EXHIBIT 10.1
 
INSIGNIA SYSTEMS, INC.
2018 EQUITY INCENTIVE PLAN
 
Non-Qualified Stock Option Agreement
 
Insignia Systems, Inc. (the “Company”), pursuant to its 2018 Equity Incentive
Plan (the “Plan”), hereby grants an Option to purchase shares of the Company’s
common stock to you, the Participant named below. The terms and conditions of
the Option are set forth in this Non-Qualified Stock Option Agreement,
consisting of this cover page and the Terms and Conditions on the following
pages, and in the Plan document, a copy of which has been provided to you. Any
capitalized term that is not defined in this Agreement shall have the meaning
set forth in the Plan as it currently exists or as it is amended in the future.
 
Name of Participant:
 
 
Number of Shares Covered:
 
Grant Date:
 
 
Exercise Price Per
Share:                                                       $
 
Expiration Date:
 
 
Vesting and Exercise Schedule:
 
 
Dates
 
 
 
 
 
Portion of Shares as to Which
Option Becomes Vested and Exercisable
 
 

 
By signing below or otherwise evidencing your acceptance of this Agreement in a
manner approved by the Company, you agree to all of the terms and conditions
contained in this Agreement and in the Plan document. You acknowledge that you
have received and reviewed these documents and that they set forth the entire
agreement between you and the Company regarding your right to purchase shares of
the Company’s common stock pursuant to this Option.
 
 PARTICIPANT:
 
 INSIGNIA SYSTEM, INC.

 
 
 
 
 
 
 By:
 
 
 
     Name:

 
 
 
 Title:
 
 

 
 

 
 

 

 
INSIGNIA SYSTEMS, INC.
2018 EQUITY INCENTIVE PLAN
Non-Qualified Stock Option Agreement
 
Terms and Conditions
 
1.             Non-Qualified Stock Option. This Option is not intended to be an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code and will be interpreted accordingly.
 
2.             Vesting and Exercisability of Option.
 
(a)           Scheduled Vesting. This Option will vest and become exercisable as
to the number of Shares and on the dates specified in the Vesting and Exercise
Schedule on the cover page to this Agreement, so long as your Service to the
Company does not end. The Vesting and Exercise Schedule is cumulative, meaning
that to the extent the Option has not already been exercised and has not expired
or been terminated or cancelled, you or the person otherwise entitled to
exercise the Option as provided in this Agreement may at any time purchase all
or any portion of the Shares subject to the vested portion of the Option.
 
(b)           Accelerated Vesting. Vesting and exercisability of this Option may
be accelerated during the term of the Option under the circumstances described
in Sections 3(b)(2), 12(b) and 12(c) of the Plan.
 
3.             Expiration. This Option will expire and will no longer be
exercisable at 5:00 p.m. Central Time on the earliest of:
 
(a) The expiration date specified on the cover page of this Agreement;
 
(b) Upon your termination of Service for Cause;
 
(c) Upon the expiration of any applicable period specified in Section 6(d) of
the Plan or Section 2 of this Agreement during which this Option may be
exercised after your termination of Service; or
 
(d)           The date (if any) fixed for termination or cancellation of this
Option pursuant to Section 12 of the Plan.
 
4.             Service Requirement. Except as otherwise provided in Section 6(d)
of the Plan or Section 2 of this Agreement, this Option may be exercised only
while you continue to provide Service to the Company or any Affiliate, and only
if you have continuously provided such Service since the Grant Date of this
Option.
 
5.             Exercise of Option. Subject to Section 4, the vested and
exercisable portion of this Option may be exercised in whole or in part at any
time during the Option term by delivering a written or electronic notice of
exercise to the Company’s Chief Financial Officer or to such other party as may
be designated by such officer, and by providing for payment of the exercise
price of the Shares being acquired and any related withholding taxes. The notice
of exercise must be in a form approved by the Company and state the number of
Shares to be purchased, the method of payment of the aggregate exercise price
and the directions for the delivery of the Shares to be acquired, and must be
signed or otherwise authenticated by the person exercising the Option. If you
are not the person exercising the Option, the person submitting the notice also
must submit appropriate proof of his/her right to exercise the Option.
 
6.             Payment of Exercise Price. When you submit your notice of
exercise, you must include payment of the exercise price of the Shares being
purchased through one or a combination of the following methods:
 
                                     
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(a) Cash (including personal check, cashier’s check or money order);
 
(b) By means of a broker-assisted cashless exercise in which you irrevocably
instruct your broker to deliver proceeds of a sale of all or a portion of the
Shares to be issued pursuant to the exercise to the Company in payment of the
exercise price of such Shares; or
 
(c) By delivery to the Company of Shares (by actual delivery or attestation of
ownership in a form approved by the Company) already owned by you that are not
subject to any security interest and that have an aggregate Fair Market Value on
the date of exercise equal to the exercise price of the Shares being purchased;
or
 
(d) By authorizing the Company to retain, from the total number of Shares as to
which the Option is being exercised, that number of Shares having a Fair Market
Value on the date of exercise equal to the exercise price for the total number
of Shares as to which the Option is being exercised.
 
7.             Withholding Taxes. You may not exercise this Option in whole or
in part unless you make arrangements acceptable to the Company for payment of
any federal, state, local or foreign withholding taxes that may be due as a
result of the exercise of this Option. You hereby authorize the Company (or any
Affiliate) to withhold from payroll or other amounts payable to you any sums
required to satisfy such withholding tax obligations, and otherwise agree to
satisfy such obligations in accordance with the provisions of Section 14 of the
Plan. You may satisfy such withholding tax obligations by delivering Shares you
already own or by having the Company retain a portion of the Shares being
acquired upon exercise of the Option, provided you notify the Company in advance
of any exercise of your desire to pay withholding taxes in this manner. Delivery
of Shares upon exercise of this Option is subject to the satisfaction of
applicable withholding tax obligations.
 
8.             Delivery of Shares. As soon as practicable after the Company
receives the notice of exercise and payment of the exercise price as provided
above, and has determined that all other conditions to exercise, including
satisfaction of withholding tax obligations and compliance with applicable laws
as provided in Section 16(c) of the Plan, have been satisfied, it shall deliver
to the person exercising the Option, in the name of such person, the Shares
being purchased, as evidenced by issuance of a stock certificate or
certificates, electronic delivery of such Shares to a brokerage account
designated by such person, or book-entry registration of such Shares with the
Company’s transfer agent. The Company shall pay any original issue or transfer
taxes with respect to the issue or transfer of the Shares and all fees and
expenses incurred by it in connection therewith. All Shares so issued shall be
fully paid and nonassessable.
 
9.             Transfer of Option. During your lifetime, only you (or your
guardian or legal representative in the event of legal incapacity) may exercise
this Option. You may not assign or transfer this Option except for a transfer
upon your death in accordance with your will or by the laws of descent and
distribution. The Option held by any such transferee will continue to be subject
to the same terms and conditions that were applicable to the Option immediately
prior to its transfer and may be exercised by such transferee as and to the
extent that the Option has become exercisable and has not terminated in
accordance with the provisions of the Plan and this Agreement.
 
10.             No Shareholder Rights Before Exercise. Neither you nor any
permitted transferee of this Option will have any of the rights of a shareholder
of the Company with respect to any Shares subject to this Option until a
certificate evidencing such Shares has been issued, electronic delivery of such
Shares has been made to your designated brokerage account, or an appropriate
book entry in the Company’s stock register has been made. No adjustments shall
be made for dividends or other rights if the applicable record date occurs
before your stock certificate has been issued, electronic delivery of your
Shares has been made to your
 
                                         
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designated brokerage account, or an appropriate book entry in the Company’s
stock register has been made, except as otherwise described in the Plan.
 
11.             Notices. Every notice or other communication relating to this
Agreement shall be in writing and shall be mailed to or delivered (including
electronically) to the party for whom it is intended at such address as may from
time to time be designated by it in a notice mailed or delivered to the other
party as herein provided. Unless and until some other address is so designated,
all notices or communications by you to the Company shall be mailed or delivered
to the Company, to the attention of its Chief Financial Officer, at its offices
at 8799 Brooklyn Blvd., Minneapolis, MN 55445, [email address], and all notices
or communications by the Company to you may be given to you personally or may be
mailed or, if you are still a Service Provider, emailed to you at the address
indicated in the Company’s records as your most recent mailing or email address.
 
12.             Additional Provisions.
 
(a)           No Right to Continued Service. This Agreement does not give you a
right to continued Service with the Company or any Affiliate, and the Company or
any such Affiliate may terminate your Service at any time and otherwise deal
with you without regard to the effect it may have upon you under this Agreement.
 
(b)           Governing Plan Document. This Agreement and Option are subject to
all the provisions of the Plan, and to all interpretations, rules and
regulations which may, from time to time, be adopted and promulgated by the
Committee pursuant to the Plan. If there is any conflict between the provisions
of this Agreement and the Plan, the provisions of the Plan will govern.
 
(c)           Governing Law. This Agreement, the parties’ performance hereunder,
and the relationship between them shall be governed by, construed, and enforced
in accordance with the laws of the State of Minnesota, without giving effect to
the choice of law principles thereof.
 
(d)           Severability. The provisions of this Agreement shall be severable
and if any provision of this Agreement is found by any court to be
unenforceable, in whole or in part, the remainder of this Agreement shall
nevertheless be enforceable and binding on the parties. You also agree that any
trier of fact may modify any invalid, overbroad or unenforceable provision of
this Agreement so that such provision, as modified, is valid and enforceable
under applicable law.
 
(e)           Binding Effect. This Agreement will be binding in all respects on
your heirs, representatives, successors and assigns, and on the successors and
assigns of the Company.
 
(f)           Other Agreements. You agree that in connection with the exercise
of this Option, you will execute such documents as may be necessary to become a
party to any shareholder, voting or similar agreements as the Company may
require.
 
(g)           Restrictive Legends. The Company may place a legend or legends on
any certificate representing Shares issued upon the exercise of this Option
summarizing transfer and other restrictions to which the Shares may be subject
under applicable securities laws, other provisions of this Agreement, or other
agreements contemplated by Section 16 of this Agreement. You agree that in order
to ensure compliance with the restrictions referred to in this Agreement, the
Company may issue appropriate “stop transfer” instructions to its transfer
agent.
 
(h)           Compensation Recovery Policy. To the extent that any compensation
paid or payable pursuant to this Agreement is considered “incentive-based
compensation” within the meaning and subject
 
                                              
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to the requirements of Section 10D of the Exchange Act, such compensation shall
be subject to potential forfeiture or recovery by the Company in accordance with
any compensation recovery policy adopted by the Board of Directors of the
Company or any committee thereof in response to the requirements of Section 10D
of the Exchange Act and any implementing rules and regulations thereunder
adopted by the Securities and Exchange Commission or any national securities
exchange on which the Company’s Shares are then listed. This Agreement may be
unilaterally amended by the Company to comply with any such compensation
recovery policy.

 
(i)           Electronic Delivery and Acceptance. The Company may deliver any
documents related to this Option Award by electronic means and request your
acceptance of this Agreement by electronic means. You hereby consent to receive
all applicable documentation by electronic delivery and to participate in the
Plan through an on-line (and/or voice activated) system established and
maintained by the Company or the Company’s third-party stock plan administrator.
 
By signing the cover page of this Agreement or otherwise accepting this
Agreement in a manner approved by the Company, you agree to all the terms and
conditions described above and in the Plan document.
 
 
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