Exhibit 10.6


 


BALLANTYNE OF OMAHA, INC.


EXECUTIVE OFFICERS


PERFORMANCE BONUS COMPENSATION PLAN


 


I.                                         INTRODUCTION.


 


Ballantyne of Omaha, Inc.’s Executive Officers Performance Bonus
Compensation Plan (“Plan”) is designed to incentivize Ballantyne Executive Officers
to maximize shareholder value, and allow the Executive Officers to share in the
increased value through a bonus pool. 
The Plan is designed to reward the Company’s Executive Officers with a
larger bonus pool as the Company’s return on equity increases.


 


II.                                     COMPENSATION  PLAN.


 


Return on Equity Thresholds.


 


	
  Allocation

  Percentage

  	
   

  	
  Pre-Bonus, Pretax Income to Book Value

  	
   

  
	
  2004

  	
   

  	
  2005**

  	
   

  	
  2006**

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0% Allocation

  	
   

  	
  <11.5%

  	
   

  	
  <15%

  	
   

  	
  <17%

  	
   

  
	
  2.25% Allocation*

  	
   

  	
  11.5% to 13%

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
  4.50% Allocation

  	
   

  	
  13% to 14.99%

  	
   

  	
  15% to 17%

  	
   

  	
  17% to 19%

  	
   

  
	
  5.85% Allocation

  	
   

  	
  15% to 16.99%

  	
   

  	
  17% to 19%

  	
   

  	
  19% to 21%

  	
   

  
	
  6.75% Allocation

  	
   

  	
  17% or >

  	
   

  	
  >19%

  	
   

  	
  >21%

  	
   

  



 










*2.25% allocation is for 2004 only


 


** 2005 and 2006 percentages are set forth for illustrative purposes
only, and are subject to change.


 


III.                                 ALLOCATION
OF BONUS POOLS TO INDIVIDUAL PARTICIPANTS.


 


1.                                       General
Allocation.  The amount of the bonus
pool to be awarded will be based on the outcome of the financial goals,
achievement of specific goals and objectives by the Executive Officers.  The bonus pool will be allocated to the
Executive Officers based on 70% salary and 30% on achievement of specific goals
and objectives.  Any Executive Officer
who is determined to have achieved all of their goals and objectives for the
applicable year shall receive their pro rata share of the 30% based on their
salary in relation to the total of all of the Executive Officers salaries.  An Executive Officer may receive less than
their pro rata share if it is determined that they have not met all of their
goals and objectives.  Any portion not
awarded to any Executive Officer will be returned to the Company.


 


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2.                                       Specific Allocation.  The Chief Executive Officer in consultation
with the Compensation Committee shall establish the specific goals and
objectives for the Executive Officers. 
The Chief Executive Officer shall review with each Executive Officer
their specific goals and objectives for the coming year.  The Compensation Committee will, with input
from the Chief Executive Officer, determine the extent to which each Executive
Officer has achieved their goals and objectives for the year and whether each
such Executive Officer will, at the end of the year, receive all or a portion
of the 30% which should be allocated to each Executive Officer.  The decision of the Compensation Committee
shall be conclusive.


 


IV.           EXAMPLE OF
PERFORMANCE BONUS COMPENSATION PLAN.


 


	
  Beginning Equity (12/31/03)

  	
   

  	
  $

  	
  29,508,491

  	
   

  
	
  Pre-Bonus, Pretax Income (2004 Budget)

  	
   

  	
  $

  	
  3,926,793

  	
   

  



 


Potential Pools:


 


	
   

  	
   

  	
  Scenario I

  	
   

  	
  Scenario II

  	
   

  	
  Scenario III

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Achieved

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Percentage of Budgeted Pretax Income

  	
   

  	
  87.0

  	
  %

  	
  100.0

  	
  %

  	
  115.0

  	
  %

  
	
  Pre-Bonus, Pretax Income Achieved

  	
   

  	
  $

  	
  3,416,310

  	
   

  	
  $

  	
  3,926,793

  	
   

  	
  $

  	
  4,515,812

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bonus
  Threshold Achieved

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pretax Income to Beginning Equity

  	
   

  	
  11.6

  	
  %

  	
  13.3

  	
  %

  	
  15.3

  	
  %

  
	
  Allocation to Bonus Pool

  	
   

  	
  2.25

  	
  %

  	
  4.50

  	
  %

  	
  5.85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bonus
  Pool

  	
   

  	
  $

  	
  76,867

  	
   

  	
  $

  	
  176,706

  	
   

  	
  $

  	
  264,175

  	
   

  



 


V.                                     COMPUTATION.


 


Computation of the amount to be included in the Executive Officers
Performance Bonus Compensation Plan shall be made by the Company
contemporaneously with approval of the Company’s financial statements by its
public accounting firm, and shall be paid within 15 days from the date the
Company makes such determination.  Any
question, difference or dispute with reference to the computation of the bonus
pool shall be resolved by the public accounting firm then employed by the
Company to audit its books for the applicable period involved, and his
determination shall be final and conclusive upon all parties.


 


VI.                                 TAXES
AND WITHHOLDING.


 


Bonus payouts under this Plan are taxable in the year in which
received.  Taxes and other withholding
will be withheld in accordance with applicable laws.


 


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VII.                             TERMINATION
OF EMPLOYMENT.


 


Ballantyne’s achievement of its return equity threshold depends upon
the combined contribution of all Executive Officers throughout the year, and
their contribution to Ballantyne’s success is, therefore, not complete until
the year is complete.  Executive Officers
whose employment is terminated for any reason, voluntary or involuntary, prior
to the last day of the fiscal year are not eligible to receive any bonus payout
under this Plan.


 


VIII.                         BALLANTYNE’S
RIGHT TO MODIFY THE PLAN.


 


Ballantyne, through its Compensation Committee, reserves the right to
amend or modify any of the terms or conditions of the Plan at any time within
ninety (90) days after the end of any fiscal year.  Said amendment or modification shall be
applicable effective as of January 1st of the year in which the
amendment or modification takes place.


 


IX.                                PLAN
IS NOT A CONTRACT OF EMPLOYMENT.


 


Nothing in this Plan should be construed as a contract of employment
for any Executive Officer, an amendment to any current contract of employment
that an Executive Officer may have, or any assurance of continued employment
for any given period of time.


 


X.                                    REVOCATION
OF PRIOR PLAN.


 


The Ballantyne of Omaha, Inc. Key Employee Bonus Plan is hereby
revoked.


 


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