2000 Employee Stock Purchase Plan

BALLANTYNE OF OMAHA, INC.
2000 EMPLOYEE
STOCK PURCHASE PLAN


1. DEFINITIONS


The following terms shall have the meanings set forth below:


(a) "Base Pay" shall mean an Eligible Employee's basic or regular compensation from the Corporation, and its Subsidiaries, excluding overtime, shift premiums, incentive payments, commissions, bonuses and other non-basic compensation items.


(b) "Board" shall mean the board of directors of the corporation.


(c) "Business Day" shall mean any day of the week other than Saturday or Sunday.


(d) "Code" shall mean the United States Internal Revenue Code of 1986, as amended.


(e) "Committee" shall have the meaning ascribed to that term in Section 9.1 hereof.


(f) "Common Stock" shall mean the common stock, $.01 par value per share, of the Corporation.


(g) "Corporate Secretary" shall mean the Corporate Secretary of the Corporation.


(h) "Corporation" shall mean Ballantyne of Omaha, Inc., a Delaware corporation.


(i) "Dispositive Act" shall have the meaning ascribed to that term in Section 10.4 hereof.


(j) "Eligible Employee" shall mean, as of any applicable Offering Date, each Employee who has been in the continuous employ of the Corporation or any of its Subsidiaries for at least ninety (90) days.


(k) "Employee" shall mean each employee of the Corporation or any of its Subsidiaries including, but not limited to, executive officers and directors who are also


employees of the Corporation and/or its Subsidiaries, provided that such employee's customary work week is more than twenty (20) hours per week.


(l) "1933 Act" shall mean the Securities Act of 1933, as amended.


(m) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.


(n) "Offering Date" shall mean the first Business Day in November in each of the years 2000 through 2004.


(o) "Offering Period" shall mean each of the periods commencing on an Offering Date and ending on the Purchase Date in the year immediately following such Offering Date.


(p) "Option" shall mean a right granted pursuant to the Plan to purchase Common Stock in an amount determined in accordance with the terms of the Plan.


(q) "Participant", as it relates to an Offering Period, shall mean each Eligible Employee who has executed a subscription and payroll deduction agreement in accordance with Section 3.1 of the Plan.


(r) "Plan" shall mean the Ballantyne of Omaha, Inc. 2000 Employee Stock Purchase Plan.


(s) "Purchase Date" shall mean the last Business Day in October in each of the years 2001 through 2005.


(t) "Stock Price", as of a specified date, shall mean the average of the highest and lowest market prices of a share of Common Stock on the New York Stock Exchange on such date as reported in the Eastern Edition of THE WALL STREET JOURNAL, or if no trading of Common Stock is reported for that day, the next preceding day on which trading was so reported. In the event that the Common Stock is not then traded on the New York Stock Exchange, the Stock Price shall be determined by reference to the principal market or exchange on which the Common Stock is then traded.


(u) "Subsidiary" shall mean any corporation of which the Corporation, directly or indirectly, is the beneficial owner of fifty percent (50%) or more of the total voting power of


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all classes of its stock having voting power and which qualifies as a subsidiary corporation pursuant to Section 424 of the Code.


2. PURPOSE


The purpose of the Plan is to provide a method by which Eligible Employees may purchase Common Stock on a discounted basis through payroll deductions. The Corporation believes that participation in the 2000 Plan provides Eligible Employees at all levels with a greater incentive to contribute to the success of the Corporation. It is the intention of the Corporation to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Code. The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of Section 423 of the Code.


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3. PARTICIPATION


3.1 COMMENCEMENT OF PARTICIPATION. Prior to each Offering Date, the Corporation shall make subscription and payroll deduction agreements available to all Eligible Employees. To subscribe for Common Stock in connection with an Offering Period, an Eligible Employee must complete, execute and deliver a subscription and payroll deduction agreement to the Corporate Secretary prior to such Offering Date. Eligible Employees who desire to participate in a subsequent Offering Period under the Plan must execute and deliver a separate subscription and payroll deduction agreement to the Corporate Secretary. Payroll deductions for a Participant shall commence on the applicable Offering Date when his or her subscription and payroll deduction agreement becomes effective and shall end on the Purchase Date to which such agreement is applicable unless sooner terminated as provided in Section 8.


3.2 RESTRICTIONS ON PARTICIPATION. Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee shall be granted an Option:


(a) if, immediately after such grant, such Eligible Employee would for purposes of Section 423(b)(3) of the Code own stock, and/or hold outstanding options to purchase stock, possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Corporation or of any Subsidiary (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any Eligible Employee); or


(b) which permits his or her rights to purchase stock under all employee stock purchase plans of the Corporation or any Subsidiary to accrue at a rate which pursuant to Section 423(b)(8) of the Code exceeds $25,000 of the fair market value of such stock (determined at the time such Option is granted) for each calendar year in which such Option is outstanding at any time.


4. COMMON STOCK SUBJECT TO THE PLAN


4.1 OFFERING PERIOD AMOUNTS. The maximum number of shares of Common Stock which may be sold pursuant to Options exercised under the Plan is 500,000, subject to adjustment upon changes in capitalization of the Corporation as provided in Section 4.3. The maximum number of shares of Common Stock purchasable by all Eligible Employees during an


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Offering Period, subject to adjustment upon changes in capitalization of the Corporation as provided in Section 4.3, shall be as follows: (a) during the Offering Period ending in October 2001, 100,000 shares of Common Stock; (b) during the Offering Period ending in October 2002, one-fourth of the shares of Common Stock remaining available for purchase under the Plan; (c) during the Offering Period ending in October 2003, one-third of the shares of Common Stock remaining available for purchase under the Plan; (d) during the Offering Period ending in October 2004, one-half of the shares of Common Stock remaining available for purchase under the Plan; and (e) during the Offering Period ending in October 2005, all of the shares of Common Stock remaining available for purchase under the Plan. In the event of an oversubscription for shares of Common Stock during any Offering Period, the Committee shall make a PRO RATA allocation of the shares of Common Stock available for delivery and distribution in as nearly a uniform manner as shall be practicable and as it shall determine to be equitable. In such event, the Corporation shall give written notice of such allocation to each Eligible Employee affected thereby and the surplus of the payroll deductions credited to the account of each such Eligible Employee shall be returned to him or her as promptly as possible.


4.2 SOURCE OF COMMON STOCK. The Common Stock to be issued upon the exercise of Options shall be authorized and unissued shares of Common Stock. If for any reason shares of Common Stock as to which an Option has been granted cease to be subject to purchase thereunder, then such shares of Common Stock again shall be available for issuance pursuant to Options.


4.3 ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to any required action by the stockholders of the Corporation, if, while any Options are outstanding, the outstanding shares of Common Stock have increased, decreased, changed into or been exchanged for a different number of shares or securities of the Corporation through reorganization, merger, subdivision, consolidation, recapitalization, reclassification, stock split, reverse stock split, stock dividend or similar transaction, the Committee may make appropriate and proportionate adjustments: (a) in the number and/or kind of shares which are subject to purchase under outstanding Options; (b) to the Stock Price applicable to such outstanding Options; and (c) the number and/or kind of shares which may be offered in each subsequent Offering Period. In no event, however, shall


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adjustments be made for the conversion of any convertible securities of the Corporation or the exercise of any option or warrant to purchase securities of the Corporation.


5. PAYROLL DEDUCTIONS


5.1 AMOUNT OF DEDUCTION. At the t ...