SECOND AMENDMENT
TO
RIGHTS AGREEMENT
JULY 25, 2001
Second Amendment to the Rights Agreement (the "Agreement"), dated as of May
25, 2000, between Ballantyne of Omaha, Inc. (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a New Jersey Limited Liability Company, (now known
as Mellon Investor Services LLC) (the "Rights Agent"), as amended by the First
Amendment dated April 30, 2001.
Capitalized terms used in this Second Amendment and not authorized defined
herein are as defined in the Agreement.
WHEREAS, pursuant to Section 27 of the Agreement, for so long as the Rights
are redeemable, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of the Agreement in any respect
without the approval of any holders of Rights;
WHEREAS, as of the date hereof the Rights are redeemable;
WHEREAS, on July 25, 2001, the Board of Directors of the Company duly
approved amendment of the Agreement with respect to matters contemplated in this
Second Amendment;
NOW, THEREFORE, pursuant to the provisions of Section 27 of the Agreement,
the Company and the Rights Agent hereby agree as follows:
1. The Company and the Rights Agent hereby amend the second paragraph
of Section 1(k) of the Agreement so that effective July 25, 2001, such
paragraph, as amended, shall read in its entirety as follows:
A Grandfathered Person shall be BalCo Holdings, L.L.C. ("BalCo"), and
solely with respect to the Common Stock beneficially owned by BalCo, any
creditor of BalCo who is a bona fide pledgee of such Common Stock as of the date
of acquisition thereof by BalCo, and any Permitted Transferee (as defined
below), provided, however, that a Grandfathered Person shall cease to be a
Grandfathered Person at the time that (i) all or any part of its interest in the
Common Stock becomes reportable on a Schedule 13D under the Securities Exchange
Act of 1934, as amended (or any comparable or successor report) as part of a
"group" (as such term is defined or used under Rule 13d-5(b) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended)
which beneficially owns, directly or indirectly, 15% or more of the then
outstanding Common Stock and includes one or more persons (including any
Affiliate or Associate thereof) who (A) are not Grandfathered Persons and (B)
individually or in the aggregate beneficially own, directly or indirectly, in
excess of 1% of the then outstanding Common Stock; (ii) the Grandfathered
Persons in the aggregate beneficially own more than 25.89% of the then
outstanding Common Stock unless such ownership threshold is exceeded as a
result of the acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares of Common Stock beneficially owned by such Grandfathered Persons in the
aggregate to more than 25.89% of the shares of Common Stock then outstanding,
provided, however, that if the Grandfathered Persons in the aggregate shall
become the Beneficial Owners of more than 25.89% of the shares of Common Stock
then outstanding by reason of such share acquisitions by the Company and shall
thereafter in the aggregate become the Beneficial Owners of any additional
shares of Common Stock, then each such Grandfathered Person shall cease to be a
Grandfathered Person, unless upon becoming in the aggregate the Beneficial
Owners of such additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common
Stock in shares of Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), the Grandfathered Persons in the aggregate do not
beneficially own more than 25.89% of the shares of Common Stock then outstanding
or (iii) a Grandfathered Person becomes the beneficial owner of less than 15% of
the Common Stock then outstanding. A Permitted Transferee shall mean any Person
who acquires Common Stock directly from BalCo if such Common Stock was
beneficially owned by BalCo as of April 30, 2001, and after giving effect to
such acquisition such Person is the Beneficial Owner of 15% or more but not more
than 29% of the shares of Common Stock outstanding at the time of transfer,
provided, that prior to such transfer, BalCo has provided the Board of Directors
with written notification of the name(s) and address(es) of the proposed
transferee(s) and within 14 days from the date of such written notification, the
Company has not provided BalCo with written notification that the Board of
Directors of the Company has determined, in good faith, that (i) such transferee
is objectionable, together with the reasons therefor, or (ii) such Person is
engaged in a business that competes with the business of the Company or any of
its subsidiaries.
2. Except as otherwise expressly provided herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
BALLANTYNE OF OMAHA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
MELLON INVESTOR SERVICES LLC
(formerly CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.), a New Jersey Limited Liability
Company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
