<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BALLANTYNE OF OMAHA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CLINE WILLIAMS WRIGHT JOHNSON & OLDFATHER LAW FIRM
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
-----------------------------------------------------------------------
4) Date Filed:
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<PAGE>
[LOGO]
NOTICE AND PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT
THE WESTIN AQUILA HOTEL
1615 HOWARD STREET
OMAHA, NEBRASKA 68102
ON
TUESDAY, JUNE 10, 1997 AT 4:00 P.M. (CENTRAL TIME)
<PAGE>
BALLANTYNE OF OMAHA, INC.
4350 MCKINLEY ROAD
OMAHA, NEBRASKA 68112
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 10, 1997
The Annual Meeting of Shareholders of Ballantyne of Omaha, Inc. will be held
at The Westin Aquila Hotel, 1615 Howard Street, Omaha, Nebraska 68102, on June
10, 1997 at 4:00 p.m. for the following purposes:
1. To elect, as Directors, three persons listed in the accompanying Proxy
Statement.
2. To approve an amendment to the Certificate of Incorporation increasing
the authorized Common Stock to 25,000,000 shares.
3. To approve an amendment to the Stock Option Plan increasing the Stock
Option Plan shares by 400,000 shares.
4. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
Only those shareholders of record at the close of business on May 7, 1997
shall be entitled to notice of the meeting and to vote at the meeting.
In order to assure a quorum, all shareholders are urged to attend the
meeting or to vote by proxy. In the event you are present at the meeting, you
may withdraw your proxy if you wish to do so, and vote in person.
In order to ensure adequate meeting space, please notify Patricia Coleman at
Ballantyne on or before May 30, 1997 (402) 453-4444, ext. 303, if you are
planning to attend the meeting.
Also, for assistance in scheduling overnight accommodations in Omaha,
contact Ms. Coleman. Please be advised that hotel accommodations may be limited
due to the College World Series taking place in Omaha during the same week.
Accordingly, early reservations are encouraged.
Dated this 1st day of May, 1997.
By Order of the Board of Directors
[SIGNATURE]
John Wilmers
President and Chief
Executive Officer
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Ballantyne of Omaha, Inc. (the "Company")
for use at the Annual Meeting of Shareholders to be held on June 10, 1997.
Shareholders of record at the close of business on May 7, 1997 are entitled to
notice of, and to vote at, the meeting and any adjournment thereof. This Proxy
Statement was first mailed to shareholders on May , 1997.
VOTING SHARES AND PRINCIPAL HOLDERS
Based upon the records of the Company, Canrad of Delaware, Inc., 100
Chestnut Street, Newark, New Jersey 07105, owns 4,323,000 shares, or % of the
Company's outstanding Common Stock. Canrad of Delaware, Inc. is a wholly owned
subsidiary of Canrad Inc. which is an indirect, wholly owned subsidiary of ARC
International Corporation ("ARC").
APPOINTMENT AND REVOCATION OF PROXIES
As of the close of business on May 7, 1997, the Company had shares
of outstanding Common Stock, all of which are entitled to vote at the Annual
Meeting.
Each share is entitled to one vote on each matter presented. ARC is the
beneficial owner of a majority of the outstanding shares of the Company's Common
Stock and, thus, is in a position to control substantially all corporate
transactions requiring the vote of a majority of shareholders, including the
election of the entire Board of Directors.
Proxies which are properly signed and returned will be voted at the meeting.
Shareholders may specify their preference by marking the appropriate boxes on
the proxy and the proxy will then be voted in accordance with such
specifications. In the absence of such specifications, the proxy will be voted
for the election of the three nominees for Directors and in accordance with the
instructions of the Board of Directors as to any other matters. Shareholders who
attend the meeting may vote in person even though they have voted by proxy. A
proxy is revocable at any time before it is voted and a proxy is automatically
revoked upon the giving of a subsequent proxy or by voting in person at the
meeting. The Company will bear the cost of solicitation of proxies, including
the charges and expenses of brokers and others for forwarding solicitation
materials to beneficial owners of stock. In addition to the use of mail, proxies
may be solicited by personal interview, telephone or facsimile.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of Directors shall be
fixed from time to time exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the Board. The Board of Directors has set
such number at seven for 1997.
The Bylaws also provide that the Directors shall be divided into three
classes. The members of each class serve staggered three-year terms. Messrs.
Tenney and Geller are Class I Directors; Messrs. Echtenkamp, Chelin and Richards
are Class II Directors; and Messrs. Wilmers and Campbell are Class III
Directors. The terms of the Class II, Class III and Class I Directors expire at
the Annual Meeting of Shareholders to be held in 1997, 1998, and 1999,
respectively. The Board of Directors has nominated the three persons listed
below for election as Directors to serve until the Annual Meeting of
Shareholders in the year 2000.
The proxy holders named in the proxy intend to vote "FOR" the election of
the three nominees listed below unless authority to so vote is withheld. In the
unexpected event that any one or more of the nominees are unable to serve or for
good cause will not serve as Directors, the proxy holders reserve the right to
vote for such substitute nominees as are designated by the Board of Directors.
1
<PAGE>
Following is a list of the names and ages of the three nominees, all of whom
are presently serving as Directors. Also listed are the two Directors whose
terms expire in 1998 and the two Directors whose terms expire in 1999. Included
is the past five-year business history of each Director and nominee and any
public company directorships held by such persons, the year in which each became
a Director of the Company and the number and the percentage of outstanding
shares of Common Stock of the Company beneficially owned by each as of May 7,
1997.
<TABLE>
<CAPTION>
DIRECTOR NO. OF
NAME AGE EMPLOYMENT HISTORY SINCE SHARES(1) %(2)
- ---------------------------- ----- ------------------------------------------------- ----------- ------------ -----
<S> <C> <C> <C> <C> <C>
CLASS I: TERM EXPIRES IN 1999
Arnold S. Tenney 54 Chairman of Board since 1992; President and CEO 1988 183,975(3)
of ARC since 1978; Chairman of Board and Director
of Cabletel Communications Corp.; Director of
Noble Peak Resources; Director of ARC.
Marshall S. Geller 58 Chairman and CEO of Geller & Friend Capital 1996 79,054(4)
Partners, Inc., a merchant banking firm, since
1995; Managing Partner Golenberg & Geller, Inc.
from 1991-1993; currently serving as Director of
Hexcel Corp.; Players International, Inc.; Styles
on Video, Inc.; Dycam, Inc. and Value Vision,
International, Inc.
CLASS II: NOMINEES FOR ELECTION
Ronald H. Echtenkamp 63 Vice Chairman of the Board since March 1997; 1993 146,673(5)
prior President of Company 1981-1997, and CEO of
Company 1991-1997; joined the Company in 1969 and
served in various capacities since.
Yale Richards 75 Senior partner in the law firm of Marks, Clare & 1995 18,300(6)
Richards; has privately practiced law since 1947.
Jeffrey D. Chelin 45 Vice President-Finance and Chief Financial 1995 24,750(7)
Officer of ARC since 1992; prior to 1992 was
Controller and Assistant Secretary of ARC.
CLASS III: TERM EXPIRES IN 1998
John Wilmers 52 President and CEO of the Company since March 1995 105,989(8)
1997;previously Executive Vice President of the
Company since 1992; joined the Company in 1981
and served in various capacities since.
Colin G. Campbell 41 Self-employed providing financial and consulting 1995 16,500(9)
services through The Castlestone Company since
1993; prior to 1993 Mr. Campbell provided
services through The Highbridge Group.
All Directors as a group (7 persons) own 575,241 shares or % of the outstanding Common Stock and currently exercisable options.
(10)
</TABLE>
- ------------------------
(1) In connection with the Company's initial public offering, Canrad Delaware
and Messrs. Tenney, Echtenkamp, Wilmers, Campbell, Chelin and Richards
entered into an agreement with the
2
<PAGE>
managing underwriters of such offering to vote, during the two-year period
ending September 12, 1997, all shares of voting capital stock of the Company
beneficially owned by them in the same proportion as the votes cast by
persons other than such named persons' voting shares of the same class or
series with respect to any liquidation, merger or business combination in
which the Company is not the surviving entity, or the sale by the Company of
all or substantially all of its assets.
(2) Based upon shares of Common Stock outstanding. Each named person is
deemed to be the beneficial owner of shares of Common Stock that may be
acquired within 60 days upon exercise of stock options. Accordingly, the
number of shares and percentage set forth next to the name of such person
and all directors as a group include the shares of Common Stock issuable
upon presently exercisable stock options. 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.
(3) Includes 41,250 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 owned indirectly by Mr. Tenney through his wife and
123,750 shares purchasable pursuant to presently exercisable stock options.
Does not include 4,323,000 shares owned beneficially by ARC.
(4) Includes 15,840 shares of Common Stock held directly by Mr. Geller, 46,714
shares issuable upon exercise of an option granted to Geller & Friend of
which Mr. Geller is CEO and Chairman and 16,500 shares purchasable pursuant
to presently exercisable stock options.
(5) Includes 22,923 shares of Common Stock owned directly by Mr. Echtenkamp and
123,750 shares purchasable pursuant to presently exercisable stock options.
(6) Includes 1,800 shares owned directly by Mr. Richards and 16,500 shares
purchasable pursuant to presently exercisable stock options.
(7) Includes 24,750 shares of Common Stock purchasable pursuant to presently
exercisable stock options.
(8) Includes 5,989 shares of Common Stock owned directly by Mr. Wilmers and
100,000 shares purchasable pursuant to presently exercisable stock options.
(9) Includes 16,500 shares of Common Stock purchasable pursuant to presently
exercisable stock options.
(10) Includes 106,777 shares of Common Stock owned by directors and 468,464
shares purchasable pursuant to presently exercisable stock options.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
AUDIT COMMITTEE
The Company has an Audit Committee whose members include Messrs. Campbell,
Chelin and Richards. The Audit Committee is responsible for recommending to the
Board of Directors the engagement of the independent auditors of the Company and
reviewing with the independent auditors the scope and results of the audits, the
internal accounting controls of the Company, audit practices and the
professional services furnished by the independent auditors. The Audit Committee
did not meet during the year ending December 31, 1996.
COMPENSATION COMMITTEE
The Company has a Compensation Committee whose members include Messrs.
Tenney, Echtenkamp, Campbell and Richards. The Compensation Committee is
responsible for reviewing all compensation agreements and arrangements for
officers of the Company other than amounts paid
3
<PAGE>
under the Company's Profit Sharing Plan or options granted under the 1995 Stock
Option Plan. The Compensation Committee met on December 3, 1996.
COMPENSATION OF DIRECTORS
Directors who are employees of ARC, Canrad Inc. or the Company are not
compensated for serving as directors. Independent directors are paid $600 for
attendance at meetings of the Board. They will receive $300 for all meetings of
the Board held by teleconference. Directors of the Company will be reimbursed
for out-of-pocket expenses. Outside directors also participate in the Outside
Directors Stock Option Plan, pursuant to which a total of 165,000 shares of
Common Stock is allocated. Subject to a one-time election to decline
participation, outside directors are granted an option to purchase 24,750 shares
of Common Stock on the first business day following their election or
appointment to the Board of Directors. The option vests at the rate of 8,250
shares on the first business day following a director's initial election or
appointment to the Board, and 8,250 shares on the first business day after each
annual meeting of shareholders, so long as the director continues to be a member
of the Board of Directors. An additional amount of options is granted
automatically to participating outside directors on the next succeeding business
day after the third consecutive annual meeting of shareholders following the
initial grant, and on the next succeeding business day after every third annual
meeting of shareholders thereafter during the term of the plan, so long as the
director continues to be a member of the Board of Directors. The options are
granted at the fair market value of the Common Stock on the date of grant and
have a term of five years.
No Director attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which he served.
LIST OF CURRENT EXECUTIVE OFFICERS OF THE COMPANY
The following is a list of the names and ages of the current executive
officers of the Company, their business history for the last five years and
their term of office with the Company.
<TABLE>
<CAPTION>
OFFICER
NAME(1) AGE POSITION AND PRINCIPAL OCCUPATION SINCE 1991 SINCE
- ---------------- ----- ----------------------------------------------------------------------------- ---------
<S> <C> <C> <C>
John Wilmers 52 Director of Company; President and CEO of Company since March 1997; 1988
previously Executive Vice President of Company since 1992; Joined Company
in 1981 and has served in various capacities since.
Brad French 44 Secretary and Treasurer of the Company since 1992; CFO since 1996; joined 1992
Company as Controller in 1990.
</TABLE>
- ------------------------
(1) Mr. Echtenkamp served as President and CEO of the Company from 1981 through
March 1997.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid to the
Chief Executive Officer and two other executive officers of the Company whose
total compensation exceeded $100,000 for the fiscal years ended December 31,
1996, 1995, and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------- PAYOUTS
---------------------------------- RESTRICTED SECURITIES -------
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) ($) ($) ($) (#) ($) ($)
(A) (B) (C) (D) (E) (F) (G) (H) (I)
- ------------------------------ ---- ---------- ------- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald H. Echtenkamp, 1996 202,500(1) 320,676 -- -- 123,750 -- --
President and Chief 1995 202,500(1) 215,000 -- -- 82,500 -- --
Executive Officer(3) 1994 202,500(1) 175,000 25,000(2)
John Wilmers, 1996 152,269 215,000 -- -- 66,000 -- --
Vice President, Sales(3) 1995 139,050 100,786 -- -- 44,000 -- --
1994 131,325 85,000 --
Brad French, 1996 88,065 60,000 -- -- 33,000 -- --
Secretary and Treasurer, 1995 81,370 40,000 -- -- 22,000 -- --
Chief Financial Officer(3) 1994 77,250 35,000 --
</TABLE>
- ------------------------
(1) Salary includes $48,000 which has been deferred pursuant to Mr. Echtenkamp's
employment contract.
(2) Award consists of an option to purchase common shares of ARC at an exercise
price of $3.00 per share until February 14, 1998.
(3) Salary includes $4,500 (1996), $4,500 (1995), and $4,500 (1994) for Mr.
Echtenkamp, $4,269 (1996), $4,050 (1995), and $3,825 (1994) for Mr. Wilmers
and $2,565 (1996), $2,370 (1995), and $2,250 (1994) for Mr. French, paid by
the Company pursuant to the Retirement and Savings Plan described below.
There were no stock options granted during fiscal year 1996.
The following table sets forth information with respect to exercised and
unexercised options and SARs, if any, during fiscal year 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY
FISCAL YEAR END (#) OPTIONS/SARS AT FISCAL
------------------- 1996 YEAR END ($)
EXERCISABLE ("EX") ----------------------
SHARES ACQUIRED VALUE REALIZED UNEXERCISABLE EXERCISABLE ("EX")
NAME ON EXERCISE (#) ($) ("UN") UNEXERCISABLE ("UN")
(A) (B) (C) (D) (E)
- -------------------------------- ----------------- ----------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Ronald H. Echtenkamp 0 0 25,000("Ex")(1) 18,750("Ex")(1)
123,750("Ex")(2) 1,152,113("Ex")
John Wilmers 0 0 66,000("Ex")(2) 614,460("Ex")
Brad French 0 0 33,000("Ex")(2) 307,230("Ex")
</TABLE>
- ------------------------
(1) Award consists of option to purchase common shares of ARC at an exercise
price of $3.00 per share until February 14, 1998.
5
<PAGE>
(2) Adjusted for 10% stock distribution effected March 8, 1996 and 3-for-2 stock
split effected as a 50% stock dividend on March 5, 1997.
EMPLOYMENT CONTRACTS
Mr. Echtenkamp's employment contract expired on March 31, 1997. On February
28, 1997, he stepped down from the office of President of the Company and
terminated his full time employment with the Company on April 30, 1997. Mr.
Echtenkamp was elected Vice Chair of the Board and remains a part-time
consultant with the Company, with the primary responsibility of pursuing and
negotiating acquisitions of other businesses.
Mr. Wilmers was elected President of the Company and Chief Executive
Officer, effective March 1, 1997. The Compensation Committee and the Board of
Directors approved a five year contract for Mr. Wilmers commencing January 1,
1997, at an initial compensation of $165,000 per year, plus participation in the
key employees' profit sharing plan and other normal employee benefits.
PROFIT SHARING PLAN
Mr. Echtenkamp participated during 1996 and Messrs. Wilmers and French
participate in the Profit Sharing Plan pursuant to which such employees are
entitled to earn cash bonuses if the Company achieves specific operating levels
that are established by the Board. The calculation of the annual bonus pool is
subject to the approval of the Compensation Committee of the Board. The
distribution of the pool among members of management is determined by Mr.
Wilmers subject to approval by the Compensation Committee. The Chief Executive
Officer, currently Mr. Wilmers, is entitled to receive no more than 40% of the
pool. The restriction that no participant may receive an amount in excess of
150% of such participant's base salary was eliminated retroactive to January 1,
1996 and Mr. Echtenkamp's employment contract was also revised to eliminate this
provision retroactive to January 1, 1996. Amounts paid to Messrs. Echtenkamp,
Wilmers and French pursuant to the Profit Sharing Plan are included in the
Summary Compensation Table.
RETIREMENT AND SAVINGS PLAN
The Company has adopted a Retirement and Savings Plan (the "Plan"), which is
a combination savings and profit sharing plan designed to qualify under Section
401 of the United States Internal Revenue Code of 1986, as amended (the "Code"),
including the provisions of Section 401(k). All full-time employees of
Ballantyne who are at least twenty-one years old and who have completed one year
of service are eligible to participate in the Plan.
Each participant may contribute an amount up to six percent (6%) of such
participant's salary to the matching portion of the Plan, and such participant
may make supplemental contributions up to an additional nine percent (9%) of
such participant's salary. These supplemental contributions are not eligible for
matching contributions from the Company. Ballantyne's matching contribution is
$.50 for each dollar contributed by the participant to the matching portion of
the Plan. In addition, the Company may elect, in the discretion of the Board, to
contribute an additional amount. All contributions to the Plan are
nonforfeitable. For 1996, no participant could contribute more than $9,500 to
the Plan.
Benefits may be distributed to participants or their beneficiaries, as the
case may be, in the event of a participant's death, retirement or other
termination of service, or, if the participant so requests, on reaching age
59 1/2. Participants may be eligible to withdraw benefits in case of hardship.
Contributions to the Plan made by the Company on behalf of Messrs.
Echtenkamp, Wilmers and French are included in the Summary Compensation Table.
6
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
RESPONSIBILITY; COMPOSITION OF COMMITTEES
The Company has a Compensation Committee which is responsible for reviewing
and recommending to the Board of Directors of the Company annually the
compensation to be paid to the executive officers of the Company. The
Compensation Committee is comprised of four members of the Board of Directors,
Messrs. Tenney, Echtenkamp, Campbell and Richards.
Mr. Wilmers, in his capacity as President and Chief Executive Officer of the
Company, will determine the compensation to be paid to Mr. French, subject to
review by the Compensation Committee.
The Company also has an independent committee, the 1995 Stock Option
Committee, which is responsible for the granting of options under the 1995 Stock
Option Plan of the Company to all executive officers of the Company. The Stock
Option Committee is comprised of Messrs. Campbell and Richards.
COMPENSATION PHILOSOPHY
Decisions with respect to executive compensation have historically been made
by the Canrad Inc. Board and Messrs. Tenney and Echtenkamp and will be made in
the future by the Compensation Committee on an individual basis based upon a
number of factors, including the provisions of any existing employment contract
with an executive officer, evaluation of the executive officer's performance,
the level of responsibility associated with the executive officer's office,
recruitment requirements and the performance of the Company. Compensation of the
executive officers of the Company has historically been structured to motivate,
reward and retain the executive officers consistent with the needs of the
Company from time to time. The major elements of the executive officers'
compensation are base salary, short-term incentive in the form of a bonus
payable from the Profit Sharing Plan and a long-term incentive in the form of
options to purchase Common Stock, with an emphasis on annual bonuses and
options.
BASE SALARY
The base salaries of executive officers have historically reflected, and
will continue to reflect their individual contribution. Mr. Wilmers has an
employment contract commencing January 1, 1997, at an initial compensation of
$165,000 per year, plus participation in the key employees' profit sharing plan
and other normal benefits. The base salary of Mr. French, which is not subject
to an employment agreement, was increased from $85,500 per year to $92,500 per
year.
CASH BONUSES
The executive officers participate in a management and sales bonus plan
designated as the Profit Sharing Plan pursuant to which they receive cash
bonuses if the Company achieves specific operating levels. The Profit Sharing
pool is based upon a percentage of operating income, as defined by the Board of
Directors. The calculation of the Profit Sharing Plan pool will be subject to
approval of the Compensation Committee but the distribution among members and
management is at the initial determination of Mr. Wilmers. Mr. Wilmers may
receive no more than 40% of the pool. Participant bonuses will continue to be
based upon individual performance during the prior year.
STOCK OPTIONS
The 1995 Stock Option Plan of the Company is designed to give employees,
officers and directors of the Company the incentive to maximize wealth for
shareholders by participating in the long-term growth of the Company.
7
<PAGE>
In 1996, no stock options were granted. As to future options, the Stock
Option Committee will consider the number and terms of the options outstanding
when determining to grant options. No member of the Stock Option Committee can
participate in the option plan during his membership on the Stock Option
Committee. According to the provisions of the option plan, the Stock Option
Committee determines, among other things, the number of shares of Common Stock
to be optioned, the option price and the term of the option.
The Company's general policy is to grant options at the fair market value of
the Common Stock on the date of grant with terms of generally ten years in
length. In no event will options be granted at less than 85% of fair market
value of the Common Stock on the date of grant.
The Company is now proposing to increase the amount of Common Stock issuable
under the Plan by 400,000 shares.
CHIEF EXECUTIVE OFFICER COMPENSATION
As stated earlier, the base annual compensation of Mr. Wilmers is set
pursuant to his employment agreement at an initial compensation of $165,000 per
year, plus participation in the key employees' profit sharing plan and other
normal employee benefits.
The foregoing report is submitted by the Compensation and Stock Option
Committees of the Board of Directors of the Company in accordance with
requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder and is not intended to create any contractually binding
employment rights for the benefit of any employee of the Company.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE: STOCK OPTION COMMITTEE:
Arnold S. Tenney Colin G. Campbell
Ronald H. Echtenkamp Yale Richards
Colin G. Campbell
Yale Richards
</TABLE>
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph shows the cumulative total return on the
Common Stock, the AMEX Market Value Index and a peer group for the period
September 7, 1995 (the date upon which the Company's common stock became
publicly traded) through December 31, 1996. The peer group is made up of five
corporations (namely Concord Camera Corp., Accom, Inc., Showscan Entertainment,
Inc., Videonics, Inc. and Sonic Solutions, Inc.). The peer group is comprised of
companies with a market capitalization between approximately $30 million and $50
million, each of which is engaged in the sale of products related to the
theater, motion picture or image capturing or image projection businesses. The
Company is unable to identify for comparison purposes any public industry or
line-of-business indices because the small number of companies offering similar
or competing products are divisions or subsidiaries of much larger, diversified
companies.
The performance graph assumes the value of the investment in the Common
Stock and each index was $100 and that all dividends were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BALLANTYNE OF OMAHA, INC. PEER GROUP AMEX MARKET VALUE INDEX
<S> <C> <C> <C>
9/7/95 100.00 100.00 100.00
12/29/95 111.21 71.99 101.02
12/31/96 301.38 58.31 107.49
</TABLE>
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
The Company is a party to a management agreement (the "Management
Agreement") with Canrad Inc. Pursuant to the terms of the Management Agreement,
Canrad Inc. provides services to the Company relating to overall management and
strategic planning and direction, banking negotiations, treasury functions,
investor relations, securities regulatory compliance, employee and general
business insurance programs and asset acquisitions and sales. Pursuant to the
Management Agreement, Canrad Inc. makes available to the Company the services of
Arnold S. Tenney, the Chairman of the Board of Canrad Inc. Mr. Tenney acts as
the Chairman of the Board of the Company. Mr. Tenney shares primary
responsibility with the Company's Chief Executive Officer with respect to
overall management and strategic planning and direction, the identification,
analysis and consummation of acquisitions, and investor relations. As
compensation for its services, Canrad Inc. receives a monthly fee of $25,000 and
is entitled to reimbursement for its identifiable reasonable out-of-pocket
expenses incurred in connection with the performance of services under the
Management Agreement. The Management Agreement provides for an initial term of
five years and thereafter is automatically renewed for successive one-year
periods until terminated by either party upon 90 days' prior notice. In 1996,
the Company paid $300,000 in management fees to Canrad Inc. During the initial
term of the Management Agreement, which expires on September 12, 2000, the
payment terms thereof may not be amended without the consent of the managing
underwriters of the Company's initial public offering.
THE GELLER OPTION
The Company has granted to Geller & Friend and its employees an option to
purchase 82,500 shares of Common Stock at a per share exercise price of $4.39 as
consideration for strategic financial services provided to the Company by Geller
& Friend. Of these 82,500 shares, options totaling 35,786 have been assigned to
employees of Geller & Friend. The option is currently exercisable and expires on
December 22, 2000. The Company effected an S-3 Registration Statement on March
6, 1997 permitting the resale of these shares. Marshall Geller, a director of
the Company, is Chairman and Chief Executive Officer of Geller & Friend.
INSURANCE COVERAGE
The Company is included in group health and business insurance programs
maintained by ARC and Canrad Inc. for all companies controlled by ARC and Canrad
Inc. The group health insurance plan is a self-insured minimum premium plan that
is administered through the Connecticut General Life Insurance Company. The
group health insurance plan provides for specific stop loss coverage in the
amount of $75,000 per employee per plan year and aggregate stop loss based upon
the head count of those covered under the plan, including the Company's
employees and certain ARC retirees. The aggregate stop loss level for the group
health insurance plan for the May 1, 1996 to April 30, 1997 plan year is
approximately $915,000. The Company is charged premiums which are a set dollar
amount based on its monthly head count for the minimum premium, stop loss and
plan administration portions of the program and its aggregate salary for
long-term disability and term life coverage. The Company is also charged for its
claims incurred pursuant to the program.
The business insurance program provides coverage for workers' compensation
and employers liability, general liability, including products and completed
operations, property, automobile, umbrella and directors and officers liability.
The Company's portion of the business insurance premium is calculated and
charged to operations based upon its allocated share of the coverage provided to
that of the entire Canrad Inc. group. Such allocations are based primarily upon
aggregate payrolls, net sales, asset values and number of automobiles. Most of
the policies require annual audit and adjustment of deposit premiums for
differences between estimated values upon which deposit premiums have been
calculated and actual results. An additional premium is assessed in
circumstances
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where actual values exceed estimated values and a premium credit is issued for
instances where the estimated values exceed the actual values.
PAYMENTS TO CANRAD
For 1996, the Company paid $1,701,911 to Canrad representing the insurance
premiums and claims described above and other miscellaneous services excluding
management fees.
OTHER
Yale Richards, a director of the Company, is a senior partner of Marks Clare
& Richards, a law firm which performs legal services for the Company from time
to time.
PROPOSAL 1
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
The Board of Directors has recommended that the Company increase the
authorized Common Stock from 10,000,000 shares to 25,000,000 shares. As of May
7, 1997, there were shares of Common Stock outstanding and no shares of
Preferred Stock outstanding.
The purpose in increasing the number of authorized shares of Common Stock is
to insure that an adequate supply of authorized unissued shares of Common Stock
is available to meet the existing obligations of the Company with respect to
various options, warrants, and the employees' stock purchase plan, and for
possible future distribution to the shareholders or for sale to the public. The
additional shares would benefit the Company by providing flexibility in
responding to future business opportunities.
The additional authorized shares may be issued hereafter by the Board of
Directors for such corporate purposes deemed advisable from time to time in the
future without future stockholder action, except for stockholder approval as
otherwise required by law, or the rules of any exchange in which the Common
Stock may then be listed. The additional authorized shares of Common Stock as
and when issued in the future, will be identical to the presently authorized
Common Stock. The proposed amendment will not change the rights of any holders
of the Company's outstanding Common or Preferred Stock, nor will the proposed
amendment amend any other part of the Certificate of Incorporation. Holders of
the Common Stock do not have preemptive rights.
If the proposed amendment is adopted, the amended first paragraph of Article
Four of the Certificate of Incorporation of the Company will read as follows:
"FOURTH:
A. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Twenty-Six Million (26,000,000)
shares, consisting of Twenty-Five Million (25,000,000) shares of Common
Stock, par value one cent ($.01) per share (the "Common Stock") and One
Million (1,000,000) shares of Preferred Stock, par value one cent ($.01) per
share (the "Preferred Stock")."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 1 TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION.
PROPOSAL 2
AMENDMENT TO 1995 STOCK OPTION PLAN
On April 2, 1997 the Board of Directors of the Company adopted an amendment
to the Company's 1995 Stock Option Plan (the "Plan") to increase the number of
shares of Common Stock that may be
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issued under the Plan from 660,000 shares to 1,060,000 shares, or an increase of
400,000 shares. Since September 1995 when the Company conducted its initial
public offering, the Company has issued options for 634,750 shares under the
Plan in order to provide long term incentive to key officers and employees.
Since the number of shares available for grant under the Plan is nearly
depleted, the Board of Directors deems it to be in the best interest of the
Company to increase the amount of shares available by 400,000 shares.
If the proposed amendment is adopted, the amended portion of the second
paragraph of Section 6 of the Plan will read 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)."
No other provisions of the Plan will be changed or altered by the amendment.
Options may continue to be granted under the Plan through September, 2005.
Options granted under the Plan may either be incentive stock options or
nonqualified stock options.
The amendment will not become effective unless approved by the holders of a
majority of the outstanding Common Stock of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 2 TO
AMEND THE PLAN.
SHAREHOLDER PROPOSALS
In accordance with the rules of the Securities and Exchange Commission,
shareholder proposals must be received by December 31, 1997 to be considered for
inclusion in the Proxy Statement for the 1998 Annual Meeting of Shareholders
which is expected to be held in June, 1998. It is suggested that any shareholder
desiring to submit a proposal, do so by Certified Mail, Return Receipt
Requested. Shareholders should also note that, in addition to the requirement of
timely receipt by the Board of Directors of a proposal as stated above, such
proposal will not be included in the proxy solicitation material for the 1998
Annual Meeting of Shareholders unless it otherwise complies with the
requirements of Section 14(a) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated and in effect thereunder.
ADDITIONAL INFORMATION
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC").
Executive officers, directors, and greater than 10% beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Messrs. Echtenkamp, Wilmers and French, failed to timely
file Form 5 yearly ownership reports.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick, certified public accountants, are the independent public
accountants for the Company.
Representatives of KPMG Peat Marwick are expected to be present at the
shareholders' meeting and will be given the opportunity to make any statement
they might desire and will also be available to respond to appropriate questions
from shareholders. KPMG Peat Marwick has been selected as independent public
accountants for the Company for fiscal 1997.
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OTHER MATTERS
The Board of Directors does not know of any other matters to be presented at
the annual meeting. In the event that other business is properly brought before
the meeting, it is the intention of the proxy holders named in the proxy to vote
the proxies in accordance with the recommendation of the Board of Directors.
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_______________________________________________________________________________
BALLANTYNE OF OMAHA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
JUNE 10, 1997
The undersigned hereby constitutes and appoints RONALD H. ECHTENKAMP and
JOHN WILMERS, or either of them, with full power to act alone, or any
substitute appointed by either of them as the undersigned's agents, attorneys
and proxies to vote the number of shares the undersigned would be entitled to
vote if personally present at the Annual Meeting of the Shareholders of
Ballantyne of Omaha, Inc. to be held at the Westin Aquila Hotel, 1615 Howard
Street, Omaha, Nebraska 68102, on the 10th day of June, 1997, at 4:00 p.m. or
any adjournments thereof, as indicated hereon.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION, FOR THE AMENDMENT TO THE STOCK
OPTION PLAN AND WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS.
_______________________________________________________________________________
FOLD AND DETACH HERE
<PAGE>
_______________________________________________________________________________
Please mark
your votes as /X/
indicated in
this example
FOR the three nominees (except as WITHHOLD AUTHORITY to vote for
marked to the contrary below) three nominees listed below
1. Election of Directors. / / / /
Ronald H. Echtenkamp, Jeffrey D. Chelin, and Yale Richards
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
_______________________________________________________________________
FOR AGAINST ABSTAIN
2. Amendment to Certificate of Incorporation / / / / / /
3. Amendment to 1995 Stock Option Plan / / / / / /
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
Signature(s) _________________________________________ Dated ___________, 1997
Please sign exactly as your name appears hereon.
When signing as attorney, executor, administrator,
trustee, guardian or conservator, give full title. All
joint trustees must sign. PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
_______________________________________________________________________________
FOLD AND DETACH HERE
