BALLANTYNE
STRONG, INC.


STOCK
OPTION AGREEMENT


 


THIS
AGREEMENT is made and entered into effective as of the 22nd day of November, 2015 (the “Grant Date”), by and between
BALLANTYNE STRONG, INC., a Delaware corporation (the “Company”), and STEPHEN L. SCHILLING (“Grantee”).


 


RECITALS:


 


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


 


A.Grantee
is a key employee of Convergent Media Systems Corporation, a wholly-owned subsidiary of the Company, and as set forth in his employment
agreement, the Company has agreed to grant Grantee an option to purchase 30,000 shares of the Company’s Common Stock (“Shares”)
as a signing bonus.


 


B.This
award and this Agreement have been approved by the Compensation Committee of the Company (the “Committee”).


 


AGREEMENT:


 


NOW,
THEREFORE, in consideration of the mutual promises and representations herein contained, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as follows:


 


1.Inducement
Grant. This Agreement is made to evidence an inducement grant pursuant to Grantee’s employment agreement.


 


2.Award.
The Company hereby grants to Grantee on the Grant Date an Award of Non-Qualified Stock Options (the “Options”) to
purchase, on the terms and conditions set forth herein, to the extent exercisable, all or any part of an aggregate of 30,000 Shares
at a price of Four Dollars and Thirty-Three Cents ($4.33) per Share (the “Exercise Price”), which is the Fair Market
Value of a Share on the Grant Date. THIS AWARD IS CONDITIONED ON GRANTEE SIGNING THIS AGREEMENT AND IS SUBJECT TO ALL TERMS, CONDITIONS
AND PROVISIONS OF THIS AGREEMENT.


 


3.Vesting.


 


(a)Generally.
The Options are immediately vested in full on the Grant Date. The Options may be exercised only to the extent they are exercisable,
and during Grantee’s lifetime, only by Grantee. In no event may the Options be exercised, in whole or in part, after November
22, 2025 (the “Expiration Date”).


 




    	 



    	 



    

 


(b)Terminations.


 


(i)Termination
Other Than For Cause. Upon a termination of Grantee’s employment, Grantee may exercise the vested Options within the
earlier of thirty (30) days after such termination or the Expiration Date.


 


(ii)Termination
For Cause. Upon a termination of Grantee’s employment for Cause, all unexercised Options shall be immediately forfeited.


 


(iii)Any
amount of the Award forfeited under this Section 3 shall be cancelled and shall terminate.


 


(c)Definition
of Cause.For purposes of this Agreement, “Cause” shall mean:


 


(i)Grantee
acted dishonestly or incompetently or engaged in willful misconduct in performance of his duties;


 


(ii)Grantee
breached fiduciary duties owed to the Company;


 


(iii)Grantee
intentionally failed to perform reasonably assigned duties; and/or


 


(iv)Grantee
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.


 


4.Exercise
of Option. To the extent vested and exercisable, the Option may be exercised by delivery to the Company of a written exercise
notice stating the number of Shares to be purchased pursuant to the Option accompanied by payment of the Exercise Price multiplied
by the number of Shares to be purchased and the payment or provision for any applicable employment or other taxes or withholding
for taxes thereon. Fractional share interests shall be disregarded. No fewer than 100 Shares may be purchased at one time, unless
the number purchased is the total number of Options at the time exercisable.


 


5.Method
of Payment of Option. Payment of the Exercise Price shall be payable to the Company in full in cash or 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 any compensation
plan maintained by the Company or having been purchased on the open market.


 




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(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.


 


6.Associated
Stock Rights. Neither Grantee nor any other person entitled to exercise the Options shall have any of the rights or privileges
of a stockholder of the Company as to any Shares subject to the Options until the issuance and delivery to him or such other person
of a certificate (or book entry in lieu thereof) evidencing the Shares registered in his or such other person’s name. No
adjustments will be made for dividends or any other rights to the stockholder as to which the record date is prior to such date
of delivery.


 


7.Non-Transferability
of Options. The Options and any other rights of Grantee under this Agreement are non-transferable by Grantee other than by
will or under the laws descent and distribution. Any attempted assignment of the Options in violation of this Section shall be
null and void. Under the discretion of the Committee, any attempt to transfer the Options other than under the terms of this Agreement,
may result in the termination of the Options.


 


8.Miscellaneous
Provisions.


 


(a)Withholding
Taxes. The Company shall be entitled to (i) withhold and deduct from Grantee’s future wages (or from other amounts that
may be due and owing to Grantee from the Company), or make other arrangement for the collection of, all legally required amounts
necessary to satisfy the minimum statutory Federal, state and local withholding tax obligation (including the FICA and Medicare
tax obligation) attributable to the Option Award; or (ii) require Grantee promptly to remit the amount of such withholding to
the Company. Unless the Committee provides otherwise, the minimum statutory withholding obligations may be satisfied by withholding
Shares to be received or by delivery to the Company of previously-owned Shares. Unless the tax withholding obligations of the
Company are satisfied, the Company shall have no obligation to issue a certificate for such Shares.


 


(b)No
Retention Rights. Nothing in this Agreement shall confer upon Grantee any right to continue in the employment or service of
the Company, or any subsidiary of the Company, for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Company or of Grantee, which rights are hereby expressly reserved by each, to terminate his employment
or service at any time and for any reason, with or without cause.


 


(c)Notices.
Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery,
upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit
with a reputable overnight courier. Notice shall be addressed to the Company at its principal executive office and to Grantee
at the address that he has most recently provided to the Company.


 




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(d)Entire
Agreement; Amendment; Waiver. This Agreement constitutes the entire agreement between the parties hereto with regard to the
subject matter hereof. This Agreement supersedes any other agreements, representations or understandings (whether oral or written
and whether express or implied) which related to the subject matter hereof. No alteration or modification of this Agreement shall
be valid except by a subsequent written instrument executed by the parties hereto. No provision of this Agreement may be waived
except by a writing executed and delivered by the party sought to be charged. Any such written waiver shall be effective only
with respect to the event or circumstance described therein and not with respect to any other event or circumstance, unless such
waiver expressly provides to the contrary.


 


(e)Choice
of Law; Venue; Jury Trial Waiver. This Agreement shall be governed by, and construed in accordance with, the laws of the State
of Delaware, as such laws are applied to contracts entered into and performed in such State, without giving effect to the choice
of law provisions thereof. The Company and Grantee stipulate and consent to personal jurisdiction and proper venue in the state
or federal courts of Douglas County, Nebraska, and waive each such party’s right to object to a Nebraska court’s jurisdiction
and venue. Grantee and the Company hereby waive their right to a jury trial on any legal dispute arising from or relating to this
Agreement, and consent to the submission of all issues of fact and law arising from this Agreement to the judge of a court of
competent jurisdiction as otherwise provided for above.


 


(f)Successors.


 


(i)This
Agreement is personal to Grantee and shall not be assignable by Grantee otherwise than by will or the laws of descent and distribution,
without the written consent of the Company. This Agreement shall inure to the benefit of and be enforceable by Grantee’s
legal representatives.


 


(ii)This
Agreement shall inure to the benefit of and be binding upon the Company and its Affiliates and the successors thereof.


 


(g)Severability.
If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal
or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining
provision or portion thereof, which remaining provision or portion thereof shall remain in full force and effect as if this Agreement
had been adopted with the invalid, illegal or unenforceable provision or portion thereof eliminated.


 


(h)Headings;
Interpretation. The headings, captions and arrangements utilized in this Agreement shall not be construed to limit or modify
the terms or meanings of this Agreement. Wherever from the context it appears appropriate, each term stated in either the singular
and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and
the neuter.


 


(i)Counterparts.
This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.


 


[Signature
Page Follows]


 




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


 


	 	BALLANTYNE
    STRONG, INC.
	 	 
	 	By:	/s/
    Nathan D. Legband
	 	Name:	Nathan
    D. Legband
	 	Title:	SVP
    and CFO


 


	 	/s/
    Stephen L. Schilling
	 	Stephen
    L. Schilling, Grantee


 




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