Adrian J Cotterill, Editor-in-Chief
Ballantyne Strong, Inc. (NYSE MKT:BTN) acquired Convergent Corporation and its wholly owned subsidiary, Convergent Media Systems back in October 2013 and whilst heads (allegedly) rolled in February 2014 that seems to have been far from the end of their troubles.
With many shareholders displeased with the company’s financial results, we’ve seen a battle for the board of directors and Ballantyne CEO Gary Cavey‘s job in the balance..
In March Fundamental Global Investors, LLC, the beneficial holder of approximately 14.7% of the shares of Ballantyne Strong, Inc. initiated a proxy contest to elect a new Board of Directors at Ballantyne’s 2015 Annual Meeting of Stockholders (typically held in May of each year).
Last week, they withdrew the proxy contest after coming to some form of settlement, D. Kyle Cerminara, Chief Executive Officer of Fundamental Global Investors. said “We look forward to working with Ballantyne Strong’s management team, Sam Freitag and the newly formed Board to improve returns for shareholders. We believe there is a significant opportunity to improve Ballantyne Strong’s financial performance while strengthening capital allocation decisions, corporate governance and shareholder relations. There is tremendous value to be unlocked at Ballantyne Strong, in our opinion, and we will look to instill a sense of urgency to create value for shareholders.”
Samuel C. Freitag, Chairman of the Board of Directors of Ballantyne Strong offered up “The Board is pleased to announce this settlement with Fundamental Global Investors and is confident that the changes we are making will serve the best interests of our shareholders. We believe the new composition of the Board of Directors is a strong collection of highly experienced and accomplished executives with diverse skill sets that will provide energetic and active leadership as we work to enhance long-term shareholder value.”
Key terms of the settlement are: –
The Board of Directors will be expanded from seven members to nine members.
Five of the members of the Board of Directors will come from FGI’s slate of proposed directors: D. Kyle Cerminara, William J. Gerber, Charles T. Lanktree, Robert J. Marino, and Robert J. Roschman.
Four of the members of the Board of Directors will come from incumbent directors of Ballantyne Strong: Samuel C. Freitag, James C. Shay, Marc E. LeBaron, and Gary L. Cavey.
At least two of the incumbent directors will serve on all committees of the Board of Directors for two years.
FGI and certain of its affiliates and associates agree not to acquire, in the aggregate, beneficial ownership of more than 20% of the outstanding shares of common stock of Ballantyne Strong for two years.
The Company will amend its Shareholder Rights Plan to expire within five business days after the date hereof without any consideration being paid to the holders of the rights thereunder.
The combined slate of nine directors will stand for election at the Company’s 2015 Annual Meeting of Stockholders to be held on May 13, 2015.
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