Exhibit 10.1

CHANGE IN CONTROL SEVERANCE AGREEMENT

AGREEMENT made as of this 13th day of June, 2011 by and between Insignia
Systems, Inc., a Minnesota corporation (the “Company”), and John Gonsior (the
“Executive”).

WHEREAS, the Company, as a publicly held corporation, recognizes the possibility
of a change in control of the Company, and that such possibility and the
uncertainty and questions which it may raise could result in Executive leaving
the Company or in distraction of Executive in the performance of Executive’s
duties to the detriment of the Company and its shareholders; and

WHEREAS, it is in the best interests of the Company and its shareholders to
encourage the availability of Executive’s services to parties who may in the
future acquire control of the Company and to provide an incentive for Executive
to remain with the Company during any period of uncertainty leading up to a
change in control;

WHEREAS, based on the foregoing, the Company wishes to provide that, in the
event of a change in control of the Company, Executive will receive certain
benefits if Executive’s employment by the Company ceases for certain reasons
within a specified period following the change in control;

NOW, THEREFORE, in consideration of the foregoing and the provisions of this
Agreement, the parties hereto agree as follows:

1.                General Provisions. This Company shall pay Executive a lump
sum severance payment if Executive ceases to be employed by the Company within
two years following a Change in Control (as defined below) for certain reasons
specified in this Agreement. Nothing in this Agreement alters the “at will”
nature of Executive’s employment by the Company. This means that either before
or after a Change in Control, either the Company or the Executive may terminate
Executive’s employment by the Company, either with or without cause, for any
reason or no reason. This Agreement relates only to whether Executive shall be
entitled to certain severance payments following cessation of employment. No
right to severance payments shall arise under this Agreement unless and until
there occurs a Change in Control.

2.                Definition of Change in Control. For purposes of this
Agreement, a “Change in Control” shall be considered to occur if any of the
following occurs after the date of this Agreement:

  (a) the closing of the sale of all or substantially all of the assets of the
Company;   (b) the closing of a merger, consolidation or corporate
reorganization of the Company which results in the stockholders of the Company
immediately prior to such event owning less than 50% of the combined voting
power of the Company’s capital stock immediately following such event;

 

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  (c) the acquisition by any person (or persons who would be considered a group
under the federal securities laws) who as of the date of this Agreement own less
than 25% of the voting power of the Company’s outstanding voting securities, of
beneficial ownership of securities representing 40% or more of the combined
voting power or the Company’s then outstanding securities; or   (d) the election
to the Company’s board of directors of persons who constitute a majority of the
board of directors and who were not nominated for election by the board of
directors as part of a management slate.

3.                Amount of Severance Payment. If a Change in Control occurs
after the date of this Agreement and Executive subsequently ceases to be
employed by the Company prior to the second anniversary of the Change in
Control, then the Company shall pay Executive a lump sum severance payment equal
to twenty-four (24) months of Executive’s base salary which was in effect
immediately prior to the Change in Control. The Company shall be entitled to
deduct from the lump sum severance payment any amounts which the Company is
required by law to withhold from such a payment.

              Payment due under this Agreement shall be made on the 60th day
after Executive’s termination of employment, except that if Executive is then a
“key employee” of the Company, as defined in Section 409A of the Internal
Revenue Code, payment shall be made on the date which is six months after
termination of employment, or to his heirs upon his death if earlier; provided,
however, that no payment shall be made unless Executive has first delivered to
the Company the Release described in Section 11, and the Release has not been
rescinded during any applicable rescission period.

4.                Circumstances in Which Severance Shall Not Be Paid.
Notwithstanding the provisions of Section 3 above, the Company shall not be
obligated to make any lump sum severance payment under this Agreement if,
following a Change in Control, Executive ceased to be employed by the Company
due to:

  (a) Executive’s death or disability;   (b) termination of Executive by the
Company for Cause (as defined below); or   (c) resignation by Executive for any
reason other than a Good Reason (as defined below), including retirement.

For purposes of this Section 4, the following defined terms have the meanings
indicated:

  “Cause” means termination by the Company of Executive’s employment due to:    
(1) conviction of a felony;     (2) the willful and continued failure of
Executive to perform his essential duties; or     (3) gross misconduct which is
materially injurious to the Company;

 

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provided, however, that the matters referred to in clause (2) or (3) shall not
be deemed to constitute “Cause” unless the Company has first given Executive
written notice specifying the conduct by Executive that constitutes such failure
or gross misconduct and Executive has failed to remedy the same to the
reasonable satisfaction of the Company’s Board of Directors.

  “Good Reason” shall mean any of the following, unless Executive gives his or
her prior written consent:     (1) the assignment to Executive of any duties
inconsistent with Executive’s status or position with the Company, or a
substantial reduction in the nature or status of Executive’s responsibilities
from those in effect immediately prior to the Change in Control;     (2) a
reduction by the Company in Executive’s annual base salary in effect immediately
prior to the Change in Control;     (3) the relocation of the Company’s
principal executive offices to a location more than fifty miles from
Minneapolis, Minnesota or the Company requiring Executive to be based anywhere
other than the Company’s principal executive offices, except for required travel
on the Company’s business to an extent substantially consistent with Executive’s
prior business travel obligations;     (4) the failure by the Company to
continue to provide Executive with benefits at least as favorable to those
enjoyed by Executive under any of the Company’s pension, life insurance,
medical, health and accident, disability, deferred compensation, incentive
awards, incentive stock options, or savings plans in which Executive was
participating at the time of the Change in Control, the taking of any action by
the Company which would directly or indirectly materially reduce any of such
benefits or deprive Executive of any material fringe benefit enjoyed at the time
of the Change in Control, or the failure by the Company to provide Executive
with the number of paid vacation days to which Executive is entitled at the time
of the Change in Control, provided, however, that the Company may amend any such
plan or programs as long as such amendments do not reduce any benefits to which
Executive would be entitled upon termination; or     (5) any termination of
Executive’s employment which is not made pursuant to a Notice of Termination
satisfying the requirements in Section 5 below.

5.                Notice of Termination. Any termination of Executive’s
employment by the Company or by Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance with the notice
provisions of Section 6. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which indicates the specific facts and
circumstances claimed to provide the basis for termination.

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6.                   Method of Giving Notice. All notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage pre-paid,
addressed to the last known residence address of the Executive, or in the case
of the Company, to its principal office to the attention of each of the then
directors of the Company with a copy to its Secretary, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

 

7.                   Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the parties. No waiver by either party
thereto at any time of any breach by the other party to this Agreement, or of
compliance with any condition or provision of this Agreement to be performed by
such other party, shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or similar time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. This Agreement shall be governed by the laws of the
State of Minnesota. This Agreement supersedes all prior agreements on this
subject matter.

 

8.                   Arbitration of Disputes. Any and all disputes between the
parties relating to this Agreement or any alleged breach of this Agreement shall
be resolved by binding arbitration held in the City of Minneapolis pursuant to
the Commercial Arbitration Rules of the American Arbitration Association before
a single arbitrator. In the event that Executive is determined by the arbitrator
to be the prevailing party in such an arbitration, the arbitrator shall award
Executive, as an additional element of damages, his or her attorneys’ fees and
legal expenses actually incurred in the enforcement of this Agreement and in the
arbitration proceeding. Judgment on the arbitration award may be entered by any
court having jurisdiction.

 

9.                   Successors. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.

 

10.                Exclusive Benefits. The benefits provided by this Agreement
are in lieu of all other severance, change in control, or similar benefits
payable to Executive due to termination following a Change in Control.

 

11.                Release. As a condition to receiving any benefits under this
Agreement, Executive shall be required to deliver a standard release to the
Company releasing the Company and its shareholder, directors, officers,
employees, agents and affiliates from any and all claims relating to Executive’s
employment and termination of employment.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

EXECUTIVE: INSIGNIA SYSTEMS, INC.             /s/ John Gonsior   By    /s/ Scott
Drill         Its  CEO        

 

 

 

 

 

 

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