# EXHIBIT 10.21

# Employment Agreement

# Between

# Image Sensing Systems, Inc. and Arthur Bourgeois





This Employment Agreement will supersede both the May 6, 2002 Consulting
Agreement as well as the Addendum dated August 9, 2004.

POSITION:

Chief Financial Officer

TERM & TERMINATION

Term:   January 1, 2006  December 28, 2006

Termination:   This Agreement will terminate
December 28, 2006 unless renegotiated by the parties. Three months severance pay will be paid if terminated without cause.

CHANGE OF OWNERSHIP

For merger or sale of the Company, ISS agrees to pay six months salary in the event over 50% of the Companys common
stock changes hands, substantially all of the assets of the Company are sold or the Board of Directors of the Company, in its sole
and absolute discretion, determines that there has been a sufficient change in stock ownership of the Company to constitute a
change in control of the Company

RESPONSIBILITIES INCLUDE, BUT ARE NOT LIMITED TO:

| | Managing
cash and investments
|- | -----------------------------

| | SEC
reporting and compliance
|- | ----------------------------

| | Preparing
financial press releases
|- | ----------------------------------

| | Preparing
budgets and forecasts
|- | -------------------------------

| | Preparing
monthly financial reports to present to the ISS Board of Directors
|- | ----------------------------------------------------------------------------

| | Attending
and participating in the ISS Board of Directors meetings
|- | ------------------------------------------------------------------

| | Liaison
with outside auditors, attorneys, analysts, investment bankers, and commercial bankers
(Wells          Fargo)
|- | ---------------------------------------------------------------------------------------------------------------------

| | Annual
Report, proxy filing and annual shareholder meeting
|- | ----------------------------------------------------------

| | Completing
the Companys policy and procedures manual
|- | -----------------------------------------------------

| | Reviewing
insurance coverage
|- | ----------------------------

| | Reviewing
all contracts for financial disclosure
|- | ------------------------------------------------

| | Other duties as assigned by the CEO/President
|- | ---------------------------------------------

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# REMUNERATION:

Annual Salary:   $132,000 for the period January 1,
2006 to December 28, 2006

Pay Period:   Semi-monthly and in advance

Hours:   A minimum of 1200 hours and a maximum of 1500
hours. Hours worked in excess of 1500 will be paid at $100 per hour. Mr. Bourgeois will submit semi-monthly time sheets with an
accounting for hours worked to the CEO for his approval.

In consideration of the annual salary, Mr. Bourgeois agrees to forfeit
the following benefits usually provided by ISS:

|1. |  | Accrued vacation
|-- |  | ----------------

|2. |  | Company bonuses
|-- |  | ---------------

|3. |  | Health and medical benefits
|-- |  | ---------------------------

The Agreement assumes that over the next six months, Mr. Bourgeois will train
the current Controller to take on the focal point responsibilities associated with Econolite Control Products, Inc. as well as
perform as the back up to the CFO to the extent she is able to adopt some of CFOs workload as noted under the
Responsibilities section.

|EMPLOYEE |                        | IMAGE SENSING SYSTEMS, INC.
|-------- | ---------------------- | ---------------------------
|        
|AGREED:  | /s/   Arthur Bourgeois |                            
|         | Arthur Bourgeois       |                            
|        
|DATED:   | MARCH 23, 2006         |                            

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