Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT made and entered into this 1st day of November 2010 by and
between BALLANTYNE STRONG, INC., a Delaware corporation (the “Company”),
and GARY CAVEY (the “Executive”).

 

RECITALS:

 

This
Executive Employment Agreement is made with reference to the following facts
and objectives:

 

A.            The Company has offered to appoint
Executive as President and Chief Executive Officer of Ballantyne Strong, Inc.
in accordance with the terms and conditions set forth in this Agreement for the
term provided in this Agreement, and

 

B.            Executive has expressed his
willingness to become President and Chief Executive Officer of Ballantyne
Strong, Inc., in accordance with the terms and conditions set forth in
this Agreement.

 

AGREEMENT:

 

NOW,
THEREFORE, in consideration of mutual promises and covenants herein contained,
the parties hereto intending to become legally bound agree as follows:

 

1.             Employment.

 

The
Company hereby agrees to employ the Executive and the Executive hereby agrees
to be employed by the Company upon the terms and conditions hereinafter set
forth.

 

2.             Duties and Services.

 

2.1          Title and Duties.  The Executive shall serve as President and
Chief Executive Officer of the Company and shall perform such services as may
be assigned to him from time to time by the Board of Directors of the Company
(the “Board”), which services may include serving as an officer or director of
a subsidiary of the Company. Executive shall be appointed as a director of the
Company to serve a term through the Company’s next annual meeting of
stockholders and shall be nominated for re-election to the Board upon
expiration of such term and each successive term thereafter, provided he is
then employed by the Company pursuant to this Agreement.

 

2.2          Time.  The Executive shall devote his full business
time and attention to the business of the Company and to the promotion of the
Company’s best interest, subject to vacations, holidays, normal illnesses and a
reasonable amount of time for civic, community and industry affairs. Executive
shall at all times comply with Company policies, including, but not limited to
the Company’s Code of Ethics.

 

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2.3          Travel.  The Executive shall undertake such travel as
may be necessary and desirable to promote the business and affairs of the
Company, consistent with Executive’s position with the Company.

 

3.             Term of Agreement.

 

3.1          Term.  The term of Executive’s employment under this
Agreement shall commence on November 1, 2010 and continue until terminated
in accordance with Section 9 below.

 

3.2          Change in Control
of Company.  In the event of a change
in control of the Company (as defined in the stock option agreement attached
hereto as Exhibit A), this Agreement shall continue in full force and
effect and any termination of Executive’s employment after such change in
control shall be in accordance with Section 9 below.

 

4.             Compensation.

 

4.1          Base Salary.  For all of the services to be rendered by the
Executive under this Agreement, the Company shall pay the Executive a starting
base salary of Three Hundred Thousand Dollars ($300,000.00) per year (“Base
Salary”).  The compensation paid
hereunder to the Executive shall be paid in accordance with the payroll
practices conducted by the Company and shall be subject to the customary
withholding taxes and other employment taxes as required with respect to
compensation paid by a corporation to an employee.  The Base Salary will be subject to annual
review and adjustment by the Board based upon Executive’s performance.

 

4.2          Additional
Compensation.  In addition to the
Base Salary set forth in subparagraph 4.1 above, the Company shall pay the
Executive additional compensation as set forth below.

 

4.2.1       Annual
Cash Bonus.  Commencing with the
Company’s 2011 fiscal year, Executive will participate in the Company’s annual
bonus program with a bonus target equal to 50% of his Base Salary.  The actual bonus earned will be subject to
achievement of performance goals and other factors to be established by the
Compensation Committee or the Board. Executive will receive no bonus for the
fiscal year ending December 31, 2010.

 

4.2.2       Stock
Options.  On the date Executive’s
employment with the Company commences, the Company will grant Executive 50,000
options pursuant to a stock option agreement in substantially the form attached
hereto as Exhibit A.

 

4.2.3       Participation
in Long-Term Incentive Plan. 
Executive will be eligible to participate in any regular long-term
incentive grants based on performance as determined in the sole discretion of
the Compensation Committee under the Ballantyne Strong, Inc. 2010
Long-Term Incentive Plan or any similar or successor long-term incentive plan.

 

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5.             Expenses and Vacation.

 

5.1          Travel and
Entertainment Expense.  The Company
shall reimburse the Executive for all reasonable and necessary travel and
entertainment expenses incurred by Executive in the performance of the
Executive’s duties hereunder upon submission of vouchers and receipts
evidencing such expenses in accordance with applicable Company policies.

 

5.2          Vacation.  The Executive shall be entitled to vacation
during each twelve (12) months of employment in accordance with the applicable
Company policy, but in no event less than four (4) weeks per calendar
year.  All vacations shall be in addition
to recognized national holidays. During all vacations, the Executive’s
compensation and other benefits as stated herein shall continue to be paid in
full.  Such vacations shall be taken only
at times convenient for the Company, as approved by the Chairman of the Board.

 

6.             Other Benefits.

 

6.1          Company Benefit
Programs.  In addition to the
compensation and to the rights provided for elsewhere in this Agreement, the Executive
shall be entitled to participate in each plan of the Company now or hereafter
adopted and in effect from time to time for the benefit of executive employees
of the Company, to the extent permitted by such plans and by applicable law,
including, but not limited to, (a) profit sharing plan, (b) medical
expense insurance program, and (c) pension plan. Nothing in this Agreement
shall limit the Company’s right to amend, modify and/or terminate any benefit
plan, policies or programs at any time for any reason.

 

6.2          Relocation Expense
Allowance.  Executive will receive a
relocation expense allowance not to exceed $75,000 for documented closing costs
and movement of household goods and other miscellaneous expenses associated
with Executive’s relocation to the Omaha metropolitan area. Executive shall be
reimbursed for said expenses upon submission of vouchers and receipts
evidencing such expenses.

 

6.3          Temporary Living
Expense.  Executive shall receive a
temporary living expense to reimburse Executive for reasonable and customary
temporary living expenses until Executive closes on a home in the Omaha
metropolitan area.  Temporary living
expenses shall continue for a maximum period of three months from the effective
date of the Agreement and shall not exceed the total sum of $10,000.00.
Executive shall be reimbursed for said expenses upon submission of vouchers and
receipts evidencing such expenses.

 

7.             Stock Ownership Requirement.  Executive shall be subject to the Company’s
stock ownership and retention policies, as may be in effect from time to
time.  Executive acknowledges such
policies currently require that Executive to acquire and maintain holdings of
the Company’s common stock in an amount at least equal to seventy-five percent
(75%) of his Base Salary within three years from the date his employment
commences.

 

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8.             Severance.  In the event Executive’s employment is
terminated (a) by the Company without cause in accordance with Section 9.2
or (b) by the Executive for good reason in accordance with Section 9.3,
then the Company shall remain liable for the Base Salary payable in accordance
with Section 4.1 of this Agreement through the later of (i) October 31,
2013 or (ii) nine (9) months after the date of Executive’s
termination. In addition, the Company will pay the premiums for, or will
reimburse the Executive for premiums paid for, continued health insurance
coverage under COBRA for a period during which such Base Salary continuation
payments are made, but not longer than twelve (12) months.  The severance benefits provided under this Section 8
shall constitute the sole severance benefits payable to Executive by the
Company.  The receipt of such payments by
Executive shall be conditioned upon Executive’s continued compliance with the
obligations set forth in Section 11 (Restrictive Covenants) and Employee’s
execution of the Company’s standard form of general release.  The Executive shall also be entitled to
receive any earned and unpaid amounts owed to him under Section 4 and such
other accrued benefits as may be provided by Sections 5 and 6 above.

 

9.             Termination.

 

9.1          Termination Due To
Death Or Incapacity.  Executive’s
employment shall be terminated upon the Executive’s death, or by the Company,
at its discretion, because of the Executive’s failure to perform substantially
all the material duties of his position for a period of a least 180 consecutive
calendar days due to physical or mental illness or injury.

 

9.1.1       If
the Company elects to terminate this Agreement because of the Executive’s
incapacity, it shall send him written notice thereof, setting forth in
reasonable detail the facts and circumstances that provide the basis for its
termination. If the Company and the Executive disagree as to the Executive’s
incapacity, each may appoint a medical doctor to certify his opinion as to the
Executive’s incapacity, and if the two doctors do not agree as to the Executive’s
incapacity, the two doctors will appoint a third medical doctor to certify his
or her opinion as to the Executive’s incapacity, and the decision of the
majority of the three doctors will prevail. 
The Company will bear all expenses for this procedure.

 

9.1.2       In
the event of termination by reason of death, the Executive’s estate shall be
paid all accrued sums due and owing under Section 4 above and such other
benefits as may be provided by Sections 5 and 6 above.

 

9.1.3       In
the event of termination by reason of incapacity, Executive shall continue to
receive his full compensation during the 180-day period prior to any notice of
termination.  After the termination,
Executive shall be entitled to any accrued amounts due and owing him under Section 4
and such other benefits as may be provided by Sections 5 and 6 above.

 

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9.2          Termination by
Company.

 

9.2.1       The
Company may terminate the Executive’s employment at any time with or without
cause. For purposes of this Agreement, circumstances constituting “cause” shall
exist if the Executive has:

 

(a)           acted
dishonestly or incompetently or engaged in willful misconduct in performance of
his executive duties;

 

(b)           breached
fiduciary duties owed to the Company;

 

(c)           intentionally
failed to perform reasonably assigned duties;

 

(d)           willfully
violated any law, rule or regulations, 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

 

(e)           is
in breach of his obligations under this Agreement and such breach is not cured
by Executive within thirty (30) days after written notice to him.

 

9.2.2       In
order for the Company to terminate the Executive’s employment for “cause”,
Executive shall be sent written notice of termination, which specifically sets
forth in reasonable detail the facts and circumstances upon which the Board
believes that the Executive has given the Company cause for termination of
Executive’s employment.  Said notice
shall give the Executive an opportunity, together with legal counsel, to be
heard before the Board. Termination for cause shall be based on a finding of
two-thirds (2/3) of the Board (not including Executive, should he be a member
of the Board), and said Board shall specify its findings concerning said
termination in detail.  For purposes of
this subsection, no acts or failures to act on the part of the Executive will
be considered willful or willfully done unless done, or failed to be done, by
the Executive in bad faith and without belief that the Executive’s action or
omission was in the best interest of the Company.

 

9.2.3       Notwithstanding
the foregoing, however, any conviction of the Executive for any crime involving
violence, dishonesty, fraud or breach of trust or other felonious behavior,
shall result in the automatic termination of the Executive’s employment,
without notice, and without any of the procedures specified in subparagraph
9.2.2 above.

 

9.2.4       In
the event the Executive is terminated for cause, he shall be entitled to
receive any accrued compensation that may be due and owing to him under Section 4
above, and any accrued vacation due him under Section 5 above, but no
other benefits or compensation whatsoever. 
In the event the Executive is terminated without cause, he shall be
eligible to receive severance benefits in accordance with Section 8 above.

 

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9.3          Termination by the
Executive with or without Good Reason.

 

9.3.1       The
Executive may terminate employment by resignation at any time with or without
good reason. For purposes of this Agreement, “good reason” shall arise in the
event that the Company materially breaches its obligations to Executive under
this Agreement.

 

9.3.2       In
order for the Executive to resign for good reason, Executive shall provide the Chairman
of the Board and Chairman of the Compensation Committee of the Board with
written notice of his intent to resign for good reason, which notice
specifically sets forth in reasonable detail the facts and circumstances upon
which the Executive believes that the Company has materially breached its
obligations under this Agreement, and affords the Company the opportunity to
cure such breach within 30 days after receipt of such written notice. In the
event the Company fails to cure such breach, Executive’s resignation for good
reason shall be effective at the end of such 30 day period.

 

9.3.3       In
the event the Executive resigns without good reason, he shall be entitled to
receive any accrued compensation that may be due and owing to him under Section 4
above, and any accrued vacation due him under Section 5 above, but no
other benefits or compensation whatsoever. 
In the event the Executive resigns for good reason, he shall be eligible
to receive severance benefits in accordance with Section 8 above.

 

9.4          Date of Termination. For
purposes of this Agreement, the date of the termination of Executive’s
employment (“Date of Termination”) will be:

 

(a)           if
Executive’s employment is terminated by his death, the end of the month in
which his death occurs;

 

(b)           if
Executive’s employment is terminated for incapacity, thirty (30) days after a
notice of termination is given; or

 

(c)           if
Executive’s employment is terminated by Executive or the Company for any other
reason, the date specified in the notice of termination, which will not be
later than thirty (30) days after the date on which the notice of termination
is given.

 

10.          Employment by a Subsidiary.  Either the Company or a subsidiary may be
Executive’s legal employer. For purposes of this Agreement, any reference to
Executive’s termination of employment with the Company means termination of
employment with the Company and all its subsidiaries, and does not include a
transfer of employment between any of them. 
The obligations created under this Agreement are obligations of the
Company. For purposes of this Section, a “subsidiary” means an entity more than
50% of whose equity interests are owned directly or indirectly by the Company.

 

11.          Restrictive Covenants.

 

11.1        Need for Protection.  Executive acknowledges that, because of his
senior executive position with the Company, he has or will develop knowledge of
the affairs of 

 

6

 

the
Company and relationships with dealers, distributors and customers such that he
could do serious damage to the financial welfare of the Company should he
compete or assist others in competing with the business of the Company.  Consequently, and in consideration of his
employment with the Company, and for the benefits he is to receive under this
Agreement, and for other good and valuable consideration, the receipt of which
he hereby acknowledges, the Executive agrees as follows:

 

11.2        Confidential
Information.

 

11.2.1     Non-disclosure.  Except as the Company may permit or direct in
writing, during the term of this Agreement and thereafter, Executive agrees
that he will never disclose to any person or entity any confidential or
proprietary information, knowledge or data of the Company which he may have
obtained while in the employ of the Company, relating to any customers,
customer lists, methods, distribution, sales, prices, profits, costs,
contracts, inventories, suppliers, dealers, distributors, business prospects,
business methods, manufacturing ideas, formulas, plans or techniques, research,
trade secrets, or know-how of the Company.

 

11.2.2     Return
of Records.  All records, documents,
software, computer disks and any other form of information relating to the
business of the Company, which are or were prepared or created by Executive, or
which may or did come into his possession during the term of his employment
with the Company, including any and all copies thereof, shall be returned to
or, as the case may be, shall remain in the possession of the Company.

 

11.2.3     Future
Employment.  Nothing in this section
shall limit Executive’s right to carry the Executive’s accumulated career
knowledge and professional skills to any future employment, subject to the
specific limitations of the foregoing provisions of this Section and the
respective covenants set forth below.

 

11.3        Covenant Not to
Solicit.

 

The
Executive agrees that he will not, during the period of his employment with the
Company and for a period of two (2) years after he ceases to be employed
by the Company for any reason:

 

(a)           directly
or indirectly, on behalf of himself or any other person or entity, engage in,
or assist any other person or entity to engage in, the manufacture, assembly,
distribution, or sale to any customer, supplier, distributor or dealer of the
Company wherever located, of motion picture equipment, lighting equipment, or
any other type of product manufactured, assembled, distributed or sold by the
Company, if said customer, distributor or dealer is one with whom Executive had
contact or on whose account Executive has worked during the twelve (12) months
prior to the termination of his employment; or

 

7

 

(b)           directly
or indirectly, request or advise any of the aforesaid customers, distributors
or dealers referred to in paragraph 11.3(a) above to curtail their
business with the Company, or to patronize another business which is in
competition with the Company; or

 

(c)           directly
or indirectly, on behalf of himself or any other person or entity, request,
advise or solicit any employee of the Company to leave that employment in order
to engage in, or to assist any other person or entity to engage in competition
with the Company.

 

11.4        Judicial Modification.  In the event that any court of law or equity
shall consider or hold any aspect of this Section 11 to be unreasonable or
otherwise unenforceable, the parties hereto agree that the aspect of this Section so
found may be reduced or modified by appropriate order of the court and shall
thereafter continue, as so modified, in full force and effect.

 

11.5        Injunctive Relief.  The parties hereto acknowledge that the
remedies at law for breach of this Section will be inadequate, and that
Company shall be entitled to injunctive relief for violation thereof; provided,
however, that nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available for such breach or
threatened breach, including the recovery of damages from Executive.

 

12.          Inventions and Discoveries.  The Executive hereby sells, transfers and
assigns to the Company or to any person or entity designated by the Company,
all of Executive’s right, title and interest in and to all inventions, ideas,
disclosures and improvements, whether patented or unpatented, and copyrightable
material made or conceived by the Executive, solely or jointly, during the term
hereof which relate to the products and services provided by the Company or
which otherwise relate or pertain to the business, functions or operations of
the Company.  The Executive agrees to
communicate promptly and to disclose to the Company in such form as the
Executive may be required to do so, all information, details and data
pertaining to such inventions, ideas, disclosures and improvements and to
execute and deliver to the Company such formal transfers and assignments and
such other papers and documents as may be required of the Executive to permit
the Company or any person or entity designated by the Company to file and
prosecute the patent applications, and, as to copyrightable material, to obtain
copyrights thereof.

 

13.          Miscellaneous.  The following miscellaneous sections apply to
this Agreement:

 

13.1        Modifications and Waivers.  No provision of this Agreement may be
modified, waived or discharged unless that modification, waiver or discharge is
agreed to in writing by Executive and the Chairman of the Board. No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by that
other party, shall be deemed a waiver of similar or dissimilar provisions or
conditions at the time, or at any prior or subsequent time.

 

8

 

13.2        Construction of Agreement.  This Agreement supercedes any oral or written
agreements between Executive and the Company and any oral representations by
the Company to Executive with respect to the subject matter of this Agreement.

 

13
..3       Governing Law.  The validity, interpretation, construction
and performance of this Agreement will be governed by the laws of the State of
Nebraska.

 

13.4        Severability.  If any one or more of the provisions of this
Agreement, including but not limited to Section 11 hereof, or any word,
phrase, clause, sentence or other portion of a provision is deemed illegal or
unenforceable for any reason, that provision or portion will be modified or
deleted in such a manner as to make this Agreement as modified legal and
enforceable to the fullest extent permitted under applicable laws. The validity
and enforceability of the remaining provisions or portions will remain in full
force and effect.

 

13.5        Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will take effect as an original and all of which
will evidence one and the same agreement.

 

13.6        Successors and Assigns.  This Agreement shall be binding upon, and
shall inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal representatives, successors and assigns.

 

13.7        Notices.  Any notice, request or other communication
required to be given pursuant to the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered in person, on the
next business day after being delivered to a nationally-recognized overnight
courier service (for such next-day delivery) or five (5) days after being
deposited in the United States mail, certified or registered, postage prepaid,
return receipt requested and addressed to the other party at the respective
addressees set forth below or to the other addresses of either party may have
furnished to the other in writing in accordance with this Section 13.7,
provided that all notices to the Company will be directed to the attention of
the Secretary of the Company and to the Chairman of the Board, and except that
notice of change of address will be effective only upon receipt.

 

	
  If to Company:

  	
  Ballantyne Strong, Inc.

  
	
   

  	
  4350 McKinley Street

  
	
   

  	
  Omaha, NE 68142

  
	
   

  	
   

  
	
  If to Executive:

  	
  At the address for the Executive
  most recently on file with the Company

  

 

13.8        Entire Agreement.  This Agreement contains the entire agreement
of the parties. All prior arrangements or understandings, whether written or
oral, are 

 

9

 

merged
herein.  This Agreement may not be
changed orally, but only by an agreement in writing, signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.

 

13.9        Section 409A Compliance.  The intent of the Company is that payments
and benefits under this Agreement which are considered “deferred compensation”
subject to Code Section 409A and the regulations and the guidance
promulgated thereunder (collectively “Code Section 409A”) comply with Code
Section 409A and be made and provided in compliance therewith.
Accordingly:

 

(a)           For
purposes of the Agreement, the terms “terminate,” “termination,” “termination
of employment,” and variations thereof, are intended to mean a termination of
employment that constitutes a “separation from service” under Code Section 409A.

 

(b)           If
on the date of “separation from service” Executive is deemed to be a “specified
employee” within the meaning of that term under Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit payable or
provided because of such separation from service that constitutes “deferred
compensation” subject to Code Section 409A, such payment or benefit shall
be made or provided at the date which is the earlier of (A) the expiration
of the six (6)-month period measured from the date of such “separation from
service,” and (B) the date of such individual’s death (the “Delay Period”).
Upon the expiration of the Delay Period, all payments and benefits delayed
pursuant to this paragraph (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due shall be paid or provided in accordance with the normal payment
dates specified for them herein.

 

(c)           Except
as specifically permitted by Section 409A, the benefits and reimbursements
provided to Executive under Section 6.2 and 6.3 and otherwise under this
Agreement during any calendar year shall not affect the benefits and
reimbursements to be provided to Executive in any other calendar year, any such
reimbursements shall be made on or before the last day of the calendar year following
the calendar year in which the applicable expense was incurred and the right to
such benefits and reimbursements shall not be liquidated or exchanged for any
other benefit.

 

(d)           The
Agreement may be amended in any respect deemed by the Board or the Compensation
Committee to be necessary in order to preserve compliance with Code Section 409A.

 

14.          Directors and Officers Liability
Coverage; Indemnification.  Executive
shall be entitled to coverage under such directors and officers liability
insurance policies maintained from time to time by the Company for the benefit
of its directors and officers. The Company shall indemnify and hold Executive
harmless, to the fullest extent 

 

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permitted
by the laws of the State of Delaware or the Company’s articles of incorporation
or bylaws, from and against all costs, charges and expenses (including
reasonable attorneys’ fees) incurred or sustained in connection with any
action, suit or proceeding to which the Executive or his legal representatives
may be made a party by reason of the Executive’s being or having been a
director, officer or employee of the Company.

 

15.          Board/Committee and Other
Resignation.  Upon termination of his
employment with the Company for any reason, Executive shall resign, as of the
date of such termination and to the extent applicable, from the Board and any
committees thereof, and from each position held with the Company or any of its
subsidiaries.

 

16.          Clawback.  In addition to any compensation recovery
(clawback) which may be required by law and regulation, Executive acknowledges
and agrees that any compensation paid or awarded to Executive in connection
with his employment with the Company shall be subject to the Company’s “clawback”
requirements as set forth in the Company’s Corporate Governance Principles and
to any similar or successor provisions as may be in effect from time to time.

 

17.          Tax Withholding.  All payments made and benefits provided by
the Company under this Agreement shall be reduced by any tax or other amounts
required to be withheld by the Company under applicable law.

 

18.          Survival of Obligations.  All obligations of the Company and Executive
that by their nature involve performance, in any particular, after the termination
of Executive’s employment or the term of this Agreement, or that cannot be
ascertained to have been fully performed until after the termination of
Executive’s employment or the term of this Agreement, will survive the
expiration or termination of the term of this Agreement.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first above written.

 

	
   

  	
  BALLANTYNE
  STRONG, INC.

  
	
   

  	
  “Company”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  WILLIAM F. WELSH, II

  
	
   

  	
   

  	
  Chairman
  of the Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  GARY L. CAVEY

  
	
   

  	
   

  	
  GARY
  L. CAVEY, “Executive”

  

 

11

 

EXHIBIT A

 

STOCK OPTION AGREEMENT

 

 

BALLANTYNE STRONG, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”), dated as of November 1,
2010 (“Effective Date”), is entered into between Ballantyne Strong, Inc.,
a Delaware corporation (the “Company”), and Gary Cavey (“Executive”).

 

WHEREAS,
in an Action By Unanimous Consent in Writing In Lieu of a Special Meeting of
the Compensation Committee dated October 31, 2010, the Compensation
Committee of the Company’s Board of Directors (the “Committee”) approved the
grant to Executive of nonqualified stock options to purchase shares of the
Company’s common stock, par value $.01 per share (the “Common Stock”), upon the
terms and conditions set forth herein; and

 

WHEREAS,
in an Action By Unanimous Consent In Writing In Lieu of a Special Meeting of
the Board of Directors dated October 31, 2010, the Board of Directors of
the Company (“Board”) approved the material terms and conditions of Executive’s
employment as President and Chief Executive Officer of the Company, including
the grant of the non-qualified stock options; and

 

WHEREAS,
the Committee and the Board each has also approved the terms and conditions of
an employment agreement with Executive effective as of November 1, 2010
(such agreement, as it may be amended from time to time, is referred to herein
as the “Employment Agreement”); and

 

WHEREAS,
both the Committee and the Board authorized the Chairman of the Committee to
execute this Agreement on behalf of the Company, in accordance with the
resolutions adopted by each of the Committee and the Board at their respective
meetings as referenced above.

 

NOW,
THEREFORE, in consideration of the services rendered and to be rendered by
Executive and the mutual promises made herein and the mutual benefits to be
derived there from, the Company and Executive agree as follows:

 

1.             Grant of Options.  The Company hereby grants to Executive the
right and option to purchase, on the terms and conditions set forth herein, to
the extent exercisable, all or any part of an aggregate of 50,000 shares of
Common Stock at a price (“Grant Price”) of $8.32 per share of Common Stock
(which is the closing market price on the American Stock Exchange of a share of
Common Stock on the date hereof), subject to the provisions of this Agreement
(the “Option”).

 

2.             Exercisability of Option.  Subject to Sections 5 and 6 below, the Option
shall vest and become exercisable as to one-third (rounded to the nearest whole
share) of the aggregate number of shares of Common Stock subject to the Option
(subject to adjustment as provided in Section 7), on each of the first,
second and third anniversaries of the Effective Date.  The Option may be exercised only to the
extent it shall have vested and is exercisable, and, during Executive’s
lifetime, only by Executive.  In no event
may the Executive exercise the Option, in whole or in part, after November 1,
2020 (the “Expiration Date”).

 

(a)           Cumulative
Exercisability.  To the extent
Executive does not, at the time of a particular exercise, purchase all the
shares of Common Stock that Executive may then purchase, Executive has the
right cumulatively thereafter to purchase any of such shares of 

 

 

Common
Stock not so purchased until the Expiration Date or, if applicable, the earlier
termination of the Option.

 

(b)           No Fractional Shares; Minimum Exercise.  Fractional share interests
shall be disregarded, but may be cumulated. No fewer than 100 shares of Common
Stock may be purchased at any one time, unless the number purchased is the
total number at the time exercisable under the Option.

 

3.             Exercise of Option.  To the extent vested and exercisable, the
Option may be exercised by the delivery to the Company of a written exercise
notice stating the number of shares of Common Stock to be purchased pursuant to
the Option accompanied by payment of the Grant Price multiplied by the
aggregate number of shares of Common Stock to be purchased (such payment to be
made in accordance with Section 4) and the payment or provision for any
applicable employment or other taxes or withholding for taxes thereon.  Subject to Section 5 below, such Option
shall be deemed to be exercised upon receipt and approval by the Company of
such written exercise notice accompanied by the aggregate Grant Price and any
other payments so required, as permitted pursuant to Section 4.

 

4.             Method of Payment of Option.  Payment of the aggregate Grant Price shall be
payable to the Company in full in cash or its equivalent or in the sole
discretion of the Committee, either:

 

(a)           by tendering (either
by actual delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of the exercise equal to the Exercise
Price prior to their tender to satisfy the Exercise Price if acquired under
this Plan or any other compensation plan maintained by the Company or have been
purchased on the open market;

 

(b)           by a cashless
exercise (broker-assisted exercise) through a “same-day sale” commitment;

 

(c)           by a combination of (a) and
(b); or

 

(d)           by any other method
approved or accepted by the Committee.

 

5.             Effect of Termination of
Employment on Exercise Period.  If
Executive’s employment by the Company terminates, the following provisions
shall apply with respect to vesting and exercise of the Option after the date
of such termination (the “Termination Date”), except that in no event may any
portion of the Option be exercised after the Expiration Date:

 

(a)           If Executive’s
employment terminates as a result of Executive’s death or incapacity (as
defined in Section 9.1 of the Employment Agreement), all unvested Options
shall cease to vest as of the Termination Date and Executive (or Executive’s
Personal Representative or Beneficiary, as the case may be) may exercise the
Option within six (6) months of the Termination Date.

 

(b)           If the Company
terminates Executive’s employment without cause (under the terms of the
Employment Agreement) or Executive’s employment terminates due to Executive’s
resignation for good reason (under the terms of the Employment Agreement) all
unvested Options shall vest as of the Termination Date and Executive may
exercise the 

 

 

unexercised
Options, in whole or in part, at any time within six (6) months of the
Termination Date.

 

(c)           If the Company
terminates Executive’s employment for cause (as defined in the Employment
Agreement) or Executive resigns other than for good reason under his Employment
Agreement, any unvested portion of the Option shall cease to vest and be
forfeited and Executive may exercise any vested, unexercised portion of the
Option at any time within thirty (30) days of the Termination Date.

 

(d)           If, at any time
after the Termination Date and during the applicable period specified in Section 11
(Restrictive Covenants) of the Employment Agreement, Executive shall have
breached any of the covenants set forth in such Section 11, any
unexercised portion of the Option shall terminate as of the date of any such
breach.

 

6.             Effect
of Change in Control on Vesting.

 

(a)           In the event of a Change in Control (as defined below),
all unvested Options shall vest and become exercisable as of the date of the
Change in Control, and remain exercisable subject to the provisions of Section 5
above.

 

(b)           For purposes of this Agreement, Change in Control means:

 

(i)            the
acquisition, whether directly or indirectly, of at least fifty percent (50%) of
the voting power of the Company, by any individual, entity or group (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended from time to time) other than employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its affiliates;

 

(ii)           individuals
who as of the Effective Date constitute the Board and subsequently elected
members of the Board whose election is approved or recommended by at least a
majority of such current members or their successors whose election was so
approved or recommended, cease for any reason to constitute at least a majority
of such Board.

 

(iii)          Consummation
of (A) a merger, reorganization or consolidation with respect to which the
individuals and entities who were the respective beneficial owners of the
Common Stock and voting securities of the Company immediately before such
merger, reorganization or consolidation do not, after such merger,
reorganization or consolidation, beneficially own, directly or indirectly, more
than fifty percent (50%) of, respectively, the then outstanding common shares
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the corporation
resulting from such merger, reorganization or consolidation, or (B) the
sale or other disposition of all or substantially all of the assets of the
Company; or

 

(iv)          The
Company’ s shareholders approve a plan of liquidation or

dissolution of the Company.

 

 

7.             Adjustments Upon Specified
Events.  In the event that the
Committee, in its sole discretion, determines that any dividend or other
distribution (whether in the form of cash, stock, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Common Stock such that an
adjustment is appropriate in order to preserve (but not increase) the rights of
Executive, the Committee shall, in such manner, to such extent (if any) and at
such times as it deems appropriate and equitable in the circumstances, make
adjustments in the number, amount and type of shares of Common Stock (or other
securities or property) subject to the Option and the Grant Price.

 

8.             Leaves of Absence.  Absence from work caused by authorized sick
leave or other leave approved in writing by the Company or the Committee shall
not be considered a termination of employment by the Company for purposes of Section 5,
unless otherwise determined by the Committee.

 

9.             Section 409A of the Code.  Notwithstanding anything herein to the
contrary, (i) if, at the time of Executive’s termination of employment
with the Company, Executive is a “specified employee” as defined in Section 409A
of the Code, and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of employment is
necessary in order to prevent the imposition of any accelerated or additional
tax under Section 409A of the Code, then the Company will defer the
commencement of the payment of any such payments or other consideration
hereunder (without any reduction in such payments or other consideration
ultimately paid or provided to Executive) until the date that is six months
following Executive’s termination of employment with the Company (or the
earliest date as is permitted under Section 409A of the Code) and (ii) if
any other payments of money or other consideration due to Executive hereunder
would cause the application of an accelerated or additional tax under Section 409A
of the Code, such payments or other consideration shall be deferred if deferral
will make such payment or other consideration compliant under Section 409A
of the Code, or otherwise such payment or other consideration shall be
restructured, to the extent possible, in a manner, determined by the Committee
or the Board, that does not cause such an accelerated or additional tax or
result in additional cost to the Company. 
The Company shall consult with its legal counsel and tax accountants in
good faith regarding the implementation of the provisions of this Section 9,
which shall be done only in a manner that is reasonably acceptable to
Executive; provided, however, that
neither the Company, any subsidiary or other affiliate of the Company, nor any
of their employees or representatives shall have any liability to the Executive
with respect thereto.

 

10.          Associated Stock Rights.  Neither Executive nor any other person
entitled to exercise the Option shall have any of the rights or privileges of a
stockholder of the Company as to any shares of Common Stock subject to the
Option until the issuance and delivery to him or such other person of a
certificate (or book entry in lieu thereof) evidencing the shares of Common
Stock registered in his or such other person’s name. No adjustment will be made
for dividends or other rights as a stockholder as to which the record date is
prior to such date of delivery, except as otherwise provided in Section 7.

 

11.          No Guarantee of Continued Service.  Nothing contained in this Agreement constitutes
an employment or service commitment by the Company, confers upon Executive any
right to remain employed by the Company, interferes in any way with the right
of the Company at any time to terminate such employment or affects the right of
the Company to increase or decrease 

 

 

Executive’s
other compensation or benefits. Nothing in this Section 11, however, is
intended to adversely affect any independent contractual right of Executive
under the Employment Agreement (or any other agreement between the Company and
Executive) without his consent thereto.

 

12.          Non-Transferability of Option.  The Option and any other rights of Executive
under this Agreement are nontransferable by the Executive other than by will or
under the laws of descent and distribution. Any attempted assignment of the
Option in violation of this Section shall be null and void. In the
discretion of the Committee, any attempt to transfer the Option other than
under the terms of this Agreement, may terminate the Option.

 

13.          Clawback Policy.  Executive acknowledges receipt of a copy of
the Ballantyne of Omaha, Inc. Corporate Governance Principles adopted by
the Board which include a “clawback policy” (“Clawback Policy”).  Executive agrees that the Option shall be
subject to all of the terms and conditions set forth in the Clawback Policy,
including future amendments thereto, if any, which Clawback Policy is hereby
incorporated by reference as part of this Agreement.

 

14.          Notices.  Any notice to be given under the terms of
this Agreement shall be in writing and addressed: to the Company at 4350
McKinley Street, Omaha, NE 68142, to the attention of the Secretary; and to
Executive at the most recent address on file with the Company, or at such other
address as either party may hereafter designate in writing to the other.

 

15.          Effect of Agreement.  This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company, except to
the extent the Committee determines otherwise.

 

16.          Entire Agreement; Governing Law.  This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes in their entirety all prior undertakings and agreements of the
Company and Executive with respect to the subject matter hereof.  The construction, interpretation, performance
and enforcement of this Agreement and the Option shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
Nebraska.

 

17.          Amendment.  The Committee may, at any time, and from time
to time, alter, amend, modify, suspend or terminate this Agreement, in whole or
in part, with Executive’s agreement.

 

18.          Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute on and the same instrument.

 

19.          Section Headings.  The Section headings of this Agreement
are for convenience of reference only and shall not be deemed to alter or
affect any provision hereof.

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by the Chairman of its Compensation Committee and Executive has hereunto
set his hand as of the date and year first written above.

 

 

	
   

  	
  BALLANTYNE
  STRONG, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CHRISTOPHER E. BEACH

  
	
   

  	
   

  	
  Chairman
  of the Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  GARY L. CAVEY

  
	
   

  	
   

  	
  Gary
  L. CaveyExhibit 10.2

 

 

InfoLogix, Inc.

101 East County Line Road

Hatboro, PA  19040

 

Re:  Waiver of 2010 Annual Minimum Purchase

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Master Services Agreement, by and between InfoLogix, Inc.
and Futura Services, Inc. (“Futura”), dated as of March 2,
2009, as amended by that certain Amendment to Master Services Agreement, dated
effective as of July 22, 2010 (the “MSA”).

 

Futura
hereby waives the Annual Minimum Purchase requirement under Section 1.3 of
the MSA for the calendar year 2010.  For
the avoidance of doubt, the foregoing shall not constitute a waiver of any
other provision of the MSA or the Annual Minimum Purchase requirement for any
year other than the calendar year 2010 and Futura hereby reserves and preserves
all of its other rights and remedies under the MSA, other than the rights
expressly waived above.

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FUTURA
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  /s/ Janet E. DeNicola

  
	
   

  	
   

  	
  Name:
  Janet E. DeNicola

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INFOLOGIX, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  /s/ Eric N. Rubino

  	
   

  	
   

  
	
  Name:
  Eric N. Rubino

  	
   

  	
   

  
	
  Title:
  Chief Operating Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: November 4,
  2010

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