Exhibit 10.1

 

AGREEMENT

 

This Agreement (“Agreement”) is made by and between Insignia Systems, Inc.
(“Company” or “Insignia”) with headquarters at 8799 Brooklyn Blvd., Minneapolis,
Minnesota 55445 and Tim Halfmann (“Employee”).

 

RECITALS

 

WHEREAS, Employee is the sole member of TLM Holdings LLC (“TLM”).

 

WHEREAS, Employee has been providing certain services to the Company by and
through TLM.

 

WHEREAS, the Company desires to retain Employee as an employee of the Company,
and Employee desires to be so employed.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Employee (the
“Parties”), intending to be legally bound, hereby agree as follows:

 

1.                                      Commencement Date; Nature of Employment
Relationship.

 

1.1                               Commencement Date.  This Agreement shall
become effective on the date it is signed by the last of the Parties (the
“Commencement Date”).

 

1.2                               Nature of Employment Relationship.  The
Parties hereby acknowledge and agree that the nature of Employee’s employment
relationship with the Company is at-will, meaning that either Employee or the
Company may terminate the employment relationship, with or without cause, at any
time for any reason or no reason, except for those reasons prohibited by
applicable federal, state or local law or regulation.  While Employee is
employed by the Company, Employee’s title will be Chief Sales and Marketing
Officer and will report to the Company’s Chief Executive Officer and perform
such duties and responsibilities for the Company as the Company’s Chief
Executive Officer may assign to Employee from time to time consistent with
Employee’s position.

 

1.3                               Performance of Duties and Responsibilities. 
Employee shall serve the Company faithfully and to the best of Employee’s
ability and shall at all times act in accordance with the law.  Employee shall
devote Employee’s full working time, attention and efforts to performing
Employee’s duties and responsibilities under this Agreement and advancing the
Company’s business interests.  Employee shall not, without the Company’s prior
written consent, accept other employment or engage in other business activities
during Employee’s employment with the Company that would prevent Employee from
fulfilling the duties or responsibilities as set forth in or contemplated by
this Agreement; provided, however, that Employee may continue to be involved in
TLM’s business and may participate in civic, religious and charitable activities
and personal investment activities so long as any such involvement with TLM or
the other permitted activities do not interfere with Employee’s performance of
Employee’s duties and responsibilities hereunder, including Employee’s
compliance with Sections 5-8 of this Agreement.  Employee hereby represents and
confirms that Employee is under no contractual or legal commitments that would
prevent Employee from fulfilling Employee’s duties and responsibilities as set
forth in this Agreement.

 

2.                                      Termination of Employment by the
Company.

 

2.1                               Payment upon Termination of Employment for
Reasons Other Than Cause. Subject to

 

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Section 3 of this Agreement, the Parties hereby agree that, in the event of the
Company’s termination of Employee’s employment other than for Cause (as defined
herein), and provided after Employee’s termination date Employee signs and does
not rescind a release of claims agreement in a form approved by the Company,
Employee shall receive a payment equal to Employee’s gross base annual salary in
effect at the time of termination, plus an amount equal to the bonus earned in
the twelve (12) months prior to termination (represented by an amount equal to
the sum of a pro rata portion of the current fiscal year’s bonus earned and, as
necessary, a remaining proportion of the previous year’s earned bonus).  By way
of example, if Employee were terminated at the end of the first quarter of a
given fiscal year, the amount of bonus earned in the first quarter would be
added to three-quarters of the bonus earned the previous year.  The total amount
due pursuant to this Agreement shall not exceed $500,000.

 

Any amount payable hereunder shall be paid in a lump sum, less applicable
withholdings, on the Company’s first regular payroll date that is more than 45
days after Employee’s termination date (but in no event no later than 75 days
after Employee’s termination date), subject to Section 409A of the Internal
Revenue Code as further set forth in Section 4 and all required tax
withholdings.

 

2.2                               Cause.  For purposes of this Agreement,
“Cause” shall mean:

 

2.2.1                Employee’s conviction of a felony;

 

2.2.2                The willful and continued failure of Employee to perform
Employee’s essential duties; or

 

2.2.3                Gross misconduct which is materially injurious to the
Company.

 

For purposes of this Section 2.2, an act or failure to act by Employee shall not
be “willful” unless it is done, or omitted to be done, in bad faith and without
any reasonable belief that Employee’s action or omission was in the best
interests of the Company.

 

2.3                               No Right to Payment upon Termination for Cause
or Employee’s Resignation for Any Reason.  Employee hereby acknowledges and
agrees, and hereby waives and releases the Company from any formal or informal
obligation, whether written or verbal, for payment of any amount if the Company
terminates Employee’s employment for Cause or if Employee resigns from
employment with the Company for any reason.

 

3.                                      Change in Control Obligations.  In the
event of a Change in Control (as defined in the Change in Control Severance
Agreement attached hereto as Exhibit A), the Company’s obligations as they
pertain to payment of any amount to Employee upon termination Employee’s
employment with the Company, including but not limited to those set forth in
Section 2.1 of this Agreement, shall be governed by the Change in Control
Severance Agreement attached hereto as Exhibit A, which shall supersede and
replace the terms of Section 2.1 of this Agreement.

 

4.                                      Delay of Payment.  Notwithstanding
anything to the contrary, to the extent that Employee is a “key employee”
pursuant to the provisions of Section 409A of the Internal Revenue Code as of
the date that any change in control benefits or other deferred compensation
becomes payable to the Employee hereunder, and such payments are required to be
delayed until the date six months following Employee’s termination of employment
in order to avoid additional tax under Section 409A of the Code, payment and
provision of such amounts or other deferred compensation shall be delayed until
the date six months after Employee’s termination of employment.

 

5.                                      Confidentiality.

 

5.1                               Confidential Nature of Relationship.  Employee
acknowledges that his or her

 

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employment by the Company creates a relationship of confidence and trust with
respect to Confidential Information (as hereinafter defined).  During his or her
employment with the Company, the Company agrees to provide Employee with access
to Confidential Information.  Employee expressly undertakes to retain in strict
confidence all Confidential Information transmitted or disclosed to Employee by
the Company or the Company’s clients, and will never make any use of such
information except as (and then, only to the extent) required to perform
Employee’s duties for the Company.  Employee will take such protective measures
as may be reasonably necessary to preserve the secrecy and interest of the
Company in the Confidential Information.  If Employee becomes aware of any
unauthorized use or disclosure of Confidential Information by any person or
entity, Employee will promptly and fully advise the Company of all facts known
to Employee concerning such unauthorized use or disclosure.

 

5.2                               Definition.  “Confidential Information” means
all commercially sensitive information and data of a confidential nature, in
their broadest context, originated by, on behalf of or within the knowledge or
possession of the Company or its clients (including any subsidiary, division or
legal affiliate thereof).  Without in any way limiting the foregoing,
Confidential Information includes, but is not limited to: information that has
been designated as proprietary and/or confidential; information constituting
trade secrets; information of a confidential nature that, by the nature of the
circumstances surrounding the disclosure, should in good faith be treated as
proprietary and/or confidential; and information and data conceived, discovered
or developed in whole or in part by Employee while employed by the Company.
Confidential Information also includes (but is not limited to) identity, contact
and other information relating to the Company’s clients and customers,
prospective clients and customers, strategic business relationships, business
opportunities, products, services, suppliers, personnel, pricing, recruiting
strategies, job candidate information, employee information, sales strategies,
technology, methods, processes, research, development (including new products or
services in concept, planning or development), systems, techniques, finances,
accounting, purchasing and business plans or as further provided in any separate
non-disclosure or confidentiality agreement with the Company.

 

5.3                             Exclusions.  Confidential Information does not
include information which: (a) is generic; (b) is or becomes part of the public
domain through no act or omission of Employee; (c) was in Employee’s lawful
possession prior to the disclosure and was not obtained by Employee in breach,
either directly or indirectly, of any obligation to the Company or any client of
the Company’s; (d) is lawfully disclosed to Employee by a third party without
restriction on disclosure; or (e) is independently developed by Employee using
Employee’s own resources, entirely on Employee’s own time, and without the use
of any Confidential Information.

 

5.4                               Additional Confidentiality Agreements. 
Employee agrees to execute, or as the case may be, comply with previously
executed non-disclosure and confidentiality agreements as the Company or its
clients may request from time to time.

 

6.                                      Use of Confidential or Material
Non-Public Information; Code of Ethics and Company Policies.

 

6.1                               Confidential or Material, Non-Public
Information.  Employee acknowledges that during and following Employee’s
employment with the Company Employee is prohibited from using or sharing any
Confidential Information for personal gain or advantage (in securities
transactions or otherwise), or for the personal gain or advantage of anyone with
whom Employee improperly shares such information.  Specifically as to material,
non-public information of the Company, Employee agrees to comply with the
Company’s insider trading policy in effect at the commencement of employment and
as amended from time to time.

 

6.2                               Code of Ethics and Company Policies.  Employee
agrees to fully comply with any Code of Ethics (or similar policy) of the
Company either having general applicability to its employees or specifically to
Employee and to comply with all other policies adopted by the Company from time
to

 

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time, including without limitation policies relating to conflict of interest,
non-discrimination, and confidentiality and protection of trade secrets.

 

7.                                      Return of Property.  Upon any
termination of employment with the Company for any reason, Employee agrees to
promptly return to the Company: (a) all materials of any kind in Employee’s
possession (or under Employee’s control) incorporating Confidential Information
or otherwise relating to the Company’s business (including but not limited to
all such materials and/or information stored on any computer or other electronic
or other storage device owned or used by Employee); and (b) all Company property
in Employee’s possession, including (but not limited to) computers, cellular
telephones, pagers, credit cards, keys, records, files, manuals, books, forms,
documents, letters, memoranda, data, tables, photographs, video tapes, audio
tapes, computer disks and other computer storage media, all materials that
include trade secrets, and all copies, summaries or notes of any of the
foregoing.

 

8.                                      Non-solicitation; Non-interference. 
Employee agrees that Employee shall not, at any time during the period beginning
on the Commencement Date and for one year following termination of Employee’s
employment with the Company for any reason, whether such termination is at the
initiative of the Company or Employee, engage in any of the following
activities:

 

8.1                               Directly or indirectly (except on behalf of
the Company), solicit or attempt to solicit, accept business from, divert or
attempt to divert, handle or attempt to handle or service or attempt to service,
the account or business of any customer or client which as of the date of
termination or during the two years preceding termination (i) was a
customer/client of the Company with which Employee dealt or (ii) had been
directly solicited by the Company with Employee’s knowledge or involvement with
a view toward establishing a customer/client relationship, or assist (either
directly or indirectly) any other person engaged in any of the foregoing; or

 

8.2                               Directly or indirectly recruit, solicit or
hire any employee or independent contractor of the Company, or induce or attempt
to induce any such person to terminate his or her employment, or other to limit
or cease his or her relationship with the Company, or assist (either directly or
indirectly) any other person engaged in any of the foregoing;

 

8.3                               Directly or indirectly interfere or attempt to
interfere in any way with the Company’s relationship with any of its customers,
clients, sales representatives, strategic business partners or suppliers,
including but not limited to inducing or attempting to induce any customers,
clients, sales representatives, strategic business partners, suppliers, key
advisors or consultants to terminate or change the terms of their dealings with
the Company, or assist any person engaged in any of the foregoing;

 

8.4                               Directly or indirectly engage in designing,
developing, manufacturing, engineering, distributing, marketing, or selling any
product that is substantially similar to and that directly competes with any
product designed, developed, manufactured, engineered, distributed, marketed,
under development, or sold by the Company at the time of the termination of
Employee’s employment that is not a Licensed Product (as defined in the License
Agreement between the Company and TLM of even date herewith (the “License
Agreement”)); or

 

8.5                               Directly or indirectly engage in designing,
developing, manufacturing, engineering, distributing, marketing, or selling any
product that is substantially similar to and that directly competes with any
Licensed Product; provided, however, that the post-employment restricted period
with respect to this Section 8.5 shall terminate immediately upon termination of
the License Agreement for any reason other than termination of the License
Agreement due to TLM’s breach of the License Agreement.

 

Employees represents and warrants that Employee has not engaged in any of the
activities set forth in Sections 8.1-8.3 prior to and including the Commencement
Date.

 

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9.                                      Assignment.  This Agreement sets forth
personal obligations of Employee, which may not be transferred, delegated or
assigned by Employee.  The Company may assign this Agreement to any successor or
affiliate.

 

10.                               Survival.  The rights and obligations set
forth in Sections 5-8 and 13-14 shall survive the termination of Employee’s
employment with the Company for any reason, whether such termination is at the
initiative of the Company or Employee.  Such provisions of this Agreement shall
survive termination of Employee’s employment regardless of whether Employee
resigns or is involuntarily discharged.

 

11.                               Miscellaneous.

 

11.1                        Headings; Construction.  The headings of Sections
and paragraphs herein are included solely for convenience of reference and shall
not control the meaning or interpretation of any of the provisions of this
Agreement.  This Agreement shall be construed without regard to any presumption
or other rule requiring construction hereof against the party causing this
Agreement to be drafted.

 

11.2                        Benefit.  Subject to Section 9, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

11.3                        Waiver.  Any delay by either party in asserting a
right under this Agreement or any failure by either party to assert a right
under this Agreement will not constitute a waiver by the asserting party of any
right hereunder, and the asserting party may subsequently assert any or all of
its rights hereunder as if the delay or failure to assert rights had not
occurred.

 

11.4                        Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

 

11.5                        Severability.  If the final determination of a court
of competent jurisdiction declares, after the expiration of the time within
which judicial review (if permitted) of such determination may be perfected,
that any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired, and (b) the invalid or
unenforceable term or provision shall be deemed replaced by a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision.

 

12.                               Entire Agreement; Amendment.

 

12.1                        Entire Agreement.  Both Employee and the Company
agree that this Agreement and the exhibits, if any, to this Agreement constitute
the entire agreement between them with respect to the subject matter hereof. 
There were no inducements or representations leading to the execution of this
Agreement except as stated in this Agreement.  Accordingly, this Agreement
(together with the exhibits to this Agreement) expressly supersedes any and all
prior oral and written agreements, representations and promises between the
Parties relating to termination of the Employee’s employment with the Company. 
For avoidance of doubt, this Agreement does not supersede, replace or modify any
agreements between TLM and the Company or the TLM Holdings LLC Equity Holders
Agreement, each of which remains in full force and effect in accordance with its
terms.

 

12.2                        Amendment.  This Agreement may be amended or
modified only with the written consent of both Employee and the Company.  No
oral waiver, amendment or modification will be effective under any circumstances
whatsoever.

 

13.                               Notices.  Any notice hereunder by either party
to the other shall be given in writing by personal delivery (by express courier
or otherwise) or certified U.S. mail, return receipt requested.  If addressed to

 

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Employee, the notice shall be delivered or mailed to Employee at the address
most recently communicated in writing by Employee to the Company, or if
addressed to the Company, the notice shall be delivered or mailed to the Company
at its executive offices to the attention of the Company’s Chief Executive
Officer.  A notice shall be deemed given, if by personal delivery, on the date
of such delivery or, if by certified mail, on the date shown on the applicable
return receipt.

 

14.                               Governing Law and Disputes; Arbitration.

 

14.1                        Governing Law and Disputes.  The Company is
headquartered in Minneapolis, Minnesota and the Parties expect that many of
Employee’s contacts with the Company will occur through or in connection with
its Minneapolis office.  Therefore, the Parties agree that this Agreement shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of Minnesota, as such laws are applied to agreements entered into and
to be performed entirely within Minnesota between Minnesota residents, without
reference to principles of conflicts or choice of law under which the law of any
other jurisdiction would apply.  Except (and only) as set forth in Section 14.2
below, the undersigned each irrevocably consent to the jurisdiction of the
United States District Court for the District of Minnesota and the courts of the
State of Minnesota in any suit, action or proceeding brought under, based on or
related to or in connection with this Agreement, and each of the undersigned
agrees that either of the aforesaid courts will be the exclusive original forum
for any such action.

 

14.2                        Arbitration.  Any dispute arising out of this
Agreement, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such controversy.  If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration.  Judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.  The arbitrator shall be a
retired state or federal judge or an attorney who has practiced business or
employment law or business or employment litigation for at least 10 years.  If
the Parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the District Court for Hennepin County, Minnesota,
select an arbitrator.  Arbitration will be conducted pursuant to the provisions
of this Agreement, and the Commercial Arbitration Rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement.  Limited civil discovery shall be permitted for the
production of documents and taking of depositions.  Unresolved discovery
disputes may be brought to the attention of the arbitrator who may dispose of
such dispute.  The arbitrator shall have the authority to award any remedy or
relief that a court of this state could order or grant; provided, however, that
punitive or exemplary damages shall not be awarded.  The Company shall pay the
fees and expenses of the arbitrator.  Unless otherwise agreed by the Parties,
the exclusive location of any arbitration proceedings shall be Hennepin County,
Minnesota.

 

14.3                        Incorporation by Reference.  The following exhibit
is hereby incorporated by reference and is an integral part of this Agreement:

 

Exhibit A — Change in Control Severance Agreement of even date herewith.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement by their signatures
below, to become effective on the Commencement Date noted above:

 

 

Insignia Systems, Inc.

 

/s/ Tim J. Halfmann

 

 

 

By:

/s/ Glen Dall

 

Tim Halfmann

 

 

 

Its:

President and CEO

 

Dated:

4/28/2014

 

 

 

Dated:

4/28/2014

 

 

 

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