EXHIBIT 10.8
BALLANTYNE OF OMAHA, INC.
1995 OUTSIDE DIRECTORS
STOCK OPTION PLAN, AS AMENDED
1. NAME.
The name of this Plan is the Ballantyne of Omaha, Inc. 1995 Outside
Directors Stock Option Plan.
2. DEFINITIONS.
For the purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any partnership, corporation, firm, joint
venture, association, trust, limited liability company,
unincorporated organization or other entity (other than a
Subsidiary) that, directly or indirectly through one or more
intermediaries, is controlled by the Company, where the term
"controlled by" means the possession, direct or indirect, of the
power to cause the direction of the management and policies of
such entity, whether through the ownership of voting interests or
voting securities, as the case may be, by contract or otherwise.
(b) "Board" means the board of directors of the Company.
(c) "Chairman" means the individual appointed by the Board to serve
as the chairman of the Committee.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury regulations promulgated
thereunder.
(e) "Committee" means the committee appointed by the Board to
administer the Plan as provided in Section 4(a).
(f) "Common Stock" means the common stock, $.01 par value per share,
of the Company or any security of the Company identified by the
Committee as having been issued in substitution or exchange
therefor or in lieu thereof.
(g) "Company" means Ballantyne of Omaha, Inc., a Delaware corporation.
(h) "Effective Date" means September 6, 1995.
(i) "Employee" means an individual whose wages are subject to the
withholding of federal income tax under Section 3401 of the Code.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute.
(k) "Fair Market Value" of a Share as of a specified date means the
average of the highest and lowest market prices of a Share on the
American Stock Exchange on such date as reported in the Eastern
Edition of The Wall Street Journal or, if no trading of Common
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Stock is reported for that day, the next preceding day on which
trading was reported. In the event the Common Stock is not then
traded on the American Stock Exchange, the Fair Market Value of a
Share shall be determined by reference to the principal market or
exchange on which the Shares are then traded.
(l) "Non-Employee Director" means an individual who: (i) is now, or
hereafter becomes, a member of the Board; (ii) is neither an
Employee nor an Officer of the Company or of any Subsidiary or
Affiliate on the date of the grant of the NQSO; and (iii) has not
elected to decline to participate in the Plan pursuant to the
immediately succeeding sentence. A director otherwise eligible
to participate in the Plan may make an irrevocable, one-time
election, by written notice to the Corporate Secretary of the
Company and the Chairman within thirty days after his initial
election or appointment to the Board to decline to participate in
the Plan.
(m) "NQSO" means an option that is not qualified under Section 422 of
the Code.
(n) "Officer" means an individual elected or appointed by the Board
or by the board of directors of a Subsidiary, or chosen in such
other manner as may be prescribed by the by-laws of the Company
or a Subsidiary, as the case may be, to serve as such.
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(o) "Participant" means a Non-Employee Director who is granted a NQSO
under the Plan.
(p) "Plan" means this 1995 Outside Directors Stock Option Plan.
(q) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor or
replacement rule adopted by the Securities and Exchange
Commission.
(r) "Share" means one share of Common Stock, adjusted in accordance
with Section 9(b), if applicable.
(s) "Stock Option Agreement" means the written agreement between the
Company and the Participant that contains the terms and
conditions pertaining to the NQSO.
(t) "Subsidiary" means any corporation or entity of which the
Company, directly or indirectly, is the beneficial owner of fifty
percent (50%) or more of the total voting power of all classes of
its stock having voting power, unless the Committee shall
determine that any such corporation or entity shall be excluded
hereunder from the definition of the term Subsidiary.
3. PURPOSE.
The purpose of the Plan is to enable the Company to provide
incentives, which are linked directly to increases in stockholder value, to Non-
Employee Directors in order that they will be encouraged to serve on the Board
and exert their best efforts on behalf of the Company.
4. ADMINISTRATION.
(a) Composition of the Committee.
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The Plan shall be administered by a Committee appointed by the Board
consisting of no less than two individuals. Members of the Committee need not
be members of the Board, Officers or Employees of the Company. Members of the
Committee shall not be entitled to participate in the Plan. The Board may from
time to time remove members from, or add members to, the Committee. Vacancies
on the Committee, however caused, shall be filled by the
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Board. The Board shall appoint one of the members of the Committee as Chairman.
(b) Actions by the Committee.
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The Committee shall hold meetings at such times and places as it may
determine. Acts approved by a majority of the members of the Committee present
at a meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.
(c) Powers of the Committee.
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The Committee shall have the authority to administer the Plan in its
sole and absolute discretion; provided, however, that the Committee shall have
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no authority to grant NQSOs, to determine the number of Shares subject to NQSOs
or the price at which each Share covered by a NQSO may be purchased pursuant to
the Plan, all of which shall be automatic as described in Section 8. To this
end, the Committee is authorized to construe and interpret the Plan and to make
all other determinations necessary or advisable for the administration of the
Plan. Subject to the foregoing, any determination, decision or action of the
Committee in connection with the construction, interpretation, administration or
application of the Plan shall be final, conclusive and binding upon all
Participants and any person validly claiming under or through a Participant.
(d) Liability of Committee Members.
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No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any grant or exercise of a NQSO thereunder.
(e) NQSO Accounts.
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The Committee shall maintain a journal in which a separate account for
each Participant shall be established. Whenever NQSOs are granted to or
exercised by a Participant, the Participant's account shall be appropriately
credited or debited. Appropriate adjustment shall also be made in the journal
with respect to each account in the event of an adjustment pursuant to Section
9(b).
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5. EFFECTIVE DATE AND TERM OF THE PLAN.
(a) Effective Date of the Plan.
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The Plan was adopted by the Board and became effective on September 6,
1995, subject to approval by the stockholders of the Company at a meeting duly
called and held within twelve months following such date.
(b) Term of Plan.
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No NQSO shall be granted pursuant to the Plan on or after September 6,
2005, but NQSOs theretofore granted may extend beyond that date.
6. SHARES SUBJECT TO THE PLAN.
The maximum aggregate number of Shares which may be subject to NQSOs
granted to Non-Employee Directors under the Plan shall be 100,000. The
limitation on the number of Shares which may be subject to NQSOs under the Plan
shall be subject to adjustment as provided in Section 9(b).
If any NQSO granted under the Plan expires or is terminated for any
reason without having been exercised in full, the Shares allocable to the
unexercised portion of such NQSO shall again become available for grant pursuant
to the Plan. At all times during the term of the Plan, the Company shall
reserve and keep available for issuance such number of Shares as the Company is
obligated to issue upon the exercise of all then outstanding NQSOs.
7. SOURCE OF SHARES ISSUED UNDER THE PLAN.
Common Stock issued under the Plan shall be authorized and unissued
Shares. No fractional Shares shall be issued under the Plan.
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8. NON-QUALIFIED STOCK OPTIONS.
(a) Grant of NQSOs.
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On the next succeeding business day after the Effective Date, NQSOs to
purchase 16,500 Shares (adjusted for 10% stock distribution effected March 8,
1996) shall be granted automatically to each Non-Employee Director. With
respect to any Non-Employee Director who first becomes a member of the Board
after the Effective Date, NQSOs to purchase 16,500 Shares shall be granted
automatically on the next succeeding business day following his election to the
Board. In addition to such initial NQSO grants, NQSOs to purchase 16,500 Shares
shall be granted automatically to each Non-Employee Director on the next
succeeding business day after the third consecutive annual meeting of the
shareholders following his initial NQSO grant, and on the next succeeding
business day after every third consecutive annual meeting of the shareholders
thereafter during the term of the Plan, provided that said Non-Employee Director
continues to be a member of the Board on the date of each such additional grant.
NQSOs shall be granted in the aforesaid manner until the date on which the
Shares available for grant shall no longer be sufficient to permit grants of
NQSOs covering 16,500 Shares to be made to each Non-Employee Director entitled
to a grant as of such date, in which event the Shares then available for grant
shall be allocated on a pro rata basis among the Non-Employee Directors entitled
to a grant of NQSOs as of such date. The provisions of this Section shall not
be amended more than once every six months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules thereunder.
(b) Exercise Price.
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Each Share covered by a NQSO granted on the business day next
succeeding the Effective Date may be purchased at a purchase price equal to the
initial public offering price of a Share. Each Share covered by a NQSO granted
after the business day next succeeding the Effective Date may be purchased at a
purchase price equal to the Fair Market Value of a Share on the date of the NQSO
grant. The provisions of this Section shall not be amended more than once every
six months, other than to comport with changes in the Code, ERISA, or the rules
thereunder.
(c) Terms and Conditions.
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All NQSOs granted pursuant to the Plan shall be evidenced by a Stock
Option Agreement (which need not be the same for each Participant or NQSO),
approved by the Committee which shall be sub-
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ject to the following express terms and conditions and to the other terms and
conditions specified in this Section 8, and to such other terms and conditions
as shall be determined by the Committee in its sole and absolute discretion
which are not inconsistent with the terms of the Plan:
(i) Except as set forth in Section 10, all NQSOs granted to a
Participant shall vest and become first exercisable as
follows:
i.i 5,500 shares (adjusted for the 10% stock distribution
effected March 8, 1996) on the next succeeding business day
following the Participant's initial election to the Board.
i.ii Thereafter, 5,500 shares on the next succeeding
business day following each annual meeting of the
Stockholders of the Company.
(ii) the failure of a NQSO to vest for any reason whatsoever
shall cause the NQSO to expire and be of no further force or
effect;
(iii) unless terminated earlier pursuant to Sections 8(f) or 10,
the term of each NQSO shall be five years from the date of
grant;
(iv) NQSOs shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the Participant
only by him or by his guardian or legal representative;
(v) no NQSO or interest therein may be transferred, assigned,
pledged or hypothecated by the Participant during his
lifetime whether by operation of law or otherwise, or be
made subject to execution, attachment or similar process;
and
(vi) payment for the Shares to be received upon exercise of a
NQSO may be made in cash, in Shares (determined with
reference to their Fair Market Value on the date of
exercise) or any combination thereof.
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(d) Additional Means of Payment.
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Any Stock Option Agreement may, in the sole and absolute discretion of
the Committee, permit payment by any other form of legal consideration
consistent with applicable law and any rules and regulations relating thereto,
including, but not limited to, the execution and delivery of a full recourse
promissory note (bearing interest at a rate not less than the prime rate
announced as then being in effect by the Company's principal lender and whose
maturity date shall not exceed beyond ten years) by the Participant to the
Company.
(e) Exercise.
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The holder of a NQSO may exercise the same by filing with the
Corporate Secretary of the Company and the Chairman a written election, in such
form as the Committee may determine, specifying the number of Shares with
respect to which such NQSO is being exercised. Such notice shall be accompanied
by payment in full of the exercise price for such Shares. Notwithstanding the
foregoing, the Committee may specify a reasonable minimum number of Shares that
may be purchased on any exercise of an Option, provided that such minimum number
will not prevent the holder from exercising the Option with respect to the full
number of Shares as to which the Option is then exercisable.
(f) Termination of NQSOs.
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NQSOs granted under the Plan shall be subject to the following events
of termination:
(i) in the event a Participant is removed from the Board for
cause (as contemplated by the Company's by-laws), all
unexercised NQSOs held by such Participant on the date of
such removal (whether or not vested) will expire
immediately;
(ii) in the event a Participant is no longer a member of the
Board, other than by reason of removal for cause, all NQSOs
which remain unvested at the time the Participant is no
longer a member of the Board shall expire immediately, and
all NQSOs which have vested prior to such time shall expire
twelve months thereafter unless by their terms they expire
sooner; and
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(iii) in the event a Participant becomes an Officer or Employee of
the Company or a Subsidiary (whether or not such Participant
remains a member of the Board) all NQSOs which remain
unvested at the time such Participant becomes an Officer or
Employee of the Company shall expire immediately, and all
NQSOs which have vested prior to such time shall expire
twelve months thereafter unless by their terms they expire
sooner.
9. RECAPITALIZATION.
(a) Corporate Flexibility.
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The existence of the Plan and the NQSOs granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
stockholders of the Company, in their sole and absolute discretion, to make,
authorize or consummate any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of bonds, debentures, common stock,
preferred or prior preference stocks ahead of or affecting the Company's capital
stock or the rights thereof, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
grant of rights, issuance of securities, transaction, corporate act or
proceeding and notwithstanding the fact that any such activity, proceeding,
action, transaction or other event may have, or be expected to have, an impact
(whether positive or negative) on the value of any NQSO.
(b) Adjustments Upon Changes in Capitalization.
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Except as otherwise provided in Section 10 below and subject to any
required action by the stockholders of the Company, in the event of any change
in capitalization affecting the Common Stock of the Company, such as a stock
dividend, stock split or recapitalization, the Committee shall make
proportionate adjustments with respect to: (i) the aggregate number of Shares
available for issuance under the Plan; (ii) the number of Shares subject to each
grant under the Plan; (iii) the number and exercise price of Shares subject to
outstanding NQSOs; and (iv) such other matters as shall be appropriate in light
of the circumstances; provided, however, that the number of Shares subject to
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any NQSO shall always be a whole number and that no such adjustment shall be
made if the adjustment would cause the Plan to fail to comply with the "formula
award" exception, as set forth in Rule 16b-3(c)(2)(ii)
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of the Exchange Act, for grants of NQSOs to non-employee directors.
10. CHANGE OF CONTROL.
In the event of a Change of Control (as defined below), all Options
not vested on or prior to the effective time of any such Change of Control shall
immediately vest as of such effective time. The Committee in its discretion may
make provisions for the assumption of outstanding Options, or the substitution
for outstanding Options of new incentive awards covering the stock of a
successor corporation or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices so as to prevent
dilution or enlargement of rights; provided, however, that no such adjustment
shall be made if the adjustment would cause the Plan to fail to comply with the
"formula award" exception, as set forth in Rule 16b-3(c)(2)(ii) of the Exchange
Act, for grants of NQSOs to non-employee directors.
A "Change of Control" will be deemed to occur on the date any of the
following events occur:
(a) any person or persons acting together which would constitute a
"group" for purpose of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary and any entity beneficially owned by any of the
foregoing), beneficially own (as defined in Rule 13d-3 under the Exchange Act)
without Board approval, directly or indirectly, at least 30% of the total voting
power of the Company entitled to vote generally in the election of the Board;
(b) either (i) the Current Directors (as herein defined) cease for any
reason to constitute at least a majority of the members of the Board (for these
purposes, a "Current Director" means any member of the Board as of the Effective
Date, and any successor of a Current Director whose election, or nomination for
election by the Company's shareholders, was approved by at least a majority of
the Current Directors then on the Board) or (ii) at any meeting of the
stockholders of the Company called for the purpose of electing directors, a
majority of the persons nominated by the Board for election as directors fail to
be elected;
(c) the stockholders of the Company approve (i) a plan of complete
liquidation of the Company, or (ii) an agreement providing for the merger or
consolidation of the Company (A) in which the Company is not the continuing or
surviving corporation (other than consolidation or merger with a wholly-owned
subsidiary of the Company in which all Shares outstanding immediately prior to
the effectiveness thereof are changed into or exchanged for the
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same consideration) or (B) pursuant to which the Shares are converted into cash,
securities or other property, except a consolidation or merger of the Company in
which the holders of the Shares immediately prior to the consolidation or merger
have, directly or indirectly, at least a majority of the common stock of the
continuing or surviving corporation immediately after such consolidation or
merger or in which the Board immediately prior to the merger or consolidation
would, immediately after the merger or consolidation, constitute a majority of
the board of directors of the continuing or surviving corporation; or
(d) the stockholders of the Company approve an agreement (or
agreements) providing for the sale or other disposition (in one transaction or a
series of transactions) of all or substantially all of the assets of the
Company.
11. SECURITIES LAW REQUIREMENTS.
No Shares shall be issued under the Plan unless and until: (i) the
Company and the Participant have taken all actions required to register the
Shares under the Securities Act of 1933, as amended, or perfect an exemption
from the registration requirements thereof; (ii) any applicable requirement of
Nasdaq or any stock exchange on which the Common Stock is listed has been
satisfied; and (iii) any other applicable provision of state or federal law has
been satisfied. The Company shall be under no obligation to register the Shares
under the Securities Act of 1933, as amended, or to effect compliance with the
registration or qualification requirements of any state securities laws.
12. AMENDMENT AND TERMINATION.
(a) Modifications to the Plan.
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The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to NQSOs, suspend or terminate the
Plan or, subject to Sections 8(a) and 8(b), revise or amend the Plan in any
respect whatsoever. However, unless the Board specifically otherwise provides,
any revision or amendment that would cause the Plan to fail to comply with Rule
16b-3 or any other requirement of applicable law or regulation if such amendment
were not approved by the stockholders of the Company shall not be effective
unless and until such approval is obtained.
(b) Rights of Participant.
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No amendment, suspension or termination of the Plan that would
adversely affect the right of any Participant with respect to
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a NQSO previously granted under the Plan will be effective without the written
consent of the affected Participant.
13. MISCELLANEOUS.
(a) Stockholders' Rights.
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No Participant and no beneficiary or other person claiming under or
through such Participant shall acquire any rights as a stockholder of the
Company by virtue of such Participant having been granted a NQSO under the Plan.
No Participant and no beneficiary or other person claiming under or through such
Participant will have any right, title or interest in or to any Shares,
allocated or reserved under the Plan or subject to any NQSO except as to Shares,
if any, that have been issued or transferred to such Participant. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date of exercise.
(b) Other Compensation Arrangements.
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Nothing contained in the Plan shall prevent the Board from adopting
other compensation arrangements, subject to stockholder approval if such
approval is required. Such other arrangements may be either generally
applicable or applicable only in specific cases.
(c) Treatment of Proceeds.
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Proceeds realized from the exercise of NQSOs under the Plan shall
constitute general funds of the Company.
(d) Costs of the Plan.
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The costs and expenses of administering the Plan shall be borne by the
Company.
(e) No Right to Continue as Director.
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Nothing contained in the Plan or in any instrument executed pursuant
to the Plan will confer upon any Participant any right to continue as a member
of the Board or affect the right of the Company, the Board or the stockholders
of the Company to terminate the directorship of any Participant at any time with
or without cause.
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(f) Severability.
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The provisions of the Plan shall be deemed severable and the validity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(g) Binding Effect of Plan.
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The Plan shall inure to the benefit of the Company, its successors and
assigns.
(h) No Waiver of Breach.
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No waiver by any party hereto at any time of any breach by another
party hereto of, or compliance with, any condition or provision of the Plan to
be performed by such other party shall be deemed a waiver of the same, any
similar or any dissimilar provisions of conditions at the same or at any prior
or subsequent time.
(i) Governing Law.
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The Plan and all actions taken thereunder shall be enforced, governed
and construed by and interpreted under the laws of the State of Delaware
applicable to contracts made and to be performed wholly within such State
without giving effect to the principles of conflict of laws thereof.
(j) Headings.
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The headings contained in the Plan are for reference purposes only and
shall not affect in any way the meaning or interpretation of the Plan.
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14. EXECUTION.
To record the adoption of the Plan to read as set forth herein, the
Company has caused the Plan to be signed by its President and attested by its
Secretary on July 8, 1996.
BALLANTYNE OF OMAHA, INC.
By: /s/ Ronald H. Echtenkamp
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Ronald H. Echtenkamp
President
ATTEST:
By: /s/ Brad French
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Brad French
Secretary
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