CORPORATE GOVERNANCEBallantyne Strong, Inc. (NYSE American: BTN)
Audit Committee Charter
The Audit Committee of the Board of Directors assists the Board of Directors in fulfilling its responsibilities for oversight of the quality and integrity of the accounting, auditing internal controls, and reporting practices of the Company, and performs such other duties as are directed by the Board. The Committee’s role includes a particular focus on the qualitative aspects of financial reporting to shareholders, and on the Company’s processes to manage business and financial risk, and for compliance with significant applicable legal, ethical, and regulatory requirements. The Committee is directly responsible for the appointment of the public accounting firm engaged to prepare or issue an audit report on the financial statements of the Company.
The membership of the Committee shall consist of at least three independent directors as defined by Section 803 of the NYSE American Company Guide and Rule 10A-3 of the Securities Exchange Act of 1934, as amended, each of whom is able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, and cash flow statement. At least one member of the Audit Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities, and shall qualify as an “audit committee financial expert” under the rules of the Securities and Exchange Commission (the ‘SEC”) and the NYSE American’s listing standards. Each member shall be free of any relationship that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgment. Applicable laws and regulations shall be followed in evaluating a member’s independence. The members of the Committee and the Chairperson of the Committee shall be appointed by the Board. The Board may remove any member from the Committee at any time, with or without cause.
The public accounting firm shall report directly to the Committee. The Committee is expected to maintain free and open communication with the public accounting firm, the internal accounting staff, and the Company’s management. This communication shall include private executive sessions, at least annually, with these parties. The Committee Chairperson shall report on the Audit Committee activities to the full Board.
The Committee shall meet four times a year or more frequently as circumstances require. The Committee may ask members of management or others to attend the meetings.
The agenda for the Committee meetings will be prepared in consultation between the Committee chair and members of the Committee, and when appropriate, with Company’s finance management and the public accounting firm.
The Committee relies on the expertise and knowledge of management, the internal accounting staff, and the public accounting firm in carrying out its oversight responsibilities. Management of the Company is responsible for determining the Company’s financial statements are complete, accurate and in accordance with generally accepted accounting principles. The public accounting firm is accountable to the full Board of Directors and the Audit Committee. The public accounting firm is responsible for auditing the Company’s financial statements. It is not the duty of the Committee to plan or conduct audits, to determine that the financial statements are complete and accurate and are in accordance with generally accepted accounting principles, to conduct investigations, or to assure compliance with laws and regulations or the Company’s internal policies, procedures, and controls.
1. Perform such functions as assigned by law, the Company’s charter, bylaws, or the Board of Directors.
2. Receive periodic reports from the Company’s public accounting firm regarding the firm’s independence (including disclosures required by the Public Company Accounting Oversight Board (the “PCAOB”)), discuss such reports with public accounting firm, and take appropriate action to oversee the independence of the public accounting firm.
3. Provide a report in the annual proxy that includes the Committee’s review and discussion of matters with management and the independent public accounting firm. In addition, a copy of the committee charter shall be made available on the Company website.
4. Appoint, approve the compensation of, determine whether to retain or terminate, and provide oversight of the public accounting firm. The Committee may delegate the responsibility of approving proposed non-audit services that arise between Committee meetings to the Chairman, provided that the decision to approve the service is presented at the next scheduled Committee meeting.
5. Confirm annually the independence of the public accounting firm, quarterly review of the firm’s non-audit services and related fees.
6. Verify the Committee consists of a minimum of three members who are financially literate, including at least one member who has financial management expertise.
7. Review with the public accounting firm and the Company’s financial management the adequacy of the Company’s internal controls, including computerized information system controls and security.
8. Review policies and procedures regarding transactions, and review and oversee the transactions, between the Company and officers, directors and other related parties that are not a normal part of the Company’s business (it being understood that if the Board of Directors creates a special committee in connection with such a transaction or holds a meeting of the non-interested directors of the Board to approve such transaction, the Committee shall not be required to consider such transaction or assess conflicts of interest in connection with such transaction).
9. Meet with management and the public accounting firm to review earnings press releases, as well as Company’s policies with respect to release of financial information and earnings guidance.
10. Review with management and the independent public auditor the annual and quarterly financial statements of the Company, including: (a) the Company’s disclosures under “Management’s Discussion and Analysis Condition and Results of Operations”; (b) any material changes in accounting principles or practices used in preparing the financial statements prior to the filing of a report on Form 10-K or 10-Q with the SEC; and (c) the items required by the PCAOB’s standards, including the matters required by Statement on Auditing Standard No. 1301, Communications with Audit Committees, and other matters, if any, brought to the attention of the Committee by employees or officers of the Company.
112. In connection with each periodic report of the Company, review management’s disclosure to the Committee under Section 302 of the Sarbanes-Oxley Act, and the contents of the Chief Executive Officer’s and the Chief Financial Officer’s certifications to be filed under Section 302 and 906 of the Act.
12. Meet with the public accounting firm in executive session to discuss any matters that the Committee or the public accounting firm believe should be discussed privately with the Audit Committee.
13. Meet with the Chief Financial Officer in executive session to discuss any matters that the Committee believe should be discussed with the Audit Committee.
14. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
15. Oversees compliance with the Company’s Code of Ethics and considers conflicts of interest (it being understood that if the Board of Directors creates a special committee in connection with a transaction or holds a meeting of the non-interested directors of the Board to approve a transaction, the Committee shall not be required to consider such transaction or assess conflicts of interest in connection with such transaction).
16. In the Committee’s sole discretion, appoint and set the compensation of such special or independent counsel, accountants or other experts as the Committee deems necessary or appropriate to discharge its duties and responsibilities. The Committee shall have appropriate resources and authority to discharge its responsibilities, including appropriate funding for payment of reasonable compensation to its advisors in such amounts as the Committee deems necessary to carry out its duties.
17. Conduct periodic oversight of the Company’s risk management.
18. Conduct periodic review of the Company Investment Policy, and approve all changes to the Investment Policy.
19. Review and reassess the adequacy of this charter on an annual basis and recommend any proposed changes to the Board for approval.
20. Conduct an annual performance review of the Audit Committee.
Last revised as of September 14, 2016
Compensation Committee CHARTER
Compensation Committee Charter
The Compensation Committee is appointed by the Board of Directors to establish policies with respect to the compensation of the Company’s officers. The Committee has overall responsibilities for approving and evaluating officer compensation plans, policies and programs of the Company.
The Compensation Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement.
The membership of the Committee shall consist of at least three (3) members, comprised solely of members who are: (i) “independent directors” for the purpose of serving on the Compensation Committee, as defined under NYSE American’s listing standards; (ii) “non-employee directors” as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended; and (iii) “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as amended. The Board shall appoint the members of the Committee and the Chairperson. The Board may remove any member from the Committee at any time, with or without cause.
Committee Authority and Responsibilities
The Compensation Committee shall have the sole authority to retain and to terminate any compensation consultant, legal counsel or financial or other advisor (each, a “Compensation 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 shall have the sole authority to approve the Compensation Advisor’s fees and other retention terms.
The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any Compensation Advisor.
The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a Compensation Advisor retained by the Committee.
Prior to hiring or obtaining advice from a Compensation Advisor whether retained by the Committee or management (other than internal legal counsel), the Committee will consider all factors relevant to the Compensation Advisor’s independence from management, including the following:
• the provision of other services to the Company by the Compensation Advisor (including subsidiaries or affiliates of the Compensation Advisor);
• the amount of fees received from the Company by the Compensation Advisor, as a percentage of the total revenue of the Compensation Advisor;
• the policies and procedures of the Compensation Advisor that are designed to prevent conflicts of interest;
• any business or personal relationships of the Compensation Advisor employees rendering services to the Committee, or of the Compensation Advisor, with a member of the Committee;
• any stock of the Company owned by the Compensation Advisor employees rendering services to the Committee, or by the Compensation Advisor;
• any business or personal relationship of the Compensation Advisor employees rendering services to the Committee, or the Compensation Advisor, with an executive officer of the Company; and
• any other factor(s) prescribed by the NYSE American that the Committee needs to consider in reviewing the independence of prospective Compensation Advisors.
The Committee will annually review an assessment of any potential conflict of interest raised by the work of a Compensation Advisor that is involved in determining or recommending executive compensation.
Any conflicts of interest raised by the work of compensation consultants shall be disclosed in accordance with applicable legal authority or regulatory guidance.
The Compensation Committee shall on an annual basis conduct an evaluation of the Chief Executive Officer’s performance and report to the Board on the results of such evaluation. In addition, the Committee shall, with the input of the Chief Executive Officer, conduct an annual assessment of the Company’s other Senior Management. With respect to the Chief Executive Officer and all other executive officers, the Compensation Committee shall annually review and approve corporate goals and objectives relevant to compensation, evaluate performance in light of those goals and objectives, and determine and approve compensation levels and any bonuses based on this evaluation.
The Compensation Committee shall make recommendations to the Board with respect to incentive compensation and equity-based plans. To the extent directed or authorized by the Board, the Compensation Committee shall adopt or administer such plans on behalf of the Board and the Company. The Compensation Committee shall approve grants of equity and equity-based awards.
The Compensation Committee shall periodically review the compensation of non-employee directors as established by the Board, and if deemed advisable by the Committee, make recommendations to the Board for changes thereto.
The Compensation Committee shall conduct 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 shall further oversee risks relating to any and all of the Company’s compensation policies, practices and procedures.
The Compensation Committee shall annually review each director’s stock ownership to determine satisfaction of the Company’s director stock ownership expectation, if any, or reasonable progress towards its satisfaction.
The Compensation Committee shall annually review each officer’s stock ownership to determine whether the Company’s officer stock ownership expectation, if any, is being met, or reasonable progress is being made toward its satisfaction.
The Compensation Committee shall review and approve the Compensation Discussion and Analysis for inclusion in the Company’s annual meeting proxy statement and shall produce the compensation committee report on executive compensation required to be included in the Company’s proxy statement for its annual meeting of stockholders.
In connection with any stockholder advisory vote on the frequency with which the Company shall hold a stockholder advisory vote on the compensation of the Company’s named executive officers identified in the Company’s proxy statement (also known as “say-on-pay”), the Compensation Committee shall review and recommend for approval by the Board (a) the frequency that should be recommended to the Company’s stockholders and (b) the frequency with which the Company should submit to the stockholders advisory “say-on-pay” votes, taking into account any prior stockholder advisory votes on such frequency. Further, the Committee shall review the results of any “say-on-pay” votes and consider whether to make or recommend adjustments to the Company’s executive compensation policies and practices as a result of such votes.
The Compensation Committee may form and delegate authority to subcommittees when appropriate.
The Compensation Committee shall make regular reports to the Board.
The Compensation Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this Charter, but not less than two (2) times a year.
The Compensation Committee shall annually review and reassess the adequacy of its Charter and recommend any proposed changes to the Board for approval.
The Compensation Committee shall annually review and evaluate its own performance.
Last revised on May 23, 2016
Nominating & Corporate Governance Committee CHARTER
Purpose of the Committee
The Nominating and Corporate Governance Committee (the “Committee”) shall report to and assist the Board of Directors (the “Board”) of Ballantyne Strong, Inc. (the “Company”). The purpose of the Committee shall be to (1) identify qualified individuals for membership on the Board and recommend to the Board the director nominees for the next annual meeting of stockholders, (2) develop and recommend to the Board a set of corporate governance principles, if and when deemed appropriate, (3) lead the Board in its annual review of the Board’s performance, and (4) take a leadership role in shaping the corporate governance of the Company.
Membership on the Committee
The Committee shall be comprised of all of the independent directors, as independence is defined in accordance with applicable rules, regulations and standards, and as determined in the business judgment of the Board.
Duties and Responsibilities of the Committee
1. Board Review: On an annual basis the Committee shall oversee the annual review of the effectiveness of the Board of Directors. The evaluation shall assess the Board’s contribution to the Company and identify areas the Board believes should be improved. The Committee shall also administer an annual reevaluation of each director to determine each director’s ongoing ability and suitability to serve on the Board.
2. Criteria for Nomination to the Board: The Board shall set general criteria for nomination to the Board, which shall be described in the Company’s proxy statement prepared in connection with the annual meeting of stockholders. The Committee will consider candidates for nomination submitted by stockholders in accordance with the Company’s Bylaws. Any candidate submitted by stockholders shall be considered on the same basis as any other candidate submitted for consideration as a nominee.
3. Nomination of Directors: The Committee shall annually consider the size, composition and needs of the Board and consider and recommend candidates for membership on the Board. The Committee shall solicit and receive recommendations and review the qualification of potential candidates. The Committee shall recommend to the Board each year the director nominees for election at the next annual meeting of stockholders. In case of a vacancy on the Board, upon the recommendation of the Committee, the Board may elect a new or replacement director to the Board during the course of the year to serve until the next annual meeting of stockholders.
4. Director Orientation: The Committee shall administer an orientation program for all newly-elected or appointed Board Members. Said orientation program shall include a presentation designed to familiarize new directors with the Company and its strategic plans, its significant financial, accounting and risk management issues, its Code of Ethics compliance programs and other controls, its Senior Management and its internal and independent auditors. The presentation shall also address procedures of the Board, director responsibilities, and the Company’s corporate governance policies and practices.
5. Reports to the Board: The Committee shall report regularly to the Board on its meetings and review with the Board significant issues and concerns that arise at meetings of the Committee.
6. Charter Review: On an annual basis, the Committee shall review the adequacy of this Charter, and recommend to the Board any modifications or changes for approval by the Board.
7. Committee Assignments: The Committee shall be responsible for recommending the assignment of Board Members to the Company’s various Committees.
8. Committee Review: The Committee shall perform an annual evaluation of its effectiveness.
9. Corporate Governance Policies and Practices: The Committee shall periodically review the Company’s corporate governance policies and practices and recommend changes to the Board when appropriate in light of the Company’s position, developments in laws and regulations applicable to the Company, and corporate governance trends and practices.
Meetings of the Committee
The Committee will meet at least twice each year. The Committee will keep written minutes on its meetings.
Inside directors are expected to submit a letter of resignation at the time of retirement from active employment with the Company, or when transferring from a top management position in the Company, with exception of the directors who are also ten percent or greater stockholders of the Company.
Outside directors are expected to submit a proposed letter of resignation under the following circumstances:
(a) Whenever a director, after election to the Board of Directors, becomes employed by or a director of a competitor of the Company.
(b) Whenever the health or physical condition of a director would prevent him or her from satisfactorily fulfilling the responsibilities of the position.
In the event that the proposed letter of resignation is not accepted, the director’s tenure will continue.
Code of Ethics
It is the policy of Ballantyne Strong, Inc. (also referred to as the “Company”) that its employees, directors and agents are held to the highest standards of honest and ethical conduct when conducting the affairs of the Company. Because the equity shares of Ballantyne Strong, Inc. are publicly traded, senior financial officers of Ballantyne Strong, Inc. are held to an especially high set of ethical standards and will not commit acts contrary to these standards of ethical conduct nor shall they condone the commission of such acts by others within the Ballantyne Strong, Inc. organization. This Code of Ethics applies to all officers, non-employee directors and employees of the Company.
1.) General Standards of Ethical Behavior
Officers, directors and employees will:
i. conduct their business and professional affairs in a way that avoids both real and apparent conflicts of interest between their interests and the interests of the Company;
ii. refrain from engaging in any activity that would compromise their professional ethics or otherwise prejudice their ability to carry out their duties to the Company;
iii. Senior financial officers of the Company will communicate to executive management of the Company and to the accountants engaged in financial audits of the Company, all relevant unfavorable as well as favorable information and professional judgments or opinions;
iv. encourage open communication and full disclosure of financial information by providing a well understood process under which management is kept informed of financial information of importance, including any departure from sound policy, practice and accounting norms;
v. Senior financial officers of the Company will ensure that all relevant staff members understand the Company’s open communication and full disclosure standards and processes;
vi. refrain from disclosing confidential information acquired in the course of their work except where authorized, unless legally obligated to do so;
vii. inform subordinates, as appropriate, regarding the confidentiality of information acquired in the course of their work and monitor, as needed, to ensure that subordinates maintain that confidentiality;
viii. refrain from using or appearing to use confidential information acquired in the course of their work for unethical or illegal advantage, either personally of indirectly through others;
ix. adhere at all times to this Code of Ethics; and
x. actively promote ethical and honest behavior among peers and other employees in the work environment.
2.) Regarding Financial Records and Reporting
Senior financial officers will:
i. Establish appropriate systems and procedures to ensure that business transactions are recorded on the Company’s books in accordance with Generally Accepted Accounting Principles, established Company policy, and appropriate regulatory pronouncements and guidelines;
ii. Establish appropriate policies and procedures for the protection and retention of accounting records and information as required by applicable law, regulation, or regulatory guidelines;
iii. Establish and administer financial accounting controls, including effective internal control over financial reporting, that are appropriate to ensure the integrity of the financial reporting process and the availability of timely, relevant information for the safe, sound, and profitable operation of the company;
iv. Completely disclose all relevant information reasonably expected to be needed by the Company’s auditors for the full, complete, and successful discharge of their duties and responsibilities; and
v. Officers, directors and employees will provide financial and other information that is full, accurate, objective, relevant, timely and understandable in all communications to colleagues, the public, the NYSE American and the Securities and Exchange Commission (the “SEC”).
3.) Compliance with Applicable Law, Rules and Regulations
i. Senior financial officers will educate members of the finance organization about any federal, state or local statute, regulation or administrative procedure that affects the operation of the finance organization and the enterprise generally;
ii. Senior financial officers will monitor the compliance of the finance organization with any applicable federal, state or local statute, regulation or administrative rule;
iii. All company activities are to be conducted in compliance with the letter and spirit of all laws and regulations. Officers, directors and employees will comply with applicable laws and regulations and will identify, report and correct in a swift and certain manner any detected deviations from applicable federal, state or local statute or regulation; and
iv. promptly report any possible violation of this Code of Ethics to Chief Financial Officer, immediate or senior management, the head of the Human Resources Department and/or the Chairman or another member of the Audit Committee.
4.) Reporting Violations
Officers, directors and employees are expected to adhere to this Code of Ethics. Violations of this Code of Ethics may result in disciplinary action, up to and including termination of service, and may also constitute violations of law that result in civil and criminal penalties. Any decision to waive the application of this Code of Ethics to an executive officer or a director must be made by the Board of Directors, and any such waivers, along with the reasons for such waivers, will be promptly publicly disclosed to stockholders, as required by applicable SEC regulations and requirements of the NYSE American. Retaliation for reporting violations is prohibited. Nothing in this Code of Ethics shall be interpreted to prohibit reporting of violations directly to the SEC. Questions concerning the applicability of any legal or regulatory provision should be directed to Chief Financial Officer of the Company who will consult with legal counsel, as necessary or appropriate.
CONTACT THE BOARD
Interested parties may communicate with Ballantyne Strong’s Board of Directors by writing to:
11422 Miracle Hills Drive, Suite 300
Omaha, NE 68154
All communications will be reviewed by Ballantyne Strong’s Corporate Secretary.