Exhibit 4.1

                                                                      As amended
                                                                    May 17, 2000


                             INSIGNIA SYSTEMS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN


         1. Establishment of Plan. Insignia Systems, Inc. (hereinafter referred
to as the "Company") proposes to grant to certain employees of the Company the
opportunity to purchase common stock of the Company. Such common stock shall be
purchased pursuant to the plan herein set forth which shall be known as the
"INSIGNIA SYSTEMS, INC. EMPLOYEE STOCK PURCHASE PLAN" (hereinafter referred to
as the "Plan"). The Company intends that the Plan shall qualify as an "Employee
Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended, and shall be construed in a manner consistent with the requirements of
said Section 423 and the regulations thereunder.

         2. Purpose. The Plan is intended to encourage stock ownership by
employees of the Company, and as an incentive to them to remain in employment,
improve operations, increase profits, and contribute more significantly to the
Company's success.

         3. Administration. The Plan shall be administered by a stock purchase
committee (hereinafter referred to as the "Committee") consisting of not less
than three directors or employees of the Company, as designated by the Board of
Directors of the Company (hereinafter referred to as the "Board of Directors").
The Board of Directors shall fill all vacancies in the Committee and may remove
any member of the Committee at any time, with or without cause. The Committee
shall select its own chairman and hold its meetings at such times and places as
it may determine. All determinations of the Committee shall be made by a
majority of its members. Any decision which is made in writing and signed by a
majority of the members of the Committee shall be effective as fully as though
made by a majority vote at a meeting duly called and held. The determinations of
the Committee shall be made in accordance with its judgment as to the best
interests of the Company, its employees and it shareholders and in accordance
with the purposes of the Plan; provided, however, that the provisions of the
Plan shall be construed in a manner consistent with the requirements of Section
423 of the Internal Revenue Code, as amended. Such determinations shall be
binding upon the Company and the participants in the Plan unless otherwise
determined by the Board of Directors. The Company shall pay all expenses of
administering the Plan. No member of the Board of Directors or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.

         4. Duration and Phases of the Plan. (a) The Plan commenced on January
1, 1993 and will terminate December 31, 2003, except that any phase commenced
prior to such termination shall, if necessary, be allowed to continue beyond
such termination until completion. Notwithstanding the


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foregoing, this Plan shall be considered of no force and effect and any options
granted shall be considered null and void unless the holders of a majority of
all of the issued and outstanding shares of the common stock of the Company
approve the Plan within twelve (12) months after the date of its adoption by the
Board of Directors.

         (b) The Plan shall be carried out in one or more phases, each phase
being for a period of one year. Each phase shall commence immediately after the
termination of the preceding phase. The existence and date of commencement of a
phase (the "Commencement Date") shall be determined by the Committee, provided
that the commencement of the first phase shall be within twelve (12) months
before or after the date of approval of the Plan by the shareholders of the
Company. In the event all of the stock reserved for grant of options hereunder
is issued pursuant to the terms hereof prior to the commencement of one or more
phases scheduled by the Committee or the number of shares remaining is so small,
in the opinion of the Committee, as to render administration of any succeeding
phase impracticable, such phase or phases shall be canceled. Phases shall be
numbered successively as Phase 1, Phase 2 and Phase 3.

         (c) The Board of Directors may elect to accelerate the termination date
of any phase effective on the date specified by the Board of Directors in the
event of (i) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares would be
converted into cash, securities or other property, other than a merger of the
Company in which shareholders immediately prior to the merger have the same
proportionate ownership of stock in the surviving corporation immediately after
the merger; (ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company, or (iii) any plan or liquidation or dissolution of the Company.

         5. Eligibility. All Employees, as defined in Paragraph 19 hereof, who
are employed by the Company at least one day prior to the Commencement Date of a
phase shall be eligible to participate in such phase.

         6. Participation. Participation in the Plan is voluntary. An eligible
Employee may elect to participate in any phase of the plan, and thereby become a
"Participant" in the Plan, by completing the Plan payroll deduction form
provided by the Company and delivering it to the Company or its designated
representative prior to the Commencement Date of that phase. Payroll deductions
for a Participant shall commence on the first payday after the Commencement Date
of the phase and shall terminate on the last payday immediately prior to or
coinciding with the termination date of that phase unless sooner terminated by
the Participant as provided in Paragraph 9 hereof.

         7. Payroll Deductions. (a) Upon enrollment, a Participant shall elect
to make contributions to the Plan by payroll deductions (in full dollar amounts
and in amounts calculated to be as uniform as practicable throughout the period
of the phase), in the aggregate amount not in excess of 10% of such
Participant's Base Pay for the term of the Phase, as determined according to
Paragraph 19 hereof.


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         The minimum authorized payroll deduction must aggregate to not less
than $10 per pay period.

         (b) In the event that the Participant's compensation for any pay period
is terminated or reduced from the compensation rate for such a period as of the
Commencement Date of the phase for any reason so that the amount actually
withheld on behalf of the Participant as of the termination date of the phase is
less than the amount anticipated to be withheld over the phase year as
determined on the Commencement Date of the phase, then the extent to which the
Participant may exercise his option shall be based on the amount actually
withheld on his behalf. In the event of a change in the pay period of any
Participant, such as from bi-weekly to monthly, an appropriate adjustment shall
be made to the deduction in each new pay period so as to ensure the deduction of
the proper amount authorized by the Participant.

         (c) All payroll deductions made for Participants shall be credited to
their accounts under the Plan. A Participant may not make any separate cash
payments into such account.

         (d) Except for his right to discontinue participation in the Plan as
provided in Paragraph 9, no Participant shall be entitled to increase or
decrease the amount to be deducted in a given phase after the Commencement Date.

         8. Options.

         (a) Grant of Option.

                  (i)      A Participant who is employed by the Company as of
                           the Commencement Date of a phase shall be granted an
                           option as of such date to purchase a number of full
                           shares of Company common stock to be determined by
                           dividing the total amount to be credited to that
                           Participant's account under Paragraph 7 hereof by the
                           option price set forth in Paragraph 8(a)(ii)(A)
                           hereof, subject to the limitations of Paragraph 10
                           hereof.

                  (ii)     The option price for such shares of common stock
                           shall be the lower of:

                           A.       Eighty-five percent (85%) of the fair market
                                    value of such shares of common stock on the
                                    Commencement Date of the phase; or

                           B.       Eighty-five percent (85%) of the fair market
                                    value of such shares of common stock on the
                                    termination date of the phase.

                  (iii)    The fair market value of shares of common stock of
                           the Company shall be determined by the Committee for
                           each valuation date in a manner acceptable under
                           Section 423 of the Internal Revenue Code of 1986.


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                  (iv)     Anything herein to the contrary notwithstanding, no
                           Employee shall be granted an option hereunder:

                           A.       Which permits his rights to purchase stock
                                    under all employee stock purchase plans of
                                    the Company, its subsidiaries or its parent,
                                    if any to accrue at a rate which exceeds
                                    Twenty-Five Thousand Dollars ($25,000) of
                                    the fair market value of such stock
                                    (determined at the time such option is
                                    granted) for each calendar year in which
                                    such option is outstanding at any time;

                           B.       If immediately after the grant such Employee
                                    would own and/or hold outstanding options to
                                    purchase stock possessing five percent (5%)
                                    or more of the total combined voting power
                                    or value of all classes of stock of the
                                    Company, its parent, if any, or of any
                                    subsidiary of the Company. For purposes of
                                    determining stock ownership under this
                                    Paragraph, the rules of Section 424(d) of
                                    the Internal Revenue Code, as amended, shall
                                    apply; or

                           C.       Which can be exercised after the expiration
                                    of 27 months from the date the option is
                                    granted.

         (d) Exercise of Option.

                  (i)      Unless a Participant gives written notice to the
                           Company pursuant to Paragraph 8(b)(ii) or Paragraph 9
                           prior to the termination date of a phase, his option
                           for the purchase of shares will be exercised
                           automatically for him as of such termination date for
                           the purchase of the number of full shares of Company
                           common stock which the accumulated payroll deductions
                           in his account at that time will purchase at the
                           applicable option price, subject to the limitations
                           set forth in Paragraph 10 hereof.

                  (ii)     A Participant may, by written notice to the Company
                           at any time during the thirty (30) day period
                           immediately preceding the termination date of a
                           phase, elect, effective as of the termination date of
                           that phase, to exercise his option for a specified
                           number of full shares less than the maximum number
                           which may be purchased under his option.

                  (iii)    As promptly as practicable after the termination date
                           of any phase, the Company will deliver to each
                           Participant herein the common stock purchased upon
                           the exercise of his option, together with a cash
                           payment equal to the balance, if any, of his account
                           which was not used for the purchase of common stock
                           with interest accrued thereon.


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         9. Withdrawal or Termination of Participation. (a) A Participant may,
at any time prior to the termination date of a phase, withdraw all payroll
deductions then credited to his account by giving written notice to the Company.
Promptly upon receipt of such notice of withdrawal, all payroll deductions
credited to the Participant's account will be paid to him with interest accrued
thereon and no further payroll deductions will be made during the phase. In such
event, the option granted the Participant under that phase of the Plan shall
lapse immediately. Partial withdrawals of payroll deductions hereunder may not
be made.

         (b) In the event of the death of a Participant, the person or persons
specified in Paragraph 14 may give notice to the Company within sixty (60) days
of the death of the Participant electing to purchase the number of full shares
which the accumulated payroll deductions in the account of such deceased
Participant will purchase at the option price specified in Paragraph 8(a)(ii)
and have the balance in the account distributed in cash with interest accrued
thereon. If no such notice is received by the Company within said sixty (60)
days, the accumulated payroll deductions will be distributed in full in cash
with interest accrued thereon.

         (c) Upon termination of Participant's employment for any reason other
than death of the Participant, the payroll deductions credited to his account,
plus interest, shall be returned to him.

         10. Stock Reserved for Options. (a) Six Hundred Thousand (600,000)
shares of the Company's common stock are reserved for issuance upon the exercise
of options to be granted under the Plan. Shares subject to the unexercised
portion of any lapsed or expired option may again be subject to option under the
Plan.

         (b) If the total number of shares of the Company common stock for which
options are to be granted for a given phase as specified in Paragraph 8 exceeds
the number of shares then remaining available under the Plan (after deduction of
all shares for which options have been exercised or are then outstanding) and if
the Committee does not elect to cancel such phase pursuant to Paragraph 4, the
Committee shall make a pro rata allocation of the shares remaining available in
as uniform and equitable a manner as it shall consider practicable. In such
event, the options to be granted and the payroll deductions to be made pursuant
to the Plan which would otherwise be effected may, in the discretion of the
Committee, be reduced accordingly. The Committee shall give written notice of
such reduction to each Participant affected.

         (c) The Participant (or a joint tenant named pursuant to Paragraph
10(d) hereof) shall have no rights as a shareholder with respect to any shares
subject to the Participant's option until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued, except as otherwise provided in
Paragraph 12 hereof.

         (d) The shares of the Company common stock to be delivered to a
Participant pursuant to the exercise of an option under the Plan will be
registered in the name of the Participant or, if the


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Participant so directs by written notice to the Committee prior to the
termination date of that phase of the Plan, in the names of the Participant and
one other person the Participant may designate as his joint tenant with rights
of survivorship, to the extent permitted by law.

         11. Accounting and Use of Funds. Payroll deductions for each
Participant shall be credited to an account established for him under the Plan.
A Participant may not make any separate case payments into such account. Such
account shall be solely for bookkeeping purposes and no separate fund or trust
shall be established hereunder and the Company shall not be obligated to
segregate such funds. All funds from payroll deductions received or held by the
Company under the Plan may be used, without limitation, for any corporate
purpose by the Company.

         12. Adjustment Provision. (a) Subject to any required action by the
shareholders of the Company, the number of shares covered by each outstanding
option, and the price per share thereof in each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of the Company common stock resulting from a subdivision or consolidation
of shares or the payment of a share dividend (but only on the shares) or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company.

         (b) In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all its authorized shares with par
value into the same number of shares with a different part value or without par
value, the shares resulting from any such change shall be deemed to be the
shares within the meaning of this Plan.

         13. Non-Transferability of Options. (a) Options granted under any phase
of the Plan shall not be transferable except under the laws of descent and
distribution and shall be exercisable only by the Participant during his
lifetime and after his death only by his beneficiary of the representative of
his estate as provided in Paragraph 9(b) hereof.

         (b) Neither payroll deductions credited to a Participant's account, nor
any rights with regard to the exercise of an option or to receive common stock
under any phase of the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by the Participant. Any such attempted assignment,
transfer, pledge or other disposition shall be null and void and without effect,
except that the Company may, at its option, treat such act as an election to
withdraw funds in accordance with Paragraph 9.

         14. Designation of Beneficiary. A Participant may file a written
designation of a beneficiary who is to receive any cash to the Participant's
credit plus interest thereon under any phase of the Plan in the event of such
Participant's death prior to exercise of his option pursuant to Paragraph 9(b)
hereof, or to exercise his option and become entitled to any stock and/or cash
upon such exercise in the event of the Participant's death prior to exercise of
the option pursuant to Paragraph 9(b) hereof. The beneficiary designation may be
changed by the Participant at any time by written notice to the Company.


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         Upon the death of a Participant and upon receipt by the Company of
proof deemed adequate by it of the identity and existence at the Participant's
death of a beneficiary validly designated under the Plan, the Company shall in
the event of the Participant's death under the circumstances described in
Paragraph 9(b) hereof, allow such beneficiary to exercise the Participant's
option pursuant to Paragraph 9(b) if such beneficiary is living on the
termination date of the phase and deliver to such beneficiary the appropriate
stock and/or cash after exercise of the option. In the event there is no validly
designated beneficiary under the Plan who is living at the time of the
Participant's death under the circumstances described in Paragraph 9(b) or in
the event the option lapses, the Company shall deliver the cash credited to the
account of the Participant with interest to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed to the knowledge of the Company, it may, in its discretion, deliver
such cash to the spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate. The Company will not be
responsible for or be required to give effect to the disposition of any cash or
stock or the exercise of any option in accordance with any will or other
testamentary disposition made by such Participant or in accordance with the
provision of any law concerning intestacy, or otherwise. No designated
beneficiary shall, prior to the death of a Participant by whom he has been
designated, acquire any interest in any stock or in any option or in the cash
credited to the Participant under any phase of the Plan.

         15. Amendment and Termination. The Plan may be terminated at any time
by the Board of Directors provided that, except as permitted in Paragraph 4(c)
with respect to an acceleration of the termination date of any phase, no such
termination will take effect with respect to any options then outstanding. Also,
the Board may, from time to time, amend the Plan as it may deem proper and in
the best interests of the Company or as may be necessary to comply with Section
423 of the Internal Revenue Code of 1986, as amended, or other applicable laws
or regulations; provided, however, that no such amendment shall, without prior
approval of the shareholders of the Company (1) increase the total number of
shares for which options may be granted under the Plan (except as provided in
Paragraph 12 herein), (2) permit aggregate payroll deductions in excess of ten
percent (10%) of a Participant's compensation as of the Compensation Date of a
phase, or (3) impair any outstanding option.

         16. Interest. In any situation where the Plan provides for the payment
of interest on a Participant's payroll deductions, such interest shall be
determined by averaging the month-end balances in the Participant's account for
the period of his participation and computing interest thereon at the initial
rate of three percent (3%) per annum. This interest rate may be adjusted
periodically by the Committee as it deems appropriate.

         17. Notices. All notices or other communications in connection with the
Plan or any phase thereof shall be in the form specified by the Committee and
shall be deemed to have been duly given when received by the Participant or his
designated personal representative or beneficiary or by the Company or its
designated representative, as the case may be.


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         18. Participation of Subsidiaries. The Employees of any Subsidiary of
the Company shall be entitled to participate in the Plan on the same basis as
Employees of the Company, unless the Board of Directors determines otherwise.
Effective as of the date of coverage of any Subsidiary, any references herein to
the "Company" shall be interpreted as referring to such Subsidiary as well as to
Insignia Systems, Inc.

         In the event that any Subsidiary which is covered under the Plan ceases
to be a Subsidiary of Insignia Systems, Inc. the employees of such Subsidiary
shall be considered to have terminated their employment for purposes of
Paragraph 9 hereof as of the date such Subsidiary ceases to be such a
Subsidiary.

         19. Definitions. (a) "Subsidiary" shall include any corporation defined
as a subsidiary of the Company in Section 424(f) of the Internal Revenue Code of
1986, as amended.

         (b) "Employee" shall mean any employee, including an officer, of the
Company who as of the day immediately preceding the Commencement Date of a phase
is customarily employed by the Company for more than twenty (20) hours per week
and more than five (5) months in a calendar year.

         (c) "Base Pay" is the regular pay for employment for each employee as
annualized for a twelve (12) month period, exclusive of overtime, commissions,
bonuses, disability payments, shift differentials, incentives and other similar
payments, determined as of the Commencement Date of each phase.


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