Daktronics, Inc.
 
2001 INCENTIVE STOCK OPTION PLAN
 
         1. Purpose. The purpose of the 2001 Incentive Stock Option Plan is to
induce certain designated persons to continue to provide valuable services to
Daktronics, Inc. (the "Company") and to encourage such persons to secure or
increase on reasonable terms their stock ownership in the Company. The Board of
Directors of the Company believes the Plan is in the best interest of the
Company and will promote the success of the Company. This success will be
achieved by encouraging continuity of management and increased incentive and
personal interest in the welfare of the Company by those who are primarily
responsible for shaping and implementing the long-range plans of the Company.
 
         Certain Options granted under this Plan are intended to be Incentive
Stock Options qualified under Section 422 of the Code.
 
         2. Definitions. For purposes of this Plan, the following terms shall
have the meanings indicated below:
                  (a) "Capital Stock" or "Common Stock": any of the Company's
         authorized but unissued shares of common stock, each without par value.
                  (b) "Code": the Internal Revenue Code of 1986, as amended from
         time to time.
                  (c) "Fair Market Value": (i) the average between the high and
         low reported sale prices for the Common Stock on the Option Date (or,
         if there were no such sales on that date, on the next most recent date
         on which there were such sales) as reported on the Composite Tape if
         the Common Stock is listed on the New York Stock Exchange ("NYSE") or
         on the National Association of Securities Dealers National Market
         System ("NMS"), (ii) if the Common Stock is not then listed on the NYSE
         or the NMS, the average between the closing bid and asked price
         quotations for the Common Stock on that date (or if none on that date,
         on the next most recent date on which there were such quotations) as
         reported by the National Association of Securities Dealers Automatic
         Quotation System or any successor thereto or (iii) if the Common Stock
         is not then listed as described above, such value as is reasonably
         determined by the Committee (see Section 4) based on the then current
         fair market value of the Common Stock at the time any Option is
         granted. Fair Market Value of Incentive Stock Options shall be
         determined consistent with the Code and regulations.
                  (d) "Incentive Stock Option": an option defined in Section 422
         of the Code to purchase shares of the common stock of the Company.
                  (e) "Non-Qualified Stock Option": an option, not intended to
         qualify as an Incentive Stock Option as defined in Section 422 of the
         Code, to purchase Common Stock of the Company.
                  (f) "Option": the term shall refer to a Stock Option granted
         under this Plan.
                  (g) "Option Agreement": a written agreement pursuant to which
         the Company grants an Option to an Optionee and sets the terms and
         conditions of the Option.
                  (h) "Option Date": the date upon which an Option Agreement for
         an option granted pursuant to this Plan is duly executed by or on
         behalf of the Company.
                  (i) "Option Stock": the Common Stock of the Company (subject
         to adjustment as described in Section 7) reserved for options pursuant
         to this Plan, or any other class of stock of the Company which may be
         substituted therefore by exchange, stock split or otherwise.
                  (j) "Optionee": a person who is eligible to receive an Option
         under Section 5 of the Plan and to whom an Option has been granted
         under the Plan.
 
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                  (k) "Plan": this 2001 Stock Option Plan effective August 15,
         2001, and as amended hereafter from time to time.
                  (l) A "Subsidiary": any corporation in an unbroken chain of
         corporations beginning with the Company, if, at the time of granting
         the option, each of the corporations other than the last corporation in
         the chain owns stock possessing fifty percent (50%) or more of the
         total combined voting power of all classes of stock in one of the other
         corporations in such chain. The term shall include any subsidiaries
         which become such after adoption of this Plan.
 
         3. Options Available Under Plan. An aggregate of 1,200,000 shares of
the Company's authorized but unissued shares of Common Stock are hereby made
available for grant, and shall be reserved for issuance, under this Plan. The
aggregate number of shares available under this Plan shall be subject to
adjustment on the occurrence of any of the events and in the manner set forth in
Section 7. If an Option shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares, shall (unless the Plan shall
have been terminated) become available for other Options under the Plan.
 
         4. Administration. The Plan shall be administered by the Board of
Directors of the Company. At all times subject to the authority of the Board of
Directors, the Board of Directors may from time to time delegate some or all of
its authority under the Plan to a committee consisting of three (3) or more
Directors (the "Committee"), and/or obtain assistance or recommendations from
such Committee. If no separate committee is appointed, the Board shall
constitute the Committee, and references to the Committee shall include the
entire Board of Directors.
 
         The Company shall grant Options pursuant to the Plan upon
determinations of the Committee as to which of the eligible persons shall be
granted Options, the number of shares to be Optioned and the term during which
any such Options may be exercised. At all times, a majority of the members of
the Committee making determinations about the grant of Options to
employee-directors or employee-officers must be disinterested in the grant being
made. The Committee may from time to time adopt rules and procedures for
carrying out the Plan and interpretations and constructions of any provision of
the Plan, which shall be final and conclusive.
 
         5. Eligibility for Stock Options. Incentive Stock Options under the
Plan may only be granted to such employees of the Company or any Subsidiary
thereof, as selected by the Committee.
 
         In selecting the employees or other persons to whom Stock Options shall
be granted, as well as determining the number of shares subject to each Option,
the Committee shall take into consideration such factors as it deems relevant in
connection with accomplishing the purpose of the Plan. For any calendar year,
the aggregate Fair Market Value (determined at the Option Date) of the stock
with respect to which any Incentive Stock Options are exercisable for the first
time by any individual employee (under all Incentive Stock Option plans of the
Company and all subsidiary corporations) shall not exceed $100,000. Subject to
the provisions of Section 3, an optionee who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options if
the Committee shall so determine. Any Incentive Stock Option that becomes
exercisable and exceeds the above limitation shall be treated as a Non-Qualified
Option.
 
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         No Stock Option may be granted under this Plan later than the
expiration at the end of the fiscal year 2011.
 
         6. Terms and Conditions of Options. Whenever the Committee shall
designate an Optionee, it shall communicate to the Secretary of the Company the
name of the Optionee, the number of shares to be Optioned and such other terms
and conditions as it shall determine, not inconsistent with the provisions of
this Plan. The President or other officer of the Company shall then enter into
an Option Agreement with the Optionee, complying with and subject to the
following terms and conditions and setting forth such other terms and conditions
of the Option as determined by the Committee:
 
                  (a) Number of shares and option price. The Option Agreement
         shall state the total number of shares to which it pertains. The price
         of Incentive Stock Option Stock shall be not less than one hundred
         percent (100%) of the Fair Market Value of the Option Stock at the
         Option Date. In the event an Incentive Stock Option is granted to an
         employee, who, at the Option Date, owns more than ten percent (10%) of
         the voting power of all classes of the Company's stock then
         outstanding, the price of the shares of Option Stock which will be
         covered by such Option shall be not less than one hundred ten percent
         (110%) of the Fair Market Value of the Option Stock at the Option Date.
         Non-Qualified Options may be granted at a price equal to, greater than
         or less than Fair Market Value at the date of grant. The Option price
         shall be subject to adjustment as provided in Section 7 hereof.
 
                  (b) Period of options and right to exercise. Options granted
         under this Plan shall be subject to such terms and conditions, shall be
         exercisable at such times and shall be evidenced by such form of
         written Option Agreement as the Committee shall determine, provided
         that such determinations are not inconsistent with Code Section 422 and
         the regulations thereunder. The Option Agreement may, at the discretion
         of the Committee, provide for the acceleration of vesting of Options
         upon a "Change in Control" of the Company, as defined in Section 6(h)
         below.
 
         In addition, no Option granted, shall by its terms, be exercisable
         after the expiration of ten (10) years from the date such Option is
         granted. Except, however, Incentive Stock Options granted to any
         employee who at the Option Date owns more than ten percent (10%) of the
         voting power of all shares of the classes of Company's stock then
         outstanding, may not be exercisable after expiration of five (5) years
         from the Option Date. The period during which the Option may be
         exercised, once it is granted, shall not be reduced, except as provided
         in paragraphs (c), (d) and (e) below. The exercise of any Option will
         be contingent upon receipt by the Company of payment as provided in
         paragraph (f) below for the full purchase price of such shares. No
         Optionee or his or her legal representatives, legatees or distributees,
         as the case may be, will be, or will be deemed to be, a holder of any
         shares subject to an Option unless and until certificates for such
         shares are issued under the terms of the Plan.
 
                  (c) Termination of Employment or Service. In the event that an
         Optionee shall cease to be employed by or performing services for the
         Company for any reason other than death, subject to the condition that
         no Incentive Stock Option shall be exercisable after the expiration of
         ten (10) years from the date it is granted, and unless the Option
         Agreement provides otherwise, such Optionee shall have the right to
         exercise any outstanding Options at any time within three (3) months
         after the termination of employment or service.
 
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                  (d) Death of Optionee. If the Optionee shall die (i) while in
         the employ of or while providing services to the Company or any
         Subsidiary, or (ii) within a period of three (3) months after the
         termination of his or her employment or as a corporate director with
         the Company or any subsidiary as provided in paragraph (c) of this
         section, and in either case shall not have fully exercised his or her
         Options, any Options granted pursuant to the Plan shall be exercisable
         until the earlier of the originally stated date of termination or one
         year from the date of death. Such Option shall be exercised pursuant to
         subparagraph (f) of this Section by the person or persons to whom the
         Optionee's rights under the Option shall pass by the Optionee's will or
         by the laws of descent and distribution, and only to the extent that
         such Options were exercisable at the time of his or her death.
 
                  (e) Transfer of Option. Each Option granted hereunder shall,
         by its terms, not be transferable by the Optionee other than by will or
         by the laws of descent and distribution, and shall be, during the
         Optionee's lifetime, exercisable only by the Optionee. Except as
         permitted by the preceding sentence, each Option granted under the Plan
         and the rights and privileges thereby conferred shall not be
         transferred, assigned or pledged in any way (whether by operation of
         law or otherwise), and shall not be subject to execution, attachment or
         similar process. Upon any attempt to so transfer, assign, pledge, or
         otherwise dispose of the Option, or of any right or privilege conferred
         thereby, contrary to the provisions of the Option or the Plan, or upon
         levy of any attachment or similar process upon such rights and
         privileges, the Option, and such rights and privileges, shall
         immediately become null and void.
 
                  (f) Manner of Exercise of Options. An Option may be exercised,
         in whole or in part, at such time or times and with respect to such
         number of shares, as the Board of Directors, in its sole discretion,
         shall determine at the time that the Option is granted. The Option
         terms shall be set forth in the Option Agreement granting the Option.
         Such Option shall be exercisable only within the Option period and only
         by (i) written notice to the Company of intent to exercise the Option
         with respect to a specified number of shares of stock; (ii) tendering
         the original Option Agreement to the Company; and (iii) payment to the
         Company of the amount of the Option purchase price for the number of
         shares of stock with respect to which the Option is then exercised.
         Payment of the Option purchase price may be made in cash, by cashier's
         check (by personal check at the discretion of the Company) or by a
         "cashless exercise" procedure established between the Company and a
         stock brokerage firm, subject to compliance with applicable securities
         laws. When shares of stock are issued to the Optionee pursuant to the
         exercise of an Option, the fact of such issuance shall be noted on the
         Option Agreement by the Company before the Agreement is returned to the
         Optionee. When all shares of Optioned stock covered by the Option
         Agreement have been issued to the Optionee, or the Option shall expire,
         the Option Agreement shall be canceled and retained by the Company.
 
                  (g) Delivery of Certificate. As promptly as practicable after
         receipt of the written notice and payment specified above, the Company
         shall deliver to the Optionee certificates for the number of shares
         with respect to which the Option has been exercised, issued in the
         Optionee's name; provided, however, that such delivery shall be deemed
         effected for all purposes when the Company, or the stock transfer agent
         for the Company, shall have deposited such certificates in the United
         States mail, postage prepaid, addressed to the Optionee at the address
         specified in the written notice of exercise.
 
 
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                  (h) Change in Control. A "Change in Control" shall, unless the
         Board otherwise directs by resolution adopted prior thereto, be deemed
         to occur if (i) any "person" (as that term is used in Sections 13 and
         14(d)(2) of the Securities Exchange Act of 1934 as amended ("Exchange
         Act")) is or becomes the beneficial owner (as that term is used in
         Section 13(d) of the Exchange Act), directly or indirectly, of 50% or
         more of the voting Capital Stock of the Company ("Voting Stock") or
         (ii) during any period of two consecutive years, individuals who at the
         beginning of such period constitute the Board cease for any reason to
         constitute at least a majority thereof, unless the election or the
         nomination for election by the Company's shareholders of each new
         director was approved by a vote of at least three-quarters of the
         directors then still in office who were directors at the beginning of
         the period. Any merger, consolidation or corporate reorganization in
         which the owners of the Company's capital stock entitled to vote in the
         election of directors prior to said combination, own 50% or more of the
         resulting entity's Voting Stock shall not, by itself, be considered a
         change in control for the purposes of this Plan.
 
                  (i) Other Provisions. The Option Agreements authorized under
         this Section may contain such other provisions as the Committee shall
         deem advisable.
 
         7. Adjustment of Number of Shares. If, and to the extent that, the
number of issued shares of the Capital Stock of the Company shall be increased
or reduced by change in par value, recapitalization, reorganization, merger,
consolidation, split up, distribution of a dividend payable in stock or the
like, the number of shares subject to the Option and the Option price therefor
shall be equitably adjusted by the Committee consistent with such change to
prevent substantial dilution or enlargement of the rights granted to or
available to Optionees.
 
         Subject to the foregoing, the grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
 
         8. No Rights as Stockholder. An Optionee shall not, by reason of any
Option granted hereunder, have any right of a stockholder of the Company with
respect to the shares covered by his or her Option until such shares shall have
been issued to the Optionee.
 
         9. No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon the Optionee to exercise such Option. Neither shall
the Plan confer upon the Optionee any rights respecting continued employment nor
limit the Optionee's rights or the employer Company's rights to terminate such
employment.
 
         10. Withholding Taxes. If required by law, upon a disqualified
disposition of an Incentive Stock Option, the Company shall have the right to
require any Optionee that is or was an employee as of the Option Date, to remit
to the Company an amount sufficient to satisfy any federal and state withholding
or other employment taxes, if any, resulting from such option exercise or early
disposition of Option Stock. Payment of such amount may be made in the same
manner as payment of the exercise price or by tendering previously owned shares
of the Company's Common Stock with a Fair Market Value on the date of exercise
equal to such amount, subject to compliance with applicable securities laws.
 
 
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         11. Common Stock Acquired for Investment. Common Stock acquired by an
Optionee under this Plan by exercise of any Option shall be acquired by the
Optionee for investment and without intention of resale, unless, in the opinion
of counsel of the Company, such common stock may be purchased without any
investment representation. Where an investment representation is deemed
necessary, the Committee may require a written representation to that effect by
the Optionee as a condition of the Optionee exercising an Option under this
Plan, and the Committee may place an appropriate legend on the common stock
issued to the Optionee indicating that such common stock has not been registered
under federal or state securities laws. Each Option shall be subject to the
requirement that if, at any time, the Committee shall determine in its
discretion that the listing, registration or qualification of the shares subject
to such Option upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Option
or the issuance or purchase of shares thereunder, then such Option shall not be
granted or exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. Nothing contained herein shall
require the Company to register the Options or the shares of voting common stock
purchased upon the exercise of said Options.
 
         12. Effective Date. This Plan shall be effective August 15, 2001 (the
"Effective Date") as approved by the Board of Directors, subject to approval by
the shareholders of the Company. However, unless within 12 months after the Plan
is adopted by the Board of Directors, the Plan is approved by the vote of the
holders of a majority of the outstanding Capital Stock of the Company, the Plan
and options granted hereunder shall not qualify under Section 422 of the Code.
 
         13. Liquidation. Upon the complete liquidation of the Company, any
unexercised Options theretofore granted under this Plan shall be deemed
canceled, except as otherwise provided in Section 7 in connection with a merger,
consolidation or reorganization of the Company.
 
         14. Termination and Amendment of the Plan. This Plan shall terminate at
the end of the fiscal year 2011or at such earlier time as the Board of Directors
shall determine. Any termination shall not affect any Options then outstanding
under the Plan.
 
         The Board may make such modifications of the Plan as it shall deem
advisable, but may not, without further approval of the stockholders of the
Company, except as provided in Section 7 hereof, (a) increase the number of
shares reserved for Options under this Plan, (b) change the manner of
determining the Option price for Incentive Stock Options, (c) increase the
maximum term of the Options provided for herein or (d) change the class of
persons eligible to receive Options under the Plan.
 
         15. Governing law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of South Dakota without reference
to the principles of conflicts of law thereof.
 
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