UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.
)
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Filed
by the Registrant ☒ |
Filed
by a Party other than the Registrant ☐ |
Check
the appropriate box:
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Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material under §240.14a-12 |
Ballantyne
Strong, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check all boxes that apply): |
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No
fee required. |
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Fee
paid previously with preliminary materials. |
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Fee
computed on table in exhibit required by Item 25(b) per Exchange
Act Rules 14a-6(i)(1) and 0-11 |
PROXY
STATEMENT AND NOTICE
FOR
THE 2022 ANNUAL MEETING OF STOCKHOLDERS
to
be held at
4201
Congress Street, Suite 190
Charlotte,
North Carolina 28209
on
December
6, 2022 at 5:00 p.m. (local time)
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
to
be held December 6, 2022
The
2022 Annual Meeting of Stockholders of Ballantyne Strong, Inc. will
be held at Village Tavern, 4201 Congress Street, Suite 190,
Charlotte, North Carolina 28209, on December 6, 2022, at 5:00 p.m.,
local time (including any adjournments or postponements thereof,
the “Annual Meeting”), for the following purposes:
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1. |
To
elect the seven director nominees named in the Proxy Statement to
our Board of Directors until our 2023 Annual Meeting of
Stockholders. |
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2. |
To
consider and act upon a non-binding advisory resolution to approve
the compensation of our Named Executive Officers, as described in
the Proxy Statement. |
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3. |
To
ratify the appointment of Haskell & White LLP as our
independent registered public accounting firm for the fiscal year
ending December 31, 2022. |
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4. |
To
consider and approve the reincorporation of the Company from
Delaware to Nevada, which will be accomplished by means of the
adoption and approval of an Agreement and Plan of Merger dated as
of [●], by and between the Company and Ballantyne Strong, Inc., a
Nevada corporation and a wholly owned subsidiary of the
Company. |
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To
transact such other business as may properly be brought before the
Annual Meeting or any adjournment or postponement
thereof. |
Only
those stockholders of record at the close of business on October
11, 2022, shall be entitled to notice of, and to vote at, the
Annual Meeting.
Your
vote is important. Whether or not you plan to attend the Annual
Meeting in person, please vote your proxy card as soon as possible
to assure a quorum. Please vote in one of these three
ways:
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(1) |
Visit
the website at www.proxyvote.com and have your proxy
card in hand to vote through the Internet, or |
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(2) |
Use
the toll-free telephone number listed on the proxy card,
or |
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(3) |
Mark,
sign, date and promptly return the enclosed proxy card in the
postage-paid envelope. |
If
you vote on the website or by telephone, you do not need to return
a proxy card by mail, unless you wish to change or revoke your
vote.
Voting
by any of these methods will ensure that you are represented at the
Annual Meeting even if you are not there in person. Stockholders
who have previously voted but attend the Annual Meeting may
withdraw their proxy if they wish to do so, and vote in
person.
Important
Notice Regarding the Availability of Proxy Materials for the Annual
Meeting to be held on December 6, 2022: The Company’s Proxy
Statement, its Annual Report on Form 10-K for the year ended
December 31, 2021, and this Notice are available at
www.ballantynestrong.com or
www.proxyvote.com.
Dated
this [●] day of October 2022.
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By
Order of the Board of Directors, |
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D.
Kyle Cerminara
Chairman
of the Board
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Table
of Contents
BALLANTYNE
STRONG, INC.
2022 Annual Meeting Proxy Statement
Summary
Below
are highlights of important information you will find in this Proxy
Statement. This summary does not contain all of the information
that you should consider, and you should read the entire Proxy
Statement carefully before voting.
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Date,
Time and
Location
of
Annual Meeting
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December
6, 2022, at 5:00 p.m., Eastern Time
Village
Tavern
4201
Congress Street, Suite 190, Charlotte, North Carolina
28209
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Management
Proposals |
1. |
Election
of seven director nominees (all incumbent directors) to serve until
Ballantyne Strong’s 2023 Annual Meeting: D. Kyle Cerminara, William
J. Gerber, Charles T. Lanktree, Michael C. Mitchell, Robert J.
Roschman, Ndamukong Suh, and Larry G. Swets, Jr. |
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2. |
Consider
and approve, on a non-binding advisory basis, the compensation of
Ballantyne Strong’s Named Executive Officers. |
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3. |
Ratify
the appointment of Haskell & White LLP as Ballantyne Strong’s
independent registered public accounting firm for the 2022 fiscal
year. |
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4. |
Consider
and approve the reincorporation of the Company from Delaware to
Nevada, which will be accomplished by means of the adoption and
approval of an Agreement and Plan of Merger dated as of [●], 2022
(the “Plan of Merger”), by and between the Company and Ballantyne
Strong, Inc., a Nevada corporation and a wholly owned subsidiary of
the Company (“BTN Nevada”).
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Our
Board of Directors recommends a vote “FOR” each of these
proposals. |
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Director
Nominees |
You
are being asked to vote on these seven director nominees. Directors
are elected by a plurality of votes cast. Detailed information
about each nominee’s background and areas of expertise can be found
beginning on page 6 of the Proxy Statement. |
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Age
as of Annual |
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Director |
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Committee
Membership |
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Name |
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Meeting |
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Since |
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Principal
Occupation |
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AC |
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CC |
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NCGC |
| D.
Kyle Cerminara |
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45 |
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2015 |
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Chief
Executive Officer, Co-Founder and Partner
Fundamental
Global
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| William
J. Gerber |
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64 |
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2015 |
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Former
Chief Financial Officer
TD
Ameritrade Holding Corporation
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| Charles
T. Lanktree |
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73 |
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2015 |
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Former
Chief Executive Officer
Eggland’s
Best, LLC
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| Michael
C. Mitchell |
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42 |
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2021 |
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Former
Partner
Locust
Wood Capital
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| Robert
J. Roschman |
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57 |
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2015 |
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Owner
Triple
R. Associates, Ltd.
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| Ndamukong
Suh |
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35 |
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2016 |
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Professional
Athlete
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| Larry
G. Swets, Jr. |
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47 |
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2021 |
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Chief
Executive Officer
FG
Financial Group, Inc.
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AC |
Audit
Committee |
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Chair
of the Committee |
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CC |
Compensation
Committee |
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Committee
Member |
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NCGC |
Nominating
and Corporate Governance Committee |
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Corporate
Governance
Highlights
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Corporate
governance matters (including director and executive officer
biographical information) are discussed beginning on page 11 of the
Proxy Statement. Some highlights include: |
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Director
Independence: The Board is composed of a majority of
independent directors. All members of the Audit, Compensation and
Nominating and Corporate Governance Committees of the Board of
Directors are independent. |
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Board
of Directors Leadership Structure and Role of the Board of
Directors in Risk Oversight: The Proxy Statement discusses Mr.
Cerminara’s role as Chairman of the Board of Directors and the
oversight of risks by the Board of Directors and its standing
committees. |
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Hedging
and Pledging Policy: Summarizes the Company’s hedging and
pledging policy. |
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Voting
Standard for Election of Directors: Directors are elected by a
plurality of votes cast. |
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Board
of Directors Self-Evaluation and Review of Independence of Board of
Directors: Annual. |
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Related
Party Transactions |
A
summary of Ballantyne Strong’s related party transactions since
January 1, 2020 can be found beginning on page 48 of the Proxy
Statement. |
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| Director
Compensation |
A
summary of director compensation for the 2021 fiscal year can be
found beginning on page 25 of the Proxy Statement. |
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| Executive
Compensation |
An
overview of the executive compensation program, including the
compensation to executives for the 2021 and 2020 fiscal years, can
be found beginning on page 20 of the Proxy Statement. |
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| Proxy
Solicitor |
Alliance
Advisors LLC. If you have any questions, require any assistance in
voting your shares of the Company, need any additional copies of
the Company’s proxy materials, or have any other questions, please
call Alliance Advisors LLC at the following toll-free telephone
number: 844-876-6187.
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PROXY
STATEMENT FOR THE 2022 ANNUAL MEETING OF
STOCKHOLDERS
TO
BE HELD ON DECEMBER 6, 2022
This
proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the “Board” or “Board of
Directors”) of Ballantyne Strong, Inc. (the “Company,” “Ballantyne
Strong,” “we,” “our” or “us”). The Company’s 2022 Annual Meeting of
Stockholders (the “Annual Meeting”) will be held on December 6,
2022, at 5:00 p.m., local time, at Village Tavern located at 4201
Congress Street, Suite 190, Charlotte, North Carolina 28209. The
mailing address of the Company’s principal executive offices is
5960 Fairview Road, Suite 275, Charlotte, North Carolina 28210, and
the Company’s telephone number is (704) 994-8279.
GENERAL INFORMATION ABOUT THE ANNUAL
MEETING AND VOTING
Important
Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders
to
be held on December 6, 2022
As
permitted by the rules of the Securities and Exchange Commission
(the “SEC”), we employ the cost-effective and
environmentally-conscious “notice and access” delivery method. This
allows us to give our stockholders access to a full set of our
proxy materials online. Beginning on or about October 27, 2022, we
will send to most of our stockholders, by mail or e-mail, a notice,
titled as the Notice of Electronic Availability of Proxy Materials,
explaining how to access our proxy materials and vote. This notice
is not a proxy card and cannot be used to vote your
shares.
On or
about the same day, we will begin mailing paper copies of our proxy
materials to stockholders who have requested them. Those
stockholders who do not receive the Notice of Electronic
Availability of Proxy Materials, including stockholders who have
previously requested to receive paper copies of our proxy
materials, will receive a copy of this proxy statement, the proxy
card, and our Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 (the “Annual Report”), by mail. The Notice of
Electronic Availability of Proxy Materials also contains
instructions on how you can (i) receive a paper copy of the proxy
statement, proxy card and Annual Report if you only received a
notice by mail, or (ii) elect to receive your proxy statement,
proxy card and Annual Report over the Internet next year if you
received them by mail this year.
The
Company may deliver multiple proxy statements to multiple
stockholders who have requested physical delivery of the proxy
materials and who are sharing an address unless it receives
contrary instructions from one or more of the stockholders. If you
are a stockholder residing at a shared address and would like to
request an additional copy of the proxy materials now or with
respect to future mailings (or to request to receive only one copy
of the proxy materials if you are currently receiving multiple
copies), please send your request to the Company, Attn: Corporate
Secretary at 5960 Fairview Road, Suite 275, Charlotte, North
Carolina 28210 or call us at (704) 994-8279.
What is the purpose of the Annual
Meeting?
At
the Annual Meeting, our stockholders will act upon the matters
described in the accompanying notice of meeting.
Who is entitled to vote at the Annual
Meeting?
The
Company has one class of voting shares outstanding. Only
stockholders of record of our common stock at the close of business
on October 11, 2022 (the “Record Date”), are entitled to receive
notice of the Annual Meeting and to vote the shares of common stock
that they held on the Record Date at the Annual Meeting. As of the
close of business on October 11, 2022, the Company had [●] shares
of common stock outstanding, all of which are entitled to vote at
the Annual Meeting. A list of stockholders as of the Record Date
will be available for inspection during ordinary business hours at
our principal executive offices located at 5960 Fairview Road,
Suite 275, Charlotte, North Carolina 28210 for ten (10) days before
the Annual Meeting. Each share of common stock will have one (1)
vote on each matter to be voted on at the Annual Meeting. The
shares of common stock held in treasury are not considered
outstanding and will not be voted.
Who may attend the Annual
Meeting?
All
stockholders as of the Record Date, or their duly appointed
proxies, may attend the Annual Meeting. If you attend the Annual
Meeting in person, you will be asked to present photo
identification (such as a state-issued driver’s license) and proof
that you own shares of Ballantyne Strong common stock before
entering the meeting. If you are a holder of record, the top half
of your proxy card or your Notice of Electronic Availability of
Proxy Materials is your admission ticket. If you hold shares in
“street name” (that is, through a bank, broker or other nominee), a
recent brokerage statement or a letter from your broker, bank or
other nominee showing your holdings of Ballantyne Strong common
stock is proof of ownership.
What is the difference between a
stockholder of record and a beneficial owner?
If
your shares are registered directly in your name with our transfer
agent, Broadridge Financial Solutions, Inc., then you are a
“stockholder of record.” The Notice of Electronic Availability of
Proxy Materials or hard copies of our proxy materials have been
provided directly to you by the Company. You may vote by ballot at
the Annual Meeting or vote by proxy by completing, signing, dating
and returning the enclosed proxy card (if you received hard copies
of our proxy materials) or following the instructions on the proxy
card for voting by Internet or telephone.
If
your shares are held for you in “street name,” then you are not a
stockholder of record. Rather, the broker, bank or other nominee
that holds your shares is the stockholder of record and you are the
“beneficial owner” of the shares. The Notice of Electronic
Availability of Proxy Materials or hard copies of our proxy
materials, as well as a voting instruction card, have been
forwarded to you by the broker, bank or other nominee. If you
complete and properly sign the voting instruction card and return
it in the appropriate envelope, or follow the instructions on the
voting instruction card for voting by Internet or telephone, the
broker, bank or other nominee will cause your shares to be voted in
accordance with your instructions. If you are a beneficial owner of
shares and wish to vote shares that you hold in street name in
person at the Annual Meeting, then you must obtain a legal proxy,
executed in your favor, from the holder of record (the broker, bank
or other nominee).
What constitutes a
quorum?
The
presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of the Company’s common stock
entitled to vote at the Annual Meeting will constitute a quorum,
permitting action to be taken and the conduct of business at the
Annual Meeting. As of the Record Date, [●] shares of common stock
were outstanding. Broker non-votes, abstentions and proxies marked
“withhold” for the election of directors will be counted for
purposes of determining the presence or absence of a quorum for the
transaction of business. Once a share is represented at the Annual
Meeting, it will be deemed present for quorum purposes throughout
the Annual Meeting (including any postponement or adjournment
thereof unless a new record date is or must be set for such
postponement or adjournment).
May I vote by proxy card or by the
Internet or telephone?
You
may vote by proxy card or by the Internet or telephone. Voting by
any of these methods will ensure that you are represented at the
Annual Meeting even if you are not there in person. Please refer to
the voting instructions on the Notice of Electronic Availability of
Proxy Materials and the proxy card. You may also vote by ballot at
the Annual Meeting if you attend in person.
May I change my vote?
Yes.
You may revoke your proxy and change your vote at any time before
the final vote at the Annual Meeting, whether submitted by mail or
by the Internet or telephone, by (i) delivering a signed written
notice stating that you revoke your proxy to the attention of the
Secretary of the Company at 5960 Fairview Road, Suite 275,
Charlotte, North Carolina 28210 that bears a later date than the
date of the proxy you want to revoke and is received prior to the
Annual Meeting, (ii) submitting a valid, later-dated proxy by the
Internet or telephone before 11:59 p.m., Eastern Time, on December
5, 2022, or by mail that is received prior to the Annual Meeting,
or (iii) attending the Annual Meeting (or, if the Annual Meeting is
postponed or adjourned, attending the postponed or adjourned
meeting) and voting in person, which automatically will cancel any
proxy previously given, or revoking your proxy in person, but your
attendance alone at the Annual Meeting will not revoke your proxy
previously given. If you hold your shares in “street name” through
a broker, bank or other nominee, you must contact your broker, bank
or other nominee to change your vote or obtain a written legal
proxy to vote your shares if you wish to cast your vote in person
at the Annual Meeting.
How many votes are required to
approve each Proposal?
Proposal
One—Election of seven directors named in this proxy statement to
the Ballantyne Strong Board of Directors, each to hold office until
our 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”)
and until a successor is duly elected and qualified or until the
director’s earlier retirement, resignation or
removal.
Under
our Bylaws, the seven candidates receiving the highest number of
“FOR” votes cast by holders of shares represented in person or by
proxy at the Annual Meeting will be elected. This number is called
a plurality. Properly submitted proxies marked “WITHHOLD” with
respect to the election of a director nominee will be counted for
purposes of determining if there is a quorum at the Annual Meeting,
but will not be considered to have been voted for the director
nominee. Similarly, any broker non-votes will be counted for
purposes of determining if there is a quorum, but will not be
considered to have been voted for the director nominee.
Proposal
Two—Advisory Vote on Executive Compensation.
The
number of votes cast “FOR” advisory approval of the compensation of
our Named Executive Officers (as defined below), either in person
or by proxy, at the Annual Meeting must exceed the number of votes
cast “AGAINST” advisory approval. Abstentions and broker non-votes
will not be counted toward the tabulation of votes cast on this
proposal and will have no effect on the outcome of this
proposal.
Proposal
Three—Ratification of Independent Registered Public Accounting
Firm.
The
number of votes cast “FOR” the ratification of the appointment of
Haskell & White LLP as the Company’s independent registered
public accounting firm for the fiscal year ending December 31,
2022, either in person or by proxy, at the Annual Meeting must
exceed the number of votes cast “AGAINST” the ratification.
Abstentions and broker non-votes will not be counted toward the
tabulation of votes cast on this proposal and will have no effect
on the outcome of this proposal.
Proposal
Four—Approval of the reincorporation of the Company from Delaware
to Nevada by means of the adoption and approval of the Plan of
Merger.
To be
approved by our stockholders, at least a majority of the shares of
common stock outstanding as of close of business on the Record Date
must vote “FOR” the proposal to approve the reincorporation of the
Company from Delaware to Nevada by means of the adoption and
approval of the Plan of Merger. Abstentions and broker non-votes
will be counted toward the tabulation of votes cast on this
proposal and will have the same effect as a vote “AGAINST” this
proposal.
Other
Proposals. No other matters are anticipated to be brought
before the Annual Meeting.
How does the Board of Directors
recommend I vote?
Unless
you give instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board of Directors
unanimously recommends a vote “FOR”:
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1. |
Election
of each of the seven director nominees named in this proxy
statement to the Board of Directors until our 2023 Annual
Meeting. |
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2. |
Approval,
on an advisory, non-binding basis, of the compensation of our Named
Executive Officers, as described in this proxy
statement. |
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Ratification
of the appointment of Haskell & White LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2022. |
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Approval
of the reincorporation of the Company from Delaware to Nevada by
means of the adoption and approval of the Plan of
Merger. |
With
respect to any other matter that properly comes before the Annual
Meeting, the proxy holders will vote as recommended by the Board of
Directors or, if no recommendation is given, in their own
discretion.
What happens if I submit a proxy card
and do not give specific voting instructions?
If
you are a stockholder of record and sign and return the proxy card
without indicating your voting instructions, your shares will be
voted in accordance with the recommendations of the Board of
Directors. With respect to any other matter that properly comes
before the meeting, the proxy holders will vote as recommended by
the Board of Directors or, if no recommendation is given, in their
own discretion. As of the filing date of this proxy statement, we
did not know of any other matter to be raised at the Annual
Meeting.
If
you are a beneficial owner and do not provide voting instructions
to your bank, broker or other nominee, then, under applicable
rules, the broker, bank or other nominee that holds your shares in
“street name” may generally vote on “routine” matters but cannot
vote on “non-routine” maters. If the broker, bank or other nominee
that holds your shares does not receive instructions from you on
how to vote your shares on a non-routine matter, the broker, bank
or other nominee will inform the inspector of election for the
Annual Meeting that it does not have the authority to vote on the
matter with respect to your shares. This is generally referred to
as a “broker non-vote.”
Which voting matters are considered
routine or non-routine, and what is the impact of a broker
non-vote?
Proposal
1 regarding the election of directors and Proposal 2 regarding
advisory approval of the compensation of our Named Executive
Officers are each considered “non-routine matters” under applicable
rules. Therefore, a broker, bank or other nominee cannot vote on
such proposals without voting instructions from the beneficial
owners. If you do not provide voting instructions to your broker,
bank or other nominee on these proposals, a “broker non-vote” will
occur. Although shares constituting broker non-votes will be
counted as present for the purpose of determining a quorum at the
Annual Meeting, broker non-votes will not be considered as votes
cast for or withheld from a director nominee or for or against
Proposal 2. Accordingly, broker non-votes will have no impact on
Proposal 1 regarding the election of directors or Proposal
2.
Proposal
3 concerning the ratification of the appointment of Haskell &
White LLP as our independent registered public accounting firm for
the year ending December 31, 2022, is considered a “routine” matter
under applicable rules. Therefore, a broker, bank or other nominee
may generally vote on this matter. No broker non-votes are expected
in connection with Proposal 3.
We
believe that Proposal 4 regarding the reincorporation of the
Company from Delaware to Nevada which will be accomplished by means
of the adoption and approval of the Plan of Merger, is considered
“non-routine” matters under applicable rules. Therefore, a broker,
bank or other nominee cannot vote on Proposal 4 without voting
instructions from the beneficial owners, and there may be broker
non-votes in connection with Proposal 4. Any broker non-votes will
have the effect of a vote “AGAINST” Proposal 4.
How will abstentions be
counted?
Although
shares constituting abstentions will be counted as present for the
purpose of determining a quorum at the Annual Meeting, withheld
votes will not be considered as votes cast for Proposal 1, and
abstentions will not be considered as votes cast for Proposals 2 or
3. Accordingly, because the election of directors requires only a
plurality vote, withheld votes will have no impact upon the
election of directors, and abstentions will also have no impact on
the outcome of Proposal 2 (advisory approval of say-on-pay) or
Proposal 3 (ratification of the independent registered public
accounting firm). Because Proposal 4 require the approvals of at
least a majority of the shares of common stock outstanding as of
close of business on the Record Date, abstentions will have the
same effect as votes “AGAINST” Proposal 4.
Who pays the expenses incurred in
connection with the solicitation of proxies?
We
have retained Alliance Advisors LLC to assist in the solicitation
of proxies for the Annual Meeting and will pay Alliance Advisors
LLC a fee of approximately $17,500, including reimbursement of
reasonable out-of-pocket expenses and disbursements incurred in
connection with the proxy solicitation. It is anticipated that
Alliance Advisors LLC will employ approximately 25 persons to
solicit stockholders of the Company for the Annual Meeting. We have
also agreed to indemnify Alliance Advisors LLC against certain
losses, costs and expenses. In addition, proxies may be solicited
on our behalf by our directors, officers or employees in person or
by mail, telephone, facsimile or electronic communications, but no
additional compensation will be paid to them. We have also
requested brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting material to beneficial owners and
have agreed to reimburse those institutions for their out-of-pocket
expenses.
How can I find out the results of the
voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. In
addition, final voting results will be published in a Current
Report on Form 8-K that we expect to file within four business days
after the Annual Meeting. If final voting results are not available
to us in time to file a Form 8-K within four business days after
the Annual Meeting, we intend to file a Form 8-K to publish
preliminary results and, within four business days after the final
results are known to us, file an amendment to the Form 8-K to
publish the final results.
How may I get additional copies of
the Annual Report?
Our
Annual Report, including financial statements, is available through
our website at www.ballantynestrong.com. The information
provided on the Company’s website is referenced in this proxy
statement for information purposes only, and shall not be deemed to
be a part of or incorporated by reference into this proxy statement
or any other filings the Company makes with the SEC. For a printed
copy, please contact our Corporate Secretary by mail at: Attn:
Corporate Secretary, Ballantyne Strong, Inc., 5960 Fairview Road,
Suite 275, Charlotte, North Carolina 28210.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Largest
Owners of Ballantyne Strong Shares
The
following table shows each person or entity that Ballantyne Strong
knows to be the beneficial owner of more than five percent of
Ballantyne Strong’s outstanding common stock as of the close of
business on the Record Date of October 11, 2022.
|
Name
and Address of Beneficial Owner |
|
Amount and
Nature of Beneficial Ownership(1)
|
|
|
Percent
of Class(2) |
|
Fundamental
Global GP, LLC
108 Gateway Boulevard, Suite 204
Mooresville, NC 28117 |
|
|
[●] |
(3) |
|
|
[●] |
% |
|
Par Sanda
and Sand Capital Associates
501 N.
Birch Rd, Unit 3
Fort
Lauderdale, FL 33304
|
|
|
[●] |
(4) |
|
|
[●] |
% |
|
(1) |
This
information is based on the following filings made with the SEC, as
indicated. Fundamental Global GP, LLC (“Fundamental Global GP”)
filed a Schedule 13D/A on July 14, 2022, and Par Sanda and Sand
Capital Associates, LLC filed a Schedule 13G on January 12,
2022. |
|
|
|
|
(2) |
Based
upon [●] shares outstanding on the Record Date. |
|
|
|
|
(3) |
Fundamental
Global has shared voting and dispositive power over [●] shares,
representing approximately [●]% of the Company’s outstanding shares
of common stock. Mr. Cerminara, Chairman of our Board of Directors
and our former Chief Executive Officer, serves as Chief Executive
Officer, Co-Founder and Partner of Fundamental Global. Mr.
Cerminara beneficially owns an additional [●] shares (including [●]
shares purchasable pursuant to stock options held by Mr. Cerminara
exercisable within 60 days of the Record Date and [●] shares
potentially issuable upon the vesting of restricted stock units
(sometimes referred to as “RSUs”) within 60 days of the Record
Date), thus increasing the total number of shares beneficially
owned by Fundamental Global to [●] shares, or approximately [●]% of
the Company’s outstanding shares of common stock. |
|
|
|
|
(4) |
Par
Sanda and Sand Capital Associates, LLC reported sole dispositive
power over [●] shares, shared dispositive power over [●] shares,
and aggregate beneficial ownership of [●] shares, or approximately
[●]% of the Company’s outstanding shares of common
stock. |
Share
Ownership of Directors, Director Nominees and Executive
Officers
The
following chart sets forth, as of the close of business on the
Record Date of October 11, 2022, certain information concerning
beneficial ownership of common stock by each director and director
nominee of the Company, each of the Named Executive Officers, and
all current directors and executive officers as a group. The
address for each director, director nominee and executive officer
listed is: c/o Ballantyne Strong, Inc., 5960 Fairview Road, Suite
275, Charlotte, North Carolina 28210.
|
Name of
Beneficial Owner
|
|
Number
of Shares Beneficially
Owned(1)
|
|
|
Percent
of
Common
Stock(2) |
|
|
Mark
D. Roberson, Chief Executive Officer |
|
|
[●] |
(3) |
|
|
[●] |
% |
| Todd
R. Major, Chief Financial Officer |
|
|
[●] |
(4) |
|
|
[●] |
% |
| Ray
F. Boegner, President of Strong Entertainment |
|
|
[●] |
(5) |
|
|
[●] |
% |
| D.
Kyle Cerminara, Chairman |
|
|
[●] |
(6) |
|
|
[●] |
% |
| William
J. Gerber, Director |
|
|
[●] |
(7) |
|
|
[●] |
% |
| Charles
T. Lanktree, Director |
|
|
[●] |
(8) |
|
|
[●] |
% |
| Michael
C. Mitchell, Director |
|
|
[●] |
(9) |
|
|
[●] |
% |
| Robert
J. Roschman, Director |
|
|
[●] |
(10) |
|
|
[●] |
% |
| Ndamukong
Suh, Director |
|
|
[●] |
(11) |
|
|
[●] |
% |
| Larry
G. Swets, Jr., Director |
|
|
[●] |
(12) |
|
|
[●] |
% |
| All
current directors and executive officers as a group (10
persons) |
|
|
[●] |
(13) |
|
|
[●] |
% |
|
* |
Less
than 1% of common stock outstanding. |
|
(1) |
Each
director, director nominee and Named Executive Officer listed in
the table owns all outstanding shares directly and has sole voting
and investment power over such shares unless otherwise specified
below. |
|
|
|
|
(2) |
Based
upon [●] shares of common stock outstanding as of the Record Date.
Beneficial ownership is determined in accordance with the rules of
the SEC and generally requires that such persons have voting or
investment power with respect to the securities. Each named person
is deemed to be the beneficial owner of shares of common stock that
may be acquired within 60 days of the Record Date, upon the
exercise of stock options and vesting of RSUs. Accordingly, the
number of shares and percentage set forth next to the name of such
person, and all current directors and executive officers as a
group, includes shares of directly owned common stock (including
shares of restricted common stock, if any), shares of common stock
purchasable pursuant to stock options exercisable within 60 days of
the Record Date and shares of common stock potentially issuable
upon the vesting of restricted stock units within 60 days of the
Record Date. However, the shares of common stock so issuable upon
the exercise of stock options or vesting of restricted stock units
held by any such person are not included in calculating the
percentage of common stock beneficially owned by any other
stockholder.
|
|
(3) |
Includes
[●] shares of common stock directly owned by Mr. Roberson, [●]
shares purchasable pursuant to stock options exercisable within 60
days of the Record Date, and [●] shares potentially issuable upon
the vesting of RSUs within 60 days of the Record Date. Does not
include (i) [●] shares potentially issuable upon the vesting of
RSUs granted on October 9, 2020, (ii) [●] shares potentially
issuable upon the exercise of stock options granted on December 4,
2018, (iii) [●] shares potentially issuable upon the exercise of
stock options granted on June 6, 2019, and (v) [●] shares
potentially issuable upon the exercise of stock options granted on
October 9, 2020. |
|
|
|
|
(4) |
Includes
[●] shares of common stock directly owned by Mr. Major and [●]
purchasable pursuant to stock options exercisable within 60 days of
the Record Date. Does not include (i) [●] shares potentially
issuable upon the vesting of RSUs granted on October 9, 2020 and
(ii) [●] shares potentially issuable upon the exercise of stock
options granted on October 9, 2020. |
|
|
|
|
(5) |
Includes
[●] shares of common stock directly owned by Mr. Boegner and [●]
shares purchasable pursuant to stock options exercisable within 60
days of the Record Date. Does not include (i) [●] shares
potentially issuable upon the vesting of RSUs granted on October 9,
2020, (ii) [●] shares potentially issuable upon the exercise of
stock options granted on February 28, 2017, (iii) [●] shares
potentially issuable upon the exercise of stock options granted on
January 26, 2018, (iv) [●] shares potentially issuable upon the
exercise of stock options granted on June 6, 2019, and (v) [●]
shares potentially issuable upon the exercise of stock options
granted on October 9, 2020. |
|
(6)
|
Includes
[●] shares of common stock directly owned by Mr. Cerminara, [●]
shares held in Mr. Cerminara’s 401(k) plan, [●] shares held by Mr.
Cerminara’s wife and children and [●] shares purchasable pursuant
to stock options exercisable within 60 days of the Record Date.
Also includes [●] shares of common stock beneficially owned by
Fundamental Global, which, with its affiliates, is the largest
stockholder of the Company. Mr. Cerminara, as Chief Executive
Officer, Co-Founder and Partner of Fundamental Global, is deemed to
have shared voting and dispositive power over the shares
beneficially owned by Fundamental Global. Mr. Cerminara disclaims
beneficial ownership of the shares beneficially owned by
Fundamental Global. Does not include (i) [●] shares potentially
issuable pursuant to RSUs granted on July 1, 2020, (ii) [●] shares
potentially issuable pursuant to RSUs granted on July 1, 2022,
(iii) [●] shares potentially issuable upon the exercise of stock
options granted on January 26, 2018, and (iv) [●] shares
potentially issuable upon the exercise of stock options granted on
June 6, 2019. |
|
(7) |
Includes
[●] shares of common stock directly owned by Mr. Gerber. Does not
include (i) [●] shares potentially issuable upon the vesting of
RSUs granted on July 1, 2020, and (ii) [●] shares potentially
issuable upon the vesting of RSUs granted on July 1,
2022. |
|
|
|
|
(8) |
Includes
[●] shares of common stock directly owned by Mr. Lanktree and [●]
shares directly owned by the Donna B. Lanktree Family Trust, the
trustee of which is Donna B. Lanktree, the spouse of Mr. Lanktree.
Does not include (i) [●] shares potentially issuable upon the
vesting of RSUs granted on July 1, 2020 and (ii) [●] shares
potentially issuable upon the vesting of RSUs granted on July 1,
2022. |
|
|
|
|
(9) |
Includes
[●] shares of common stock directly owned by Mr. Mitchell. Does not
include [●] shares potentially issuable upon the vesting of RSUs
granted on July 1, 2022. |
|
|
|
|
(10) |
Includes
[●] shares of common stock directly owned by Mr. Roschman. Does not
include (i) [●] shares potentially issuable upon the vesting of
RSUs granted on July 1, 2020 and (ii) [●] shares potentially
issuable upon the vesting of RSUs granted on July 1,
2022. |
|
|
|
|
(11) |
Includes
[●] shares of common stock directly owned by Mr. Suh. Does not
include (i) [●] shares potentially issuable upon the vesting of
RSUs granted on July 1, 2020 (ii) [●] shares potentially issuable
upon the vesting of RSUs granted on July 1, 2022. |
|
|
|
|
(12) |
Includes
[●] shares of common stock directly owned by Mr. Swets. Does not
include [●] shares potentially issuable upon the vesting of RSUs
granted on July 1, 2022. |
|
|
|
|
(13) |
Includes
[●] shares directly owned by all current directors and executive
officers as a group, [●] shares held in Mr. Cerminara’s 401(k)
plan, [●] shares held by Mr. Cerminara’s wife and children, [●]
shares held by the Donna B. Lanktree Family Trust, [●] shares
purchasable pursuant to stock options exercisable within 60 days of
the Record Date, [●] shares potentially issuable upon the vesting
of RSUs within 60 days of the Record Date, and [●] shares held by
Fundamental Global. |
PROPOSAL ONE
ELECTION
OF DIRECTORS
Ballantyne
Strong’s Certificate of Incorporation, as amended (the “Certificate
of Incorporation”), and Bylaws, as amended (the “Bylaws”), provide
for the annual election of all directors. The Certificate of
Incorporation and Bylaws allow the Board of Directors to set the
number of directors from time to time and to appoint directors
between Annual Meetings. The Board of Directors has set the number
of directors at seven.
During
2021, the Board of Directors was comprised of seven directors,
namely D. Kyle Cerminara, William J. Gerber, Charles T. Lanktree,
Michael C. Mitchell, Robert J. Roschman, Ndamukong Suh, and Larry G
Swets, Jr., all of whom were elected at the 2021 Annual Meeting of
Stockholders held on December 6, 2021.
Set
forth below is a list of the seven current directors of the
Company, each of whom is nominated for re-election at the Annual
Meeting, and certain information regarding them, including their
age as of the Annual Meeting. The information below also sets forth
the year in which each director became a director of the Company.
Each director nominee, if elected, will be entitled to serve until
the 2023 Annual Meeting and until a successor is duly elected and
qualified or until his earlier retirement, resignation or
removal.
D.
Kyle Cerminara, age 45, has served as a director of Ballantyne
Strong since February 2015 and the Chairman of the Company’s Board
of Directors since May 2015. Mr. Cerminara previously served as the
Company’s Chief Executive Officer from November 2015 to April 2020.
Mr. Cerminara has over 20 years’ experience as an institutional
investor, asset manager, director, chief executive, founder and
operator of multiple financial services and technology businesses.
Mr. Cerminara co-founded Fundamental Global in 2012, which is the
largest stockholder of the Company, and serves as its Chief
Executive Officer. Mr. Cerminara is a member of the board of
directors of a number of companies focused in the reinsurance,
investment management, technology, communication, and real estate
sectors, including BK Technologies Corporation (NYSE American:
BKTI), a provider of two-way radio communications equipment, since
July 2015; Ballantyne Strong Inc. (NYSE American: BTN), since
February 2015; Firefly Systems Inc., a venture-backed digital
advertising company, since August 2020; and FG Communities, Inc., a
real estate management company focused on preserving and improving
affordable housing, since July 2022. Mr. Cerminara is President
since February 2021 and will serve as a director of FG New America
Acquisition II Corp., a special purpose acquisition company
currently in the process of completing its initial public offering
which is focused on searching for a target business in the
financial services and insurance industries, and he is also the
chairperson of the board of directors of FG Acquisition Corp. (TSX:
FGAA.U), a Canadian special purpose acquisition company focused on
searching for a target company in the financial services sector. In
addition, Mr. Cerminara has served as a Senior Advisor to FG Merger
Corp. (NASDAQ: FGMC), a special purpose acquisition company, since
February 2022. From April 2021 to December 2021, Mr. Cerminara
served as a director of Aldel Financial Inc. (NYSE: ADF), a special
purpose acquisition company co-sponsored by Fundamental Global,
which merged with Hagerty (NYSE: HGTY), a leading specialty
insurance provider focused on the global automotive enthusiast
market. From July 2020 to July 2021, Mr. Cerminara served as
Director and President of FG New America Acquisition Corp. (NYSE:
FGNA), a special purpose acquisition company, which merged with
OppFi Inc. (NYSE: OPFI), a leading financial technology platform
that powers banks to help everyday consumers gain access to credit.
Mr. Cerminara has served as the Chairman of Ballantyne Strong, Inc.
since May 2015 and previously served as its Chief Executive Officer
from November 2015 through April 2020. Mr. Cerminara was the
Chairman of BK Technologies Corporation from March 2017 until April
2020. He served on the board of directors of GreenFirst Forest
Products Inc. (TSXV: GFP) (formerly Itasca Capital Ltd.), a public
company focused on investments in the forest products industry,
from June 2016 to October 2021 and was appointed Chairman from June
2018 to June 2021; Limbach Holdings, Inc. (NASDAQ: LMB), a company
which provides building infrastructure services, from March 2019 to
March 2020; Iteris, Inc. (NASDAQ: ITI), a publicly-traded, applied
informatics company, from August 2016 to November 2017; Magnetek,
Inc., a publicly-traded manufacturer, in 2015; and blueharbor bank,
a community bank, from October 2013 to January 2020. He served as a
Trustee and President of StrongVest ETF Trust, which was an
open-end management investment company, from July 2016 to March
2021. Previously, Mr. Cerminara served as the Co-Chief Investment
Officer of CWA Asset Management Group, LLC, a position he held from
January 2013 to December 2020. Prior to these roles, Mr. Cerminara
was a Portfolio Manager at Sigma Capital Management, an independent
financial adviser, from 2011 to 2012, a Director and Sector Head of
the Financials Industry at Highside Capital Management from 2009 to
2011, and a Portfolio Manager and Director at CR Intrinsic
Investors from 2007 to 2009. Before joining CR Intrinsic Investors,
Mr. Cerminara was a Vice President, Associate Portfolio Manager and
Analyst at T. Rowe Price (NASDAQ: TROW) from 2001 to 2007, where he
was named amongst Institutional Investor’s Best of the Buy Side
Analysts in November 2006, and an Analyst at Legg Mason from 2000
to 2001. Mr. Cerminara received an MBA degree from the Darden
Graduate School of Business at the University of Virginia and a
B.S. in Finance and Accounting from the Smith School of Business at
the University of Maryland, where he was a member of Omicron Delta
Kappa, an NCAA Academic All American and Co-Captain of the men’s
varsity tennis team. He also completed a China Executive Residency
at the Cheung Kong Graduate School of Business in Beijing, China.
Mr. Cerminara holds the Chartered Financial Analyst (CFA)
designation. We believe Mr. Cerminara is qualified to serve on our
Board as he contributes his perspective as one of the Company’s
largest stockholders. He also offers to the Board valuable insights
obtained through his management and operational experience and
extensive experience in the financial industry, including
investing, capital allocation, finance and financial analysis of
public companies.
William
J. Gerber, age 64, has served as a director of Ballantyne
Strong since May 2015. Mr. Gerber served as Chief Financial Officer
of TD Ameritrade Holding Corporation (Nasdaq: AMTD) (“TD
Ameritrade”), a provider of securities brokerage services and
related technology-based financial services to retail investors,
traders and independent registered investment advisors, from
October 2006 to October 2015. In May 2007, he was named Executive
Vice President of TD Ameritrade. In his role as Chief Financial
Officer, he oversaw investor relations, business development,
certain treasury functions and finance operations, including
accounting, business planning and forecasting, external and
internal reporting, tax and competitive intelligence. From May 1999
until October 2006, he served as the Managing Director of Finance
at TD Ameritrade, during which time he played a significant role in
evaluating merger and acquisition opportunities. Prior to joining
TD Ameritrade, he served as Vice President of Acceptance Insurance
Companies, Inc. (“Acceptance”), where he was responsible for all
aspects of mergers and acquisitions, investment banking activity,
banking relationships, investor communications and portfolio
management. Prior to joining Acceptance, Mr. Gerber spent eight
years with Coopers & Lybrand, now known as
PricewaterhouseCoopers, serving as an audit manager primarily
focusing on public company clients. Mr. Gerber was named to
Institutional Investor Magazine’s All-America Executive Team as one
of the top three CFOs in the Brokerage, Asset Managers and
Exchanges category (2012 and 2013). He was also named a member of
the CNBC CFO Council (2013 and 2014). Since January 2017, he has
served on the Board of Directors of Northwestern Mutual Series
Fund, Inc., a mutual fund company. He has also served on the Board
of Directors of the U.S. holding company for the Royal Bank of
Canada since July 2016 and Streck, Inc., a privately held company,
since March 2015. He previously served on the Boys Town National
Board of Trustees and the Board of Directors for CTMG Inc., a
privately held pharmaceutical testing company. Mr. Gerber holds a
B.B.A. in Accounting from the University of Michigan. Mr. Gerber is
also a Certified Public Accountant in the State of Michigan. Mr.
Gerber served as Executive Vice President and Chief Financial
Officer of TD Ameritrade, an online brokerage business, for more
than eight years and has extensive financial experience, bringing
valuable skills to our Board of Directors.
Charles
T. Lanktree, age 73, has served as a director of Ballantyne
Strong since May 2015. Mr. Lanktree has served as Chief Executive
Officer of Eggland’s Best, LLC, a joint venture between Eggland’s
Best, Inc. and Land O’Lakes, Inc. distributing nationally branded
eggs, since 2012 and also served as its President from 2012 to
2018. Since 1997, Mr. Lanktree has served as President and Chief
Executive Officer of Eggland’s Best, Inc., a franchise-driven
consumer egg business, where he previously served as the President
and Chief Operating Officer from 1995 to 1996 and Executive Vice
President and Chief Operating Officer from 1990 to 1994. Mr.
Lanktree currently serves on the Board of Directors of Eggland’s
Best, Inc. and several of its affiliates. He has also served on the
board of directors of BK Technologies Corporation (NYSE American:
BKTI), a holding company with a wholly owned operating subsidiary
that manufactures high-specification communications equipment,
since March 2017. From 2010 to 2013, he served on the Board of
Directors of Eurofresh Foods, Inc., a privately held company, and,
from 2004 to 2013, he was on the Board of Directors of Nature’s
Harmony Foods, Inc. Prior to joining Eggland’s Best, Inc., Mr.
Lanktree served as the President and Chief Executive Officer of
American Mobile Communications, Inc. from 1987 to 1990 and as the
President and Chief Operating Officer of Precision Target
Marketing, Inc. from 1985 to 1987. From 1976 to 1985, he held
various executive-level marketing positions with The Grand Union
Company and Beech-Nut Foods Corporation. Mr. Lanktree received an
MBA from the University of Notre Dame and a B.S. in Food Marketing
from St. Joseph’s University. He also served in the U.S. Army and
U.S. Army Reserves from 1971 to 1977. Mr. Lanktree’s 25 years of
experience in consumer marketing and retail operations and his
extensive experience as a Chief Executive Officer, coupled with his
knowledge and insight of the retail industry, including
distribution and franchising operations, qualifies him to serve on
our Board of Directors.
Michael
C. Mitchell, age 43, has served as a director of Ballantyne
Strong since October 2021. Mr. Mitchell most recently served as a
Partner at Locust Wood Capital, which he retired from in 2019 after
nine years with the firm in analytical positions in the consumer,
industrial, real estate and media industries. From 2006 to 2011,
Mr. Mitchell was a senior analyst at Breeden Capital LP, working
with former SEC Chairman Richard C. Breeden, where Mr. Mitchell was
primarily focused on consumer business and was actively involved in
board engagements at Applebee’s, a then-Nasdaq-listed restaurant
operating company and franchisor and Zale Corporation, a
then-NYSE-listed leading specialty retailer of fine jewelry as an
advisor to the board. From 2005 to 2006, Mr. Mitchell worked as an
analyst for Kellogg Capital Group, LLC, the private investment firm
founded by Peter Kellogg, From 2004 to 2005, Mr. Mitchell served as
an equity research analyst at Jefferies and Company, Inc. covering
post-reorganization equities. Mr. Mitchell is currently the Chief
Operating Officer of Children’s Eye Care of Northern Colorado,
P.C., a Pediatric Ophthalmology practice based in Fort Collins, CO,
which he cofounded and operates with his wife Dr. Carolyn G.
Mitchell. Additionally, Mr. Mitchell serves on the advisory board
of the Michael F. Price College of Business at the University of
Oklahoma. Mr. Mitchell received an MBA from the Michael F. Price
College of Business at the University of Oklahoma and a B.S. in
Marketing from the Spears College of Business at Oklahoma State
University. We believe Mr. Mitchell is qualified to serve on our
Board of Directors as he offers the Board valuable insights
obtained through his extensive experience in the financial
industry, including investing, capital allocation, finance and
financial analysis of public companies.
Robert
J. Roschman, age 57, has served as a director of Ballantyne
Strong since May 2015. Mr. Roschman has been an owner of Triple R.
Associates, Ltd., a real estate firm with over 100 properties
leased to fast food, distribution and retail tenants, since 1992.
Mr. Roschman also holds ownership interests in several development
properties throughout Florida. Mr. Roschman previously served on
the Board of Directors of Giant Holdings, Inc., a privately held
federally chartered bank with an Internet division, which he
founded in 1998 and which merged into Home BancShares, Inc.
(Nasdaq: HOMB) in February 2017. From 1987 to 2000, Mr. Roschman
was a Co-Founder and Vice President of Snapps Restaurants, Inc., a
76-store fast food restaurant which merged into Rally’s Hamburgers,
Inc. From 1983 until 1997, he served as a shareholder of Charter
Bank in Delray Beach, Florida, which merged into Southtrust Bank in
1997. Mr. Roschman received a B.S. from Florida State University.
Mr. Roschman brings over 30 years of experience as an investor in
multiple lines of business, including real estate, franchising,
distribution, banking and retail. Mr. Roschman’s extensive
experience as an investor and in managing and overseeing multiple
businesses is valuable for evaluating strategic opportunities and
qualifies him to serve on our Board of Directors.
Ndamukong
Suh, age 35, has served as a director of Ballantyne Strong
since January 2016. Mr. Suh is an independent private investor and
holds ownership interests in several real estate development
projects across Michigan, Nebraska, Oregon and Colorado. Mr. Suh is
the Founder and a director of the Suh Family Foundation. He is also
a professional athlete and was a member of the Tampa Bay Buccaneers
of the National Football League (“NFL”) from 2019 to 2022, becoming
a Superbowl champion in February 2021. He previously was with the
NFL’s Los Angeles Rams from 2018 to 2019, Miami Dolphins from 2015
to 2017 and Detroit Lions from 2010 to 2014. He currently serves on
the Board of Advisors of Ember Technologies, a privately held
manufacturer and designer of patented temperature adjustable
dishware and drinkware. Mr. Suh holds a Bachelor’s degree in
Engineering focused on Construction Management from the University
of Nebraska. Our Board of Directors believes that Mr. Suh’s well
cultivated business and personal network adds unique value to the
Company, which, coupled with his extensive experience as an
investor, allows him to evaluate strategic opportunities and
qualifies him to serve on our Board of Directors.
Larry
G. Swets, Jr., age 48, has served as a director of Ballantyne
Strong since October 2021. Mr. Swets has served as the Chief
Executive Officer of FG Financial Group, Inc. (Nasdaq: FGF) (“FG
Financial”), a diversified reinsurance, investment management and
real estate holding company, since November 2020, after having
served as Interim CEO from June 2020 to November 2020. Mr. Swets
founded Itasca Financial LLC (“Itasca Financial”), an advisory and
investment firm, in 2005 and has served as its managing member
since inception. Mr. Swets is a member of the board of directors of
FG Financial since November 2013; GreenFirst Forest Products Inc.
(TSXV: GFP) (“GreenFirst”), a public company focused on investments
in the forest products industry, since June 2016; Harbor Custom
Development, Inc. (Nasdaq: HCDI) since February 2020; Alexian
Brothers Foundation since March 2018; and Unbounded Media
Corporation since June 2019. Mr. Swets also serves as Chief
Executive Officer and a member of the board of directors of FG
Acquisition Corp. (TSX: FGAA.U) since October 2021, and chairman of
the board of directors of FG Merger Corp (Nasdaq: FGMC) since
February 2022, two special purpose acquisition companies seeking to
complete acquisitions. Previously, Mr. Swets served as a Director
and Chief Executive Officer of FG New America Acquisition Corp.
(NYSE: FGNA), a special purpose acquisition company which merged
with OppFi Inc. (NYSE: OPFI), a leading financial technology
platform that powers banks to help everyday consumers gain access
to credit, from July 2020 to July 2021. Mr. Swets served as Senior
Advisor to Aldel Financial Inc. (NYSE: ADF), a special purpose
acquisition company which merged with Hagerty, Inc. (NYSE: HGTY), a
leading specialty insurance provider focused on the global
automotive enthusiast market, from April 2021 to December 2021. Mr.
Swets served as Chief Executive Officer of GreenFirst from June
2016 to June 2021. Mr. Swets served as the Chief Executive Officer
of Kingsway Financial Services Inc. (NYSE: KFS) (“Kingsway”) from
July 2010 to September 2018, including as its President from July
2010 to March 2017. He served as Chief Executive Officer and a
director of 1347 Capital Corp., a special purpose acquisition
company, from April 2014 to July 2016 when the company completed
its initial business combination to form Limbach Holdings, Inc.
(Nasdaq: LMB) (“Limbach”). Mr. Swets also previously served as a
member of the board of directors of Limbach from July 2016 to
August 2021; Kingsway from September 2013 to December 2018; Atlas
Financial Holdings, Inc. (Nasdaq: AFH) from December 2010 to
January 2018; FMG Acquisition Corp. (Nasdaq: FMGQ) from May 2007 to
September 2008; United Insurance Holdings Corp. from 2008 to March
2012; and Risk Enterprise Management Ltd. from November 2007 to May
2012. Mr. Swets served as director of Insurance Income Strategies
Ltd. from October 2017 to December 2021. Prior to founding Itasca
Financial, Mr. Swets served as an insurance company executive and
advisor, including the role of director of investments and fixed
income portfolio manager for Lumbermens Mutual Casualty Company,
formerly known as Kemper Insurance Companies. Mr. Swets began his
career in insurance as an intern in the Kemper Scholar program in
1994. Mr. Swets earned a Master’s Degree in Finance from DePaul
University in 1999 and a Bachelor’s Degree from Valparaiso
University in 1997. He is a member of the Young Presidents’
Organization and holds the Chartered Financial Analyst (CFA)
designation. Mr. Swets’ 25 years of experience within financial
services and extensive financial experience qualifies him to serve
on our Board of Directors.
The Board of Directors unanimously recommends a vote “FOR” the
election of each of the director nominees listed above.
CORPORATE GOVERNANCE
The
Board of Directors operates pursuant to the provisions of the
Certificate of Incorporation and Bylaws and has also adopted
several corporate governance policies to address significant
corporate governance issues. Our Code of Ethics, Audit Committee
Charter, Nominating and Corporate Governance Committee Charter, and
Compensation Committee Charter are available on our website at
www.ballantynestrong.com under the tab “Investor
Relations” and then the “Corporate Governance” tab. The
information provided on our website is referenced in this proxy
statement for information purposes only, and shall not be deemed to
be a part of or incorporated by reference into this proxy statement
or any other filings the Company makes with the SEC.
Board Leadership Structure and Role of
the Board in Risk Oversight
D.
Kyle Cerminara is the Chairman of the Company’s Board of Directors
and former Chief Executive Officer. Mr. Cerminara is the Chief
Executive Officer and co-founder of Fundamental Global, the
Company’s largest stockholder, which, together with its affiliates,
held approximately [●]% of the voting and economic interest in the
Company as of the Record Date. As such, Mr. Cerminara may be deemed
to be the Company’s controlling stockholder.
Mr.
Roberson serves as Chief Executive Officer while Mr. Cerminara is
the non-executive Chairman of the Board. Prior to April 13, 2020,
Mr. Cerminara served as both Chairman and Chief Executive Officer
of the Company, which the Board of Directors believed was the best
leadership structure for the Company and our stockholders at the
time. On April 13, 2020, Mr. Cerminara resigned from his position
as our Chief Executive Officer, while continuing to serve as
Chairman of the Board of Directors, at which time Mr. Roberson was
appointed Chief Executive Officer.
We
believe it is beneficial to separate the roles of Chairman of the
Board and Chief Executive Officer to facilitate their differing
roles in the leadership of the Company. The role of the Chairman
includes setting the agenda for, and presiding over, all meetings
of our Board, including executive sessions of independent
directors, providing input regarding information sent to our Board,
serving as liaison between the Chief Executive Officer and the
independent directors and directors and providing advice and
assistance to the Chief Executive Officer. The Chairman is also a
key participant in establishing performance objectives and
overseeing the process for the annual evaluation of our Chief
Executive Officer’s performance. In contrast, our Chief Executive
Officer is responsible for handling our day-to-day management and
direction, serving as a leader to the management team and
formulating corporate strategy.
The
Board has historically sought to ensure that a majority of its
members are independent. The Board believes that this structure is
appropriate for the Company and provides the appropriate level of
independent oversight necessary to ensure that the Board meets its
fiduciary obligations to our stockholders, that the interests of
management and our stockholders are properly aligned, and that we
establish and follow sound business practices and strategies that
are in the best interests of our stockholders. The Board has not
appointed a lead independent director at this time. Currently, the
Board consists of seven directors, five of whom are independent.
All independent directors serve on one or more committees of the
Board, are able to closely monitor the activities of the Company
and meet in executive sessions without management present to
discuss the Company’s business strategy and operations. Given the
active involvement of all of the independent directors in the
Company’s matters, the Board has determined that a lead independent
director is not necessary at this time. Additionally, because the
Company’s Chairman is appointed annually by the Board, the
directors are able to evaluate the leadership and performance of
the Chairman each year.
The
Board of Directors does not believe that one particular leadership
structure is appropriate at all times and will continue to evaluate
the Board’s leadership structure from time to time.
One
of the Board of Directors’ key functions is informed oversight of
the Company’s risk management process. The Board of Directors does
not have a standing risk management committee, but rather
administers this oversight function directly through the Board of
Directors as a whole, as well as through various standing
committees of the Board of Directors that address risks inherent in
their respective areas of oversight. In particular, the Board of
Directors is responsible for monitoring and assessing strategic and
operational risk exposure, which may include financial, legal and
regulatory, human capital, information technology and security and
reputation risks. The Audit Committee has the responsibility to
consider and discuss major financial risk exposures and the steps
management has taken to monitor and control these exposures,
including guidelines and policies to govern the process by which
risk assessment and management is undertaken. The Nominating and
Corporate Governance Committee monitors the effectiveness of the
Company’s corporate governance policies and the selection of
prospective members of the Board of Directors and their
qualifications, as well as environmental, social and governance
(“ESG”)-related risks. The Compensation Committee, in conjunction
with the Audit Committee, assesses and monitors whether any of the
Company’s compensation policies and programs have the potential to
encourage excessive risk-taking. In addition, the Compensation
Committee reviews and monitors matters related to human capital
management, including diversity and inclusion initiatives and
management of human capital risks. Like all businesses, we also
face threats to our cybersecurity, as we are reliant upon
information systems and the Internet to conduct our business
activities. In light of the pervasive and increasing threat from
cyberattacks, the Board believes oversight of this risk is
appropriately allocated to the Audit Committee. The Audit
Committee, with input from management, assesses the Company’s
cybersecurity risks and the measures implemented by the Company to
mitigate and prevent cyberattacks and respond to data breaches, and
periodically reports on the Company’s cybersecurity program to the
Board of Directors. In addition, in connection with the COVID-19
outbreak, the Board and management have focused on our efforts to
mitigate associated financial and human capital management risk
exposures.
Our
Board satisfies its oversight responsibility through full reports
by each committee chair regarding the applicable committee’s
considerations and actions, as well as through regular reports
directly from members of management responsible for oversight of
particular risks within the Company. Typically, the entire Board of
Directors meets with management and the applicable committees of
the Board of Directors at least annually to evaluate and monitor
respective areas of oversight. Both the Board of Directors as a
whole and the various standing committees receive periodic reports
from individuals responsible for risk management, as well as
incidental reports as matters may arise. It is the responsibility
of the committee chairs to report findings regarding material risk
exposures to the Board of Directors as quickly as possible. The
Board of Directors’ role in risk oversight does not affect its
leadership structure.
Board Independence
The
Board of Directors is composed of a majority of independent
directors as defined by the listing requirements of the NYSE
American. The Board of Directors has determined that Messrs.
Gerber, Lanktree, Mitchell, Roschman and Suh are independent
directors of the Company under the listing standards adopted by the
NYSE American. In making these independence determinations, the
Board of Directors considered all of the factors that automatically
compromise director independence as specified in the NYSE
American’s listing standards and determined that none of those
conditions existed. In addition, the Board of Directors considered
whether any direct or indirect material relationship, beyond those
factors that automatically compromise director independence,
existed between those directors, their immediate family members, or
their affiliated entities, on the one hand, and us and our
subsidiaries, on the other hand. The Board of Directors determined,
for those directors identified as independent above, that any
relationship that existed was not material and did not compromise
that director’s independence. Our independent directors meet in an
executive session at least once per year. All standing committee
members are independent for the purpose of the committees on which
they serve.
Communication to the
Board
Stockholders
and other interested parties wishing to communicate with the Board
of Directors or a specific director may do so by delivering written
correspondence to the Corporate Secretary of the Company at: Attn:
Corporate Secretary, Ballantyne Strong, Inc., 5960 Fairview Road,
Suite 275, Charlotte, North Carolina 28210. The Corporate Secretary
will present the communication to the appropriate director or
directors.
Board and Committee Meeting
Attendance
The
Board of Directors held 13 meetings during 2021. During 2021, each
current director attended at least seventy-five percent (75%) of
the aggregate of the total number of Board meetings held during the
period for which he served as a director and the total number of
meetings held by all committees of the Board on which he served
during the periods that he served.
The
Company does not have a policy with regard to board members’
attendance at annual meetings of our stockholders. Messrs.
Cerminara, Mitchell, Lanktree, and Swets attended the 2021 Annual
Meeting of Stockholders.
Hedging and Pledging
Policy
Under
Ballantyne Strong’s Insider Trading Policy, all directors, officers
and employees of Ballantyne Strong and its subsidiaries are
prohibited from engaging in any hedging transactions involving
Ballantyne Strong securities or equity securities of any
subsidiaries of Ballantyne Strong, holding Ballantyne Strong
securities in a margin account or pledging Ballantyne Strong
securities as collateral.
Legal Proceedings
No
director or executive officer has been involved in any legal
proceeding during the past ten years that is material to an
evaluation of his or her ability or integrity.
Family Relationships
There
are no family relationships among any of our directors, director
nominees or executive officers.
BOARD COMMITTEES
The
Board of Directors has an Audit Committee, a Nominating and
Corporate Governance Committee and a Compensation Committee. The
current charters for each of the committees are available on our
website www.ballantynestrong.com under the “Investor
Relations” tab and then the “Corporate Governance” tab.
The members of the committees, as of the Record Date, are
identified in the following table:
|
Director |
|
Audit
Committee |
|
Compensation
Committee |
|
Nominating
and Corporate Governance Committee |
| D.
Kyle Cerminara(1) |
|
|
|
|
|
|
| William J.
Gerber |
|
Chair |
|
X |
|
|
| Charles T.
Lanktree |
|
|
|
Chair |
|
X(3) |
| Michael C.
Mitchell |
|
X(2) |
|
|
|
|
| Robert J.
Roschman |
|
X |
|
X |
|
Chair(4) |
| Ndamukong
Suh |
|
|
|
|
|
X |
| Larry G. Swets,
Jr. |
|
|
|
|
|
|
(1)
Chairman of the Board of Directors.
(2)
Mr. Mitchell was appointed as a member of the Audit Committee on
November 16, 2021.
(3)
Mr. Lanktree was appointed as a member of the Nominating and
Corporate Governance Committee on September 29, 2021.
(4)
Mr. Roschman was appointed as the chair of the Nominating and
Corporate Governance Committee on September 29, 2021.
Audit Committee
The
Audit Committee of the Board of Directors consists of Messrs.
Gerber (Chair), Mitchell, and Roschman, who are independent for
purposes of serving on the committee under the SEC’s rules and NYSE
American’s listing requirements. The Audit Committee acts under a
written charter adopted by the Board of Directors, which is
available on our website at https://ballantynestrong.com/investors.
All Audit Committee members are financially literate. The Board of
Directors has determined that Mr. Gerber is an “audit committee
financial expert” as defined by Item 407(d)(5)(ii) of Regulation
S-K under the Exchange Act. The Audit Committee assists the Board
of Directors in fulfilling its responsibilities for oversight of
the quality and integrity of the accounting, internal controls, and
reporting practices of the Company, and performs such other duties
as are directed by the Board of Directors. The Audit Committee’s
role includes a particular focus on the qualitative aspects of
financial reporting to stockholders, and on the Company’s processes
to manage business and financial risk, and for compliance with
significant applicable legal, ethical and regulatory requirements.
The Audit Committee’s responsibilities include, among other things,
reviewing policies and procedures regarding transactions, and
reviewing and overseeing the transactions, between the Company and
officers, directors and other related parties that are not a normal
part of the Company’s business, and overseeing compliance with the
Company’s Code of Ethics and considering conflicts of interest.
Annually and on a quarterly basis, the Audit Committee reviews and
discusses matters separately with management of the Company and
with the Company’s independent registered public accounting
firm.
The
Audit Committee also conducts periodic oversight of the Company’s
risk management, including regularly reviewing the Company’s
cybersecurity and other information technology risks, controls and
procedures and the Company’s plans to mitigate cybersecurity risks
and to respond to data breaches.
The
Audit Committee is directly responsible for the appointment of the
independent registered public accounting firm engaged to prepare
and issue an audit report on the financial statements of the
Company and periodically reviews and evaluates such firm’s
performance and independence from management. All audit and
permitted non-audit services are pre-approved by the Audit
Committee. The Audit Committee has delegated the responsibility of
approving proposed non-audit services that arise between Audit
Committee meetings to the Audit Committee Chairman, provided that
the decision to approve the services is presented for ratification
at the next scheduled Audit Committee meeting. During 2021, the
Audit Committee held four meetings.
Compensation
Committee
The
Compensation Committee of the Board of Directors consists of
Messrs. Lanktree (Chair), Gerber and Roschman. All members of the
Compensation Committee are independent for purposes of serving on
the committee under the NYSE American’s listing requirements and
applicable SEC and tax regulations. The Compensation Committee acts
under a written charter adopted by the Board of Directors, which is
available on our website at https://ballantynestrong.com/investors.
The Compensation Committee is responsible for establishing policies
with respect to the compensation of the Company’s officers and has
overall responsibilities for approving and evaluating officer
compensation plans, policies and programs of the Company. The
Compensation Committee’s functions include, but are not limited
to:
|
● |
Determining
the compensation of the Chief Executive Officer, and overseeing all
other executive officers’ compensation, including salary and
payments under the Company’s incentive and stock plans; |
|
● |
Administering
the Company’s stock compensation plans, including approving all
individual grants and awards under these plans; |
|
● |
Reviewing
compensation for non-employee directors and recommending changes to
the Board of Directors; |
|
● |
Reviewing
and monitoring matters related to human capital management,
including talent acquisition, development and retention, internal
pay equity, diversity and inclusion, and corporate culture;
and |
|
● |
Conducting
an annual risk assessment to ensure that the Company’s executive
compensation plans and programs do not promote the assumption of
excessive risk and remain consistent with the approved overall
compensation philosophy and strategy. |
The
Compensation Committee has the sole authority to retain and to
terminate any compensation consultant, legal counsel or financial
or other advisor to be used to assist in the performance of its
duties and responsibilities, without consulting or obtaining the
approval of senior management of the Company in advance, and has
the sole authority to approve the compensation advisor’s fees and
other retention terms. The Compensation Committee is responsible
for annually reviewing an assessment of any potential conflict of
interest raised by the work of a compensation consultant (and other
compensation advisor, as required) that is involved in determining
or recommending executive and/or director compensation.
The
Compensation Committee may delegate its authority to a subcommittee
of its members. The Compensation Committee held three meetings
during 2021.
Nominating and Corporate Governance
Committee
The
members of the Nominating and Corporate Governance Committee are
Messrs. Roschman (Chair), Lanktree and Suh. All members of the
Nominating and Corporate Governance Committee are independent for
purposes of serving on the committee under the NYSE American’s
listing requirements. The Nominating and Corporate Governance
Committee acts under a written charter adopted by the Board of
Directors, which is available on our website at
https://ballantynestrong.com/investors. The functions of the
Nominating and Corporate Governance Committee include, among other
items, overseeing all aspects of the Company’s corporate governance
functions, including compliance with significant legal, ethical and
regulatory requirements. The Nominating and Corporate Governance
Committee’s functions include, but are not limited to:
|
● |
Overseeing
the annual review of the effectiveness of the Board of Directors
and its committees; |
|
● |
Administrating
a director orientation program for all newly-elected or appointed
members of the Board of Directors; |
|
● |
Recommending
the assignment of directors to the various committees of the Board
of Directors; |
|
● |
Evaluating
emergent ESG-related risks and the Company’s ESG goals, and
reviewing and discussing with management strategies, activities,
and policies regarding ESG-related matters and making
recommendations to the Board; |
|
● |
Reviewing
and assessing stockholder proposals submitted to the Company for
inclusion in the Company’s proxy statement; and |
|
● |
Periodically
reviewing the Company’s corporate governance policies and practices
and recommending changes to the Board of Directors when appropriate
in light of the Company’s position, developments in laws and
regulations applicable to the Company, and corporate governance
trends and practices. |
The
Nominating and Corporate Governance Committee also reports to, and
assists, the Board of Directors in identifying individuals for
membership on the Board of Directors and recommends to the Board of
Directors the director nominees for the Company’s Annual Meeting of
Stockholders. The Nominating and Corporate Governance Committee
held one meeting during 2021.
Director Nomination Process—The Nominating and Corporate
Governance Committee believes that the Company is well-served by
its current directors. In the ordinary course, absent special
circumstances or a material change in the criteria for membership
on the Board of Directors, the Nominating and Corporate Governance
Committee will re-nominate incumbent directors who continue to be
qualified for service on the Board of Directors and are willing to
continue as directors. If an incumbent director is not standing for
re-election or if a vacancy occurs between annual stockholder
meetings, the Nominating and Corporate Governance Committee will
seek out potential candidates for appointment to the Board of
Directors who meet the criteria for selection as a nominee and have
the specific qualities or skills being sought. Director candidates
will be selected based upon input from the members of the Board of
Directors, senior management of the Company and, if the Nominating
and Corporate Governance Committee deems appropriate, a third-party
search firm.
Candidates
will be chosen for their ability to represent all of the
stockholders, and for their character, judgment, fairness and
overall ability. As a group, they are expected to set the
appropriate policy for the Company, and to bring to the Board of
Directors broad experience in business matters and an insight and
awareness of the appropriate and ever-changing role that
corporations should have in society. Because the advice of those
facing similar issues is of particular value, executive officers of
other corporations are desirable candidates. Ballantyne Strong does
not have a set policy or process for considering “diversity”,
however that term may be defined, in identifying nominees. However,
the Nominating and Corporate Governance Committee strives to
identify and recruit individuals whose diverse talents, experiences
and backgrounds enhance the inclusive environment in which the
Board of Directors currently functions. The Nominating and
Corporate Governance Committee relies upon its judgment of the
foregoing general criteria and the following personal criteria in
selecting candidates for nomination to the Board of
Directors:
|
|
● |
Independence
and absence of conflicts of interest; |
|
|
● |
Honesty,
integrity and accountability; |
|
|
● |
Substantial
business experience with a practical application to the Company’s
needs; |
|
|
● |
Willingness
to ask tough questions in a constructive manner that adds to the
decision-making process of the Board of Directors; |
|
|
● |
Demonstrated
ability to think strategically and make decisions with a
forward-looking focus; |
|
|
● |
Ability
to assimilate relevant information on a broad range of
topics; |
|
|
● |
Willingness
to express independent thought; |
|
|
● |
Willingness
to make a strong commitment of time and attention to the Board of
Directors’ processes and affairs; and |
|
|
● |
Ability
to commit to Company stock ownership. |
The
Nominating and Corporate Governance Committee will also consider
proposals for nominees for director from stockholders which are
made in writing to the Corporate Secretary of the Company and
comply with the requirements set forth in the Bylaws. The
recommendation must contain sufficient background information
concerning the nominee to enable a proper judgment to be made as to
his or her qualifications. Recommendations must also include a
written statement from the candidate expressing a willingness to
serve.
INFORMATION ABOUT OUR EXECUTIVE
OFFICERS
The
following is a list of the names and ages of the executive officers
of the Company as of the Record Date, their business history and
their term of office with the Company.
|
Name |
|
Age |
|
Position
and Principal Occupation |
|
Officer
Since
|
|
Mark
D. Roberson |
|
57 |
|
Chief
Executive Officer since April 2020 and Executive Vice President,
Chief Financial Officer and Treasurer from November 2018 to April
2020. Mr. Roberson brings an extensive background in executive
leadership, operations, corporate finance, SEC reporting, treasury,
and mergers and acquisitions. He previously served as Chief
Operations Officer of Chanticleer Holdings, Inc., a Nasdaq-listed
restaurant operating company, from May 2015 to November 2018, and
as Chief Executive Officer of PokerTek, Inc., a then-Nasdaq-listed
gaming technology company, from February 2010 to October 2014
(having served as Acting Chief Executive Officer from May 2009
until February 2010). He also served as Chief Financial Officer and
Treasurer of PokerTek, Inc. from October 2007 until October 2014.
Mr. Roberson previously held positions of increasing responsibility
at Curtiss-Wright, Inc., a NYSE-listed aerospace and defense
contractor, Krispy Kreme Doughnut Corporation, a then-NYSE-listed
fast-casual restaurant franchisor and operator, and LifeStyle
Furnishings International, a $2 billion private equity backed
furniture manufacturer. Mr. Roberson is a Certified Public
Accountant who started his career with Ernst & Young and
PricewaterhouseCoopers. He earned an MBA from Wake Forest
University, a B.S. in Accounting from UNC-Greensboro and a B.S. in
Economics from Southern Methodist University. He served on the
Board of Directors of CynergisTek, Inc. (NYSE American: CTEK), a
cybersecurity and information management consulting firm, from May
2016 to September 2022, where he chaired the Audit
Committee. |
|
2018 |
|
|
|
|
|
|
|
|
|
Todd
R. Major |
|
49 |
|
Chief
Financial Officer, Secretary and Treasurer since April 2020 and
Senior Vice President, Finance from April 2019 to April 2020. Mr.
Major previously served as Senior Director, Financial and SEC
Reporting of Bojangles, Inc., a then-Nasdaq-listed restaurant
operating company and franchisor, from March 2015 to April 2019, as
Director, Financial Reporting of Premier, Inc. (Nasdaq: PINC), a
healthcare performance improvement company, from September 2014 to
February 2015, and as Senior Director, Financial Reporting of
Horizon Lines, Inc., a then-NYSE-traded transportation and
logistics company, from November 2006 to September 2014. From June
2003 to November 2006, Mr. Major previously held positions of
increasing responsibility at Nabi Biopharmaceuticals, Inc., a
then-Nasdaq-listed biopharmaceutical company engaged in the
development and commercialization of proprietary products. Mr.
Major is a Certified Public Accountant and earned an MBA from
Queens University of Charlotte and a B.A. in Accounting from
Flagler College. |
|
2020 |
|
|
|
|
|
|
|
|
|
Ray
F. Boegner |
|
72 |
|
President
of Strong Entertainment; previously Senior Vice President and
Senior Vice President of Sales; Vice President of Sales prior to
November 1996; joined the Company in 1985. |
|
1997 |
EXECUTIVE
COMPENSATION
Introduction
In
this section of the proxy statement, we disclose our executive
compensation for our named executive officers (the “Named Executive
Officers”), consisting of our principal executive officer during
2021 and the two other individuals who were serving as the most
highly compensated executive officers other than the principal
executive officer at the end of 2021. Our Named Executive Officers
for 2021 were as follows:
|
|
● |
Mark
D. Roberson, Chief Executive Officer (as of April 2020) and former
Executive Vice President and Chief Financial Officer; |
|
|
|
|
|
|
● |
Todd
R. Major, Chief Financial Officer (as of April 2020);
and |
|
|
|
|
|
|
● |
Ray
F. Boegner, President of Strong Entertainment. |
Base Salaries
Effective
as of August 16, 2021, Messrs. Roberson and Major receive an annual
salary of $295,000 and $230,000 respectively. Effective as of March
1, 2017, Mr. Boegner receives an annual base salary of
$275,000.
Prior
to August 16, 2021, Mr. Roberson received a base salary of
$250,000, which salary was negotiated as part of his employment
agreement at the time of his hiring as Executive Vice President and
Chief Financial Officer of the Company, effective November 16,
2018. Prior to August 16, 2021, Mr. Major received a base salary of
$200,000, which salary was negotiated as part of his employment
agreement at the time of his hiring as Senior Vice President of
Finance of the Company, effective March 20, 2019.
In
response to the impact of the COVID-19 pandemic on the Company, the
economy, and the industry, each executive officer of the Company
agreed to four temporary reductions in the base salaries otherwise
payable to the executive officers, which were expected to be
temporary until the Company resumes normal operations. On April 29,
2020, as approved by the Board on April 30, 2020, Messrs. Roberson
and Boegner agreed to a 60% reduction in each of their salaries,
and Mr. Major agreed to a 25% reduction in his salary, which
reductions were effective from April 13, 2020, until June 30, 2020.
On July 8, 2020, the Board approved, and Messrs. Roberson, Boegner
and Major agreed to, a 25% reduction in each of their salaries,
which reductions were effective from July 1, 2020, until and
including July 31, 2020. On August 17, 2020, as approved by the
Board on August 18, 2020, Messrs. Roberson, Boegner and Major
agreed to a 25% reduction in each of their salaries, which
reductions were effective from August 1, 2020, until and including
August 31, 2020. On September 15, 2020, the Board approved, and
Messrs. Roberson, Boegner and Major agreed to, a 25% reduction in
each of their salaries, which reductions were effective from
September 1, 2020, until and including September 30,
2020.
Discretionary Bonuses
In
March 2021, the Compensation Committee approved the payment of
performance bonuses to Messrs. Roberson and Major of $262,500 and
$112,500, respectively, for extra time and effort given by such
employees in connection with the successful completion of the sale
of our Convergent operating business. In October 2020, the
Compensation Committee approved the payment of performance bonuses
to Messrs. Roberson and Major of $75,000 and $25,000, respectively,
for extra time and effort given by such employees in connection
with the successful completion of the sale of our Strong Outdoor
operating business.
Long-Term Incentives
We
use long-term incentive equity awards as a part of our executive
compensation program, in order to incentivize and reward the
achievement of longer-term strategic objectives and align the
financial interests of the Company’s executive officers with those
of the Company’s stockholders. The Company’s long-term incentive
program for its Named Executive Officers has consisted of
restricted stock awards, restricted stock units and nonqualified
stock options. Each such type of award, and the reasons it is used,
is described below. At the Company’s 2017 Annual Meeting of
Stockholders, the Company’s stockholders approved the 2017 Plan
(prior to its amendment and restatement) as the successor to our
2010 Long-Term Incentive Plan (the “2010 Plan”) and 2014
Non-Employee Directors’ Restricted Stock Plan, and long-term
incentive awards granted after the 2017 Annual Meeting of
Stockholders have been made under the 2017 Plan. In addition,
stockholders approved an amendment and restatement of the 2017 Plan
at the 2019 Annual Meeting of Stockholders.
Restricted Stock Awards. Restricted stock awards represent
the transfer of ownership of a certain number of shares of the
Company’s common stock, subject to restrictions on transfer and a
substantial risk of forfeiture based on the recipient’s continued
employment by the Company during the applicable vesting period set
out in the award agreement. Restricted stock awards are designed
primarily to encourage retention of executive officers and key
employees.
Restricted Stock Units. RSUs represent a right to receive a
specific number of units at the end of the specified period. Each
recipient of RSUs has no rights as a stockholder through such RSUs
during the restriction period of the RSUs. Settlement of an RSU
award is made in cash, shares of stock or some combination thereof,
as specified in the applicable award agreement. RSUs are designed
to provide retention incentives to our executive officers and key
employees.
Nonqualified Stock Options. Nonqualified stock options
represent an option to purchase shares of the Company’s common
stock at an option price equal to the closing price on the NYSE
American of the Company’s common stock on the grant date. The stock
options are designed to motivate executives to increase stockholder
value as the stock options will only have value if our stockholders
also benefit from increasing stock prices.
2021
Equity Grants
The
Compensation Committee did not approve grants of stock options or
RSUs to our Named Executive Officers during 2021.
2020
Equity Grants
On
October 9, 2020, the Compensation Committee approved grants of
stock options and RSUs to Messrs. Roberson, Major and Boegner.
Messrs. Roberson, Major and Boegner received options to purchase
20,000, 10,000 and 15,000 shares of the Company’s common stock,
respectively, at an exercise price of $1.60 per share, pursuant to
the 2017 Plan. The stock options have a ten-year term, and become
exercisable in one-fifth annual installments, beginning on the
first anniversary of the grant date, subject to continued
employment.
Messrs.
Roberson, Major and Boegner also received 40,000, 20,000 and 30,000
RSUs, respectively, pursuant to the 2017 Plan. These RSUs vest in
one-third annual installments, beginning on the first anniversary
of the grant date, subject to continued employment.
401(k) Retirement
Plan
The
Company’s executive officers are able to participate in the
Company’s Retirement and Savings 401(k) Plan (the “401(k) Plan”),
which is a combination savings and profit sharing plan designed to
qualify under Section 401 of the U.S. Internal Revenue Code.
Participation in the 401(k) Plan is generally available to all
Ballantyne Strong employees on the same terms. Each participant may
defer up to 100% of his or her compensation. The Company may make a
discretionary matching contribution equal to a uniform percentage
of salary. Each year the Company determines the amount of the
discretionary percentage. In 2021 and 2020, the Company matched 50%
of the amount deferred up to 6% of each participating employee’s
contribution. Employee contributions to the 401(k) Plan are
non-forfeitable. Employer contributions vest annually over three
years on the employee’s employment anniversary. 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 59½. Participants may be eligible to withdraw benefits
in case of hardship.
Contributions
to the 401(k) Plan made by the Company on behalf of the Named
Executive Officers are included in the 2021 Summary Compensation
Table.
Employment Agreements
The
Company currently has written employment agreements with Messrs.
Boegner, Roberson and Major. The material provisions of these
employment agreements are discussed below.
Mr.
Roberson’s employment agreement with the Company, which was entered
into as of November 6, 2018, provides for a base salary, subject to
annual review and adjustment, and he is eligible for
performance-based compensation in the form of an annual bonus
targeted at $150,000, payable partly in cash and partly through
equity awards as determined by the Compensation Committee. The
bonus will be subject to the achievement of performance metrics and
other criteria as determined by the Compensation Committee. Mr.
Roberson is also eligible to participate in the Company’s 401(k),
medical, dental and vision plans and certain other benefits
available generally to employees of the Company. The employment
agreement also contains customary non-competition and
non-solicitation covenants. If Mr. Roberson’s employment is
terminated by the Company without Cause (as defined in the
Amendment), Mr. Roberson will be entitled to severance equal to one
year of his base salary payable over a period of twelve months
following the termination date in accordance with the Company’s
regular payroll practices and, if Mr. Roberson timely and properly
elects continuation health coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company
will pay Mr. Roberson’s COBRA premiums for a period of twelve
months following the termination date.
Mr.
Major’s employment agreement with the Company, which was entered
into as of March 20, 2019, provides for a base salary, subject to
annual review and adjustment, and he is eligible for
performance-based compensation in the form of an annual bonus
targeted at 25% of base salary, payable in a combination in cash
and equity, as determined by the Compensation Committee. The bonus
will be subject to the achievement of performance metrics and other
criteria as determined by the Compensation Committee. As a signing
bonus, the Company granted Mr. Major 30,000 RSUs (equal to $90,000
of common stock, as determined based on the trading price of the
Company’s common stock on the date of grant) pursuant to the 2017
Plan, vesting over a period of three years from the date of grant.
The Company also paid a cash signing bonus of $30,000. Mr. Major is
also eligible to participate in the Company’s 401(k), medical,
dental and vision plans and certain other benefits available
generally to employees of the Company. The employment agreement
also contains customary non-competition and non-solicitation
covenants. Mr. Major is entitled to severance equal to one year of
his base salary in the event of a change in control that results in
his termination or if the Senior Vice President of Finance position
is eliminated without Mr. Major being offered a mutually-agreed
comparable opportunity at an affiliate of the Company.
Mr.
Boegner’s employment agreement with the Company, which was entered
into on February 14, 2012, provides for a base salary, subject to
annual review and adjustment, and Mr. Boegner’s eligibility to
participate in and/or receive other benefits under compensation
plans provided to other executive employees of the Company. He is
eligible for performance-based compensation in the form of an
annual bonus and is eligible to receive awards, in the Compensation
Committee’s discretion, under the Company’s long-term incentive
plans. Pursuant to his employment agreement, in the event that his
employment is terminated by Ballantyne Strong without cause or by
Mr. Boegner for good reason, as these terms are defined in the
agreement, then he will receive his base salary for a period equal
to three (3) weeks for each year that he was employed by the
Company. On April 26, 2021, the Company amended Mr. Boegner’s
employment agreement to limit this severance period to three (3)
weeks for each year that he was employed by the Company up to and
including October 2020. In addition, the Company will pay for, or
reimburse Mr. Boegner for, the cost of health insurance during this
same period. For more information on the terms of Mr. Boegner’s
employment agreement, see “Potential Payments Upon Termination or
Change in Control — Employment Agreements.”
Executive Compensation
Tables
The
following table sets forth information regarding all forms of
compensation earned by the Company’s Named Executive Officers
during the last two fiscal years. Messrs. Roberson, Major and
Boegner were employed by the Company during all of fiscal 2021 and
2020. Mr. Roberson served as Chief Financial Officer from November
16, 2018, to April 13, 2020, and was appointed as the Company’s
Chief Executive Officer on April 13, 2020. Mr. Major served as
Senior Vice President, Finance from April 8, 2019, to April 13,
2020, and was appointed as the Company’s Chief Financial Officer on
April 13, 2020.
2021 Summary Compensation
Table
|
Name
and
Principal
Position
|
|
Year |
|
|
Salary
($) |
|
|
Bonus
($)(3)
|
|
|
Stock
Awards
($)(4)
|
|
|
Option
Awards
($)(4)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Nonqualified
deferred compensation earnings
($)
|
|
|
All
Other
Compensation
($)(7)
|
|
|
Total
($)
|
|
| Mark
D. Roberson (1) |
|
|
2021 |
|
|
|
265,577 |
|
|
|
262,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,821 |
|
|
|
537,898 |
|
| CEO and Former
CFO |
|
|
2020 |
|
|
|
201,250 |
|
|
|
75,000 |
|
|
|
64,000 |
(5) |
|
|
16,800 |
(6) |
|
|
— |
|
|
|
— |
|
|
|
7,080 |
|
|
|
364,130 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Todd
R. Major (2)
|
|
|
2021 |
|
|
|
210,385 |
|
|
|
112,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,227 |
|
|
|
331,112 |
|
| CFO |
|
|
2020 |
|
|
|
176,346 |
|
|
|
25,000 |
|
|
|
32,000 |
(5) |
|
|
8,400 |
(6) |
|
|
— |
|
|
|
— |
|
|
|
6,621 |
|
|
|
248,367 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ray F.
Boegner |
|
|
2021 |
|
|
|
275,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,913 |
|
|
|
284,913 |
|
| President of Strong
Entertainment |
|
|
2020 |
|
|
|
221,375 |
|
|
|
— |
|
|
|
48,000 |
(5) |
|
|
12,600 |
(6) |
|
|
— |
|
|
|
— |
|
|
|
7,762 |
|
|
|
289,737 |
|
|
(1) |
Mr.
Roberson served as our Executive Vice President and Chief Financial
Officer from November 16, 2018, to April 13, 2020, and was
appointed as our Chief Executive Officer effective April 13,
2020. |
|
|
|
|
(2) |
Mr.
Major served as our Senior Vice President, Finance from April 8,
2019, to April 13, 2020, and was appointed as our Chief Financial
Officer effective April 13, 2020. |
|
|
|
|
(3) |
In
October 2020 and March 2021, the Compensation Committee approved
the payment of transaction-related bonuses to Messrs. Roberson and
Major for extra time and effort given by such employees in
connection with the successful completion of the sale of certain
portions of our operating businesses. |
|
|
|
|
(4) |
The
amounts in these columns represent the aggregate grant date fair
value calculated in accordance with the Financial Accounting
Standards Board Accounting Standards Codification Topic 718. For
additional information relating to the assumptions made in valuing
and expensing these awards refer to Note 13 in the Company’s
consolidated financial statements included in the Company’s Annual
Report, as filed with the SEC. |
|
|
|
|
(5) |
Consists
of the grant date fair value of the October 9, 2020 grant of
40,000, 20,000 and 30,000 RSUs granted to Messrs. Roberson, Major
and Boegner, respectively, pursuant to the 2017 Plan. The RSUs are
to be settled in shares of the Company’s common stock on a
one-for-one basis as soon as practicable following the applicable
vesting date. The RSUs vest in one-third annual installments,
beginning on the first anniversary of the grant date, subject to
continued employment. |
|
(6) |
Consists
of the grant date fair value of the October 9, 2020 grant of
20,000, 10,000 and 15,000 stock options to Messrs. Roberson, Major
and Boegner, respectively, pursuant to the 2017 Plan. The stock
options vest in one-fifth annual installments, beginning on the
first anniversary of the grant date, subject to continued
employment. |
|
|
|
|
(7) |
The
Company provides its executives with certain employee benefits.
These benefits include excess life and disability insurance and
contributions made by the Company under the 401(k) Plan. The
amounts reported for each Named Executive Officer as All Other
Compensation for 2021 are identified and quantified
below. |
|
|
|
Mr.
Roberson |
|
|
Mr.
Major |
|
|
Mr.
Boegner |
|
|
Employer
match on 401(k) Plan |
$ |
7,906 |
|
|
$ |
6,312 |
|
|
$ |
8,250 |
|
|
Excess
life and disability insurance |
|
1,915 |
|
|
|
1,915 |
|
|
|
1,663 |
|
| Total
All Other Compensation |
$ |
9,821 |
|
|
$ |
8,227 |
|
|
$ |
9,913 |
|
The
following table sets forth information concerning outstanding
equity awards for each of the Company’s Named Executive Officers as
of the end of the last completed fiscal year.
Outstanding Equity Awards at 2021
Fiscal Year-End
| |
|
Option
Awards |
|
|
Stock
Awards |
|
|
Name |
|
Number of
Securities Underlying Unexercised Options (#)
Exercisable |
|
|
Number of
Securities Underlying Unexercised Options (#)
Unexercisable |
|
|
Option
Exercise Price ($) |
|
|
Option
Expiration Date |
|
|
Number of
Shares or Units of Stock That Have Not Vested (#) |
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(*) |
|
| Mark D.
Roberson |
|
|
24,000 |
|
|
|
16,000 |
(1) |
|
|
2.25 |
|
|
|
12/4/2028 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
12,000 |
|
|
|
18,000 |
(2) |
|
|
2.89 |
|
|
|
6/6/2029 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
4,000 |
|
|
|
16,000 |
(3) |
|
|
1.60 |
|
|
|
10/9/2030 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,667 |
(8) |
|
|
62,618 |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,667 |
(9) |
|
|
77,068 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Todd R.
Major |
|
|
2,000 |
|
|
|
8,000 |
(3) |
|
|
1.60 |
|
|
|
10/9/2030 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,000 |
(10) |
|
|
28,900 |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,334 |
(9) |
|
|
38,535 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ray F.
Boegner |
|
|
5,000 |
|
|
|
— |
(5) |
|
|
4.70 |
|
|
|
1/11/2022 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
32,000 |
|
|
|
— |
(6) |
|
|
4.33 |
|
|
|
11/22/2025 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
32,000 |
|
|
|
8,000 |
(7) |
|
|
6.50 |
|
|
|
2/28/2027 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
30,000 |
|
|
|
20,000 |
(4) |
|
|
4.70 |
|
|
|
1/26/2028 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
8,000 |
|
|
|
12,000 |
(2) |
|
|
2.89 |
|
|
|
6/6/2029 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
— |
|
|
|
12,000 |
(3) |
|
|
1.60 |
|
|
|
10/9/2030 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,334 |
(8) |
|
|
35,535 |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,000 |
(9) |
|
|
57,800 |
|
*
Based on the closing stock price of our common stock of $2.89 on
December 31, 2021, the last trading day of the 2021 fiscal
year.
|
(1) |
The
40,000 stock options granted to Mr. Roberson on December 4, 2018,
pursuant to the 2017 Plan become exercisable in five equal annual
installments beginning on December 4, 2019, and thereafter on
December 4 of each year through 2023. |
|
|
|
|
(2) |
The
30,000, 30,000 and 20,000 stock options granted to Messrs.
Cerminara, Roberson and Boegner, respectively, on June 6, 2019,
pursuant to the 2017 Plan become exercisable in five equal annual
installments beginning on June 6, 2020, and thereafter on June 6 of
each year through 2024. |
|
|
|
|
(3) |
The
20,000, 10,000 and 15,000 stock options granted to Messrs.
Roberson, Major and Boegner, respectively, on October 9, 2020,
pursuant to the 2017 Plan become exercisable in five equal annual
installments beginning on October 9, 2021, and thereafter on
October 9 of each year through 2025. |
|
|
|
|
(4) |
The
50,000 stock options granted to each of Messrs. Cerminara and
Boegner on January 26, 2018, pursuant to the 2017 Plan become
exercisable in five equal annual installments beginning on January
26, 2019, and thereafter on January 26 of each year through
2023. |
|
(5) |
The
30,000 stock options granted to Mr. Boegner on January 11, 2012,
pursuant to the 2010 Plan became exercisable in four equal
installments beginning on January 11, 2013, and thereafter on
January 11 of each year through 2016. On both August 11, 2016, and
August 30, 2016, Mr. Boegner exercised options from this grant to
acquire 5,000 shares of the Company’s common stock. On June 8,
2017, Mr. Boegner exercised options from this grant to acquire
7,000 shares of the Company’s common stock. On August 10, 2017, Mr.
Boegner exercised options from this grant to acquire 8,000 shares
of the Company’s common stock. |
|
|
|
|
(6) |
The
40,000 stock options granted to Mr. Boegner on November 22, 2015,
pursuant to the 2010 Plan became exercisable in five equal annual
installments beginning on November 22, 2016, and thereafter on
November 22 of each year through 2020. On November 23, 2016, Mr.
Boegner exercised options from this grant to acquire 8,000 shares
of the Company’s common stock at an exercise price of $4.33 per
share. |
|
|
|
|
(7) |
The
40,000 stock options granted to Mr. Boegner on February 28, 2017,
pursuant to the 2010 Plan become exercisable in five equal annual
installments beginning on February 28, 2018, and thereafter on
February 28 of each year through 2022. |
|
|
|
|
(8) |
Represents
RSUs to be settled in shares of the Company’s common stock on a
one-for-one basis as soon as practicable following the applicable
vesting date. The RSUs vested on June 6, 2022. |
|
|
|
|
(9) |
Represents
RSUs to be settled in shares of the Company’s common stock on a
one-for-one basis as soon as practicable following the applicable
vesting date. The RSUs vest in equal annual installments on October
9, 2022 and October 9, 2023. |
|
|
|
|
(10) |
Represents
RSUs to be settled in shares of the Company’s common stock on a
one-for-one basis as soon as practicable following the applicable
vesting date. The RSUs vested on May 31, 2022. |
Potential Payments Upon Termination
or Change in Control
Employment
Agreements
If
Mr. Roberson’s employment is terminated by the Company without
Cause (as defined in the Amendment), Mr. Roberson will be entitled
to severance equal to one year of his base salary payable over a
period of twelve months following the termination date in
accordance with the Company’s regular payroll practices and, if Mr.
Roberson timely and properly elects continuation health coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), the Company will pay Mr. Roberson’s COBRA premiums
for a period of twelve months following the termination
date
Pursuant
to Mr. Major’s employment agreement with the Company, in the event
of a change in control that results in Mr. Major being terminated,
or if the Senior Vice President of Finance position is eliminated
without Mr. Major being offered a mutually-agreed comparable
opportunity at an affiliate of the Company, Mr. Major will be
entitled to severance equal to one year of his base
salary.
Pursuant
to Mr. Boegner’s employment agreement with the Company, in the
event Mr. Boegner’s employment is terminated by the Company without
cause or by Mr. Boegner for good reason, then he will receive his
base salary for a period equal to three (3) weeks for each year
that he has been employed by the Company and all existing insurance
benefits shall remain in force until the last day of the month in
which the severance period expires, subject to Mr. Boegner’s
continued compliance with certain restrictive covenants set forth
in the employment agreement (including confidentiality and
non-solicitation covenants) and his execution of the Company’s
standard form of general release. On April 26, 2021, the Company
amended Mr. Boegner’s employment agreement to limit the severance
period to three (3) weeks for each year that he was employed by the
Company up to and including October 2020. In addition, Mr. Boegner
would be entitled to receive any earned and unpaid amounts owed to
him under the employment agreement and such other accrued benefits
as may be provided for under the agreement. For purposes of Mr.
Boegner’s employment agreement, “good reason” means a material
breach by the Company of its obligations to Mr. Boegner under the
agreement. In addition, for purposes of the agreement, “cause”
exists if Mr. Boegner (i) acted dishonestly or incompetently or
engaged in willful misconduct in performance of his executive
duties, (ii) breached fiduciary duties owed to the Company, (iii)
intentionally failed to perform reasonably assigned duties, (iv)
willfully violated any law, rule or regulation, or court order
(other than minor traffic violations or similar offenses), or
otherwise committed any act which would have a material adverse
impact on the business of the Company, and/or (v) is in breach of
his obligations under the agreement and fails to cure such breach
within thirty (30) days after receiving notice of the breach from
the Company.
We
are also obligated under Mr. Boegner’s employment agreement to
provide certain payments to Mr. Boegner in the event of his death
or termination by reason of his incapacity. In the event of Mr.
Boegner’s death, we are obligated to pay his estate all accrued
sums due and owing to Mr. Boegner with respect to his salary and
such other benefits as may be provided under his agreement. In
addition, in the event we terminate Mr. Boegner’s employment by
reason of his incapacity, Mr. Boegner is entitled to any accrued
amounts due and owing to him with respect to his salary and such
other benefits as may be provided under his agreement.
2017
Omnibus Equity Compensation Plan – Change in Control
Provisions
Our
2017 Plan, which was initially approved by our stockholders on June
15, 2017, with the amendment and restatement of the 2017 Plan,
effective as of October 28, 2019, approved by our stockholders on
December 17, 2019, generally provides for “double-trigger” vesting
of equity awards in connection with a change in control of the
Company, as described below.
To
the extent that outstanding awards granted under the 2017 Plan are
assumed in connection with a change in control, except as otherwise
provided in the applicable award agreement or in another written
agreement with the participant, all outstanding awards will
continue to vest and become exercisable (as applicable) based on
continued service during the remaining vesting period, with
performance-based awards being converted to service-based awards at
the “target” level. Vesting and exercisability (as applicable) of
awards that are assumed in connection with a change in control
generally would be accelerated in full on a “double-trigger” basis,
if, within two years after the change in control, the participant’s
employment is involuntarily terminated without cause, or by the
participant for “good reason.” Any stock options or stock
appreciation rights (“SARs”) that become vested on a
“double-trigger” basis generally would remain exercisable for the
full duration of the term of the applicable award.
To
the extent outstanding awards granted under the 2017 Plan are not
assumed in connection with a change in control, then such awards
generally would become vested in full on a “single-trigger” basis,
effective immediately prior to the change in control, with
performance-based awards becoming vested at the “target” level. Any
stock options or SARs that become vested on a “single-trigger”
basis generally would remain exercisable for the full duration of
the term of the applicable award.
The
Compensation Committee has the discretion to determine whether or
not any outstanding awards granted under the 2017 Plan will be
assumed by the resulting entity in connection with a change in
control, and the Compensation Committee has the authority to make
appropriate adjustments in connection with the assumption of any
awards. The Compensation Committee also has the right to cancel any
outstanding awards in connection with a change in control, in
exchange for a payment in cash or other property (including shares
of the resulting entity) in an amount equal to the excess of the
fair market value of the shares subject to the award over any
exercise price related to the award, including the right to cancel
any “underwater” stock options and SARs without payment
therefor.
For
purposes of the 2017 Plan, subject to the exceptions set forth in
the 2017 Plan, a “change in control” generally includes (a) the
acquisition of more than 50% of the voting power or value of the
Company’s stock; (b) the incumbent board of directors ceasing to
constitute a majority of the board of directors during a
twelve-month period; and (c) the acquisition of 50% or more of the
gross fair market value of the Company’s assets over a twelve-month
period. The full definition of “change in control” is set out in
the 2017 Plan.
For
purposes of the 2017 Plan, unless otherwise defined in a written
agreement with the participant or an applicable severance plan,
“cause”, as a reason for the Company’s termination of a
participant’s employment, generally means that the participant (a)
acted dishonestly or incompetently or engaged in willful misconduct
in performance of his or her duties; (b) breached fiduciary duties
owed to the Company; (c) intentionally failed to perform reasonably
assigned duties, which the participant did not satisfactorily
correct within 30 calendar days following written notification; (d)
was convicted or entered a plea of guilty or nolo contendere of any
felony crime involving dishonesty; or (e) otherwise committed any
act which could have a material adverse impact on the business of
the Company.
For
purposes of the 2017 Plan, unless otherwise defined in a written
agreement with the participant or an applicable severance plan,
“good reason”, as a reason for a participant’s termination of his
or her employment, generally means the occurrence of any of the
following without the participant’s consent (and unless timely
cured by the Company following notice from the participant): (a)
any material diminution in the participant’s compensation or
benefits, unless generally applicable to all similarly situated
employees of the Company; (b) the assignment to the participant of
any duties inconsistent with, or substantially adverse to, his or
her status and duties, or a reduction in title; (c) a material
breach by the Company or a subsidiary of its obligations under the
participant’s employment agreement, if any; or (d) the relocation
of the participant’s primary work location to a location more than
fifty miles away from the current location.
Except
as described above with respect to a change in control,
unexercisable stock options, unvested restricted shares and
unvested RSUs generally become forfeited upon termination of
employment. The stock options that are exercisable at the time of
termination of employment expire within the earlier of thirty days
after such termination or the expiration date of the options. Upon
termination for “cause,” all options, whether or not exercisable,
are generally automatically forfeited.
Awards
granted under the 2017 Plan may be subject to forfeiture or
recoupment as determined by the Compensation Committee in the event
of certain detrimental activity, such as a participant’s breach of
applicable restrictive covenants. Awards granted under the 2017
Plan also may be subject to forfeiture or recoupment as provided
pursuant to any compensation recovery (or “clawback”) policy that
the Company may adopt or maintain from time to time.
2010
Long-Term Incentive Plan – Change in Control
Provisions
The
2010 Plan provides that no acceleration of an award shall occur
upon or after a “change in control” unless such acceleration is
provided for in the applicable award agreement and determined by
the Compensation Committee on a grant-by-grant basis or as may be
provided in an after written agreement between the Company and the
grantee. The award agreements for the stock options and restricted
shares granted to Messrs. Cerminara and Boegner under the 2010 Plan
provide for accelerated vesting of all unvested options and
restricted shares upon the occurrence of a “change in control”
while the grantee is employed by the Company or a subsidiary of the
Company as of the date of the change in control.
For
purposes of the 2010 Plan, subject to the exceptions set forth in
the 2010 Plan, a “change in control” generally includes (i) the
acquisition of more than 50% of the Company’s common stock; (ii)
over a twelve-month period, the acquisition of more than 50% of the
Company’s common stock or the replacement of a majority of the
board of directors by directors not endorsed by the persons who
were members of the board before the new directors’ appointment;
and (iii) the acquisition of more than 50% of the total gross fair
market value of all the assets of the Company over a twelve-month
period.
Compensation
Committee Interlocks and Insider Participation
The
Compensation Committee of the Board of Directors consists of
Messrs. Lanktree (Chair), Gerber and Roschman, none of whom has
been at any time an executive officer or employee of the Company,
or has any relationship requiring disclosure under Item 404 of
Regulation S-K. None of our executive officers serves, or in the
past has served, on the board of directors, or as a member of the
compensation committee (or other committee performing an equivalent
function) of the board of directors of any entity that has one or
more executive officers who serve as members of our Board of
Directors or Compensation Committee.
Compensation
Committee Report
The
following report of the Compensation Committee shall not be deemed
to be “soliciting material” or to be “filed” with the Securities
and Exchange Commission, nor shall this report be incorporated by
reference into any filing made by the Company under the Securities
Act of 1933, as amended, or the Exchange Act.
The
Compensation Committee has reviewed and discussed the executive
compensation, as disclosed above, with management. Based on this
review and those discussions, the Compensation Committee
recommended that the executive compensation be included in this
proxy statement.
Compensation
Committee
Charles
T. Lanktree (Chair)
William
J. Gerber
Robert
J. Roschman
DIRECTOR COMPENSATION
The
following table sets forth the compensation paid to the Company’s
directors in fiscal 2021.
| |
|
Fees
Earned
Or
Paid
in Cash
($)(1)
|
|
|
Stock
Awards ($)(2) |
|
|
Option
Awards ($) |
|
|
Non-Equity
Incentive Plan Compensation ($) |
|
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($) |
|
|
D. Kyle
Cerminara |
|
|
65,000 |
|
|
|
49,999 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
114,999 |
|
| William J.
Gerber |
|
|
58,000 |
|
|
|
39,998 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
97,998 |
|
| Lewis M. Johnson
(3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Charles T.
Lanktree |
|
|
50,750 |
|
|
|
39,998 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
90,748 |
|
| Michael C. Mitchell
(4) |
|
|
10,302 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,302 |
|
| Robert J.
Roschman |
|
|
50,750 |
|
|
|
39,998 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
90,748 |
|
| Ndamukong
Suh |
|
|
43,000 |
|
|
|
39,998 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
82,998 |
|
| Larry G. Swets, Jr.
(5) |
|
|
9,674 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,674 |
|
|
(1) |
Although
not included in the above table, the directors are reimbursed for
their out-of-pocket expenses of attending meetings of the Board of
Directors. |
|
(2) |
On
July 1, 2021, Mr. Cerminara was granted 10,504 RSUs under the 2017
Plan, and Messrs. Gerber, Lanktree, Roschman and Suh were each
granted 8,403 RSUs under the 2017 Plan. The RSUs vest on the
one-year anniversary of the grant date, provided that, if the
director makes himself available and consents to be nominated by
the Company for continued service as a director of the Company, but
is not nominated to the Board of Directors for election by
stockholders, other than for good reason as determined by the Board
of Directors in its discretion, then the RSUs will vest in full as
of the director’s last date of service as a director of the
Company. Each RSU represents a contingent right to receive one
share of common stock of the Company. The amounts shown in this
column include the fair value of the annual RSU award on the date
of grant, which was $4.76 per share. For additional information
relating to the assumptions made in valuing and expensing these
awards for 2021, refer to Note 13 in the Company’s consolidated
financial statements included in the Company’s Annual Report, as
filed with the SEC. |
The
aggregate number of unvested RSU awards outstanding as of December
31, 2021, for each of Messrs. Gerber, Lanktree, Roschman and Suh
was 32,366. The aggregate number of unvested RSU awards outstanding
as of December 31, 2021 for Mr. Cerminara was 54,612.
|
(3) |
Mr.
Johnson resigned from our Board of Directors on March 9,
2021. |
|
(4) |
Mr.
Mitchell was appointed to our Board of Directors on October 4, 2021
and was appointed to the Audit Committee on November 16,
2021. |
|
(5) |
Mr.
Swets was appointed to our Board of Directors on October 4,
2021. |
On
March 31, 2021, we modified the compensation program for all
non-employee directors which was effective for fiscal year 2021.
The program was adopted to remain competitive in attracting and
retaining qualified Board members and to better align director
compensation to other public companies of comparable size to the
Company. The terms of the new program are as follows:
|
|
● |
The
Chairman of the Board of Directors is entitled to receive an annual
cash retainer of $65,000, and each other non-employee director is
entitled to receive an annual cash retainer of $40,000, paid in
quarterly installments; |
|
|
|
|
|
|
● |
The
Chairman of the Audit Committee is entitled to receive an
additional annual cash retainer of $10,000 and each other member of
the Audit Committee is entitled to receive an additional cash
retainer of $3,000, paid in quarterly installments; |
|
|
|
|
|
|
● |
The
Chairman of the Compensation Committee as well as the Chairman of
the Nominating and Corporate Governance Committee are each entitled
to receive an additional cash retainer of $10,000, and each other
member of the Compensation Committee as well as each other member
of the Nominating and Corporate Governance Committee are entitled
to receive and annual cash retainer of $3,000, paid in quarterly
installments; |
|
|
|
|
|
|
● |
The
Chairman of the Board of Directors receives an annual grant of RSUs
with a value of $50,000, and each other non-employee director
receives an annual grant of RSUs with a value of $40,000, vesting
on the one-year anniversary of the grant date, provided that, if
the director makes himself available and consents to be nominated
by the Company for continued service as a director of the Company,
but is not nominated to the Board of Directors for election by
stockholders, other than for good reason as determined by the Board
of Directors in its discretion, then the RSUs will vest in full as
of the director’s last date of service as a director of the
Company; and |
|
|
|
|
|
|
● |
Each
non-employee director receives reimbursement for reasonable
out-of-pocket expenses for attending meetings of the Board of
Directors and its committees. |
The
2017 Plan includes a limit on the amount of compensation payable to
our non-employee directors. Specifically, the 2017 Plan provides
that the aggregate grant date fair value of all awards granted to
any single non-employee director during any single calendar year
(determined as of the applicable grant date(s) under applicable
financial accounting rules), when taken together with any cash fees
paid to the non-employee director during the same calendar year,
may not exceed $200,000.
REPORT OF THE AUDIT
COMMITTEE
The
following report of the Audit Committee shall not be deemed to be
“soliciting material” or to be “filed” with the Securities and
Exchange Commission, nor shall this report be incorporated by
reference into any filing made by the Company under the Securities
Act of 1933, as amended, or the Exchange Act.
The
Company’s management is responsible for the preparation of the
Company’s financial statements and for maintaining an adequate
system of internal controls and processes for that purpose. Haskell
& White LLP (“Haskell & White”) acted as the Company’s
independent registered public accounting firm for the year ended
December 31, 2021 and was responsible for conducting an independent
audit of the Company’s annual financial statements in accordance
with the standards of the Public Company Accounting Oversight Board
(the “PCAOB”) and issuing a report on the results of their audit.
The Audit Committee is responsible for providing independent,
objective oversight of both of these processes.
The
Audit Committee has reviewed and discussed the audited financial
statements for the year ended December 31, 2021 with management of
the Company and with representatives of Haskell & White. The
discussions with Haskell & White included all matters that
Haskell & White was required to communicate and discuss with
the Audit Committee by the applicable requirements of the PCAOB and
the SEC.
In
addition, the Audit Committee reviewed the independence of Haskell
& White. The Audit Committee discussed Haskell & White’s
independence with them and has received written disclosures and a
letter from Haskell & White regarding their independence as
required by the applicable requirements of the PCAOB regarding the
independent accountant’s communications with the audit committee
concerning independence.
Based
upon its review and the discussions noted above, the Audit
Committee recommended to the Board that the Company’s audited
consolidated financial statements for the year ended December 31,
2021 be included in the Company’s Annual Report.
The
foregoing report is submitted by the Audit Committee in accordance
with the requirements of the Exchange Act and the rules and
regulations thereunder.
William
J. Gerber (Chair)
Michael
C. Mitchell
Robert
J. Roschman
PROPOSAL TWO
ADVISORY
APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION
Background
At
the 2017 Annual Meeting of Stockholders, the stockholders approved,
by advisory vote, an annual frequency for future advisory votes on
the compensation of the Company’s Named Executive Officers
(“say-on-pay vote”). This advisory vote was accepted by the Board
of Directors. Stockholders are expected to have the opportunity to
vote on the frequency of future votes on Named Executive Officer
compensation at the 2023 Annual Meeting of Stockholders.
The
annual advisory say-on-pay vote on executive compensation is
provided to stockholders as required by the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 and Section 14A of the
Exchange Act and is a non-binding vote on the compensation of the
Company’s Named Executive Officers, as disclosed in this proxy
statement pursuant to the compensation disclosure rules promulgated
by the SEC, including the 2021 Summary Compensation Table and the
other related tables and narrative disclosure. As a smaller
reporting company, we are not required to provide a
separately-captioned “Compensation Discussion and Analysis” section
in this proxy statement.
The
advisory say-on-pay vote is not a vote on the Company’s general
compensation policies, compensation of the Board of Directors, or
the Company’s compensation policies as they relate to risk
management.
The
Compensation Committee believes the Company’s executive
compensation program reflects a strong philosophy that rewards
performance and is closely aligned with stockholders’ long-term
interests. We recognized that the COVID-19 pandemic could
significantly impact our financial results and compensation
outcomes and, accordingly, have temporarily reduced our executive
officer and non-employee director compensation during 2020, as
discussed under “Executive Compensation” and “Director
Compensation” in this proxy statement.
Non-Binding
Advisory Resolution
We
are asking our stockholders to indicate their support for the
Company’s executive compensation program as described in this proxy
statement. This proposal gives our stockholders the opportunity to
express their views on our Named Executive Officers’ compensation.
This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our Named
Executive Officers and the philosophy, policies and practices
described in this proxy statement. Accordingly, we will ask our
stockholders to vote “FOR” the following resolution at the Annual
Meeting:
“RESOLVED,
that the compensation paid to the Company’s Named Executive
Officers, as disclosed pursuant to the compensation disclosure
rules of the SEC, including the narrative compensation discussion
sections, the compensation tables and any related materials
disclosed in the Company’s Proxy Statement, is hereby
APPROVED.”
This
advisory say-on-pay vote on executive compensation is not binding
on the Board of Directors or the Compensation Committee. However,
the Board of Directors values the opinion of our stockholders and
will take into account the result of the vote when making future
decisions regarding executive compensation. The next say-on-pay
vote is currently expected to occur at our 2023 Annual
Meeting.
Required
Vote
The
number of votes cast by stockholders, either in person or by proxy,
at the Annual Meeting “FOR” advisory approval of the compensation
of our Named Executive Officers pursuant to the above resolution
must exceed the number of votes cast “AGAINST” advisory
approval.
Our
Board of Directors recommends a vote “FOR” adoption of the advisory
resolution approving the compensation of the Company’s Named
Executive Officers.
PROPOSAL THREE
RATIFICATION
OF APPOINTMENT OF THE COMPANY’S
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Haskell
& White has served as the Company’s independent registered
public accounting firm since April 11, 2019. It is expected that
representatives of Haskell & White will attend the Annual
Meeting, either in person or telephonically, will have an
opportunity to make a statement if they so desire and will be
available to respond to appropriate questions from
stockholders.
Audit
Fees
The
following table sets forth the aggregate fees for professional
services rendered by Haskell & White for the years ended
December 31, 2021, and December 31, 2020.
| |
|
2021 |
|
|
2020 |
|
| Audit
Fees(1) |
|
$ |
236,300 |
|
|
$ |
238,000 |
|
| Audit-Related
Fees(2) |
|
|
28,000 |
|
|
|
26,257 |
|
| Tax Fees |
|
|
— |
|
|
|
— |
|
| All
Other Fees(3) |
|
|
296,000 |
|
|
|
— |
|
| Total |
|
$ |
560,300 |
|
|
$ |
264,257 |
|
|
(1) |
Includes
fees for professional services rendered during the fiscal year for
the audit of our annual financial statements and for reviews of the
financial statements included in our quarterly reports on Form
10-Q. |
|
(2) |
Includes
fees for services that generally only the independent registered
public accounting firm can be reasonably expected to provide,
including comfort letters, consents, and review of registration
statements filed with the SEC. |
|
(3) |
As
noted in the Annual Report, Strong Global Entertainment filed a
registration statement with the SEC and intends to commence an
initial public offering of its common shares during 2022 to raise
additional capital to support its growth plans. Includes fees for
professional services rendered during the fiscal year for the audit
of Strong Global Entertainment’s annual financial statements for
2019, 2020 and 2021 and for reviews of interim financial statements
to be included in the registration statement. |
The
Audit Committee has implemented pre-approval procedures consistent
with the rules adopted by the SEC. All audit and permitted
non-audit services are pre-approved by the Audit Committee. The
Audit Committee has delegated the responsibility of approving
proposed non-audit services that arise between Audit Committee
meetings to the Audit Committee Chairman, provided that the
decision to approve the services is presented for ratification at
the next scheduled Audit Committee meeting.
Ratification
of Haskell & White as our Independent Registered Public
Accounting Firm
The
Audit Committee has appointed Haskell & White as the
independent registered public accounting firm to perform an audit
of the Company’s consolidated financial statements for the year
ending December 31, 2022. The Audit Committee is directly
responsible for the appointment, compensation, retention, and
oversight of the Company’s independent registered public accounting
firm, and it oversees the negotiation of the fees that are paid for
these services. In the course of these responsibilities, the Audit
Committee periodically considers whether it would be in the
Company’s and stockholders’ interests to change the Company’s
independent registered public accounting firm. In addition, the
Audit Committee ensures the mandatory, regular rotation of the lead
audit partner, and in connection with that rotation, the Audit
Committee and its Chairman are involved in the selection of the new
lead audit partner.
After
reviewing the performance of Haskell & White during the course
of 2019, 2020 and 2021, and Haskell & White’s independence,
among other matters, the Audit Committee believes that the
continued retention of Haskell & White to serve as the
Company’s independent registered public accounting firm for 2022 is
in the best interests of the Company and its stockholders. This
appointment is being presented to the stockholders for
ratification.
Although
applicable law does not require stockholder ratification of the
appointment of Haskell & White as the Company’s independent
registered public accounting firm, our Board of Directors has
determined to ascertain the position of our stockholders on the
appointment. If stockholders fail to ratify the appointment of
Haskell & White as the Company’s independent registered public
accounting firm, the Audit Committee will reconsider whether to
retain Haskell & White, but may ultimately decide to retain
them. Any decision to retain Haskell & White or another
independent registered public accounting firm will be made by the
Audit Committee and will not be resubmitted to stockholders. In
addition, even if stockholders ratify the appointment of Haskell
& White, the Audit Committee retains the right to appoint a
different independent registered public accounting firm for fiscal
2022 if the Audit Committee determines that it would be in the
Company’s best interests to do so.
Required
Vote
The
ratification of the appointment of the independent registered
public accounting firm will be approved if the number of votes cast
“FOR” the ratification of Haskell & White exceed the number of
votes cast “AGAINST” ratification.
Our
Board of Directors recommends a vote “FOR” ratification of the
appointment of Haskell & White as the Company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2022.
PROPOSAL FOUR
APPROVAL
OF THE REINCORPORATION OF THE COMPANY FROM DELAWARE TO NEVADA BY
MEANS OF THE ADOPTION AND APPROVAL OF THE PLAN OF
MERGER
General
We are
proposing to reincorporate the Company from Delaware to Nevada (the
“Reincorporation”). The Reincorporation will be accomplished by
means of the adoption and approval of an Agreement and Plan of
Merger (the “Plan of Merger”) by and between the Company and
Ballantyne Strong, Inc., a Nevada corporation and a wholly owned
subsidiary of the Company (“BTN Nevada”). October 5, 2022, the
Board of Directors unanimously approved the Reincorporation
pursuant to the terms of the Plan of Merger and recommended that
the stockholders of the Company approve the Reincorporation and
approve and adopt the Plan of Merger. If the proposed
Reincorporation and the Plan of Merger is adopted and approved by
the Company’s stockholders, the Reincorporation will become
effective at such time as determined by the Board of Directors by
the filing articles of merger with the Secretary of State of the
State of Nevada (the “Articles of Merger”) and a certificate of
merger with the Secretary of State of the State of Delaware (the
“Certificate of Merger”). Assuming this proposal is approved by the
stockholders, these filings are expected to be made promptly
following the Annual Meeting.
Reincorporation
in Nevada will not result in a material change in our business,
management, assets, liabilities or net worth. Reincorporation in
Nevada will allow us to take advantage of certain provisions of the
corporate laws of Nevada in addition to saving the Company a
substantial amount with respect to annual state fees.
Reasons
for the Reincorporation Proposal
Our
Board of Directors believes that there are several reasons why a
reincorporation in Nevada is in the best interests of the Company
and our stockholders. Among other reasons described herein, the
Reincorporation will eliminate our obligation to pay the annual
Delaware franchise tax, which we expect will result in savings to
us over the long term. The Company estimates that it will save
approximately $22,000 per year on franchise taxes as a result of
the Reincorporation.
In
addition, the Reincorporation may help us attract and retain
qualified management by reducing the risk of frivolous lawsuits
being filed against the Company and its directors and officers. We
believe that for the reasons described below, in general, Nevada
law provides greater protection from such litigation to our
directors, officers and the Company than Delaware law. The
increasing frequency of claims and litigation with little or no
merit directed towards directors and officers has greatly expanded
the risks facing directors and officers of public companies in
exercising their duties. The amount of time and money required to
respond to these claims and to defend this type of litigation can
be substantial. Delaware law provides that every person becoming a
director of a Delaware corporation consents to the personal
jurisdiction of the Delaware courts in connection with any action
concerning the corporation. Accordingly, a director can be
personally sued in Delaware, even though the director has no other
contacts with Delaware. Similarly, Nevada law provides that every
person who accepts election or appointment, including reelection or
reappointment, as a director or officer of a Nevada corporation
consents to the personal jurisdiction of the Nevada courts in
connection with all civil actions or proceedings brought in Nevada
by, on behalf of or against the entity in which the director or
officer is a necessary or proper party, or in any action or
proceeding against the director or officer for a violation of a
duty in such capacity, whether or not the person continues to serve
as a director or officer at the time the action or proceeding is
commenced. We believe that the advantage of Nevada is that, unlike
Delaware corporate law, much of which consists of judicial
decisions that migrate and develop over time, Nevada has pursued a
statute-focused approach that does not depend upon constant
judicial supplementation and revision, and is intended to be
stable, predictable and more efficient.
Also,
reincorporation in Nevada will provide potentially greater
protection from frivolous litigation for directors of the Company
and, unlike Delaware, for officers as well. Delaware law permits a
corporation to adopt provisions limiting or eliminating the
liability of a director to a company and its stockholders for
monetary damages for breach of fiduciary duty as a director,
provided that the liability does not arise from certain proscribed
conduct, including breach of the duty of loyalty, acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law. By contrast, Nevada law permits a broader
exclusion of liability of both officers and directors to the
Company and its stockholders, providing for an exclusion of all
monetary damages for breach of fiduciary duty unless they arise
from acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law. The Reincorporation will result in
the elimination of any liability of an officer or director for a
breach of the duty of loyalty unless arising from intentional
misconduct, fraud or a knowing violation of law. There is currently
no known pending claim or litigation against any of our directors
or officers for breach of fiduciary duty related to their service
as directors or officers of the Company.
Stockholders
should understand that the directors and our officers have an
interest in the Reincorporation to the extent that they will be
entitled to such limitation of liability. The Reincorporation is
not being effected to prevent a change in control, nor is it in
response to any present attempt known to our Board to acquire
control of the Company or obtain representation on our Board.
Nevertheless, certain effects of the proposed reincorporation may
be considered to have anti-takeover implications by virtue of being
subject to Nevada law. For a discussion of differences between the
laws of Delaware and Nevada, including differences that may have
anti-takeover implications, please see “Comparative Rights of
Stockholders under Delaware and Nevada Law” below.
Background
and Effects of the Reincorporation
On
October 5, 2022, our Board unanimously approved the Reincorporation
pursuant to the Plan of Merger to change the state of our
incorporation from the State of Delaware to the State of Nevada. A
majority of the outstanding stock of the Company entitled to vote
thereon is necessary for the adoption and approval of the
Reincorporation pursuant to the Plan of Merger. Pursuant to the
Plan of Merger between BTN Nevada and the Company, the Company will
merge into BTN Nevada and BTN Nevada will be the surviving
entity.
The
principal effects of the Plan of Merger, if approved by our
stockholders and effected, will be that:
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The
affairs of the Company will cease to be governed by Delaware law,
including the Delaware General Corporation Law (“DGCL”), and will
become subject to Nevada law, including the Nevada Revised Statutes
(“NRS”). |
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The
resulting Nevada corporation (referred to herein as the “Surviving
Corporation”) will continue with all of the rights, privileges and
powers of the Company, as currently incorporated in Delaware
(sometimes referred to herein as “BTN Delaware”), will possess all
of the properties of BTN Delaware, will continue with all of the
debts, liabilities and obligations of BTN Delaware, and will
continue with the same officers and directors of BTN Delaware
immediately prior to the Reincorporation, as more fully described
below. |
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If
and when the Reincorporation becomes effective, all of the issued
and outstanding shares of common stock, par value $0.01 per share,
of BTN Delaware will be automatically converted into issued and
outstanding shares of common stock, par value $0.01 per share of
the Surviving Corporation, without any action on the part of our
stockholders. The common stock of the Surviving Corporation will
continue to be quoted on the NYSE American under the same symbol,
BTN. |
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The
Surviving Corporation will continue to file periodic reports and
other documents with the SEC. The Reincorporation will not change
the respective positions of BTN Delaware or its stockholders under
the federal securities laws. Shares of our common stock are freely
tradable prior to the Reincorporation will continue to be freely
tradable as shares of common stock after the Reincorporation, and
shares of our common stock that are subject to restrictions prior
to the Reincorporation will continue to be subject to the same
restrictions as shares of common stock of the Surviving Corporation
after the Reincorporation. For purposes of computing compliance
with the holding period requirement of Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”),
stockholders will be deemed to have acquired the common stock of
the Surviving Corporation on the respective dates they acquired
their shares of common stock of BTN Delaware. |
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Upon
effectiveness of the Reincorporation, all of the employee benefit
and incentive plans of BTN Delaware will become plans of the
Surviving Corporation, and each option, equity award or other right
issued under such plans will automatically be converted into an
option, equity award or right to purchase or receive the same
number of shares of common stock of the Surviving Corporation, at
the same price per share, upon the same terms and subject to the
same conditions as before the Reincorporation. In addition, our
employment agreements and other employee benefit arrangements also
will be continued by the Surviving Corporation upon the terms and
subject to the conditions in effect at the time of the
Reincorporation.
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Upon
effectiveness of the Reincorporation, all outstanding options and
warrants to purchase shares of BTN Delaware common stock will
automatically be converted into options and warrants to purchase or
receive the same number of shares of common stock of the Surviving
Corporation, at the same price per share, upon the same terms, and
subject to the same conditions as before the
Reincorporation. |
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Upon
effectiveness of the Reincorporation, the number of shares of
common stock that the Surviving
Corporation
will be authorized to issue is Fifty Million (50,000,000) shares
which is the same number of shares of common stock that BTN
Delaware is authorized to issue.
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Upon
effectiveness of the Reincorporation, the number of shares of
preferred stock that the Surviving Corporation will be authorized
to issue is One Million (1,000,000) shares which is the same number
of shares of preferred stock that BTN Delaware is authorized to
issue. |
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Plan
of Merger
To
accomplish the Reincorporation, our Board of Directors has adopted
and approved the Plan of Merger, substantially in the form attached
to this Proxy Statement as Appendix A. The Plan of Merger provides
that we will merge into our wholly owned subsidiary, BTN Nevada,
and thereafter will be subject to all of the provisions of the NRS.
At the effective time of the Reincorporation, the Articles of
Incorporation of BTN Nevada in the form attached to this Proxy
Statement as Appendix B (the “Nevada Articles of Incorporation”)
will become the Articles of Incorporation of the Surviving
Corporation and the Bylaws of BTN Nevada in the form attached to
this Proxy Statement as Appendix C (the “Nevada Bylaws”) will
become the Bylaws of the Surviving Corporation, in each case,
unless and until later amended in accordance with Nevada law. The
Nevada Articles of Incorporation and the Nevada Bylaws have each
been drafted to be substantially similar to the BTN Delaware
Certificate of Incorporation and Bylaws, other than as described in
the section set forth below entitled “Comparison of Stockholder
Rights Before and After the Reincorporation”.
Assuming
that we receive the requisite stockholder approval of Proposal 4,
we will cause the Reincorporation to be effected at such time as
our Board of Directors determines by filing with the Secretary of
State of the State of Delaware, a Certificate of Merger and by
filing with the Secretary of State of the State of Nevada, Articles
of Merger. We expect that the Reincorporation will be effective
prior to December 31, 2022.
Treatment
of Outstanding Agreements
Our
employment agreements and other employee benefit arrangements will
be continued by the Surviving Corporation upon the terms and
subject to the conditions in effect at the time of the
Reincorporation.
We
believe that the Reincorporation will not affect any of our
material contracts with any third parties, and that our rights and
obligations under such material contractual arrangements will
continue as rights and obligations of the Surviving Corporation
after the Reincorporation.
Amendments,
Termination, and Abandonment of the Plan of Merger
The
Plan of Merger may be amended or modified by the Board prior to
effecting the Reincorporation, provided that the Board determines
that such amendment would be in the best interests of the Company
and our stockholders, and provided further that the amendment does
not (1) alter or change the manner or basis of exchanging an
owner’s interest to be acquired for owner’s interests, rights to
purchase owner’s interests, or other securities of any entity, or
for cash or other property in whole or in part, or (2) alter or
change any of the terms and conditions of the Plan of Merger in a
manner that adversely affects our stockholders.
Subject
to the determination of the Board, the Plan of Merger may be
terminated and abandoned by action of the Board, at any time prior
to the effective time of the Reincorporation if the Board
determines for any reason that such delay or termination would be
in the best interests of the Company and our
stockholders.
Effects
of the Reincorporation
Aside
from being governed by the Nevada Articles of Incorporation, the
Nevada Bylaws and Nevada law, for all other purposes, the Surviving
Corporation will be the same entity as BTN Delaware immediately
prior to the Reincorporation. By virtue of the Reincorporation, all
of the rights, privileges and powers of BTN Delaware, all property
owned by BTN Delaware, all debt due to BTN Delaware, and all other
causes of action belonging to BTN Delaware immediately prior to the
Reincorporation will remain vested in the Surviving Corporation
following the Reincorporation. In addition, by virtue of the
Reincorporation, all debts, liabilities and duties of BTN Delaware
immediately prior to the Reincorporation will remain attached to
the Surviving Corporation following the Reincorporation. The
Reincorporation will not result in any change in our business,
management or operations, or the location of our principal
executive offices.
Directors
and Officers
The
Plan of Merger provides that the board of directors of the
Surviving Corporation after the Reincorporation will consist of the
existing directors of BTN Delaware immediately prior to the
Reincorporation. The Plan of Merger further provides that the
officers of the Surviving Corporation after the Reincorporation
will be the existing officers of BTN Delaware immediately prior to
the Reincorporation.
Regulatory
Approvals
The
Reincorporation will not be consummated unless and until we have
received the approval of the Reincorporation and the Plan of Merger
by the holders of a majority of the outstanding shares of our
common stock at the Special Meeting. We will obtain all required
consents of governmental authorities, including the filing of the
Delaware Certificate of Merger with the Secretary of State of the
State of Delaware and the filing of the Nevada Articles of Merger
and the Nevada Articles of Incorporation with the Secretary of
State of the State of Nevada.
Blank
Check Preferred Stock
The
Delaware Certificate of Incorporation and the Nevada Articles of
Incorporation both authorize the Board to issue up to 1,000,000
shares of preferred stock in series with such preferences as
designated at the time of issuance. Frequently, opportunities arise
that require prompt action, and the Board believes that the delay
necessary for stockholder approval of a specific issuance would be
a detriment to the Company and our stockholders. The Board does not
currently intend to seek stockholder approval prior to any issuance
of a new class or series of preferred stock if the Reincorporation
is approved, except as required by law or regulation. Should the
Board determine to issue a new class or series of preferred stock,
it will only do so upon terms that the Board deems to be in the
best interests of the Company and our stockholders.
The
voting rights and other rights to be accorded to any unissued
series of preferred stock of the Company remain to be fixed by the
Board. If the Board so authorizes, the holders of a new series of
preferred stock may be entitled to vote separately as a class in
connection with approval of certain extraordinary corporate
transactions, might be given a disproportionately large number of
votes or might be given preferences in dividend payment,
liquidation or other rights. Such new series of preferred stock
also could be convertible into a large number of shares of our
Common Stock under certain circumstances or have other terms that
might make acquisition of a controlling interest in the Company
more difficult or more costly, including the right to elect
additional directors to the Board. Potentially, a new series of
stock could be used to create voting impediments or to frustrate
persons seeking to effect a merger or otherwise to gain control of
the Company. In addition, a new series of stock could be privately
placed with purchasers who might side with our management opposing
a hostile tender offer or other attempt to obtain control of the
Company.
Securities
Act Consequences
The
shares of Surviving Corporation common stock to be issued in
exchange for shares of our common stock are not being registered
under the Securities Act. In that respect, the Surviving
Corporation is relying on Rule 145(a)(2) under the Securities Act,
which provides that a merger that has as its sole purpose a change
in a corporation’s domicile does not involve the sale of securities
for purposes of the Securities Act. After the Merger, the Surviving
Corporation will be a publicly held company, and it will file with
the SEC and provide to its stockholders the same type of
information that we have previously filed and provided. In summary,
the Surviving Corporation and its stockholders will be in the same
respective positions under the federal securities laws after the
Reincorporation as the Company and our stockholders prior to the
Reincorporation.
Material
U.S. Federal Income Tax Consequences of the
Reincorporation
The
following is a summary of the material United States federal income
tax consequences to U.S. holders (as defined below) of the
Reincorporation. The discussion is based on the Internal Revenue
Code (the “Code”), regulations promulgated under the Code by the
U.S. Treasury Department (including proposed and temporary
regulations), rulings, current administrative interpretations and
official pronouncements of the Internal Revenue Service (the
“IRS”), and judicial decisions, all as currently in effect and all
of which are subject to differing interpretations or to change,
possibly with retroactive effect. Such change could materially and
adversely affect the tax consequences described below. This summary
does not discuss all aspects of United States federal income
taxation which may be important to particular investors in light of
their individual investment circumstances. For example, it does not
consider the effect of any applicable state, local, or non-U.S. tax
laws, or any non-income tax laws (such as estate and gift tax
laws). In addition, it does not address all aspects of U.S. federal
income taxation that may affect particular holders in light of
their particular investment or tax circumstances, including,
without limitation, holders subject to special tax rules, such as
partnerships, subchapter S corporations or other entities that are
fiscally transparent for U.S. federal income tax purposes, banks,
financial institutions, tax-exempt entities, insurance companies,
regulated investment companies, real estate investment trusts,
trusts and estates, dealers in stocks, securities or currencies,
traders in securities that have elected to use the mark-to-market
method of accounting for their securities, persons holding our
common stock as part of an integrated transaction, including a
“straddle,” “hedge,” “constructive sale,” or “conversion
transaction,” persons whose functional currency for tax purposes is
not the U.S. dollar, persons who acquired our common stock pursuant
to the exercise of stock options or otherwise as compensation,
persons whose common stock constitutes qualified business stock
with the meaning of Section 1202 of the Code, persons who are
subject to the “applicable financial statement” accounting rules
under Section 451(b) of the Code and persons who are not “U.S.
persons” as defined below. This summary also does not consider any
alternative minimum or Medicare “net investment income” tax
considerations. Furthermore, this discussion does not address the
tax consequences of transactions occurring prior to or after the
Reincorporation (whether or not such transactions are in connection
with the Reincorporation). This summary only applies to persons who
hold our common stock and will hold BTN Delaware common stock as
capital assets (generally, property held for investment) under the
Code. Stockholders are urged to consult their tax advisors
regarding the United States federal, state, local, and non-United
States income and other tax considerations of the
Reincorporation.
For
purposes of this summary, a “U.S. holder” is a beneficial owner of
our common stock who is, for United States federal income tax
purposes (1) an individual who is a citizen or resident of the
United States, (2) a corporation created in, or organized under the
laws of, the United States or any state or political subdivision
thereof or the District of Columbia, (3) an estate the income of
which is includible in gross income for United States federal
income tax purposes regardless of its source, or (4) a trust (A)
the administration of which is subject to the primary supervision
of a United States court and which has one or more United States
persons who have the authority to control all substantial decisions
of the trust or (B) that otherwise elected to be treated as a
United States person under applicable United States Treasury
regulations.
We
believe that the Reincorporation of the Company from Delaware to
Nevada should constitute a tax-free “reorganization” within the
meaning of Section 368(a) of the Code. Assuming that the
Reincorporation will be treated for United States federal income
tax purposes as a reorganization, (1) holders of the Company’s
common stock will not recognize any gain or loss as a result of the
consummation of the Reincorporation, (2) the aggregate tax basis of
shares of BTN Nevada’s common stock received in the Reincorporation
will be equal to the aggregate tax basis of the shares of the
Company’s common stock converted therefor, and (3) the holding
period of the shares of BTN Nevada’s common stock received in the
Reincorporation will include the holding period of the shares of
Company common stock converted therefor.
No
ruling will be sought from the IRS with respect to the United
States federal income tax consequences of the Reincorporation, and
no assurance can be given that the United States federal income tax
consequences described above will not be challenged by the IRS or,
if challenged, will be upheld by a court. Accordingly, U.S. holders
are urged to consult their tax advisors regarding the tax
consequences of the Reincorporation.
EACH
STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISORS TO
DETERMINE THE PARTICULAR FEDERAL TAX CONSEQUENCES TO SUCH
STOCKHOLDER OF THE REINCORPORATION, AS WELL AS THE APPLICABILITY
AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER LAWS.
Effect
of the Reincorporation on Stock Certificates
The
Reincorporation will not have any effect on the transferability of
outstanding stock certificates representing common stock of BTN
Delaware. The Reincorporation will be reflected by our transfer
agent in book-entry. For those stockholders that hold physical
certificates, please do not destroy or send us your stock
certificates. Following the Reincorporation, stock certificates
previously representing common stock of BTN Delaware may be
delivered in effecting sales (through a broker or otherwise) of
shares of common stock of the Surviving Corporation. Following the
effective time of the Reincorporation, any stock certificates
submitted to our transfer agent for transfer, whether pursuant to a
sale or otherwise, automatically will be exchanged for stock
certificates of the Surviving Corporation. It will not be necessary
for you to exchange your existing stock certificates for stock
certificates of the Surviving Corporation, and if you do so, it
will be at your own expense.
Accounting
Treatment
We
expect that the Reincorporation will have no effect from an
accounting perspective because there is no change in the entity as
a result of the Reincorporation. As such, our financial statements
previously filed with the SEC will remain our financial statements
following the Reincorporation.
No
Appraisal Rights
Appraisal
rights are statutory rights that, if applicable under law, enable
stockholders to dissent from an extraordinary transaction, such as
a merger, and to demand that the corporation pay the fair value for
their shares as determined by a court in a judicial proceeding
instead of receiving the consideration offered to stockholders in
connection with the extraordinary transaction. Appraisal rights are
not available in all circumstances, and exceptions to these rights
are provided under the DGCL.
Section
262 of the DGCL provides that stockholders have the right, in some
circumstances, to dissent from certain corporate actions and to
instead demand payment of the fair value of their shares.
Stockholders do not have appraisal rights with respect to shares of
any class or series of stock if, at the record date for the meeting
held to approve such transaction, such shares of stock, or
depositary receipts in respect thereof, are either (i) listed on a
national securities exchange or (ii) held of record by more than
2,000 holders, unless the stockholders receive in exchange for
their shares anything other than shares of stock of the surviving
or resulting corporation (or depositary receipts in respect
thereof), or of any other corporation that is listed on a national
securities exchange or held by more than 2,000 holders of record,
cash in lieu of fractional shares or fractional depositary receipts
described above or any combination of the foregoing. In addition,
neither the Company’s current Certificate of Incorporation nor its
current Bylaws contain any additional provisions relating to
dissenters’ rights of appraisal. Therefore, because our common
stock is listed on The NYSE American stock exchange, and holders of
our common stock will receive in the Reincorporation only shares of
the Surviving Corporation’s common stock, which will be listed on
The NYSE American stock exchange, holders of our common stock will
not be entitled to appraisal rights in the Reincorporation with
respect to their shares of our common stock.
Comparison
of Stockholder Rights Before and After the
Reincorporation
As a
result of differences between the DGCL and the NRS, as well as
differences between the Delaware Certificate of Incorporation and
the Delaware Bylaws, on the one hand, and the Nevada Articles of
Incorporation and the Nevada Bylaws, on the other hand, the
Reincorporation will effect changes in the rights of our
stockholders. Summarized below are the material differences between
the DGCL and the NRS, the Delaware Certificate of Incorporation and
the Nevada Articles of Incorporation, and the Delaware Bylaws and
the Nevada Bylaws. The summary below does not purport to be a
complete statement of the respective rights of our stockholders
before and after the Reincorporation, and is qualified in its
entirety by reference to the DGCL and the NRS, to the Delaware
Certificate of Incorporation and Delaware Bylaws, and to the Nevada
Articles of Incorporation and the Nevada Bylaws.
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DGCL,
Delaware Certificate of Incorporation and Delaware
Bylaws |
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NRS,
Nevada Articles of Incorporation and Nevada Bylaws |
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BOARD
OF DIRECTORS; ELECTIONS; VOTING; PROCEDURAL MATTERS |
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Board of Directors |
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Under
the DGCL, a corporation may provide in its certificate of
incorporation or bylaws for the classification of its board of
directors into as many as three classes with staggered terms of
office. |
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Under
the NRS, a corporation may provide in its articles of incorporation
or bylaws for the classification of its board of directors provided
that at least one-fourth of the total number of directors is
elected annually. |
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The
Delaware Certificate of Incorporation does not provide for the
classification of directors. |
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The
Nevada Articles of Incorporation do not provide for the Company to
have a staggered board of directors. |
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The
Company’s directors serve on the Board of Directors of the Company
for a term of one year and until his or her successor has been duly
elected and qualified or until his or her earlier death,
retirement, resignation, or removal. |
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The
Surviving Corporation’s directors will serve on the board of
directors for a term of one year and until his or her successor has
been duly elected and qualified or until his or her earlier death,
retirement, resignation, or removal. |
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Removal of Directors |
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Under
the DGCL, unless otherwise provided in the certificate of
incorporation, directors of a corporation may be removed by the
holders of a majority of the shares then entitled to vote only for
cause. The DGCL does not provide for the removal of a director by
the board of directors. |
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Under
the NRS, any one or all of the directors of a corporation may be
removed by the holders of not less than two-thirds of the voting
power of a corporation’s issued and outstanding stock. The NRS does
not distinguish between removal of directors with or without cause.
The NRS does not provide for the removal of a director by the board
of directors. |
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The
Delaware Certificate of Incorporation provides that any directors,
or the entire board of directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-⅔%) of the
voting power of all of the then-outstanding shares of capital stock
of the Company entitled to vote generally in the election of
directors, voting together as a single class.
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The
Nevada Articles of Incorporation provide that any directors, or the
entire board of directors, may be removed from office at any time,
but only by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-⅔%) of the voting power of all
of the then-outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors, voting
together as a single class. |
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Vacancies on the Board of Directors
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Under
the DGCL, unless otherwise provided in the certificate of
incorporation or bylaws, any vacancy, including one caused by an
increase in the number of directors, may be filled by a majority of
the remaining directors, though less than a quorum. The DGCL
further provides that if, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall
constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at
least 10 percent of outstanding voting stock having the right to
vote, order an election to be held to fill any vacancy pursuant to
a stockholder meeting. |
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Under
the NRS, unless otherwise provided in the articles of
incorporation, any vacancy, including one caused by an increase in
the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum. |
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The
Delaware Certificate of Incorporation provides that any and all
vacancies in the Board of Directors, however occurring, including,
without limitation, newly-created directorships by reason of an
increase in the size of the Board of Directors, or the death,
resignation, disqualification or removal of a director, shall,
unless otherwise required by law or by resolution of the Board of
Directors, be filled only by a majority vote of the remaining
directors then in office, even if less than a quorum (and not by
stockholders), and directors so chosen shall serve for a term
expiring at the annual meeting of stockholders at which their term
of office expires or until such directors’ successors shall have
been duly elected and qualified.
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The
Nevada Bylaws provide that any and all vacancies in the Board of
Directors, however occurring, including, without limitation,
newly-created directorships by reason of an increase in the size of
the Board of Directors, or the death, resignation, disqualification
or removal of a director, shall, unless otherwise required by law
or by resolution of the Board of Directors, be filled only by a
majority vote of the remaining directors then in office, even if
less than a quorum (and not by stockholders), and directors so
chosen shall serve for a term expiring at the next annual meeting
of stockholders, or, if applicable, at the annual meeting of
stockholders at which their term of office expires or until such
directors’ successors shall have been duly elected and
qualified. |
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Special Meetings of Stockholders |
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Under
the DGCL, a special meeting of stockholders may be called by the
board of directors or by such persons as may be authorized by the
certificate of incorporation or by the bylaws. |
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The
NRS provides that unless otherwise provided in a corporation’s
articles of incorporation or bylaws, the entire board of directors,
any two directors, or the president of the corporation may call a
special meeting of the stockholders. |
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The
Delaware Bylaws provide that special meetings of the stockholders,
other than those required by statute, may be called at any time by
the Chairman of the Board, the President or by the Board of
Directors acting pursuant to a resolution adopted by a majority of
the Whole Board, which is defined in the Delaware Bylaws to mean
the total number of authorized directors, whether or not there
exist any vacancies in previously authorized
directorships. |
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The Nevada Bylaws
provide that except as otherwise provided by law or the Nevada
Articles of Incorporation, special meetings of the stockholders may
be called only by (1) the Chairman of the Board of Directors, (2)
the President; or by the Board of Directors acting pursuant to a
resolution duly adopted.
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Stockholder Voting Provisions |
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The
comparable provision of the DGCL provides that unless otherwise
provided by the certificate of incorporation or bylaws: (1) a
majority of the voting power present in person or by proxy
generally constitutes a quorum at a meeting of stockholders; (2)
generally, action by the stockholders on a matter is approved upon
the affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote; (3)
directors are generally elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and
entitled to vote in an election of directors; and (4) where a
separate vote by a class or series is required, a majority of the
voting power of the class or series that is present or represented
by proxy generally constitutes a quorum, except that under the
DGCL, in no event may a quorum consist of less than one-third of
the shares entitled to vote at a meeting, and where a separate vote
by a class or series is required, a quorum may consist of no less
than one-third of the shares of such class or series. |
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Under
the NRS, unless otherwise provided by the articles of incorporation
or bylaws: (1) a majority of the voting power present in person or
by proxy, regardless of whether the proxy has authority to vote on
all matters, generally constitutes a quorum at a meeting of
stockholders; (2) generally, action by the stockholders on a matter
other than the election of directors is approved if the number of
votes cast in favor of the action exceed the number of votes cast
in opposition to the action; (3) directors are generally elected by
a plurality of the votes cast at an Annual Meeting of stockholders;
(4) where a separate vote by a class or series is permitted or
required, a majority of the voting power of the class or series
that is present or represented by proxy, regardless of whether the
proxy has authority to vote on all matters, generally constitutes a
quorum; and (5) where a separate vote by a class or series is
permitted or required, generally an act by the stockholders of each
such class or series is approved if a majority of the voting power
of a quorum of the class or series votes for the
action. |
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The
Delaware Bylaws provide that at any meeting of the stockholders,
the holders of a majority of all of the shares of the stock
entitled to vote at the meeting, present in person or by proxy,
shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law.
Where a separate vote by a class or classes is required, a majority
of the shares of such class or classes present in person or
represented by proxy shall constitute a quorum entitled to take
action with respect to that vote on that matter.
The
Delaware Bylaws also provide that all elections of a director or
directors shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast affirmatively or
negatively.
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The Nevada
Bylaws provide that at any meeting of the stockholders, the holders
of a majority of all of the shares of the stock entitled to vote at
the meeting, present in person or by proxy, shall constitute a
quorum for all purposes, unless or except to the extent that the
presence of a larger number may be required by law. Where a
separate vote by a class or classes is required, a majority of the
shares of such class or classes present in person or represented by
proxy shall constitute a quorum entitled to take action with
respect to that vote on that matter.
The Nevada Bylaws also
provide that all elections of a director or directors shall be
determined by a plurality of the votes cast, and except as
otherwise required by law, all other matters shall be determined by
a majority of the votes cast affirmatively or
negatively.
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Advance Notice Procedures for Business to be Brought by a
Stockholder at a Meeting |
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The
DGCL does not have any statutory requirement with regard to advance
notice procedures required of stockholders in order to properly
bring business before a meeting of stockholders. Federal securities
laws generally provide that any stockholder that wishes to include
a proposal in a company’s proxy materials must be received not less
than 120 days in advance of the anniversary of the date on which
the proxy statement was sent out in connection with the previous
year’s Annual Meeting of stockholders |
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The
NRS does not have any statutory requirement with regard to advance
notice procedures required of stockholders in order to properly
bring business before a meeting of stockholders. Federal securities
laws generally provide that any stockholder that wishes to include
a proposal in a company’s proxy materials must be received not less
than 120 days in advance of the anniversary of the date on which
the proxy statement was sent out in connection with the previous
year’s Annual Meeting of stockholders.
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The
Delaware Bylaws provide certain procedures which stockholders must
follow in order to nominate a director or present any other
business, not submitted for inclusion in the proxy statement, at an
annual stockholders’ meeting. Generally, a stockholder must give
timely notice to the Corporate Secretary of the Company. To be
timely, such notice must be received by the Company at its
principal executive offices not less than 60 nor more than 90 days
prior to the first anniversary of the preceding year’s annual
meeting. However, in the event that the date of the annual meeting
is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice must be so delivered not earlier
than the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made. The
Delaware Bylaws further provide that in addition to such
requirements, a stockholder must comply with all applicable
requirements of the federal securities laws regarding such
notices. |
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The
Nevada Bylaws provide certain procedures which stockholders must
follow in order to nominate a director or present any other
business, not submitted for inclusion in the proxy statement, at an
annual stockholders’ meeting. Generally, a stockholder must give
timely notice to the Corporate Secretary of the Company. To be
timely, such notice must be received by the Company at its
principal executive offices not less than 60 nor more than 90 days
prior to the first anniversary of the preceding year’s annual
meeting. However, in the event that the date of the annual meeting
is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice must be so delivered not earlier
than the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made. The Nevada
Bylaws further provide that in addition to such requirements, a
stockholder must comply with all applicable requirements of the
federal securities laws regarding such notices. |
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Stockholder Action by Written Consent |
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The
DGCL provides that, unless the certificate of incorporation
provides otherwise, any action required or permitted to be taken at
a meeting of the stockholders may be taken without a meeting if the
holders of outstanding stock having at least the minimum number of
votes that would be necessary to authorize or take the action at a
meeting of stockholders consent to the action in writing. In
addition, the DGCL requires the corporation to give prompt notice
of the taking of corporate action without a meeting by less than
unanimous written consent to those stockholders who did not consent
in writing. |
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The
NRS provides that, unless the articles of incorporation or the
bylaws provide otherwise, any action required or permitted to be
taken at a meeting of the stockholders may be taken without a
meeting if, before or after the action, a written consent is signed
by stockholders holding at least a majority of the voting power,
except that if a different proportion of voting power is required
for such an action at a meeting, then that proportion of written
consents is required. The NRS also permits a corporation to
prohibit stockholder action by written consent in lieu of a meeting
of stockholders by including such prohibition in its
by-laws. |
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The
Delaware Bylaws provide that any action required to be taken at any
annual or special meeting of stockholders of the Company, or any
action which may be taken at any annual or special meeting of the
stockholders, may be taken without a meeting and without a vote, if
a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
The
Delaware Bylaws further provide that stockholder consents to
corporate action shall be valid for a maximum of sixty (60) days
after the date of the earliest dated consent delivered to the
Corporation in the manner provided in Section 228(c) of the DGCL.
Consents may be revoked by written notice (i) to the Company, (ii)
to the stockholder or stockholders soliciting consents or
soliciting revocations in opposition to action by consent (the
“Soliciting Stockholders”), or (iii) to a proxy solicitor or other
agent designated by the Company or the Soliciting
Stockholders.
Within
ten (10) business days after receipt of the earliest dated consent
delivered to the Company in the manner provided in Section 228(c)
of the DGCL or the determination by the Board of Directors that the
Company should seek corporate action by written consent, as the
case may be, the Secretary shall, unless otherwise directed by the
Board of Directors, engage nationally recognized independent
inspectors of elections for the purpose of performing a ministerial
review of the validity of the consents and revocations. The cost of
retaining inspectors of election shall be borne by the
Company.
Following
appointment of the inspectors, consents and revocations shall be
delivered to the inspectors upon receipt by the Company, the
Soliciting Stockholders or their proxy solicitors or other
designated agents. As soon as practicable following the earlier of
(i) the receipt by the inspectors, a copy of which shall be
delivered to the Company, of any written demand by the Soliciting
Stockholders, or (ii) sixty (60) days after the date of the
earliest dated consent delivered to the Company in the manner
provided in Section 228(c) of the DGCL, the inspectors shall issue
a preliminary report to the Company and the Soliciting Stockholders
stating the number of valid and unrevoked consents and whether,
based on their preliminary count, the requisite number of valid and
unrevoked consents has been obtained to authorize or take the
action specified in the consents.
Unless
the Company and the Soliciting Stockholders shall agree to a
shorter or longer period, the Company and the Soliciting
Stockholders shall have forty-eight (48) hours to review the
consents and revocations and to advise the inspectors and the
opposing party in writing as to whether they intend to challenge
the preliminary report of the inspectors. If no written notice of
an intention to challenge the preliminary report is received within
forty-eight (48) hours after the inspectors’ issuance of the
preliminary report, the inspectors shall issue to the Company and
the Soliciting Stockholders their final report containing the
information from the inspectors’ determination with respect to
whether the requisite number of valid and unrevoked consents was
obtained to authorized and take the action specified in the
consents. If the Company or the Soliciting Stockholders issue
written notice of an intention to challenge the inspectors’
preliminary report within forty-eight (48) hours after the issuance
of that report, a challenge session shall be scheduled by the
inspectors as promptly as practicable. Following completion of the
challenge session, the inspectors shall as promptly as practicable
issue their final report to the Soliciting Stockholders and the
Company, which report shall contain the information included in the
preliminary report, plus any change in the vote total as a result
of the challenge and a certification of whether the requisite
number of valid and unrevoked consents was obtained to authorize or
take the action specified in the consents.
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The
Nevada Bylaws provide that any action required by statute to be
taken at any annual or special meeting of the stockholders, or any
action which may be taken at any annual or special meeting of the
stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, or by electronic
transmission setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted. |
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Stockholder Vote for Mergers and Other Corporate
Reorganizations |
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The
DGCL requires authorization by a majority of outstanding shares
entitled to vote, as well as approval by the board of directors, to
approve the terms of a merger or a sale of substantially all of the
assets of a corporation, except that there is no distinction
between voting shares and participating shares under the DGCL. The
DGCL does not require a stockholder vote of the surviving
corporation if (1) the existing certificate of incorporation is not
amended; (2) each share of stock of the surviving corporation
outstanding immediately before the effective date of the merger is
identical after the merger; and (3) either no shares of common
stock of the surviving corporation and no shares, securities or
obligations convertible into such stock are to be issued or
delivered under the plan of merger, or if the authorized unissued
shares or shares of common stock of the surviving corporation to be
issued or delivered under the plan of merger, plus those initially
issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed
20% of the shares of common stock of such constituent corporation
outstanding immediately prior to the effective date of the
merger. |
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Unless
otherwise provided in the articles of incorporation, the NRS
requires authorization by an absolute majority of outstanding
shares entitled to vote, as well as approval by the board of
directors, with respect to the terms of a merger or a sale of
substantially all of the assets of the corporation. So long as the
surviving corporation is organized in Nevada, the NRS does not
generally require a stockholder vote of the surviving corporation
if: (1) the existing articles of incorporation are not amended; (2)
each share of stock of the surviving corporation outstanding
immediately before the merger is identical after the merger; (3)
the number of voting shares outstanding immediately after the
merger, plus the number of new voting shares issued as a result of
the merger, will not exceed the total number of voting shares of
the surviving corporation outstanding immediately before the merger
by more than 20%; and (4) the number of participating shares
outstanding shares immediately after the merger, plus the number of
participating shares issuable as a result of the merger, will not
exceed the total number of participating shares outstanding
immediately before the merger by more than 20%. |
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The
Delaware Certificate of Incorporation does not contain any specific
provisions that depart from the provisions of the DGCL.
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The
Nevada Articles of Incorporation do not contain any specific
provisions that depart from the provisions of the NRS. |
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Stockholder
Inspection Rights |
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Under
the DGCL, any stockholder of record has the right to inspect and
copy for any proper purpose (defined as reasonably related to such
person’s interest as a stockholder) the corporation’s stock ledger,
list of its stockholders, and its other records. |
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Under
the NRS, only a stockholder of record who owns at least 15% of the
corporation’s issued and outstanding shares of stock, or has been
authorized in writing by holders of at least 15% of such issued and
outstanding shares, is entitled to inspect and make copies of the
corporation’s financial records. This provision does not apply to
any corporation that furnishes to its stockholders a detailed,
annual financial statement or any corporation that has filed during
the preceding 12 months all reports required to be filed pursuant
to section 13 or section 15(d) of the Exchange Act. |
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Only
a person who has been a stockholder of record for at least six
months, or who owns at least 5% of the corporation’s outstanding
shares or has been authorized in writing by holders of at least 5%
of the outstanding shares, is entitled to inspect and make copies
of the corporation’s stock ledger, articles of incorporation, and
bylaws. |
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Neither
the Delaware Certificate of Incorporation nor Delaware Bylaws
contains any specific provisions that depart from the provisions of
the DGCL. |
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Neither the Nevada
Articles of Incorporation nor Nevada Bylaws contains any specific
provisions that depart from the provisions of the NRS.
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INDEMNIFICATION
OF OFFICERS AND DIRECTORS AND ADVANCEMENT OF EXPENSES; LIMITATION
ON PERSONAL LIABILITY |
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Indemnification |
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Under
the DGCL, a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by
or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person
in connection with such action, suit or proceeding if: the person
acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person’s conduct was unlawful. With
respect to actions by or in the right of the corporation, no
indemnification shall be made with respect to any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit is
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court shall deem
proper. |
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Under
the NRS, a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses, including attorneys’ fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person
in connection with the action, suit or proceeding if the person is
not liable under the NRS for failing to exercise his or her power
in good faith and with a view to the interests of the corporation
(and in deciding upon matters of business on an informed basis) or
acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was
unlawful. With respect to actions by or in the right of the
corporation, a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement
and attorneys’ fees actually and reasonably incurred by the person
in connection with the defense or settlement of the action or suit
if the person is not liable under the NRS for failing to exercise
his or her power in good faith and with a view to the interests of
the corporation (and in deciding upon matters of business on an
informed basis) or acted in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best
interests of the corporation. |
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A
director or officer who is successful, on the merits or otherwise
in defending any proceeding subject to the Delaware corporate
statutes’ indemnification provisions shall be indemnified against
expenses (including attorneys’ fees) actually and reasonably
incurred by such person in connection therewith.
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The
Delaware Bylaws provide that each person who was or is made a party
or is threatened to be made a party to or is otherwise involved in
any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or
she is or was a director or an officer of the Company or is or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect
to an employee benefit plan (hereinafter an “indemnitee”), whether
the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Company to the
fullest extent authorized by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide
broader indemnification rights than such law permitted the Company
to provide prior to such amendment), against all expense, liability
and loss (including attorneys’ fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith;
provided, however, that, except as provided with respect to
proceedings to enforce rights to indemnification, the Company shall
indemnify any such indemnitee in connection with a proceeding (or
part thereof) initiated by such indemnitee only if such proceeding
(or part thereof) was authorized by the Board of
Directors.
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The Nevada
Articles of Incorporation provided that to the fullest extent
permitted by applicable law, the Company is authorized to provide
indemnification of (and advancement of expenses to) directors and
officers of the Company (and any other persons to which the NRS
permits the Company to provide indemnification) through bylaw
provisions, agreements with such persons, vote of stockholders or
disinterested directors or otherwise, in excess of the
indemnification and advancement otherwise permitted by the NRS. Any
amendment, repeal or modification of the provisions of the Nevada
Articles of Incorporation shall not adversely affect any right or
protection of any director or officer of the Company existing at
the time of such amendment, repeal or modification or increase the
liability of any director or officer of the Company with respect to
any acts or omissions of such director or officer occurring prior
to, such amendment, repeal or modification.
The Nevada Articles of
Incorporation further provide that the Company may, to the extent
authorized from time to time by the Board of Directors, provide
rights to indemnification and to the advancement of expenses to
employees and agents of the Company similar to those conferred to
directors and officers of the Company.
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Advancement of Expenses |
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The
DGCL provides that expenses incurred by an officer or director of
the corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it is
ultimately determined that such person is not entitled to be
indemnified by the corporation as authorized under the
indemnification laws of Delaware. Such expenses may be so paid upon
such terms and conditions as the corporation deems appropriate.
Under Delaware law, unless otherwise provided in its certificate of
incorporation or bylaws, a corporation has the discretion whether
or not to advance expenses. |
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Under
the NRS, the articles of incorporation, bylaws or an agreement made
by the corporation may provide that the corporation must pay
advancements of expenses in advance of the final disposition of the
action, suit or proceedings upon receipt of an undertaking by or on
behalf of the director, officer, employee, or agent of the
corporation to repay the amount if it is ultimately determined that
he or she is not entitled to be indemnified by the
corporation. |
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The Delaware Bylaws
provide the right to be paid by the Corporation the expenses
(including attorneys’ fees) incurred in defending any such
indemnification proceeding in advance of its final disposition;
provided, however, that, if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only
upon delivery to the Company of an undertaking, by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which
there is no further right to appeal that such indemnitee is not
entitled to be indemnified for such expenses.
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The Nevada Articles of
Incorporation and the Nevada Bylaws provide Expenses (including
attorneys’ fees) incurred by an officer or director of the
corporation in defending any proceeding shall be paid by the
corporation in advance of the final disposition of such proceeding
upon receipt of a written request therefor (together with
documentation reasonably evidencing such expenses) and an
undertaking by or on behalf of the person to repay such amounts if
it shall ultimately be determined that the person is not entitled
to be indemnified under the Nevada Articles of Incorporation,
Nevada Bylaws or the NRS.
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Limitation on Personal Liability of Directors |
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The
DGCL does not statutorily limit the personal liability of a
director, but does permit a corporation to adopt provisions in its
certificate of incorporation that limit or eliminate the liability
of a director in substantially the same manner as the NRS, except
that a corporation may not limit the liability of a director for
actions involving a breach of the duty of loyalty or improper
personal benefit. |
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Under
the NRS, unless the articles of incorporation provide otherwise,
neither a director nor an officer of a Nevada corporation can be
held personally liable to the corporation, its stockholders or its
creditors unless the director or officer committed both a breach of
fiduciary duty and such breach was accompanied by intentional
misconduct, fraud or knowing violation of law. The NRS does not
exclude breaches of the duty of loyalty or instances where the
director has received an improper personal benefit. |
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The
Delaware Certificate of Incorporation provides that no director
shall be personally liable to the Company or its stockholders for
monetary damages for any breach of fiduciary duty by such director,
provided, that a director shall be liable to the extent
permitted under the DGCL for (i) breach of duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law, (iii) in connection with paying any unlawful
dividend, or an unlawful stock purchase or redemption or (iv) for
any transaction from which the director derived an improper
personal benefit. The Delaware Certificate of Incorporation further
provides that if the DGCL is amended to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director shall be eliminated or
limited to the fullest extent permitted by the DGCL, as so amended,
and no amendment or repeal of this provision in the Delaware
Certificate of Incorporation shall have any effect on the liability
of any director with respect to any acts or omissions of such
director occurring prior to such amendment. |
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The
Nevada Articles of Incorporation provides that the liability of
directors and officers shall be eliminated to the fullest extent
permitted under the NRS. |
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DIVIDENDS |
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Declaration and Payment of Dividends |
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Under
the DGCL, unless further restricted in the certificate of
incorporation, a corporation may declare and pay dividends only out
of surplus (defined as the excess of a corporation’s net assets
over the aggregate par value of such corporation’s issued stock),
or if no surplus exists, out of net profits for the year in which
the dividend is declared and/or the preceding year, and only if the
amount of capital of the corporation is greater than or equal to
the aggregate amount of the capital represented by the issued and
outstanding stock of all classes having a preference upon the
distribution of assets. A corporation may redeem or repurchase its
shares only if the capital of the corporation is not impaired and
such redemption or repurchase would not impair the capital of the
corporation. A repurchase or redemption would impair the capital of
a corporation if the funds used for such repurchase or redemption
would exceed the amount of such corporation’s surplus. |
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Under
the NRS, except as provided in its articles of incorporation, a
corporation may make distributions to its stockholders, including
by the payment of dividends, provided that, after giving effect to
the distribution, the corporation would be able to pay its debts as
they become due and the corporation’s total assets would not be
less than the sum of its total liabilities plus any amount needed,
if the corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights of stockholders
whose rights are superior to those receiving the
distribution.
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The
Delaware Bylaws provides that holders of common stock of the
Company shall be entitled to receive dividends out of funds legally
available therefor and at such times and amounts as the Board of
Directors may determine in its sole discretion.
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The Nevada
Bylaws contain substantially the same provisions as the Delaware
Bylaws regarding the payment of dividends.
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ANTI-TAKEOVER
STATUTES |
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Business Combination Statute |
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The
DGCL provides for a similar three-year prohibition on business
combinations with interested stockholders, except the prohibition
is limited to corporations with securities that are either listed
on a national securities exchange or held of record by more than
2,000 stockholders. Delaware law generally defines an interested
stockholder as the beneficial owner of 15% or more of company’s
stock, which is higher than the 10% threshold set by the NRS.
Further, unlike the NRS, under the DGCL the moratorium will not
apply if the business combination is approved by the holders of
two-thirds of the company’s voting stock not owned by the
interested stockholder. Because we or the affiliates or associates
of the interested stockholder currently have fewer than 2,000
stockholders of record and are not listed on a national securities
exchange, this provision of the NRS is not now applicable to
us. |
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The
NRS generally prohibits an interested stockholder from engaging in
a business combination with a corporation that has at least 200
stockholders of record for two years after the person first became
an interested stockholder unless the combination or the transaction
is approved in advance by the board of directors a before the
person first became an interested stockholder, or the combination
is approved by the board of directors and by the affirmative vote
of the holders of stock representing at least 60% of the
outstanding voting power of the resident domestic corporation not
beneficially owned by the interested stockholder. This prohibition
does not apply after the expiration of 4 years from when such
person first became an interested stockholder. |
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An
interested stockholder is (1) a person that beneficially owns,
directly or indirectly, 10% or more of the voting power of the
outstanding voting shares of a corporation, or (2) an affiliate or
associate of the corporation that, at any time within the past two
years, was an interested stockholder of the corporation. Because we
currently have fewer than 200 stockholders of record, this
provision of the NRS will not be applicable to us. |
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The
comparable provision of the DGCL (Section 203 of the DGCL) is
substantially the same as the described provision of the NRS
regarding the ability of a company to elect not to be governed by
the provisions of state law regarding business
combinations. |
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A
Nevada corporation may elect not to be governed by these provisions
in its original articles of incorporation, or it may adopt an
amendment to its articles of incorporation expressly electing not
to be governed by these provisions, if such amendment is approved
by the affirmative vote of a majority of the disinterested shares
entitled to vote. |
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The
Nevada Articles of Incorporation and the Nevada Bylaws do not
contain any specific provisions that depart from the provisions of
the NRS. |
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Control Share Acquisition Statute |
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Delaware
does not have a control share acquisition statute. See “Business
Combination Statute” above for a description of Section 203 of the
DGCL regarding business combinations with interested
stockholders. |
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The
NRS limits the rights of persons acquiring a controlling interest
in a Nevada corporation with 200 or more stockholders of record, at
least 100 of whom have Nevada addresses appearing on the stock
ledger of the corporation, and that does business in Nevada
directly or through an affiliated corporation. A “controlling
interest” is deemed to be the direct or indirect power to exercise
at least 20% of the voting power of the stockholders in the
election of directors. An “acquisition” means, with certain
exceptions, the direct or indirect acquisition of a controlling
interest. Under the NRS, an “acquiring person” that acquires a
controlling interest in such a corporation may not exercise voting
rights on any control shares unless such voting rights are
conferred on such person by a majority vote of the disinterested
stockholders of the corporation at a special or Annual Meeting of
the stockholders. In the event that the control shares are accorded
full voting rights and the acquiring person acquires control shares
with a majority or more of all the voting power, any stockholder,
other than the acquiring person, that does not vote in favor of
authorizing voting rights for the control shares is entitled to
demand payment for the fair value of such person’s
shares. |
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The
control share acquisition statute does not apply if the corporation
opts out of such provision in the articles of incorporation or
bylaws in effect on the tenth day following the acquisition of a
controlling interest by an acquiring person. |
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The
Nevada Articles of Incorporation and the Nevada Bylaws do not
contain any specific provisions that depart from the provisions of
the NRS. |
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Appraisal or Dissenters’ Rights |
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Under
the DGCL, stockholders have the right, in some circumstances, to
dissent from certain corporate actions and to instead demand
payment of the fair value of their shares.
Stockholders
do not have appraisal rights with respect to shares of any class or
series of stock if such shares of stock, or depositary receipts in
respect thereof, are either:
(i) listed
on a national securities exchange;
(ii) included
in the national market system by the National Association of
Securities Dealers, Inc.; or
(iii) held
by more than 2,000 stockholders of record,
unless
the stockholders receive in exchange for their shares anything
other than shares of stock of the surviving or resulting
corporation (or depositary receipts in respect thereof), or of any
other corporation that is publicly listed or held by more than
2,000 holders of record, cash in lieu of fractional shares or
fractional depositary receipts described above or any combination
of the foregoing. Only stockholders of record are entitled to
appraisal rights.
Neither
the Delaware Certificate of Incorporation nor Delaware Bylaws
contains any specific provisions that depart from the provisions of
the DGCL.
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Under
the NRS, stockholders have the right, in some circumstances
(including, unless otherwise provided in the articles of
incorporation or bylaws of a corporation, when a controlling
interest has been acquired by an acquiring person (as defined
above)), to dissent from certain corporate actions and to instead
demand payment of the fair value of their shares.
Unless
otherwise provided in the articles of incorporation or board of
director resolutions approving the plan of merger, conversion or
exchange, stockholders do not have appraisal rights with respect to
shares of any class or series of stock if such shares of stock are,
among other things,
(i)
listed on a national securities exchange; or
(ii)
traded in an organized market and held by at least 2,000
stockholders of record and have a market value of at least
$20,000,000, exclusive of the value of such shares held by a
corporation’s subsidiaries, senior executives, directors and
beneficial stockholders owning more than 10% of such shares; or
(iii) issued by an open end management investment company
registered under the Investment Company Act of 1940, as amended,
unless the stockholders receive in exchange for their shares
anything other than cash, or shares of any class or any series of
shares of any corporation, or any other proprietary interests of
any other entity, that is, among other things, listed on a national
securities exchange or traded in an organized market and held by at
least 2,000 stockholders of record with market value of at least
$20,000,000, exclusive of the value of such shares held by
corporation’s subsidiaries, senior executives, directors and
beneficial stockholders owning more than 10% of such shares at the
time the corporate action becomes effective. Both stockholders of
record and beneficial stockholders are entitled to dissenters’
rights.
Neither
the Nevada Articles of Incorporation nor Nevada Bylaws contains any
specific provisions that depart from the provisions of the
NRS.
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AMENDMENTS
TO CHARTER AND BYLAWS |
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Amendments to Charter |
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The
DGCL provides that, subject to certain categories of amendments, an
amendment to the certificate of incorporation must be effected by
the board of directors adopting a proposed amendment and then
submitting such amendment to the stockholders at an annual or
special meeting, which must be approved by the affirmative vote of
the holders of a majority of all outstanding shares entitled to
vote. The DGCL further provides that the affirmative vote of a
majority of the holders of the outstanding shares of a particular
class is required to approve a proposed amendment if the amendment
would increase or decrease the number of authorized shares (unless
such affirmative vote of such holders to amend such increase or
decrease is not required by the certificate of incorporation), or
par value of such shares, or alter or change the power,
preferences, or special rights of one or more series or class so as
to affect them adversely. |
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The
NRS provides that, unless a larger proportion of voting power of
the stockholders is provided in the articles of incorporation, an
amendment to the articles of incorporation must be effected by the
board of directors adopting a proposed amendment and then
submitting such amendment to the stockholders at an annual or
special meeting, which must be approved by the affirmative vote of
the holders of a majority of all outstanding shares entitled to
vote. The NRS further provides, unless otherwise provided in the
articles of incorporation, in addition to the affirmative vote
otherwise required, the affirmative vote of a majority of the
holders of the outstanding shares of a particular class is required
to approve a proposed amendment if the amendment would alter or
change the power, preferences, or special rights of one or more
series of any class so as to affect them adversely. |
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Neither
the Delaware Certificate of Incorporation nor Delaware Bylaws
contains any specific provisions that depart from the provisions of
the DGCL. |
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Neither
the Nevada Articles of Incorporation nor Nevada Bylaws contains any
specific provisions that depart from the provisions of the
NRS. |
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Amendment of Bylaws |
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The
DGCL states that the power to adopt, amend or repeal a company’s
bylaws shall be vested in the stockholders entitled to vote,
provided that a company’s certificate of incorporation may confer
such power on the board of directors, although the power vested in
the stockholders is not divested or limited where the board of
directors also has such power. |
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The
NRS provides that, unless otherwise prohibited by any bylaw adopted
by the stockholders, the directors may adopt, amend or repeal any
bylaw, including any bylaw adopted by the stockholders. |
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The
Delaware Certificate of Incorporation and Delaware Bylaws expressly
provide that the Board of Directors has the power to adopt, amend
or repeal the Delaware Bylaws. The Delaware Certificate of
Incorporation and Delaware Bylaws provide that the vote of a
majority of the Whole Board is sufficient to alter, amend or repeal
the Delaware Bylaws. The stockholders shall also have power to
adopt, amend or repeal the Delaware Bylaws of the Company;
provided, however, that, in addition to any vote of the holders of
any class or series of stock of the Company required by law or by
this Certificate of Incorporation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent
(66-⅔%)
of the voting power of all of the then-outstanding shares of the
capital stock of the Company entitled to vote generally in the
election of directors, voting together as a single class, shall be
required to adopt, amend or repeal any provision of the Delaware
Bylaws of the Company. |
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The
Nevada Bylaws provide that the Board of Directors is expressly
authorized to adopt, amend or repeal the Nevada Bylaws. The
stockholders of the Company shall also have power to adopt, amend
or repeal the Nevada Bylaws; provided, however, that, in addition
to any vote of the holders of any class or series of stock of the
Company required by law or by the Company’s Articles of
Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-⅔%) of the voting power of all
of the then-outstanding shares of the capital stock of the Company
entitled to vote generally in the election of directors, voting
together as a single class, shall be required for the stockholders
to adopt, amend or repeal any provision of the Nevada
Bylaws.
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MISCELLANEOUS |
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Interested Party Transactions |
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The
DGCL provides that no contract or transaction between a company and
one or more of its directors or officers, or between a company and
any other entity of which one or more of its directors or officers
are directors or officers, or in which one or more of its directors
or officers have a financial interest, is void or voidable if: (1)
the material facts as to the director’s or officer’s relationship
or interest and as to the contract or transaction are disclosed or
known to the board of directors or a committee thereof, which
authorizes the contract or transaction in good faith by the
affirmative vote of a majority of the disinterested directors, even
though the disinterested directors are less than a quorum; (2) the
material facts as to the director’s or officer’s relationship or
interest and as to the contract or transaction are disclosed or
known to the stockholders entitled to vote thereon and the contract
or transaction is specifically approved in good faith by the
stockholders; or (3) the contract or transaction is fair to the
company as of the time it is authorized, approved or ratified by
the board of directors, a committee thereof or
stockholders. |
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Under
the NRS, a contract or transaction between a corporation and one or
more of its directors or officers, or between a corporation and any
other organization in which one or more of its directors or
officers are directors or officers, or are financially interested,
is not void or voidable solely for that reason, if one or more of
the following circumstances exist: (1) the director’s or officer’s
interest is known to the board of directors or stockholders and the
transaction is approved by the board or stockholders in good faith
without counting the vote or votes of the interested director or
officer; (2) the common interest is known to the stockholders, and
they approve or ratify the transaction in good faith by a majority
vote of stockholders; (3) the common interest is not known to the
interested director or officer at the time the transaction is
brought before the board; or (4) the transaction is fair to the
corporation at the time it is authorized or approved. |
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Neither
the Delaware Certificate of Incorporation nor Delaware Bylaws
contains any specific provisions that depart from the provisions of
the DGCL. |
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Neither
the Nevada Articles of Incorporation nor Nevada Bylaws contains any
specific provisions that depart from the provisions of the
NRS. |
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Taxes and Fees |
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Delaware
imposes annual franchise tax fees on all corporations incorporated
in Delaware. The annual fee ranges from a nominal fee to a maximum
of $200,000, based on an equation consisting of the number of
shares authorized, or the number of shares outstanding and the net
assets of the corporation. |
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Nevada
charges corporations incorporated in Nevada an annual $200 business
license fee and an annual list filing fee based on capitalization
of the Company. Fees range from $150 to a maximum of
$11,125. |
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The
Company’s annual Delaware franchise tax fee for, 2020 was
approximately $29,000 and for 2021 was approximately $28,000 and is
expected to be approximately $22,000 in 2022, based on its
capitalization and our existing assets. |
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We
expect to pay an annual filing fee of approximately $500. Nevada
does not impose any franchise taxes on corporations. |
Required
Vote
To be
approved by our stockholders, at least a majority of the shares of
common stock outstanding as of close of business on the Record Date
must vote “FOR” the proposal to approve the reincorporation of the
Company from Delaware to Nevada by means of the adoption and
approval of the Plan of Merger. Abstentions and broker non-votes
will be counted toward the tabulation of votes cast on this
proposal and will have the same effect as a vote “AGAINST” this
proposal.
Our
Board of Directors recommends a vote “FOR” the approval and
adoption of the Plan of Merger and the approval of the
reincorporation of the Company from Delaware to Nevada by means of
the Plan of Merger.
STOCKHOLDER PROPOSALS
In
accordance with the rules of the SEC, stockholders wishing to
submit timely proposals for inclusion in the proxy statement for
the 2023 Annual Meeting must submit their proposals to the Company
on or before June 29, 2023, unless the date of the 2023 Annual
Meeting is more than 30 days from the anniversary date of the
Annual Meeting, in which case the proposals must be submitted a
reasonable time before the Company begins to print and send its
proxy materials. Such proposals should be sent by certified mail,
return receipt requested, to the Company at 5960 Fairview Road,
Suite 275, Charlotte, North Carolina 28210, Attention: Corporate
Secretary. In addition to being submitted in a timely manner,
stockholder proposals must comply with the other requirements of
Rule 14a-8 under the Exchange Act in order to be included in the
Proxy Statement for the 2023 Annual Meeting.
The
Company’s Bylaws set forth certain procedures which stockholders
must follow in order to nominate a director or present any other
business, not submitted for inclusion in the proxy statement, at an
annual stockholders’ meeting. Generally, a stockholder must give
timely notice to the Corporate Secretary of the Company. To be
timely, such notice must be received by the Company at its
principal executive offices not less than 60 nor more than 90 days
prior to the first anniversary of the preceding year’s annual
meeting (that is, for the 2023 Annual Meeting, no earlier than
September 7, 2023, and no later than October 7, 2023. However, in
the event that the date of the annual meeting is advanced by more
than 30 days or delayed by more than 60 days from such anniversary
date, notice must be so delivered not earlier than the 90th day
prior to such annual meeting and not later than the close of
business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which public announcement (as
defined in the Bylaws) of the date of such meeting is first made.
The Bylaws specify the information which must accompany such
stockholder notice. Details of the provision of the Bylaws may be
obtained by any stockholder from the Corporate Secretary of the
Company. The Company reserves the right to reject, rule out of
order, or take other appropriate action with respect to any
proposal that does not comply with these and other applicable
requirements.
RELATED PERSON
TRANSACTIONS
The
Company’s Audit Committee Charter requires the Audit Committee to
review policies and procedures regarding transactions between the
Company and officers, directors and other related parties that are
not a normal part of the Company’s business. There are no formal
written policies or procedures used by Board of Directors or the
Audit Committee to review, approve or ratify related party
transactions. Rather, the Board of Directors or the Audit Committee
reviews all related party transactions on a case-by-case basis for
potential conflict of interest situations on an ongoing basis and
uses its discretion in approving all such transactions. The Board
of Directors or the Audit Committee will apply the standards of
Item 404(a) of Regulation S-K when evaluating certain relationships
and related transactions.
On an
annual basis, the Company determines whether there are any related
party transactions that need to be evaluated and approved by the
Board of Directors or the Audit Committee based on the responses
received from each director and executive officer based on an
annual questionnaire completed by the director or executive
officer. While there are no formal written policies or procedures
used, the Board of Directors or the Audit Committee may consider
the following factors in evaluating related party
transactions:
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the
nature of the related person’s interest in the
transaction; |
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the
presence of standard prices, rates, charges or terms otherwise
consistent with arms-length dealings with unrelated third
parties; |
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the
materiality of the transaction to each party; |
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the
reasons for the Company entering into the transaction with the
related person; |
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the
potential effect of the transaction on the status of a director as
an independent, outside or disinterested director or committee
member; and |
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any
other factors the Board of Directors or the Audit Committee may
deem relevant. |
All
of the arrangements discussed below were approved by the Audit
Committee and/or the independent members of our Board of
Directors.
Itasca
Financial, LLC
Mr.
Swets founded and serves as the managing member of Itasca
Financial, which provided services related to the strategic
direction of the Company. On May 19, 2020, the Company entered into
a Financial and Consulting Services Agreement with Itasca
Financial. During the year ended December 31, 2020, the Company
paid $130,000 to Itasca Financial. The Company and Itasca Financial
have terminated the Financial and Consulting Services Agreement,
and the Company does not expect to make any additional payments
pursuant to the agreement.
Indemnification
Agreements
On
September 1, 2020, the Company entered into indemnification
agreements with each of its directors and executive officers. Under
the terms of the indemnification agreements, subject to certain
exceptions specified in the indemnification agreements, the Company
will, among other things, indemnify its directors and executive
officers to the fullest extent permitted by law in the event such
director or executive officer becomes subject to or a participant
in certain claims or proceedings as a result of his service as a
director or officer. The Company will also, subject to certain
exceptions and repayment conditions, advance to such director or
executive officer specified indemnifiable expenses incurred in
connection with such claims or proceedings.
ADDITIONAL
INFORMATION
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act 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 SEC. Ballantyne Strong
believes that all persons subject to these reporting requirements
filed the required reports on a timely basis during
2021.
Appendix-A
PLAN
OF MERGER
BALLANTYNE
STRONG, INC.
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (“Agreement”), dated as
of [●], 2022, is entered into by and between Ballantyne Strong,
Inc., a Delaware corporation (the “Company”), and Ballantyne
Strong, Inc., a Nevada corporation and a wholly owned subsidiary of
the Company (“NewCo”).
WHEREAS,
the Company, whose shares of common stock are registered pursuant
to Section 12(b) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), desires to reincorporate as a Nevada
corporation and has formed NewCo in order to effectuate such
reincorporation (the “Reincorporation”).
WHEREAS,
the respective boards of directors of each of the Company and NewCo
deems it advisable, fair to and in the best interests of such
corporation and its respective stockholders that the Company be
merged with and into NewCo, upon the terms and subject to the
conditions herein stated, and that NewCo shall be the surviving
corporation (the “Reincorporation Merger”).
NOW,
THEREFORE, in consideration of the premises and the agreements of
the parties hereto contained herein, intending to be legally bound,
the parties hereto agree as follows:
ARTICLE
I
THE
REINCORPORATION MERGER; EFFECTIVE TIME
Section
1.1. The Reincorporation Merger. Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective
Time (as defined in Section 1.2), the Company shall be merged with
and into NewCo whereupon the separate existence of the Company
shall cease. NewCo shall be the surviving corporation (the
“Surviving Corporation”) in the Reincorporation Merger and
shall continue to be a corporation formed under the laws of the
State of Nevada. The Reincorporation Merger shall have the effects
specified in the General Corporation Law of the State of Delaware,
as amended (the “DGCL”) and the Nevada Revised Statutes, as
amended (the “NRS”), and the Surviving Corporation shall
succeed, without other transfer, to all of the assets and property
(whether real, personal or mixed), rights, privileges, franchises,
immunities and powers of the Company, and shall assume and be
subject to all of the liabilities, obligations and restrictions of
every kind and description of the Company, including, without
limitation, all outstanding indebtedness of the Company.
Section
1.2. Effective Time. Unless this Agreement is terminated or
abandoned in accordance with its terms, as soon as practicable
following the satisfaction of the conditions set forth in Article V
in accordance with the terms of this Agreement, the Company and
NewCo shall cause Articles of Merger to be executed and filed with
the Office of the Secretary of State of Nevada (the “Nevada
Articles of Merger”) and a Certificate of Merger to be executed
and filed with the Office of the Secretary of State of Delaware
(the “Delaware Certificate of Merger”). The Reincorporation
Merger shall become effective upon the date and time specified in
the Nevada Articles of Merger and the Delaware Certificate of
Merger (the “Effective Time”).
ARTICLE
II
ARTICLES
AND BYLAWS OF THE SURVIVING CORPORATION
Section
2.1. The Articles of Incorporation. The articles of
incorporation of NewCo in effect at the Effective Time shall be as
set forth on Exhibit A hereto, and such articles shall be
the articles of incorporation of the Surviving Corporation (such
articles of incorporation, the “Articles of Incorporation”),
until thereafter amended in accordance with the provisions provided
therein or applicable law.
Section
2.2. The Bylaws. Subject to the provisions of applicable
laws, the bylaws of NewCo in effect at the Effective Time shall be
as set forth on Exhibit B hereto, and such bylaws shall be
the bylaws of the Surviving Corporation (the “Bylaws”),
until thereafter amended in accordance with the provisions provided
therein or applicable law.
ARTICLE
III
OFFICERS,
DIRECTORS, COMMITTEES, AND CORPORATE POLICIES OF THE SURVIVING
CORPORATION
Section
3.1. Officers. The officers of the Company at the Effective
Time shall, from and after the Effective Time, become the officers
of the Surviving Corporation, until their successors have been duly
elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Articles of
Incorporation and the Bylaws.
Section
3.2. Directors. The board of directors of the Surviving
Corporation effective as of, and immediately following, the
Effective Time shall consist of all of the directors of the Company
immediately prior to the Effective Time, each to serve in such
capacity until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal
in accordance with the Articles of Incorporation and the
Bylaws.
Section
3.3. Committees. Each committee of the board of directors of
the Company existing immediately prior to the Effective Time shall,
effective as of, and immediately following, the Effective Time,
become a committee of the board of directors of the Surviving
Corporation, consisting of the members of such committee of the
Company immediately prior to the Effective Time and governed by the
charter of such committee of the Company in existence immediately
prior to the Effective Time, which charter shall, at the Effective
Time, become the charter of such committee of the Surviving
Corporation except that the governing law thereof shall be, from
and after the Effective Time, the law of Nevada. Each member of a
committee of the board of directors of the Surviving Corporation
shall serve in such capacity until his or her successor has been
duly elected or appointed and qualified or until his or her earlier
death, resignation or removal in accordance with the applicable
committee charter and the Bylaws.
Section
3.4. Corporate Policies. The corporate policies of the
Surviving Corporation, including, without limitation, its code of
business conduct, corporate governance guidelines, conflict
policies and director independence guidelines, effective as of, and
immediately following, the Effective Time shall consist of the
corporate policies, including, without limitation, the code of
business conduct, corporate governance guidelines, conflict
policies and director independence guidelines, of the Company
immediately prior to the Effective Time.
ARTICLE
IV
EFFECT
OF THE MERGER ON CAPITAL STOCK; CERTIFICATES
Section
4.1. Effect of Merger on Capital Stock. At the
Effective Time, as a result of the Reincorporation Merger and
without any action on the part of the Company, NewCo or the
stockholders of the Company:
(a)
Each share of common stock, par value $0.01, of the Company
(“Company Common Stock”) issued and outstanding immediately
prior to the Effective Time shall be converted (without the
surrender of stock certificates or any other action by NewCo, the
Company or the stockholders of the Company) into one fully paid and
non-assessable share of common stock, par value $0.01, of the
Surviving Corporation (“Surviving Corporation Common
Stock”), and all shares of Company Common Stock shall be
canceled and retired and shall cease to exist.
(b)
Each share of preferred stock, par value $0.01, of the Company
(“Company Preferred Stock”) issued and outstanding
immediately prior to the Effective Time, if any, shall be converted
(without the surrender of stock certificates or any other action by
NewCo, the Company or the stockholders of the Company) into one
fully paid and non-assessable share of preferred stock, par value
$0.01, of the Surviving Corporation (“Surviving Corporation
Preferred Stock”).
(c)
With respect to the number of shares of Company Common Stock
reserved for issuance under the Company’s equity compensation plans
(including all amendments or modifications, collectively, the
“Plans”), an equal number of shares of Surviving Corporation
Common Stock shall be so reserved. The Surviving Corporation shall
assume the sponsorship of the Plans, the rights and obligations of
the Company thereunder, and the rights and obligations of the
Company under all award agreements evidencing any award issued
under any Plan or any inducement award with respect to Company
Common Stock (including all amendments and modifications,
collectively, the “Award Agreements”), in each case in
accordance with the terms thereof and applicable law. Each
equity-based award with respect to Company Common Stock issued and
outstanding immediately prior to the Effective Time that was
granted pursuant to the Plans and the Award Agreements (an
“Equity Award”) shall be converted into a corresponding
equity-based award with respect to the number of shares of
Surviving Corporation Common Stock equal to the number of shares of
Company Common Stock underlying such Equity Award at the Effective
Time, in accordance with the terms of the applicable Plan and Award
Agreement. Such converted equity-based award shall be subject to
the same terms and conditions applicable to the corresponding
Equity Award prior to the conversion, including any vesting and
forfeiture conditions. Further, none of the execution of this
Agreement, the Reincorporation Merger or other transaction
contemplated herein is intended, or shall be deemed, to constitute
a “Change in Control” (or term of similar import) under any
Plan, Award Agreement, employment agreement or other employee
benefit plan of the Company or its affiliates.
(d)
Each share of common stock, par value $0.01, of NewCo registered in
the name of the Company shall be reacquired by the Surviving
Corporation and canceled and retired, and shall resume the status
of authorized and unissued Surviving Corporation Common Stock. No
shares of Surviving Corporation Common Stock or other securities of
the Surviving Corporation shall be issued in respect
thereof.
Section
4.2. Certificates. At and after the Effective Time, all of
the outstanding certificates which immediately prior thereto
represented shares of Company Common Stock, Company Preferred
Stock, or options, warrants or other securities of the Company
shall be deemed for all purposes to evidence ownership of and to
represent a number of shares of Surviving Corporation Common Stock
or Surviving Corporation Preferred Stock equal to the number of
shares of Company Common Stock or Company Preferred Stock
represented thereby or that were acquirable pursuant to such
options, warrants or other securities of the Surviving Corporation,
as the case may be, into which the shares of Company Common Stock,
Company Preferred Stock, or options, warrants or other securities
of the Company represented by such certificates shall have been
converted as herein provided and shall be so registered on the
books and records of the Surviving Corporation or its transfer
agent. The registered owner of any such outstanding certificate
shall, until such certificate shall have been surrendered for
transfer or otherwise accounted for to the Surviving Corporation or
its transfer agent, have and be entitled to exercise any voting and
other rights with respect to, and to receive any dividends and
other distributions upon, the shares of Surviving Corporation
Common Stock, Surviving Corporation Preferred Stock, or options,
warrants or other securities of the Surviving Corporation, as the
case may be, evidenced by such outstanding certificate, as above
provided.
ARTICLE
VII
CONDITIONS
Section
7.1. Conditions to the Obligations of Each Party. The
respective obligation of each party hereto to effectuate the
Reincorporation Merger is subject to satisfaction of the following
conditions:
(a)
the holders of a majority of the outstanding shares of Company
Common Stock shall have adopted and approved this Agreement in
accordance with applicable law prior to the Effective Time;
and
(b)
any and all consents, approvals, authorizations or permits, filings
or notifications deemed in the sole discretion of the Company to be
necessary to the consummation of the Reincorporation Merger
(“Required Consents”) shall have been obtained and shall be
in full force and effect, including, without limitation, (i)
consents, registrations, approvals, findings of suitability,
licenses, declarations, notifications or filings required to be
made, given or obtained under applicable laws, rules and
regulations, including without limitation the rules of the NYSE
American stock exchange, in connection with this Agreement or the
consummation of the Reincorporation Merger, and (ii) supplements,
agreements, amendments, conveyances, instruments, consents,
approvals, authorizations and other documents to be executed and/or
delivered by the Company in connection with any agreements the
Company or its affiliates have entered for the provision of debt
financing; provided, however, that either of the
parties hereto may waive this condition (b), in its sole discretion
to the extent permitted by law, with respect to any and all
Required Consents.
ARTICLE
VI
TERMINATION
Section
6.1. Termination. This Agreement may be terminated and the
Reincorporation Merger may be abandoned at any time prior to the
Effective Time, whether before or after the adoption and approval
of this Agreement by the holders of Company Common Stock referred
to in Section 5.1, if the board of directors of the Company
determines for any reason that the consummation of the
Reincorporation Merger would be inadvisable or not in the best
interests of the Company and its stockholders. In the event of the
termination and abandonment of this Agreement, this Agreement shall
become null and void and have no effect, without any liability on
the part of either the Company or NewCo, or any of their respective
stockholders, directors or officers.
ARTICLE
VII
MISCELLANEOUS
AND GENERAL
Section
7.1. Modification or Amendment. Subject to the provisions of
applicable laws, at any time prior to the Effective Time, the
parties hereto may modify or amend this Agreement; provided,
however, that an amendment made subsequent to the adoption
of this Agreement by the holders of Company Common Stock shall not
(a) alter or change the amount or kind of shares and/or rights to
be received in exchange for or on conversion of all or any of the
shares of the Company, (b) alter or change any provision of the
Articles of Incorporation or the bylaws of the Surviving
Corporation that will become effective immediately following the
Reincorporation Merger other than as provided herein or (c) alter
or change any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the holders of capital
stock of either of the parties hereto.
Section
7.2. Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together
constitute the same agreement.
Section
7.3. Governing Law. This Agreement shall be deemed to be
made in and in all respects shall be interpreted, construed and
governed by and in accordance with the laws of the State of Nevada,
without regard to the conflicts of law principles thereof to the
extent that such principles would direct a matter to another
jurisdiction.
Section
7.4. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior agreements,
understandings, representations and warranties both written and
oral, among the parties, with respect to the subject matter
hereof.
Section
7.5. No Third Party Beneficiaries. This Agreement is not
intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
Section
7.6. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the
other provisions hereof. If any provision of this Agreement, or the
application thereof to any person or any circumstance, is
determined by any court or other authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose
of such invalid or unenforceable provision and (b) the remainder of
this Agreement and the application of such provision to other
persons or circumstances shall not be affected by such invalidity
or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section
7.7. Headings. The headings herein are for convenience of
reference only, do not constitute part of this Agreement and shall
not be deemed to limit or otherwise affect any of the provisions
hereof.
[Signature
page follows]
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BALLANTYNE
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NEWCO: |
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Ballantyne
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Appendix-B
AMENDED
AND RESTATED
ARTICLES
OF INCORPORATION
OF
BALLANTYNE
STRONG, INC.
The
undersigned, Mark D. Roberson, hereby certifies that:
1. He
is the duly elected and acting Chief Executive Officer of
Ballantyne Strong, Inc., a Nevada corporation.
2.
The Articles of Incorporation of this corporation were originally
filed with the Secretary of State of Nevada on [●],
2022.
3.
The Articles of Incorporation of this corporation shall be further
amended and restated to read in full as follows:
ARTICLE
I
The
name of this corporation is Ballantyne Strong, Inc. (hereinafter
referred to as the “Corporation”).
ARTICLE
II
The
address of the Corporation’s registered office in the State of
Nevada is 112 North Curry Street, Carson City, Nevada 89703. The
name of its registered agent at that address is Corporation Service
Company.
ARTICLE
III
The
purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Nevada
Revised Statutes (“NRS”).
ARTICLE
IV
A.
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Fifty-One Million
(51,000,000) shares consisting of Fifty Million (50,000,000) 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”).
B.
The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of shares of
Preferred Stock in series, and by filing a certificate pursuant to
the applicable law of the State of Nevada (such certificate being
hereinafter referred to as a “Preferred Stock Designation”),
to establish from time to time the number of shares to be included
in each such series, and to fix the designation, powers,
preferences, and rights to the shares of each such series and any
qualifications, limitations or restrictions thereof. The number of
authorized shares of Preferred Stock may be increased or decreased
(but not below the number of shares thereon then outstanding) by
the affirmative vote of the holders of a majority of the Common
Stock, without a vote of the holders of the Preferred Stock, or of
any series thereof, unless a vote of any such holders is required
pursuant to the terms of any Preferred Stock
Designation.
ARTICLE
V
The
following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
A.
The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the
powers and authority expressly conferred upon them by statute or by
these Articles of Incorporation or the bylaws of the Corporation,
the directors are hereby empowered to exercise all such powers and
do all such acts and things as may be exercised or done by the
Corporation.
B.
The directors of the Corporation need not be elected by written
ballot unless the bylaws of the Corporation so provide.
ARTICLE
VI
A.
Subject to the rights of the holders of any series of Preferred
Stock to elect additional directors under specified circumstances,
the authorized number of directors shall be fixed from time to time
by the Board of Directors in the manner set forth in the
bylaws.
B.
Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any
meeting of the stockholders of the Corporation shall be given in
the manner provided in the bylaws of the Corporation.
C.
Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, but only by the
affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-⅔%) of the voting power of all of the
then-outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting
together as a single class.
ARTICLE
VII
The
Board of Directors is expressly empowered to adopt, amend or repeal
bylaws of the Corporation. Any adoption, amendment or repeal of the
bylaws of the Corporation by the Board of Directors shall require
the approval of a majority of the directors then in office. The
stockholders shall also have power to adopt, amend or repeal the
bylaws of the Corporation; provided, however, that, in addition to
any vote of the holders of any class or series of stock of the
Corporation required by law or by these Articles of Incorporation,
the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-⅔%) of the voting power of all of the
then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors, voting
together as a single class, shall be required for the stockholders
to adopt, amend or repeal any provision of the bylaws of the
Corporation.
ARTICLE
VIII
To
the maximum extent permitted under the NRS, no director or officer
of the Corporation shall be personally liable to the Corporation or
its stockholders for damages as a result of any act or failure to
act in his capacity as a director or officer. If the NRS is amended
after the effective date of these Articles of Incorporation to
authorize corporate action further eliminating or limiting the
personal liability of Directors, then the liability of a Director
of the Corporation shall be eliminated or limited to the fullest
extent permitted by the NRS, as so amended.
Neither
any amendment nor repeal of this Article VIII, nor the adoption of
any provision of the Corporation’s Articles of Incorporation
inconsistent with this Article VIII, shall eliminate or reduce the
effect of this Article VIII in respect of any matter occurring, or
any action or proceeding accruing or arising or that, but for this
Article VIII, would accrue or arise, prior to such amendment,
repeal or adoption of an inconsistent provision.
ARTICLE
IX
To
the fullest extent permitted by applicable law, the Corporation is
authorized to provide indemnification of (and advancement of
expenses to) Directors and officers of the Corporation (and any
other persons to which the NRS permits the Corporation to provide
indemnification) through bylaw provisions, agreements with such
persons, vote of stockholders or disinterested Directors or
otherwise, in excess of the indemnification and advancement
otherwise permitted by the NRS. Any amendment, repeal or
modification of the foregoing provisions of this Article IX shall
not adversely affect any right or protection of any Director or
officer of the Corporation existing at the time of such amendment,
repeal or modification or increase the liability of any Director or
officer of the Corporation with respect to any acts or omissions of
such Director or officer occurring prior to, such amendment, repeal
or modification.
The
Corporation may, to the extent authorized from time to time by the
Board of Directors, provide rights to indemnification and to the
advancement of expenses to employees and agents of the Corporation
similar to those conferred in this Article IX to Directors and
officers of the Corporation.
The
rights to indemnification and to the advancement of expenses
conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under these
Articles of Incorporation, the bylaws of the Corporation, any
statute, agreement, vote of stockholders or disinterested Directors
or otherwise.
Any
amendment, repeal, or modification of the foregoing provisions of
this Article IX will not adversely affect any right or protection
of any Director, officer, employee or other agent of the
Corporation existing at the time of such amendment, repeal or
modification.
ARTICLE
X
The
Corporation reserves the right to amend or repeal any provisions
contained these Articles of Incorporation in the manner prescribed
by the laws of the State of Nevada and all rights conferred upon
stockholders are granted subject to this reservation; provided,
however, that, notwithstanding any other provision of these
Articles of Incorporation or any provision of law that might
otherwise permit a lesser vote or no vote, but in addition to any
vote of the holders of any class or series of the stock of the
Corporation required by law or by these Articles of Incorporation,
the affirmative vote of the holders of at least sixty-six percent
(66-⅔%) of the voting power of all of the then-outstanding shares
of the capital stock of the Corporation entitled to vote generally
in the election of directors, voting together as a single class,
shall be required to amend or repeal this Article X, Section C of
Article V, Article VI, Article VII, Article VIII or Article
IX.
ARTICLE
XI
Subject
to the terms of these Amended and Restated Articles of
Incorporation, and to the fullest extent permitted by the NRS, the
Corporation shall be expressly permitted to redeem, repurchase or
make distributions on shares of its capital stock in all
circumstances other than where doing so would cause the Corporation
to be unable to pay its debts as they become due in the usual
course of business.
* *
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4.
The foregoing Amended and Restated Articles of Incorporation have
been duly adopted and approved by this corporation’s Board of
Directors and by the holders of a majority of its outstanding
capital stock in accordance with the applicable provisions of
Chapter 78 of the Nevada Revised Statutes and the corporation’s
Articles of Incorporation.
Executed
this [●] day of [●], 2022.
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Mark
D. Roberson |
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Chief
Executive Officer |
Appendix-C
BALLANTYNE
STRONG, INC.
BYLAWS
ARTICLE
I — STOCKHOLDERS
Section
1. Annual Meeting.
(1)
An annual meeting of the stockholders, for the election of
directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the
meeting, shall be held at such place, on such date, and at such
time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months of the last annual meeting of
stockholders.
(2)
Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders
(a) pursuant to the Corporation’s notice of meeting, (b) by or at
the direction of the Board of Directors or (c) by any stockholder
of the Corporation who was a stockholder of record at the time of
giving of the notice provided for in this Bylaw, who is entitled to
vote at the meeting and who complied with the notice procedures set
forth in this Bylaw.
(3)
For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of
Subsection (2) of this Bylaw, the stockholder must have given
timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder’s notice shall be
delivered to the Secretary at the principal executive offices of
the Corporation not less than sixty (60) days nor more than ninety
(90) days prior to the first anniversary of the preceding year’s
annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced by more than thirty
(30) days or delayed by more than sixty (60) days from such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the ninetieth (90th) day prior to such
annual meeting and not later than the close of business on the
later of the sixtieth (60th) days prior to such annual meeting or
the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made. Such stockholder’s
notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all
information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or
is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)(including such person’s written consent to being
named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such stockholder and
the beneficial owner, if any, on whose behalf the proposal is made;
and (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the
Corporation’s books, and of such beneficial owner and (ii) the
class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such beneficial
owner.
(4)
Notwithstanding anything in the second sentence of Subsection (3)
of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement naming
all of the nominees for director or specifying the size of the
increased Board of Directors made by the Corporation at least
seventy (70) days prior to the first anniversary of the preceding
year’s annual meeting, a stockholder’s notice required by this
Bylaw shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it
shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on
the tenth (10th) day following the day on which such public
announcement is first made by the Corporation.
(5)
Only such persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible to serve as
directors and only such business shall be conducted at an annual
meeting of stockholders as shall have been brought before the
meeting in accordance with the procedures set forth in these
Bylaws. The chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the
procedures set forth in these Bylaws. The chairman of the meeting
shall have the power and duty to determine whether a nomination or
any business proposed to be brought before the meeting was made in
accordance with the procedures set forth in these Bylaws and, if
any proposed nomination or business is not in compliance with these
Bylaws, to declare that such defective proposed business or
nomination shall be disregarded.
(6)
For purposes of these Bylaws, “public announcement” shall mean
disclosure in a press release reported by the Dow Jones News
Service, Associated Press, PR Newswire, Businesswire or a
comparable national news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(7)
Notwithstanding the foregoing provisions of the Bylaws, a
stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Bylaw. Nothing in this
Bylaw shall be deemed to affect any rights of stockholders to
request inclusion of proposals in the Corporation’s proxy statement
pursuant to Rule 14a-8 under the Exchange Act.
Section
2. Special Meetings.
Special
meetings of the stockholders, other than those required by statute,
may be called at any time by the Chairman of the Board, the
President or by the Board of Directors acting pursuant to a
resolution duly adopted. The Chairman of the Board, the President
or the Board of Directors acting pursuant to a resolution duly
adopted may postpone or reschedule any previously scheduled special
meeting.
Only
such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant
to the Corporation’s notice of meeting.
Section
3. Notice of Meetings.
Written
notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than
sixty (60) days before the date on which the meeting is to be held,
to each stockholder entitled to vote at such meeting, except as
otherwise provided herein or required by law (meaning, here and
hereinafter, as required from time to time by the Nevada Revised
Statutes or the Articles of Incorporation of the
Corporation).
When
a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place,
date and time thereof (and, if applicable, the means of remote
communication by which stockholders or their proxies may be present
and vote thereat) are announced at the meeting at which the
adjournment is taken; provided, however, that if the
date of any adjourned meeting is more than thirty (30) days after
the date for which the meeting was originally noticed, or if a new
record date is fixed for the adjourned meeting, written notice of
the place, date, and time of the adjourned meeting shall be given
in conformity herewith. At any adjourned meeting, any business may
be transacted which might have been transacted at the original
meeting.
Section
4. Quorum.
At
any meeting of the stockholders, the holders of a majority of all
of the shares of the stock entitled to vote at the meeting, present
in person or by proxy, shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number
may be required by law. Where a separate vote by a class or classes
is required, a majority of the shares of such class or classes
present in person or represented by proxy shall constitute a quorum
entitled to take action with respect to that vote on that
matter.
If a
quorum shall fail to attend any meeting, the chairman of the
meeting may adjourn the meeting to another place, date, or
time.
Section
5. Organization.
Such
person as the Board of Directors may have designated or, in the
absence of such a person, the Chairman of the Board or, in his or
her absence, the President or, in his or her absence, such person
as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the
meeting. In the absence of the Secretary of the Corporation, the
secretary of the meeting shall be such person as the chairman
appoints.
Section
6. Conduct of Business.
The
chairman of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as
seem to him or her in order. The chairman shall have the power to
adjourn the meeting to another place, date and time. The date and
time of the opening and closing of the polls for each matter upon
which the stockholders will vote at the meeting shall be announced
at the meeting.
Section
7. Proxies and Voting.
At
any meeting of the stockholders, every stockholder entitled to vote
may vote in person or by proxy authorized by an instrument in
writing or by a transmission permitted by law filed in accordance
with the procedure established for the meeting. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission created pursuant to this Section may be substituted or
used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission.
All
voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided,
however, that upon demand therefore by a stockholder
entitled to vote or by his or her proxy, a stock vote shall be
taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the stockholder or proxy voting and such
other information as may be required under the procedure
established for the meeting.
The
Corporation may, and to the extent required by law, shall, in
advance of any meeting of stockholders, appoint one or more
inspectors to act at the meeting and make a written report thereof.
The Corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders,
the person presiding at the meeting may, and to the extent required
by law, shall, appoint one or more inspectors to act at the
meeting. Each inspector, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the
best of his ability. Every vote taken by ballots shall be counted
by a duly appointed inspector or inspectors.
All
elections of directors shall be determined by a plurality of the
votes cast, and expect as otherwise required by law, all other
matters shall be determined by a majority of the votes cast
affirmatively or negatively.
Section
8. Stock List.
A
complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the
number of shares registered in his or her name, shall be open to
the examination of any such stockholder, for any purpose germane to
the meeting, during ordinary business hours for a period of at
least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at
the place where the meeting is to be held.
The
stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any
such stockholder who is present. This list shall presumptively
determine the identity of the stockholders entitled to vote at the
meeting and the number of shares held by each of them.
Section
9. Consent of Stockholders in Lieu of
Meeting.
Any
action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken
at any annual or special meeting of the stockholders, may be taken
without a meeting and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted.
ARTICLE
II — BOARD OF DIRECTORS
Section
1. Number, Election and Term of Directors.
Subject
to the rights of the holders of any series of preferred stock to
elect directors under specified circumstances, the authorized
number of directors shall be fixed from time to time exclusively by
the Board of Directors pursuant to a resolution duly adopted. The
directors, other than those who may be elected by the holders of
any series of preferred stock under specified circumstances, shall
be elected at the annual meeting of stockholders to serve one-year
terms or until their successors are elected and
qualified.
Section
2. Newly Created Directorships and Vacancies.
Subject
to the rights of the holders of any series of preferred stock with
respect to such series of preferred stock, newly created
directorships resulting from any increase in the authorized number
of directors or any vacancies on the Board of Directors resulting
from death, resignation, retirement, disqualification, removal from
office or other cause shall, unless otherwise provided by law or by
resolution of the Board of Directors, be filled only by a majority
vote of the directors then in office, whether or not less than a
quorum, and directors so chosen shall hold office for a term
expiring at the next annual meeting of stockholders, or, if
applicable, at the annual meeting of stockholders at which the term
of office of the class to which they have been chosen expires. No
decrease in the authorized number of directors shall shorten the
term of any incumbent director.
Section
3. Chairman of the Board.
The
Board of Directors shall elect one of its members as a Chairman.
The Chairman of the Board shall, if present, preside at all
meetings of the Board and of the stockholders. The Chairman of the
Board shall keep in close touch with the administration of the
affairs of the Corporation. The Chairman of the Board shall also
exercise and perform such other powers and duties as may be, from
time to time, assigned to him or her by the Board of Directors or
prescribed by the Bylaws.
Section
4. Regular Meetings.
Regular
meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall
have been established by the Board of Directors and publicized
among all directors. A notice of each regular meeting shall not be
required.
Section
5. Special Meetings.
Special
meetings of the Board of Directors may be called by the Chairman of
the Board, the President, by two or more directors then in office,
and shall be held at such place, on such date, and at such time as
they or he or she shall fix. Notice of the place, date and time of
each such special meeting shall be given each director by whom it
is not waived, by mailing written notice not less than five (5)
days before the meeting, or by telegraphing, telexing, faxing or
sending by other electronic transmission (which may include by
electronic mail) of the same not less than 24 hours before the
meeting. Unless otherwise indicated in the notice thereof, any and
all business may be transacted at a special meeting.
Section
6. Quorum.
At
any meeting of the Board of Directors, a majority of the directors
then in office shall constitute a quorum for all purposes. If a
quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time,
without further notice or waiver thereof.
Section
7. Participating in Meetings By Conference
Telephone.
Members
of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other and such participation shall constitute presence in person at
such meeting.
Section
8. Conduct of Business; Actions by Written
Consent.
At
any meeting of the Board of Directors, business shall be transacted
in such order and manner as the Board may from time to time
determine, and all matters shall be determined by the vote of a
majority of the directors present, except as otherwise provided
herein or required by law. Action may be taken by the Board of
Directors without a meeting if all members thereof consent thereto
in writing, which writing or writings shall be filed with the
minutes of proceedings of the Board of Directors.
Section
9. Powers.
The
Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, including, without limiting
the generality of the foregoing, the unqualified power:
(1)
To declare dividends from time to time in accordance with
law;
(2)
To purchase or otherwise acquire any property, rights or privileges
on such terms as it shall determine;
(3)
To authorize the creation, making and issuance, in such form as it
may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things
necessary in connection therewith;
(4)
To remove any officer of the Corporation with or without cause, and
from time to time to devolve the powers and duties of any officer
upon any other person for the time being;
(5)
To confer upon any officer of the Corporation the power to appoint,
remove and suspend subordinate officers, employees and
agents;
(6)
To adopt from time to time such stock option, stock purchase, bonus
or other compensation plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may
determine;
(7)
To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine;
and,
(8)
To adopt from time to time regulations, not inconsistent with these
Bylaws, for the management of the Corporation’s business and
affairs.
Section
10. Compensation of Directors.
Unless
otherwise restricted by the Corporation’s Articles of
Incorporation, the Board of Directors shall have the authority to
fix the compensation of the directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or paid a stated salary or paid
other compensation as director. No such payment shall preclude any
director from serving the Corporation in any other capacity and
receiving compensation therefore. Members of special or standing
committees may be allowed like compensation for attending committee
meetings.
ARTICLE
III — COMMITTEES
Section
1. Committees of the Board of Directors.
The
Board of Directors may from time to time designate committees of
the Board, with such lawfully delegable powers and duties as it
thereby confers, to serve at the pleasure of the Board and shall,
for those committees and any others provided for herein, elect a
director or directors to serve as the member or members,
designating, if it desires, other directors as alternate members
who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of any member of
any committee and any alternate member in his or her place, the
member or members of the committee present at the meeting and not
disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member
of the Board of Directors to act at the meeting in the place of the
absent or disqualified member.
Section
2. Conduct of Business; Action by Written
Consent.
Each
committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith,
except as otherwise provided herein or required by law. Adequate
provision shall be made for notice to members of all meetings;
one-third (1/3) of the members shall constitute a quorum unless the
committee shall consist of one (1) or two (2) members, in which
event one (1) member shall constitute a quorum; and all matters
shall be determined by a majority vote of the members present.
Action may be taken by any committee without a meeting if all
members thereof consent thereto in writing, which writing or
writings shall be filed with the minutes of the proceedings of such
committee.
ARTICLE
IV — OFFICERS
Section
1. Generally.
The
officers of the Corporation shall consist of a President, one or
more Vice-Presidents, a Secretary, a Treasurer and such other
officers as may from time to time be appointed by the Board of
Directors. Officers shall be elected by the Board of Directors,
which shall consider that subject at its first meeting after every
annual meeting of stockholders. Each officer shall hold office
until his or her successor is elected and qualified or until his or
her earlier resignation or removal. Any number of offices may be
held by the same person. The salaries of officers elected by the
Board of Directors shall be fixed from time to time by the Board of
Directors or by such officers as may be designated by resolution of
the Board.
Section
2. President.
Unless
otherwise determined by the Board of Directors, the President shall
be the Chief Executive Officer of the Corporation. Subject to the
provisions of these Bylaws and to the direction of the Board of
Directors, he or she shall have the responsibility for the general
management and control of the business and affairs of the
Corporation and shall perform all duties and have all powers which
are commonly incident to the office of chief executive or which are
delegated to him or her by the Board of Directors. He or she shall
have power to sign all contracts and other instruments of the
Corporation which are authorized and shall have general supervision
and direction of all of the other officers, employees and agents of
the Corporation.
Section
3. Vice President.
In
the absence of the President, or in the event of his death,
inability or refusal to act, the Vice President (or in the event
there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or the absence of
any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the
President. Any Vice President may sign, with the Secretary or an
assistant secretary, certificates for shares of the Corporation,
and shall perform such other duties as may from time to time be
delegated to him or her by the Board of Directors
Section
4. Treasurer.
The
Treasurer shall have the responsibility for maintaining the
financial records of the Corporation. He or she shall make such
disbursements of the funds of the Corporation as are authorized and
shall render from time to time an account of all such transactions
and of the financial condition of the Corporation. The Treasurer
shall also perform such other duties as the Board of Directors may
from time to time prescribe.
Section
5. Secretary.
The
Secretary shall issue all authorized notices for, and shall keep
minutes of, all meetings of the stockholders and the Board of
Directors. He or she shall have charge of the corporate books and
shall perform such other duties as the Board of Directors may from
time to time prescribe.
Section
6. Delegation of Authority.
The
Board of Directors may from time to time delegate the powers or
duties of any officer to any other officers or agents,
notwithstanding any provision hereof.
Section
7. Removal.
Any
officer of the Corporation may be removed at any time, with or
without cause, by the Board of Directors.
Section
8. Action with Respect to Securities of Other
Corporations.
Unless
otherwise directed by the Board of Directors, the Chairman of the
Board the President or any officer of the Corporation authorized by
the Chairman of the Board or the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by
proxy, at any meeting of stockholders of or with respect to any
action of stockholders of any other corporation in which this
Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason
of its ownership of securities in such other
corporation.
ARTICLE
V — STOCK
Section
1. Certificates of Stock.
Shares
of the Corporation’s stock may be certificated or uncertificated,
as provided under the Nevada Revised Statutes. The holder of stock
represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the Corporation by, the Chairman of
the Board, Vice Chairman of the Board, a President or a Vice
President and the Treasurer or Assistant Treasurer or the Secretary
or an Assistant Secretary of the Corporation representing the
number of shares registered in certificate form. Any or all of the
signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar, who has signed, or whose
facsimile signature has been placed upon such certificate shall
have ceased to be such officer, transfer agent or registrar before
such certificate is issued, the certificate may, nevertheless, be
issued by the Corporation with the same effect as if such person
were such officer, transfer agent or registrar as of the date of
issue.
Section
2. Transfers of Stock.
Transfers
of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer
agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance
with Section 4 of Article V of these Bylaws, an outstanding
certificate for the number of shares involved shall be surrendered
for cancellation before a new certificate is issued
therefor.
Section
3. Record Date.
(1)
The Board of Directors may fix a record date, which shall not be
more than sixty (60) nor less than ten (10) days before the date of
any meeting of stockholders, nor more than sixty (60) days prior to
the time for any other action hereinafter described, as of which
there shall be determined the stockholders who are entitled: to
notice of or to vote at any meeting of stockholders or any
adjournment thereof; to express consent to corporate action in
writing without a meeting consistent with and as provided in
Subsection (2) below; to receive payment of any dividend or other
distribution or allotment of any rights; or to exercise any rights
with respect to any other lawful action; provided,
however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held, and, for
determining stockholders entitled to receive payment of any
dividend or other distribution or allotment of rights or to
exercise any rights of change, conversion or exchange of stock or
for any other purpose, the record date shall be at the close of
business on the day on which the Board of Directors adopts a
resolution relating thereto.
Except
as otherwise provided by law, a determination of stockholders of
record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment or postponement of the
meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting or
postponement of a meeting.
(2)
In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record
date shall not precede, or be more than ten (10) days after, the
date upon which the resolution fixing the record date is adopted by
the Board of Directors. Any stockholder of record seeking to have
the stockholders authorize or take corporate action by written
consent shall, by written notice to the Secretary, request the
Board of Directors to fix a record date. The Board of Directors
shall within ten (10) days after the date on which such a request
is delivered to, or mailed and received at, the office of the
Secretary at the principal executive offices of the Corporation,
adopt a resolution fixing the record date. If no record date has
been fixed by the Board of Directors within ten (10) days after the
date on which such a request is received, the record date for
determining stockholders entitled to consent to corporate action in
writing without a meeting, when no prior action by the Board of
Directors is required by law, shall be the first date on which a
signed written consent setting forth the action taken or proposed
to be taken is delivered to the Corporation by delivery to its
registered office in the State of Nevada, its principal place of
business or an officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are
recorded (the “Custodian”). If no record date has been fixed by the
Board of Directors and prior action by the Board of Directors is
required by law, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the
Board of Directors adopts the resolution taking such prior
action.
Section
4. Lost, Stolen or Destroyed Certificates.
In
the event of the loss, theft or destruction of any certificate of
stock, another may be issued in its place pursuant to such
regulations as the Board of Directors may establish concerning
proof of such loss, theft or destruction and concerning the giving
of a satisfactory bond or bonds of indemnity.
Section
5. Regulations.
The
issue, transfer, conversion and registration of certificates of
stock shall be governed by such other regulations as the Board of
Directors may establish. The Board of Directors shall adopt
procedures for the registration of transfers of uncertificated
securities in lieu of the procedures set forth in the bylaws for
certificated shares.
ARTICLE
VI — NOTICES
Section
1. Notices.
Notices
to directors and stockholders shall be in writing and delivered
personally or mailed to the directors or stockholders at their
addresses appearing on the books of the Corporation. Notice by mail
shall be deemed to be given at the time when the same shall be
mailed. Notice to directors may also be given by telegram,
facsimile or by other media, including electronic mail, if the
sending of notice by such other media may be verified or confirmed.
Notwithstanding the foregoing, nothing in this paragraph shall
preclude the Corporation from delivering notice to its directors or
stockholders by any other delivery method from time to time
permitted by applicable law.
Section
2. Waivers.
A
written waiver of any notice, signed by a stockholder, director,
officer, employee or agent, whether before or after the time of the
event for which notice is to be given, shall be deemed equivalent
to the notice required to be given to such stockholder, director,
officer, employee or agent. Neither the business nor the purpose of
any meeting need be specified in such waiver. Attendance at any
meeting shall constitute waiver of notice except attendance for the
sole purpose of objecting to the timeliness of notice.
ARTICLE
VII — MISCELLANEOUS
Section
1. Facsimile Signatures.
In
addition to the provisions for use of facsimile signatures
elsewhere specifically authorized in these Bylaws, facsimile
signatures of any officer or officers of the Corporation may be
used whenever and as authorized by the Board of Directors or a
committee thereof.
Section
2. Corporate Seal.
The
Board of Directors may provide a suitable seal, containing the name
of the Corporation, which seal shall be in the charge of the
Secretary. If and when so directed by the Board of Directors or a
committee thereof, duplicates of the seal may be kept and used by
the Treasurer.
Section
3. Reliance upon Books, Reports and Records.
Each
director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the
performance of his or her duties, by fully protected in relying in
good faith upon the books of account or other records of the
Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated,
or by any other person as to matters which such director or
committee member reasonably believes are within such other person’s
professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
Section
4. Fiscal Year.
The
fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section
5. Time Periods.
In
applying any provision of these Bylaws which requires that an act
be done or not be done a specified number of days prior to an event
or that an act be done during a period of a specified number of
days prior to an event, calendar days shall be used, the day of the
doing of the act shall be excluded, and the day of the event shall
be included.
ARTICLE
VIII — INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section
1. Right to Indemnification.
Each
person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (hereinafter a “proceeding”), by reason of the fact
that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan
(hereinafter an “indemnitee”), whether the basis of such proceeding
is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Nevada Revised Statutes, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including attorneys’ fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith;
provided, however, that, except as provided in
Section 3 of this ARTICLE VIII with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify
any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or
part thereof) was authorized by the Board of Directors of the
Corporation.
Section
2. Right to Advancement of Expenses.
The
right to indemnification conferred in Section 1 of this ARTICLE
VIII shall include the right to be paid by the Corporation the
expenses (including attorneys’ fees) incurred in defending any such
proceeding in advance of its final disposition (hereinafter an
“advancement of expenses”); provided, however, that,
if the Nevada Revised Statutes requires, an advancement of expenses
incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service
to an employee benefit plan) shall be made only upon delivery to
the Corporation of an undertaking (hereinafter an “undertaking”),
by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal
(hereinafter a “final adjudication”) that such indemnitee is not
entitled to be indemnified for such expenses under this Section 2
or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections 1 and 2 of this ARTICLE VIII
shall be contract rights and such rights shall continue as to an
indemnitee who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the indemnitee’s heirs,
executors and administrators.
Section
3. Right of Indemnitee to Bring Suit.
If a
claim under Section 1 or 2 of this ARTICLE VIII is not paid in full
by the Corporation within sixty (60) days after a written claim has
been received by the Corporation, except in the case of a claim for
an advancement of expenses, in which case the applicable period
shall be twenty (20) days, the indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such
suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking,
the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not
in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in
any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met any applicable
standard for indemnification set forth in the Nevada Revised
Statutes. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders)
to have made a determination prior to the commencement of such suit
that indemnification of the indemnitee is proper in the
circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Nevada Revised Statutes, nor
an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct, shall
create a presumption that the indemnitee has not met the applicable
standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses,
under this ARTICLE VIII or otherwise shall be on the
Corporation.
Section
4. Non-Exclusivity of Rights.
The
rights to indemnification and to the advancement of expenses
conferred in this ARTICLE VIII shall not be exclusive of any other
right which any person may have or hereafter acquire under any
statute, the Corporation’s Articles of Incorporation or Bylaws,
agreement, vote of stockholders or disinterested directors or
otherwise.
Section
5. Insurance.
The
Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the
Nevada Revised Statutes.
Section
6. Indemnification of Employees and Agents of the
Corporation.
The
Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article VIII with
respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
ARTICLE
IX — AMENDMENTS
In
furtherance and not in limitation of the powers conferred by law,
the Board of Directors is expressly authorized to adopt, amend or
repeal these Bylaws. The stockholders of the Corporation shall also
have power to adopt, amend or repeal these Bylaws; provided,
however, that, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by
the Corporation’s Articles of Incorporation, the affirmative vote
of the holders of at least sixty-six and two-thirds percent (66-⅔%)
of the voting power of all of the then-outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be
required for the stockholders to adopt, amend or repeal any
provision of these Bylaws.
ARTICLE
X
The
Corporation expressly elects not to be governed by the provisions
of NRS Sections 78.378 through 78.3793 (Acquisition of Controlling
Interest), as may be subsequently amended or expanded, or any
successor statutes thereto.
* * *
* *
Adopted
by the corporation on ______________, 2022.
If
you have any questions, require any assistance in voting your
shares in the Company, need any additional copies of the Company’s
proxy materials, or have any other questions, please call Alliance
Advisors LLC, the Company’s proxy solicitor, at the toll-free
telephone number included below.
|
Alliance
Advisors LLC
200
Broadacres Drive, 3rd Floor
Bloomfield,
NJ 07003
Toll-free
number: 844-876-6187
|
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