EXHIBIT 10.1
INSIGNIA SYSTEMS, INC.
2013 OMNIBUS STOCK AND INCENTIVE PLAN
 
FORM OF
RESTRICTED STOCK AWARD AGREEMENT
 
You have been granted an award of Restricted Stock subject to the terms and
conditions of the Company’s 2013 Omnibus Stock and Incentive Plan, as amended
from time to time (the “Plan”), and the Restricted Stock Agreement set forth
below (the “Agreement”), as follows:
 
Name of Grantee:
 
 
 
Date of Issuance:
 
 
 
Shares of Restricted Stock:
 
 
 
Vesting Schedule:
Vesting Date
Number of Shares
 
 
 
 
 
 

 
The period over which a share of Restricted Stock vests is referred to as its
“Restricted Period.”
 
Capitalized terms used but not defined in this Agreement have the meanings
assigned to them in the Plan.
 

THIS AGREEMENT, made effective as of the Date of Issuance set forth above, by
and between Insignia Systems, Inc., a Minnesota corporation (the “Company”), and
the Grantee identified above (“Grantee”).
 
W I T N E S S E T H:
 
WHEREAS, Grantee and the Company are party to that certain Employment Agreement
dated ____________, setting forth the terms and conditions of Grantee’s
employment as ____________ of the Company (the “Employment Agreement”);
 
WHEREAS, the Company desires to give Grantee an inducement to acquire a
proprietary interest in the Company and an added incentive to advance the
interests of the Company by awarding shares of Restricted Stock to Grantee (the
“Shares”), on the terms and conditions and subject to the restrictions set forth
in this Agreement; and
 
WHEREAS, the Company and Grantee each desire to enter into this Agreement to
establish the terms and conditions of such Award.
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:
 
 
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1. GRANT OF RESTRICTED STOCK
. The Company hereby grants to Grantee, subject to the terms and conditions in
this Agreement and the Plan, the number of shares of Restricted Stock specified
above. Such shares are subject to the restrictions provided for in this
Agreement and are referred to collectively as the “Restricted Shares” and each
as a “Restricted Share.” The grant of the Restricted Stock is made in
consideration of Grantee’s execution of the Employment Agreement and the
services to be rendered by the Grantee to the Company.
 
2.     RESTRICTIONS ON RESTRICTED SHARES
 
. Subject to any exceptions set forth in this Agreement or the Plan, during the
Restricted Period, the Restricted Shares or the rights relating thereto may not
be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell
or otherwise transfer or encumber the Restricted Shares or the rights relating
thereto during the Restricted Period shall be wholly ineffective and, if any
such attempt is made, the Restricted Shares will be forfeited by the Grantee and
all of the Grantee’s rights to such shares shall immediately terminate without
any payment or consideration by the Company. The Restricted Shares shall be
subject to forfeiture until satisfaction of the vesting conditions set forth in
Section 0 of this Agreement.
 
3.     ACCEPTANCE
 
. Grantee’s execution of this Agreement will indicate his or her acceptance of
and willingness to be bound by its terms and the terms of the Plan.
 
4.     NORMAL VESTING
 
. If Grantee remains an employee of the Company or at least one of its
Affiliates continuously from the Date of Issuance as specified above, then the
Restricted Shares will vest in the numbers and on the Vesting Dates specified
above.
 
5.     ACCELERATED VESTING
 
. Notwithstanding Section 0 of this Agreement:
 
(a) In the event of Grantee’s death or if Grantee’s employment is terminated by
the Company for Disability or without Cause or by Grantee for Good Reason, then
the amount of Restricted Shares eligible to vest on the next applicable Vesting
Date shall vest as of the date of the applicable triggering event, and all
remaining unvested Restricted Shares shall be immediately forfeited.
 
(b) If a Change in Control occurs and the continuing or successor entity
following such Change in Control fails to assume or replace any unvested
Restricted Shares with new awards of equivalent value of such continuing or
successor entity, then all such Restricted Shares shall automatically become
100% vested upon the date of the Change in Control.
 
6.     ISSUANCE OF UNRESTRICTED SHARES
 
. Upon the vesting of any Restricted Shares, such vested Restricted Shares will
no longer be subject to forfeiture as provided in Section 0 of this Agreement,
but will continue to be subject to the provisions of Section 0 of this
Agreement.
 
7.     FORFEITURE
 
. If Grantee ceases to be an employee of the Company and its Affiliates prior to
the last Vesting Date set forth above, then any Restricted Shares that have not
previously vested (including pursuant to Section 0 of this Agreement) will be
forfeited by Grantee to the Company, and Grantee will thereafter have no right,
title or interest whatever in such Restricted Shares. If the Company does not
have custody of any and all certificates representing Restricted Shares so
forfeited, then Grantee must immediately return to the Company any and all
certificates representing Restricted Shares so forfeited. Additionally, Grantee
must deliver to the Company a stock power duly executed in blank relating to any
and all certificates representing the Restricted Shares forfeited to the Company
in accordance with the previous sentence or, if such stock power has previously
been tendered to the Company, the Company will be authorized to deem such
previously tendered stock power delivered, and the Company will be authorized to
cancel any and all certificates representing Restricted Shares so forfeited and
issue and deliver to Grantee a new certificate for any Shares that vested prior
to forfeiture. If the Restricted Shares are recorded in a book entry account in
lieu of a certificate, Grantee agrees that the number of shares in the account
will be reduced to reflect any forfeited shares and Grantee agrees to promptly
complete any documentation reasonably required by the Company’s transfer agent
to effect such reduction.
 
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8.     DEFINITIONS
 
. For purposes of this Agreement:
 
(a) “Cause” means what the term is expressly defined to mean in a then-effective
written agreement (including, but not limited to the Employment Agreement)
between Grantee and the Company or any Affiliate or, in the absence of any such
then-effective agreement or definition, means (a) the deliberate and continued
failure to substantially perform Grantee’s duties and responsibilities as Chief
Executive Officer of the Company; (b) the criminal felony conviction of, or a
plea of guilty or nolo contendere by, Grantee; (c) the material violation of
Company policy; (d) the act of fraud or dishonesty resulting or intended to
result in personal enrichment at the expense of the Company; (e) the gross
misconduct in performance of duties that results in material economic harm to
the Company; or (f) the material breach by Grantee of the Employment Agreement
or any successor thereto. Notwithstanding the foregoing, in order to establish
“Cause” for Grantee’s termination for purposes of clauses (a), (c) and (f)
above, the Company must deliver a written demand to Grantee which specifically
identifies the conduct that may provide grounds for Cause, and the Grantee must
have failed to cure such conduct within thirty (30) days after such demand.
Reference in this paragraph to the Company shall also include direct and
indirect subsidiaries of the Company.
 
(b) “Disability” means what the term is expressly defined to mean in a
then-effective written agreement (including, but not limited to the Employment
Agreement) between Grantee and the Company or any Affiliate or, in the absence
of any such then-effective agreement or definition, means “total and permanent
disability” within the meaning of Code Section 22(e)(3).
 
 
(c) “Good Reason” means what the term is expressly defined to mean in a
then-effective written agreement (including, but not limited to the Employment
Agreement) between Grantee and the Company or any Affiliate or, in the absence
of any such then-effective agreement or definition, means any of the following:
(a) a material and adverse change in Grantee’s duties, title or position,
provided, however, that a change in the Company’s status as a publicly held
corporation filing reports with the Securities and Exchange Commission shall not
be deemed to constitute Good Reason hereunder; (b) a reduction in the Grantee’s
base salary, provided, however, that Good Reason shall not exist in the event
that Grantee’s base salary is reduced no more than 15% in connection with an
across-the-board salary reduction by the Company similarly affecting all senior
executives of the Company; or (c) a material breach by the Company of its
obligations under the Employment Agreement or any successor thereto. Good Reason
shall not exist unless Grantee shall provide notice of the existence of the Good
Reason condition within ninety (90) days of the date Grantee learns of the
condition. The Company shall have a period of thirty (30) days during which it
may remedy the condition, and in case of full remedy such condition shall not be
deemed to constitute Good Reason hereunder.
 
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9.    THIS AWARD SUBJECT TO PLAN
 
. The Award of Restricted Stock evidenced by this Agreement is granted pursuant
to the Plan, a copy of which Plan has been made available to Grantee and is
hereby incorporated into this Agreement. This Agreement is subject to and in all
respects limited and conditioned as provided in the Plan, including, without
limitation, Section 6(f)(viii) regarding compliance with Section 409A of the
Code. The Plan governs this Award and, in the event of any questions as to the
construction of this Agreement or in the event of a conflict between the Plan
and this Agreement, the Plan shall govern, except as the Plan otherwise
provides.
 
10.     SECURITIES MATTER AND CERTAIN TRANSACTIONS
 
(a) Rights as Shareholder. The Grantee shall be the record owner of the
Restricted Shares until the Shares are sold or otherwise disposed of, and shall
be entitled to all of the rights of a shareholder of the Company including,
without limitation, the right to vote such Shares and receive all dividends or
other distributions paid with respect to such Shares; provided that, any
dividends with respect to the Restricted Shares shall be withheld by the Company
for the Grantee’s account in a non-interest bearing account. The dividends so
withheld by the Committee and attributable to any particular Share of Restricted
Shares shall be distributed to the Grantee in cash upon the release of
restrictions on such Share and, if such Share is forfeited, the Grantee shall
have no right to such dividends.
 
(b) No Right of Employment. This Agreement does not confer on Grantee any right
to continued employment with the Company or any of its Affiliates or with
respect to the continuance of any other relationship between Grantee and the
Company, nor will it interfere in any way with the right of the Company to
terminate any such relationship.
 
(c)           Evidence of Ownership; Stock Legend. Each Restricted Share will be
evidenced by a duly issued stock certificate or electronic equivalent (which may
represent more than one Restricted Share) registered in the name of Grantee.
Physical possession or custody of any stock certificates that are issued shall
be retained by the Company until such time as the Restricted Share vests. The
certificates or other evidence of the Restricted Shares or any Shares issued to
Grantee (or, in the case of death, Grantee’s successors) may bear a legend
indicating restrictions on transferability of the Restricted Shares and Shares
pursuant to this Agreement or any other restrictions as may be determined or
authorized by the Company in its sole discretion, including any legends it may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any applicable federal or state securities
laws or any stock exchange on which the Shares are then listed or quoted.
 
(d)           Securities Law Compliance. The issuance and transfer of Shares
shall be subject to compliance by the Company and the Grantee with all
applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company’s Shares may
be listed. No Shares shall be issued or transferred unless and until any then
applicable requirements of state and federal laws and regulatory agencies have
been fully complied with to the satisfaction of the Company and its counsel. The
Grantee understands that the Company is under no obligation to register the
Shares with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.
 
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(e)           Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and
subject to Section 4(c) of the Plan, certain changes in the number or character
of the common stock of the Company (through sale, merger, consolidation,
exchange, reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in the Restricted Shares.
 
(f)           Change in Control. Upon the occurrence of a Change in Control, the
Committee shall have the right, in its sole and absolute discretion, but not the
obligation, to take actions to make one or more adjustments or modifications to
this Award pursuant to Section 9(g) of the Plan.
 
(g)           Limitation on Change in Control Payments. Notwithstanding anything
in this Agreement to the contrary, if, with respect to Grantee, the acceleration
of the vesting of Restricted Shares as provided in Section (b) of this Agreement
(which acceleration could be deemed a “payment” within the meaning of Section
280G(b)(2) of the Code), together with any other payments that Grantee has the
right to receive from the Company or any corporation which is a member of an
“affiliated group” (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member, would constitute
a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the
“payments” to Grantee will be reduced to the largest amount as will result in no
portion of such “payments” being subject to the excise tax imposed by Section
4999 of the Code. Without limiting the prior sentence, Grantee will have the
discretion to determine which “payments” will be reduced so that no portion of
such “payments” are subject to the excise tax imposed by Section 4999 of the
Code. Notwithstanding anything to the contrary in this Section 0, if Grantee is
subject to a separate agreement with the Company that expressly addresses the
potential application of Section 280G or 4999 of the Code (including, without
limitation, that “payments” under such agreement or otherwise will be reduced,
that such “payments” will not be reduced or that such “payments” will be
“grossed up” for tax purposes), then this Section 0 will not apply, and any
“payments” to Grantee pursuant to Section (b) of this Agreement will be treated
as “payments” arising under such separate agreement.
 
(h)           Accounting Compliance. Grantee agrees that, if a reclassification,
reorganization, liquidation or other transaction described in Section 4(c) of
the Plan occurs and Grantee is an “affiliate” of the Company or any Subsidiary
(as defined in applicable legal and accounting principles) at the time of such
transaction, Grantee will comply with all requirements of Rule 145 of the
Securities Act of 1933, as amended, and the requirements of such other legal or
accounting principles, and will execute any documents necessary to ensure such
compliance.
 
(i)           Withholding Taxes. The parties to this Agreement recognize that
the Company or its Affiliate may be obligated to withhold federal and state
income taxes or other taxes upon the vesting of the Restricted Shares, or, in
the event that the Employee elects under Section 83(b) of the Code to report the
receipt of the Restricted Shares as income in the year of receipt, upon the
Grantee’s receipt of the Restricted Shares. Grantee agrees that, at such time,
if the Company or a parent or subsidiary is required to withhold such taxes, the
Company will withhold Shares issuable to Grantee as a result of vesting of the
Restricted Shares in such amount as is necessary to satisfy
 
 
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the tax withhold obligation, unless (x) Grantee provides notice to the Company
prior to the applicable Vesting Date that Grantee desires to pay cash or directs
the Company (or any Affiliate) to withhold from payroll or other amounts payable
to Grantee any sums required to satisfy such withholding tax obligations or (y)
the withholding obligation is satisfied in such other manner as is permitted by
the Committee in accordance with the terms of the Plan. Such Shares shall have a
Fair Market Value equal to the minimum required tax withholding, based on the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from the grant or vesting of the Restricted Shares, as applicable. In
no event may the Company accept or withhold securities having a Fair Market
Value in excess of such statutory minimum required tax withholding. Any Shares
withheld to satisfy tax withholding requirements under this Section 10(i) will
be deemed forfeited and the number of Shares held by Grantee will be adjusted in
connection therewith as provided in Section 7.
 
11.     MISCELLANEOUS

(a) Binding Effect. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
(b)     Governing Law. This Agreement and all rights and obligations hereunder
shall be construed in accordance with the Plan and governed by the laws of the
State of Minnesota.
(c)    Entire Agreement. This Agreement and the Plan set forth the entire
agreement and understanding of the parties hereto with respect to the grant of
this Award and the administration of the Plan and supersede all prior
agreements, arrangements, plans and understandings relating to the grant of this
Award and the administration of the Plan.
(d)    Amendment and Waiver. This Agreement may be amended, waived, modified or
canceled by the Committee at any time, provided that all such amendments,
waivers, modifications or cancellations shall comply with and not be prohibited
by the provisions of the Plan, and any amendment, waiver, modification or
cancellation that has an adverse effect on Grantee’s rights under this Agreement
shall be with Grantee’s consent in a written instrument executed by Grantee and
the Company.
(e)    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
 
INSIGNIA SYSTEMS, INC.
 
By:                                                                             
Name:
Title:
 
 
GRANTEE
 
By:                                                                             
Name:
 
 
 
 
 
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