
business.
SIGNIFICANT STOCKHOLDER
ARC, through its ownership of Canrad Delaware, is the beneficial owner of
22.8% of the outstanding shares of Common Stock. As a result of the level of
its beneficial ownership of the Common Stock, ARC is in a position to exercise
substantial influence over all corporate matters requiring stockholder approval,
including the election of directors and merger and consolidation
-4-
<PAGE>
proposals. In addition, two members of the Board of Directors (the "Board") of
the Company are directors and employees of ARC or its affiliates (other than the
Company), and one of such directors has substantial shareholdings in ARC.
SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON MARKET PRICE
Future sales of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the market price of the Common
Stock of the Company's ability to raise additional capital through sales of its
equity securities. The Company has : (i) 2,056,411 shares of Common Stock
outstanding owned by Canrad Delaware, (ii) 6,961,908 shares of Common Stock
outstanding owned by others, (iii) 920,950 shares of Common Stock reserved for
issuance under the Company's stock option plans, of which 404,950 shares are
issuable pursuant to currently outstanding options thereunder, (iv) 264,150
shares of Common Stock issuable pursuant to an outstanding warrant and other
outstanding options to purchase Common Stock and (v) 140,305 shares of Common
Stock reserved for issuance pursuant to the Company's employee stock purchase
plan. Of the shares outstanding or subject to outstanding options or the
outstanding warrant, 6,973,294 are immediately eligible for resale in the
public market without restriction under the Securities Act and substantially all
of the remaining shares will be eligible for resale in the public market subject
to compliance with the applicable provisions of Rule 144 under the Securities
Act. The Company is unable to predict the effect that sales made under Rule
144, or otherwise, may have on the then prevailing market price of the Common
Stock.
All of the shares of Common Stock owned by Canrad Delaware, 89,564 shares
owned by certain officers and directors of the Company, 304,000 shares issuable
to certain officers and directors of the Company pursuant to the Company's stock
option plans, and 264,150 shares issuable pursuant to an outstanding warrant and
other options to purchase Common Stock are subject to "lock-up" agreements under
which the holders thereof have agreed not to sell or otherwise dispose of such
securities without the prior written consent of Cowen & Company, on behalf of
the Underwriters, until September 26, 1997.
All of the shares of Common Stock owned by Canrad Delaware, as well as
the stock of certain other subsidiaries of ARC (including Cabletel
Communications Corp. ("Cabletel")), have been pledged to BNY Financial
Corporation and BNY Financial Corporation--Canada (collectively, "BNY") to
secure indebtedness incurred by certain subsidiaries of ARC, including Canrad
Delaware and ARC Ice, under two revolving credit facilities (collectively,
the "BNY Credit Facility"). The Company has been advised by ARC, Canrad
Delaware and ARC Ice that, as of September 15, 1997, the principal amount of
indebtedness outstanding under the BNY Credit Facility was approximately
$7.53 million. In the event of a default under the BNY Credit Facility, BNY
has certain rights as a secured creditor under the terms of the BNY Credit
Facility to vote and to sell or otherwise dispose of all or a portion of the
pledged shares, including the Common Stock pledged by Canrad Delaware.
Although such shares of Common Stock are subject to "lock-up" agreements,
Cowen & Company has agreed to consent to sales hereof by BNY in the event of
default under the BYN Credit Facility.
UNCERTAINTY OF FUTURE ACQUISITIONS
Although the Company does not currently have any specific acquisition under
consideration, the Company may make acquisitions in the future. The significant
uncertainties which accompany any acquisition and its integration into the
Company's existing operations could have an adverse effect on the Company.
There can be no assurance that the Company will be able to locate appropriate
acquisition candidates, that any identified candidates will be acquired or that
acquired operations will be effectively integrated or prove profitable. The
Company's revolving credit facility (the "Norwest Facility") with Norwest Bank
Nebraska N.A. ("Norwest Bank") currently prohibits the Company from making
acquisitions without the consent of Norwest Bank.
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<PAGE>
CERTAIN ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation provides for, among other
things, the issuance of 1,000,000 shares of preferred stock, par value $0.01
per share ("Preferred Stock"). The Board is authorized, without stockholder
approval, to cause the Company to issue such preferred stock in one or more
series and to fix the voting powers and the designations, preferences and
relative, participating, optional or other rights and restrictions thereof.
Accordingly, the Company may issue a series of preferred stock in the future
that will have preference over the Common Stock with respect to the payment
of dividends and upon the Company's liquidation, dissolution or winding up or
have voting or conversion rights that could adversely affect the voting power
and ownership percentages of the holders of Common Stock. The Company's
Certificate of Incorporation also provides for the affirmative vote of at
least 66 2/3% of all outstanding shares of capital stock entitled to vote
generally in the election of directors, voting as a single class, to change
certain provisions of such Certificate of Incorporation and the Company's
By-Laws, and to change the authority of the Board, without further action by
stockholders, to cause the Company to issue shares of preferred stock. The
Company's Certificate of Incorporation further provides for the division of
the Board into three classes. One class of directors is elected at each
annual meeting of stockholders for three-year terms. The Company's By-Laws
contain certain advance notice requirements relating to stockholder proposals
and stockholder nomination of directors. These provisions may have the
effect of making more difficult or discouraging transactions that could give
stockholders of the Company the opportunity to realize a premium over the
then prevailing market price for their shares of Common Stock.
POSSIBLE VOLATILITY OF STOCK PRICE; LIMITED TRADING VOLUME
The trading price of the Common Stock may be highly volatile and could be
subject to significant fluctuations in response to variations in the Company's
quarterly operating results, general conditions in the industries in which the
Company operates and other factors. In addition, the stock market is subject to
price and volume fluctuations affecting the market price for the stock of many
companies generally, which fluctuations often are unrelated to operating
performance. Although the Common Stock is listed on the AMEX, daily trading
volume of the Common Stock has generally been limited and accordingly the
trading price is more vulnerable to significant fluctuations.
USE OF PROCEEDS
The Company will receive no proceeds from the reoffer or resale of Common
Stock.
DIVIDEND POLICY
The Company intends to retain its earnings to assist in financing its
business and does not anticipate paying any dividends on its Common Stock in the
foreseeable future. The Norwest Facility contains certain prohibitions on the
payment of cash dividends. In addition, the underwriting agreement relating to
the Company's initial public offering restricts the payment of cash dividends
until September 1997. The declaration and payment of dividends by the Company
are also subject to the discretion of the Board. Any determination by the Board
as to the payment of dividends in the future will depend upon, among other
things, business conditions and the Company's financial condition and capital
requirements, as well as any other factors deemed relevant by the Board.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock of
the Company for the Selling Stockholders as of September 15, 1997, (assuming the
Options had been exercised in full) and as adjusted to reflect the sale of
shares offered hereby by the Selling Stockholders (assuming 100% of the shares
offered hereby are sold).
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Name of Amount of Beneficial Number Beneficial Ownership of Common
Beneficial Ownership of Common of Shares Stock After Offering(1)
Owner Stock Prior to to be
Offering (1) Offered
------------------------- ------------------------------
Number of Percentage of Number of Percentage of
Shares Outstanding Shares Outstanding
Shares Shares
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Marshall S. Geller 28,590 (2) * 12,750 15,840 *
- -----------------------------------------------------------------------------------------------
Colin G. Campbell 12,750 (3) * 12,750 0 *
- -----------------------------------------------------------------------------------------------
Yale Richards 26,550 (4) * 24,750 1,800 *
- -----------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%.
(1) Based upon 9,018,319 shares of Common Stock outstanding as of September 15,
1997. A person is deemed to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date of this Reoffer
Prospectus upon exercise of options or warrants. Each beneficial owner's
percentage ownership is determined by assuming that options or warrants
that are held by such person and that are exercisable within 60 days from
the date of this Reoffer Prospectus have been exercised. However, the
shares of Common Stock so issuable upon such exercise by any such person
are not included in calculating the percentage of Common Stock beneficially
owned by any other stockholder.
(2) Consists of 15,840 shares of Common Stock held directly by Mr. Geller and
12,750 shares of Common Stock underlying presently exercisable options.
(3) Consists of 12,750 shares of Common Stock underlying presently exercisable
options.
(4) Consists of 1,800 shares of Common Stock owned directly by Mr. Richards and
24,750 shares of Common Stock underlying presently exercisable options.
PLAN OF DISTRIBUTION
The distribution of shares of Common Stock by the Selling Stockholders may
be effected in one or more transactions that may take place in ordinary broker
transactions, privately negotiated transactions or through sales to one or more
dealers for resale of such securities as principals, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Stockholders in connection with
such sales of securities.
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In order to comply with certain state securities laws, if applicable, the
securities offered hereby will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and complied with.
DESCRIPTION OF CAPITAL STOCK
The total number of shares the Company is authorized to issue is
26,000,000, consisting of 25,000,000 shares of Common Stock, par value $.01 per
share, and 1,000,000 shares of Preferred Stock, par value $.01 per share. As of
September 15, 1997, there were 9,018,319 shares of Common Stock outstanding and
no shares of Preferred Stock outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by the stockholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of a majority of the shares of Common Stock voting for the
election of directors can elect all of the directors then up for election. The
holders of Common Stock are entitled to receive dividends, subject to the senior
rights of preferred stockholders, when, as and if declared by the Board out of
funds legally available therefor. In the event of liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining which are available for distribution to them
after payment of liabilities and after provision has been made for each class of
stock having preference over the Common Stock. Holders of shares of Common
Stock, as such, have no conversion, preemptive or other subscription rights, and
there are no redemption provisions applicable to the Common Stock. All of the
outstanding shares of Common Stock are, and, upon completion of the offering,
all shares of Common Stock offered hereby will be, duly authorized, fully paid
and non-assessable.
The Delaware General Corporation Law provides that stockholders may take
action without the holding of a meeting by written consent or consents signed by
the holders of a majority of the outstanding shares of the capital stock of the
Company entitled to vote thereon. Prompt notice of the taking of any action
without a meeting by less than unanimous consent of the stockholders will be
given to those stockholders who do not consent in writing to the action. The
purposes of this provision are to facilitate action by stockholders and to
reduce the corporate expense associated with annual and special meetings of
stockholders. Pursuant to the rules and regulations of the Commission, if
stockholder action is taken by written consent, the Company will be required to
send each stockholder entitled to vote on the matter voted on, but whose consent
was not solicited, an information statement containing information substantially
similar to that which would have been contained in a proxy statement.
PREFERRED STOCK
The Board is authorized, without further approval or action by the
stockholders, to issue shares of Preferred Stock in one or more series and to
determine the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and number of shares
constituting any series of Preferred Stock or the designation of such series.
The rights of the holders of Common Stock will generally be subject to the
prior rights of the holders of any outstanding shares of Preferred Stock with
respect to dividends, liquidation preferences and other matters. Among other
things, the Preferred Stock could be issued by the Company to raise capital or
finance acquisitions. The Preferred Stock could have certain anti-takeover
effects under certain circumstances. The issuance of shares of Preferred Stock
could enable the Board to render more difficult or discourage an attempt to
obtain control of the Company by means of a merger, tender offer or other
business combination transaction directed at the Company by, among other things,
placing shares of Preferred Stock with investors who might align themselves with
the Board, issuing new shares
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to dilute stock ownership of a person or entity seeking control of the Company
or creating a class or series of Preferred Stock with class voting rights.
The Company has no current plans to issue any shares of its Preferred
Stock.
WARRANT AND OPTIONS TO PURCHASE COMMON STOCK
As partial consideration for providing certain financial assistance in
connection with the Company's acquisition of the Cinema Products Division of
ORC, on September 12, 1995, the Company issued to Merita Bank Ltd. a warrant
(the "Merita Warrant") to purchase up to 323,400 shares of Common Stock at a per
share exercise price equal to $3.94 of which 108,000 shares has been purchased.
The Merita Warrant first became exercisable on October 12, 1996 and expires on
September 12, 2000. The Company has granted Geller & Friend an option, expiring
on December 22, 2000, to purchase 82,500 shares of Common Stock at an exercise
price of $4.39 per share as consideration for strategic financial services
provided to the Company by Geller & Friend. At September 15, 1997, the option
had been exercised to the extent of 75,000 shares of Common Stock. The Company
has granted to Jaffoni & Collins Incorporated an option to purchase 41,250
shares of Common Stock at an exercise price of $4.24 per share as consideration
for investor relations and financial relations services provided to the Company.
The option is currently exercisable and terminates on October 7, 1999. A
registration statement filed under the Securities Act registering the resale of
all of the shares of Common Stock underlying the Merita Warrant and each of the
aforesaid options was declared effective on March 6, 1997.
DELAWARE ANTI-TAKEOVER LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. Section 203 provides, with certain exceptions, that a
Delaware corporation may not engage in certain business combinations with a
person or affiliate or associate of such person who is an "interested
stockholder" for a period of three years from the date such person became an
interested stockholder unless: (i) the transaction resulting in the acquiring
person's becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquires 85% or more
of the outstanding voting stock of the corporation in the same transaction which
makes it an interested stockholder (excluding shares owned by directors who are
also officers, and excluding certain employee stock option plans); and (iii) on
or after the date the person becomes an interested stockholder, the business
combination is approved by the corporation's board of directors and by the
holders of at least 66 2/3% of the corporation's outstanding voting stock at an
annual or special meeting, excluding shares owned by the interested stockholder.
Except as otherwise specified in Section 203, an "interested stockholder" is
defined as (a) any person that is the owner of 15% or more of the outstanding
voting stock of the corporation, (b) any person that is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three year period
immediately prior to the date on which it is sought to be determined whether
such person is an interested stockholder, or (c) the affiliates and associates
of any such person. By restricting the ability of the Company to engage in
business combinations with an interested person, the application of Section 203
to the Company may provide a barrier to hostile or unwanted takeovers. Under
Delaware law, the Company could have opted out of Section 203 but elected to be
subject to its provision.
CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS
CLASSIFIED BOARD OF DIRECTORS. The Company's Certificate of Incorporation
and By-Laws provide that the Board shall be divided into three classes of
directors serving staggered terms. One class of directors will be elected at
each annual meeting of stockholders for a three-year term. Thus, at least two
annual meetings of stockholders, instead of one, generally will be required to
change the majority
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of the Board. Directors can be removed from office only for cause and only
by the affirmative vote of at least 66 2/3% of the then outstanding shares of
capital stock entitled to vote generally in the election of directors, voting
as a single class. Vacancies on the Board may be filled only by the
remaining directors and not the stockholders. The foregoing provisions may
have the effect of making it more difficult to acquire control of the Company
by means of a hostile tender offer, open market purchases, a proxy contest or
otherwise.
REQUIREMENT FOR ADVANCE NOTIFICATION OF STOCKHOLDER NOMINATION AND
PROPOSALS. The Company's By-Laws require 60 to 90 days' notice to the Company
with regard to stockholder proposals and the nomination, other than by or at the
direction of the board or a committee thereof, of candidates for election as
directors. Such notice must provide specified information, including
information regarding the ownership of Common Stock by the person giving the
notice, information regarding the proposal or the nominees and information
regarding the interest of the proponent in the proposal or the nominations.
SPECIAL MEETINGS OF STOCKHOLDERS. The Company's Certificate of
Incorporation and By-Laws provide that special meetings of stockholders of the
Company may only be called by the Chairman of the Board, the President or a
majority of the then authorized number of directors. This provision precludes
stockholders from calling a special meeting and taking actions opposed by the
Board.
LIMITATION OF DIRECTOR LIABILITY. The Company's Certificate of
Incorporation limits the liability of directors to the Company or its
stockholders to the fullest extent permitted by Delaware law. Specifically,
under current Delaware law, a director will not be personally liable for
monetary damages for breach of the director's fiduciary duty or care as a
director, except liability (i) for a breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions by a director not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law) or
(iv) for any transaction from which the director derived an improper personal
benefit. The inclusion of this provision in the Company's Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care.
SUPERMAJORITY PROVISIONS. The Company's Certificate of Incorporation
provides that the vote of the Board or the affirmative vote of at least
66 2/3% of the then outstanding shares of capital stock entitled to vote
generally in the election of directors, voting as a single class, is required
to amend, repeal or alter any of the Company's By-Laws or the foregoing
provisions contained in the Company's Certificate of Incorporation.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, LLC whose address is 85 Challenger Road, Overpeck Center,
Ridgefield Park, NJ 07660.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Cline, Williams, Wright, Johnson and Oldfather, Omaha,
Nebraska.
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