<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ 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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
------------------------------------------------------------------------
<PAGE>
[LOGO]
NOTICE AND PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT
THE OMAHA SHERATON HOTEL
1615 HOWARD STREET
OMAHA, NEBRASKA 68102
ON
WEDNESDAY, JUNE 14, 2000 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 14, 2000
The Annual Meeting of Shareholders of Ballantyne of Omaha, Inc. will be held
at The Omaha Sheraton Hotel, 1615 Howard Street, Omaha, Nebraska 68102, on
June 14, 2000 at 4:00 p.m. for the following purposes:
1. To elect, as Directors, two persons listed in the accompanying Proxy
Statement.
2. 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 April 24,
2000, (the "Record Date") 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 June 5, 2000 at (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. Early reservations are encouraged.
I look forward to seeing you at the Annual Meeting.
Dated this 10th day of May, 2000.
By Order of the Board of Directors
/s/ John Wilmers
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 14, 2000.
Shareholders of record at the close of business on April 24, 2000 are entitled
to notice of, and to vote at, the meeting and any adjournment thereof. This
Proxy Statement was first mailed to shareholders on approximately May 10, 2000.
VOTING SHARES AND PRINCIPAL HOLDERS
Based upon the records of the Company, Canrad of Delaware, Inc., 14 Commerce
Drive, Cranford, New Jersey 07016, owns 3,238,845 shares, or 26.0% of the
Company's outstanding Common Stock as of April 24, 2000. Canrad of
Delaware, Inc. is a wholly owned subsidiary of Canrad Inc. which is an indirect,
wholly owned subsidiary of ARC International Corporation ("ARC"). In addition,
Seamark Asset Management Ltd. filed with the Securities and Exchange Commission
a Schedule 13G on January 28, 1999 indicating that as of October 30, 1998 it
owned 713,213 shares of the Company's Common Stock. An amendment to the Schedule
13G was filed with the Securities and Exchange Commission on February 14, 2000
indicating that Seamark Asset Management Ltd., Manulife Financial Corporation
and the Manufacturers Life Insurance Company, as a group, now own 715,741 shares
of the Company's Common Stock. All shares have been adjusted for the 5% stock
dividend effected by the Company on March 1, 1999.
APPOINTMENT AND REVOCATION OF PROXIES
As of the close of business on April 24, 2000, the Company had 12,459,323
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.
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 two 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 six (6) for 2000.
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 and Chelin
are Class II Directors; and Messrs. Wilmers and Campbell are Class III
Directors. The terms of the Class I, Class II and Class III Directors expire at
the Annual Meeting of Shareholders to be held in 2002, 2000, and 2001,
respectively.
The Board of Directors has nominated Mr. Ronald H. Echtenkamp and
Mr. Jeffrey D. Chelin for election as Class II Directors to serve until the
Annual Meeting of Shareholders in the year 2003.
1
<PAGE>
The proxy holders named in the proxy intend to vote "FOR" the election of
the nominees Mr. Ronald H. Echtenkamp and Mr. Jeffrey D. Chelin unless authority
to so vote is withheld. In the unexpected event that any one or both 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.
The chart on the following page sets forth a list of the names and ages of
the two nominees, both of whom are presently serving as Directors. Also listed
are the two Directors whose terms expire in 2001 and the two Directors whose
terms expire in 2002. 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 April 24, 2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
MESSRS. ECHTENKAMP AND CHELIN.
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR NO. OF
NAME AGE EMPLOYMENT HISTORY SINCE SHARES %(1)
---- -------- -------------------------------------------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
CLASS II: NOMINEES FOR ELECTION
Ronald H. Echtenkamp 66 Retired President and CEO, Prior Vice 1993 128,635(2) 1.03%
Chairman of the Board, March 1997 to
December 1998; prior President of Company
1981-1997, and CEO of Company 1991-1997;
joined the Company in 1969 and served in
various capacities thereafter.
Jeffrey D. Chelin 48 Vice President--Finance and Chief Financial 1995 41,081(3) *
Officer of ARC since 1992.
CLASS III: TERM EXPIRES IN 2001
John P. Wilmers 55 President and CEO of the Company since 1995 220,724(4) 1.77%
March 1997; previously Executive Vice
President of the Company since 1992; joined
the Company in 1981 and served in various
capacities since.
Colin G. Campbell 44 Principal of Intrepid Partners, a financial 1995 43,706(5) *
advisory firm; prior to that, Mr. Campbell
provided consulting services through the
Castlestone Company since 1993.
CLASS I: TERM EXPIRES IN 2002
Arnold S. Tenney 57 Chairman of Board since 1992; President and 1988 303,686(6) 2.44%
CEO of ARC since 1978; Chairman of Board and
Director of Cabletel Communications Corp.;
Director of ARC.
Marshall S. Geller 61 Chairman and CEO of Geller and Friend 1996 68,654(7) *
Capital Partners, Inc., a merchant banking
firm, since 1995; Managing Partner Golenberg
& Geller, Inc. from 1991-1993; currently
serving as Director of Hexcel Corp.;
Cabletel Corp.; Stroud's Inc. and Value
Vision International, Inc.
</TABLE>
* Less than 1% of Common Stock outstanding.(1)
All Executive Officers beneficially own 434,758 shares, including presently
exercisable stock options, or 3.49% of the outstanding Common Stock.(1)(8)
All Directors and Executive Officers as a group (8 persons) beneficially own
1,020,520 shares, including presently exercisable stock options, or 8.2% of the
outstanding Common Stock.(1)(9)
- ------------------------
(1) Based upon 12,459,323 shares of Common Stock outstanding as of April 24,
2000. Each named person is deemed to be the beneficial owner of shares of
Common Stock that may be acquired within 60 days of April 24, 2000 upon the
exercise of stock options. Accordingly, the number of shares and percentage
set forth next to the name of such person, all Executive Officers as a group
and all Directors and Executive Officers as a group includes 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.
(2) Includes 73,510 shares of Common Stock owned directly by Mr. Echtenkamp and
55,125 shares purchasable pursuant to presently exercisable stock options.
3
<PAGE>
(3) Includes 41,081 shares of Common Stock purchasable pursuant to presently
exercisable stock options.
(4) Includes 23,849 shares of Common Stock owned directly by Mr. Wilmers and
196,875 shares purchasable pursuant to presently exercisable stock options.
(5) Includes 43,706 shares of Common Stock purchasable pursuant to presently
exercisable stock options.
(6) Includes 52,500 shares of Common Stock held indirectly by Mr. Tenney through
Arnmart Investments Limited, a corporation controlled by Mr. Tenney and
members of his family, 12,288 shares of Common Stock owned directly by
Mr. Tenney, 3,898 shares owned indirectly by Mr. Tenney through his wife and
235,000 shares purchasable pursuant to presently exercisable stock options.
Does not include 3,238,845 shares owned beneficially by ARC.
(7) Includes 24,948 shares of Common Stock held directly by Mr. Geller, and
43,706 shares purchasable pursuant to presently exercisable stock options.
(8) Includes 49,933 shares of Common Stock owned directly or indirectly by all
Executive Officers and 384,825 shares purchasable pursuant to presently
exercisable stock options.
(9) Includes 217,077 shares of Common Stock owned directly or indirectly by all
Directors and Executive Officers as a group and 803,443 shares purchasable
pursuant to presently exercisable stock options.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
AUDIT COMMITTEE
<TABLE>
<CAPTION>
NAME OF COMMITTEE MEMBERS FUNCTIONS OF COMMITTEE MEETINGS IN 1999
- ------------------------- ----------------------------------------------------- ----------------
<S> <C> <C> <C>
Colin Campbell - Confers with independent accountants
Ronald Echtenkamp regarding scope of examination
- Recommends to board the engagement of
independent auditors 2
- Reviews reports of independent accountants
- Reviews recommendations about internal
controls
</TABLE>
COMPENSATION COMMITTEE
<TABLE>
<CAPTION>
NAME OF COMMITTEE MEMBERS FUNCTIONS OF COMMITTEE MEETINGS IN 1999
- ------------------------- ----------------------------------------------------- ----------------
<S> <C> <C> <C>
Arnold Tenney - Reviews all compensation agreements for
Ronald Echtenkamp officers of the Company
Colin Campbell - Evaluates executive officers performance
in conjunction with recommending salary 2
increases
- Coordinates recruitment requirements for
the Company at the executive level
</TABLE>
COMPENSATION OF DIRECTORS
We do not pay directors who are also officers or employees of the Company
additional compensation for their service as directors.
4
<PAGE>
In 1999, compensation for non-employee directors (other than employees of
ARC and Canrad, Inc.) included the following:
- Annual retainer of $20,000
- $1,000 for each Board meeting attended
- $500 for each Board meeting held by telephone conference
- Expenses of attending Board meetings
- Subject to a one time election to decline participation, stock option
grant of 23,625 options
- vesting at a rate of 7,875 shares on the first business day after
election
- vesting an additional 7,875 shares on the first business day after each
annual shareholders meeting, assuming they continue to serve on the
board
- exercise price of all 23,625 options is fair market value on date of
initial grant
- options have a term of five years
- non-employee directors are automatically granted additional options
every three years as long as they continue to serve on the Board
In 1999, compensation for non-employee directors affiliated with ARC or
Canrad, Inc. included the following:
- Mr. Tenney is a party to a Consulting Agreement effective January 1, 1999
pursuant to which he is paid $100,000 annually. See "Certain Relationships
and Related Transactions".
- Mr. Chelin was granted an option to purchase 5,250 shares at an exercise
price of $9.24.
The Board of Directors held thirteen (13) meetings in 1999, five (5) actual
and eight (8) telephonic. The Directors also acted once by unanimous written
consent. During 1999, each of the Directors attended at least 75% of the
aggregate number of meetings of the Board and Board committees on which they
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 AGE POSITION AND PRINCIPAL OCCUPATION SINCE 1995 SINCE
- ---- -------- -------------------------------------------- --------
<S> <C> <C> <C>
John P. Wilmers 55 Director of Company; President and CEO of 1988
Company since March 1997; previously
Executive Vice President of Company since
1992; joined Company in 1981 and has served
in various capacities since.
Brad J. French 47 CFO since 1996; Secretary and Treasurer of 1992
the Company since 1992; joined Company as
Controller in 1990.
Ray F. Boegner 50 Senior Vice President; previously Senior 1997
Vice President of Sales; Vice President of
Sales prior to November 1996.
</TABLE>
5
<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 $100,000 for the fiscal years ended December 31,
1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------ --------------------------------------
AWARDS PAYOUTS
-------------------------- ---------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP
NAME AND SALARY ($) BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS
PRINCIPAL POSITION YEAR (1) ($) ($) ($) (#)(2) ($)
(A) (B) (C) (D) (E) (F) (G) (H)
- ---------------------------- -------- ---------- -------- ------------ ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John P. Wilmers, 1999 203,173 348,000 246,875
President and Chief 1998 183,058 378,200 196,875
Executive Officer 1997 169,950 454,000 181,125
Brad J. French, 1999 127,713 104,000 112,675
Secretary and Treasurer, 1998 112,577 110,000 87,675
Chief Financial Officer 1997 95,275 120,000 77,175
Ray F. Boegner, 1999 138,906 135,000 125,275
Senior Vice President 1998 123,125 140,000 100,275
1997 108,029 140,000 89,775
<CAPTION>
ALL OTHER
NAME AND COMPENSATION
PRINCIPAL POSITION ($)
(A) (I)
- ---------------------------- ------------
<S> <C>
John P. Wilmers,
President and Chief
Executive Officer
Brad J. French,
Secretary and Treasurer,
Chief Financial Officer
Ray F. Boegner,
Senior Vice President
</TABLE>
- ------------------------
(1 ) Salary includes $3,173 (1999), $3,750 (1998) and $4,950 (1997) for
Mr. Wilmers; $2,713 (1999), $3,000 (1998) and $2,775 (1997) for Mr. French;
$3,906 (1999), $3,586 (1998) and $3,029 (1997) for Mr. Boegner paid by the
Company pursuant to the Retirement and Savings Plan described herein.
(2) Adjusted for all stock split and dividends effected by the Company and
including the stock option grants discussed in the "Change of Control"
section below.
The following table sets forth information with respect to exercised and
unexercised options and SARs, if any, during fiscal year 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL 1999 FISCAL 1999
SHARES YEAR END (#) YEAR END ($)
ACQUIRED ON ---------------------- ----------------------
EXERCISE VALUE EXERCISABLE ("EX") EXERCISABLE ("EX")
NAME (#) REALIZED ($) UNEXERCISABLE ("UN") UNEXERCISABLE ("UN")
(A) (B) (C) (D)(1)(2) (E)(2)
- --------------------------- ----------- ------------ ---------------------- ----------------------
<S> <C> <C> <C> <C>
John P. Wilmers 0 0 196,875 ("Ex") $301,610 ("Ex")
50,000(3)("Un") $ 0 ("Un")
Brad J. French 0 0 87,675 ("Ex") $130,241 ("Ex")
25,000(3)("Un") $ 0 ("Un")
Ray F. Boegner 0 0 100,275 ("Ex") $150,805 ("Ex")
25,000(3)("Un") $ 0 ("Un")
</TABLE>
- ------------------------
(1) Adjusted for all stock splits and dividends effected by the Company.
6
<PAGE>
(2) The value in column (e) was determined by using the average of the high and
low trade price ($5.41) on December 31, 1999, less the option exercise
price, multiplied by the number of shares.
(3) See discussion of stock options contained in "Change of Control" section
below.
EMPLOYMENT CONTRACTS
Mr. Wilmers was elected President and Chief Executive Officer of the Company
effective March 1, 1997. The Compensation Committee and the Board of Directors
approved a five year contract for Mr. Wilmers commencing January 1, 1997.
Effective January 1, 2000 Mr. Wilmers' base compensation was increased to
$215,000 per year. He is also eligible to participate in the Key Employees Bonus
Plan ("Bonus Plan") and other normal employee benefits.
Mr. French is a party to a five year employment agreement dated May 1, 1998.
Effective January 1, 2000, Mr. French's base compensation was increased to
$135,000 per year. He is also eligible to participate in the Bonus Plan and
other normal employee benefits.
Mr. Boegner is a party to a five year employment agreement dated November
20, 1996. Effective January 1, 2000 Mr. Boegner's base compensation was
increased to $145,000 per year. He is also eligible to participate in the Bonus
Plan and other normal employee benefits.
KEY EMPLOYEES BONUS PLAN
During 1999 Messrs. Wilmers, French and Boegner participated in the Bonus
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. Amounts paid to
Messrs. Wilmers, French and Boegner pursuant to the Bonus Plan are included in
the Summary Compensation Table.
CHANGE OF CONTROL AGREEMENTS
The Company entered into change in control agreements in 1999 with the
Messrs. Wilmers, French and Boegner (the "Agreements"). The Agreements provide
generally that, if the respective officer is terminated following a change of
control, as defined in the Agreements, the officer will receive certain
severance benefits including, but not limited to, payment of a sum equal to:
(i) three (3) times the sum of (a) the annual rate of base salary as of the date
of termination or date of change in control, whichever is greater and (b) the
average annual incentive bonus received by the officer for the two (2) fiscal
years preceding the year in which the date of termination occurs or the date in
which the change of control occurs, whichever is greater; and (ii) certain
gross-up payments if the officer would be subject to an excise tax, as defined
under Section 4999 of the Internal Revenue Code of 1986. Such sum will be placed
in a trust and be paid out in 36 equal monthly installments.
Additionally, the Company granted Messrs. Wilmers, French and Boegner stock
options exercisable upon the occurrence of a sale of substantially all of the
capital stock or substantially all of the assets of the Company, as defined in
the Stock Option Agreements. Upon the occurrence of such event, the respective
officers are entitled to purchase shares of the Company's common stock (50,000
shares for Mr. Wilmers and 25,000 shares each for Messrs. French and Boegner) at
a price of $5.50 per share. These stock options expire October 26, 2000.
The following table sets forth information with respect to options granted
in 1999 to the executive officers of the Company. In 1999, the Company did not
grant any stock options to employees pursuant to
7
<PAGE>
the Company's 1995 Stock Option Plan. The only stock options granted were the
change of control stock options shown below:
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- --------------------------------------------------------------------------------- ----------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
(A) (B)(1) (C) (D) (E) (F) (G)
- ---------------------- ------------ ------------ ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John P. Wilmers 50,000 50% $5.50 10/26/00 $13,750 $27,500
Brad J. French 25,000 25% $5.50 10/26/00 $ 6,875 $13,750
Ray F. Boegner 25,000 25% $5.50 10/26/00 $ 6,875 $13,750
</TABLE>
- ------------------------
(1) See discussion of stock options in "Change of Control Agreements" section
above.
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 and a minimum of 1,000 hours worked 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, at the discretion of the Board, to
contribute an additional amount. All contributions to the Plan are
nonforfeitable. For 1999, no Participant could contribute more than $10,000 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. Wilmers,
French and Boegner are included in the Summary Compensation Table.
8
<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 President and Chief Executive Officer of the
Company. The Compensation Committee is comprised of three members of the Board
of Directors, Messrs. Tenney, Echtenkamp and Campbell.
Mr. Wilmers, in his capacity as President and Chief Executive Officer of the
Company, determines the compensation to be paid to Mr. French and Mr. Boegner,
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 executive officers, directors and key employees of
the Company. The Stock Option Committee is comprised of Messrs. Campbell and
Geller.
COMPENSATION PHILOSOPHY
Decisions with respect to executive compensation are made 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 Bonus 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. Base salaries have
historically been reviewed annually.
CASH BONUSES
The executive officers participate in a management and sales bonus plan
designated as the Key Employees Bonus Plan pursuant to which they receive cash
bonuses if the Company achieves specific operating levels. The Bonus Pool is
based upon a percentage of operating income, as defined by the Board of
Directors. The calculation of the Bonus Plan Pool will be subject to approval of
the Compensation Committee. The distribution among management is at the initial
determination of Mr. Wilmers but is also subject to approval by the Compensation
Committee. 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 (the "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. In 1999, the Stock Option Committee granted a total of 5,250 stock
options with an exercise price of $9.24 pursuant to the Stock Option Plan to a
director not eligible to receive options pursuant to the 1995 Outside Directors
Stock Option Plan. No other grants were made pursuant to the Stock Option Plan.
Certain grants were made pursuant to the change of control agreements as
discussed in the "Change of Control" section above.
9
<PAGE>
As to future options, the Stock Option Committee will consider the number
and terms of the options outstanding when determining whether to grant options.
The Stock Option Plan currently provides that no member of the Stock Option
Committee can participate in the Stock Option Plan during his membership on the
Stock Option Committee. According to the provisions of the Stock 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 with an exercise price
equal to the fair market value of the common stock on the date of grant, said
options vesting immediately and having a ten year term. In no event will options
be granted at less than 85% of fair market value of the common stock on the date
of grant.
CHIEF EXECUTIVE OFFICER COMPENSATION
As stated earlier, the base annual compensation of Mr. Wilmers was increased
effective January 1, 2000 to $215,000 plus participation in the Bonus 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.
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
10
<PAGE>
PERFORMANCE GRAPH
The following performance graph shows the cumulative total return on the
Company's Common Stock, the S & P 500 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, 1999. 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 S&P 500
<S> <C> <C> <C>
9/7/95 $100.00 $100.00 $100.00
12/95 $111.21 $69.95 $108.65
12/96 $301.55 $46.16 $133.60
12/97 $409.66 $30.42 $178.17
12/98 $300.84 $25.32 $229.08
12/99 $206.11 $79.35 $277.29
</TABLE>
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
The Company is a party to a management agreement (the "Management
Agreement") with Canrad Inc. dated September 12, 1995. 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
compli-ance, employee and general business insurance programs and asset
acquisitions and sales. The Management Agreement was amended on July 1, 1997 to
reduce the Management Fee charged to Ballantyne by Canrad, Inc. from $25,000 per
month to $12,500 per month. The Management Agreement was again amended on
January 1, 1999 to change certain services provided to Ballantyne by Canrad,
Inc.; specifically, Canrad, Inc. is no longer required pursuant to the
Management Agreement, to make available the services of Arnold Tenney.
CONSULTING AGREEMENT
Effective January 1, 1999, the Company also entered into a Consulting
Agreement with Arnold Tenney. The Consulting Agreement provides that during the
term of the contract, Mr. Tenney will assist the Company in the continued
operation of its business and render advice and other services as the Company
and Mr. Tenney mutually agree upon. Mr. Tenney will devote such time to the
business affairs of the Company as he, in his sole judgment and discretion shall
deem necessary for such purposes. In return for these services, the Consulting
Agreement provides for annual compensation of $100,000. On January 1, 2000, the
Company and Mr. Tenney amended the Consulting Agreement extending its term an
additional six months.
INSURANCE COVERAGE
The Company is included in group health and business insurance programs
maintained by ARC and Canrad Inc. The group health insurance plan is a
self-insured minimum premium plan that is administered through United
HealthCare. 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
coverage 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 is calculated based on 125% of
expected claims as determined by a third party administrator and is estimated to
be $1,972,000 for the January 1, 2000 through December 31, 2000 plan year. 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 and umbrella. 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 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 1999, the Company paid approximately $1,757,000 to Canrad representing
the insurance premiums and claims described above and other miscellaneous items
excluding management fees.
12
<PAGE>
LOAN TO TENNEY
On June 24, 1999, the Company advanced Mr. Tenney $500,000. The term of the
loan is one (1) year and bears interest, payable monthly, at one percent (1%)
above the interest rate in effect from time to time under the Company's credit
facility with its lending institution. Mr. Tenney is current in his payments due
to the Company pursuant to the loan.
SHAREHOLDER PROPOSALS
In accordance with the rules of the Securities and Exchange Commission,
shareholder proposals must be received by December 31, 2000 to be considered for
inclusion in the Proxy Statement for the 2001 Annual Meeting of Shareholders
which is expected to be held in May 2001. 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 2001
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. In 1999, Messrs. Chelin and Echtenkamp each failed to
timely file a Form 4.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP ("KPMG"), certified public accountants, are the independent public
accountants for the Company.
Representatives of KPMG 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 has been selected as independent public accountants for the
Company for fiscal 2000.
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.
BY ORDER OF THE BOARD OF DIRECTORS
Brad J. French
Secretary
13
<PAGE>
BALLANTYNE OF OMAHA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
JUNE 14, 2000
The undersigned hereby constitutes and appoints John P. Wilmers and Brad
J. French, with full power to act alone or together, or any substitute
appointed by either of them as the undersigned's agent, attorney and proxy 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 Sheraton Omaha Hotel, 1615 Howard Street,
Omaha, Nebraska 68102, on the 14th day of June, 2000 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 BOTH NOMINEES FOR DIRECTOR AND WITH
DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS.
<PAGE>
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 BOTH NOMINEES FOR DIRECTOR AND WITH DISCRETIONARY
AUTHORITY ON ALL OTHER MATTERS.
Please mark your votes
as indicated in this /x/
example
1. Election of Directors Ronald H. Echtenkamp and
Jeffrey D. Chelin
FOR the two nominees WITHHOLD
(except as marked to the AUTHORITY
contrary to the right) to vote for two
nominees listed to
the right.
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
2. In their discretion, the Dated:___________________, 2000
proxies are authorized to
vote upon such other business ________________________________
as may properly come before Signature of Shareholder
the meeting.
________________________________
Signature of Shareholder
Please sign exactly as your name appears at the left. 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.
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