Blueprint





 







EXHIBIT 10.1



INSIGNIA SYSTEMS, INC.


2003
INCENTIVE STOCK OPTION PLAN



(As Amended through November 28, 2016)


1. Purpose


. The
purpose of this Plan is to provide a means whereby Insignia
Systems, Inc. (the “Company”), may be able, by granting
options to purchase stock in the Company, to attract, retain and
motivate capable and loyal employees, directors, consultants and
advisors of the Company and its subsidiaries, for the benefit of
the Company and its shareholders. Both incentive stock options
which qualify for favorable tax treatment under Section 422 of the
Internal Revenue Code (the “Code”), and nonqualified
stock options which do not qualify for favorable tax treatment, may
be granted under the Plan.


2. Reservation
of Shares


. A
total of 3,675,000 shares of the authorized but unissued shares of
Common Stock of the Company, par value $.01 per share, is reserved
for issue upon the exercise of options granted under the Plan. If
any option expires or terminates for any reason without having been
exercised in full, the unpurchased shares covered thereby shall
become available for additional options which may be issued to
persons eligible under the Plan so long as it remains in effect.
Shares reserved for issue as provided herein shall cease to be
reserved upon termination of the Plan.


3. Administration


. The
Plan shall be administered by the Compensation Committee of the
Board of Directors (the “Committee”). The Committee
shall be appointed by the Board of Directors and shall be comprised
solely of two or more “non-employee directors” within
the meaning of SEC Rule 16b-3. Each member of the Committee
shall also be an “outside director” within the meaning
of Code Section 162(m). The Committee shall have the full
power to construe and interpret the Plan and to establish and amend
rules and regulations for its administration. The Committee shall
determine which persons shall be granted options hereunder, the
number of shares for which each option shall be granted, the types
of options to be granted, and any limitations on the exercise of
options in addition to those imposed by this Plan. The Committee
may also waive any restrictions on the exercise of outstanding
options and approve amendments to outstanding options, provided
there is no conflict with the terms of the Plan. The Committee
shall apply such criteria as it deems appropriate in determining
the persons to whom options are granted and the number of shares to
be covered by each option.


4. Eligibility


. An
option may be granted to any employee, director, consultant or
advisor of the Company or its subsidiaries, except that no
consultant or advisor shall be granted options in connection with
the offer and sale of securities in a capital raising transaction
on behalf of the Company. The maximum number of shares for which
any person may be granted options under the Plan in any year is
limited to 100,000 shares.


5. Option
Grants To Outside Directors


. Each
outside director of the Company shall automatically be granted an
option to purchase 10,000 shares of Common Stock on the date first
appointed or elected as a director. Each outside director shall
also automatically be granted an option to purchase 5,000 shares of
Common Stock on (a) the date of each subsequent annual meeting of
the shareholders, provided the outside director is either reelected
or continues to serve as an outside director, or (b) the
anniversary of the prior year’s grant in any year in which
there is no meeting of the shareholders. In no event shall a
director receive more than one grant in any fiscal
year.


The
period within which an option granted to an outside director must
be exercised shall be the earlier of (a) ten years from the date of
grant, or (b) 90 days after the director ceases to be a director
for any reason. Options granted to outside directors shall be
immediately exercisable in full when granted.


6. Exercise
Price


. The
per share exercise price for each option shall be determined by the
Committee at the time of grant, provided that the per share
exercise price for any incentive stock option, and any option
granted to an outside director, shall be not less than the fair
market value of the Common Stock on the date the option is granted.
In making such determination, the Committee shall rely on market
quotations, if available, but if not available, upon independent
appraisals of the stock or such other information deemed
appropriate by the Committee.


7. Changes
in Present Stock


. In
the event of changes in the capital stock of the Company or in the
capital structure of the Company by reason of a recapitalization,
merger, consolidation, reorganization, stock or extraordinary cash
dividend, stock split or other change in capitalization,
appropriate adjustment may be made by the Committee, in its sole
discretion, in the number or kind of shares and the option price of
shares which are or may become subject to options granted or to be
granted hereunder or as otherwise determined by the Committee to be
equitable.


8. Exercise
of Option


.
Receipt by the Company of a written notice from an optionee,
specifying the number of shares to be purchased, and accompanied by
payment of the purchase price for such shares, shall constitute
exercise of the option as to such shares. The date of receipt by
the Company of such written notice shall be the date of exercise of
the option. The Company may accept payment from a broker and, upon
receipt of written instructions from the optionee, deliver the
purchased shares to the broker.


9. Option
Agreement Provisions


. Each
option granted under the Plan shall be evidenced by a Stock Option
Agreement executed by the Company and the optionee, and shall be
subject to the following terms and conditions, and such other terms
and conditions as may be prescribed by the Committee:




(a)


Payment






. The
full purchase price of the shares acquired upon exercise of an
option shall be paid in cash, certified or cashier’s check,
or in the form of Common Stock of the Company with a market value
equal to the option exercise price and free and clear of all liens
and encumbrances.


The
Committee in its sole discretion may also permit the
“cashless exercise” of an option. In the event of a
cashless exercise, the optionee shall surrender the option to the
Company, and the Company shall issue the optionee the number of
shares determined as follows:



X 

= 

Y (A-B) /A
where:







X 

= 

the number of
shares to be issued to the optionee.







Y 

= 

the number of
shares with respect to which the option is being
exercised.







A 

= 

the closing sale
price of the Common Stock on the date of exercise, or in the
absence thereof, the fair market value on the date of
exercise.







B 

= 

the option exercise
price.








(b)


Exercise Period






. The
period within which an option must be exercised shall be fixed by
the Committee, and shall not exceed ten years from the date of
grant for an incentive stock option. The Committee may provide that
an option will vest and become exercisable upon the completion of
specified periods of employment, or the attainment of specified
performance goals. To the extent exercisable, an option may be
exercised in whole or in part. Outstanding unvested options shall
become immediately exercisable in full in the event the Company is
acquired by merger, purchase of all or substantially all of the
Company’s assets, or purchase of a majority of the
outstanding stock by a single party or a group acting in
concert.




(c)


Rights of Optionee Before Exercise






. The
holder of an option shall not have the rights of a shareholder with
respect to the shares covered by his or her option until such
shares have been issued to him or her upon exercise of the
option.




(d)


No Rights to Continued Employment






.
Nothing in the Plan or in any Stock Option Agreement entered into
pursuant hereto shall be construed to confer upon any optionee any
right to continue in the employ of his or her employer or interfere
in any way with the right of his or her employer to terminate his
or her employment at any time.




(e)


Death of Optionee






. Upon
the death of an optionee, the option, or any portion thereof, may
be exercised to the extent the optionee was entitled to do so at
the time of the optionee’s death, by his or her executor or
administrator or other person entitled by law to the
optionee’s rights under the option, at any time within one
year subsequent to the date of death. The option shall
automatically expire one year after the optionee’s death to
the extent not exercised.




(f)


Disability of Optionee






. If an
optionee is an employee of the Company or its subsidiaries, and if
the optionee’s employment is terminated due to his or her
disability, the optionee may, within one year of such termination,
exercise any unexercised portion of the option to the extent he or
she was entitled to do so at the time of such termination. The
option shall automatically expire one year after such termination
to the extent not exercised.




(g)


Other Termination of Employment






. If an
optionee is an employee of the Company or its subsidiaries, and if
the optionee’s employment is terminated other than by death,
disability, or conduct which is contrary to the best interests of
his or her employer, the optionee may, within 90 days of such
termination, exercise any unexercised portion of the option to the
extent he or she was entitled to do so at the time of such
termination. The option shall automatically expire 90 days after
such termination to the extent not exercised. If the
optionee’s employment is terminated by his or her employer
for conduct which is contrary to the best interests of his or her
employer, or if the optionee violates any written nondisclosure
agreement with his or her employer, as determined in either case by
the optionee’s employer in its sole discretion, the
unexercised portion of the optionee’s option shall
automatically expire at that time. Inter-company transfers and
approved leaves of absence for up to 90 days shall not be
considered termination of employment.




(h)


Non-transferability of Option






. No
option shall be transferable by the optionee other than by will or
by the laws of descent and distribution, and each option shall be
exercisable during the optionee’s lifetime only by the
optionee. No option may be attached or subject to levy by an
optionee’s creditors.




(i)


Date of Grant






. The
date on which the Committee approves the granting of an option
shall be considered the date on which such option is
granted.


10. Additional
Provisions for Incentive Stock Options




(a)


Dollar Limit






. Each
option granted to an employee shall constitute an incentive stock
option, provided that no more than $100,000 of such options (based
upon the fair market value of the underlying shares as of the date
of grant) can first become exercisable for any employee in any
calendar year. To the extent an option grant exceeds the $100,000
limitation, it shall constitute a non-qualified stock option. Each
Stock Option Agreement with an employee shall specify the extent to
which it is an incentive and/or non-qualified stock option. For
purposes of applying the $100,000 limitation, options granted under
this Plan and all other incentive stock option plans of the Company
and any parent or subsidiary corporation shall be
included.




(b)


Ten Percent Shareholders






. No
incentive stock option shall be granted to any employee who at the
time directly or indirectly owns more than 10 percent of the
combined voting power of all classes of stock of the Company or of
a parent or subsidiary corporation, unless the exercise price is
not less than 110 percent of the fair market value of such stock on
the date of grant, and unless the option is not exercisable more
than five years after the date of grant.


11. Restrictions
on Transfer


.
During any period in which the offering of the shares under the
Plan is not registered under federal and state securities laws, an
optionee shall agree in his or her option agreement that he or she
is acquiring shares under the Plan for investment purposes, and not
for resale, and that the shares cannot be resold or otherwise
transferred except pursuant to registration or unless, in the
opinion of counsel for the Company, registration is not
required.


Any
restrictions upon shares acquired upon exercise of an option
pursuant to the Plan and the Stock Option Agreement shall be
binding upon the optionee, and his or her heirs, executors, and
administrators. Any stock certificate issued under the Plan which
is subject to restrictions shall be endorsed so as to refer to the
restrictions on transfer imposed by the Plan, and by applicable
securities laws.


12. Withholding
of Taxes


. The
Company shall make such provisions and take such steps as it may
deem necessary or appropriate for the withholding of any taxes that
the Company is required by any law or regulation to withhold in
connection with any option including, but not limited to,
withholding a portion of the shares issuable on exercise of an
option, or requiring the optionee to pay to the Company, in cash,
an amount sufficient to cover the Company’s withholding
obligations.


13. Duration
of Plan


. The
Plan shall terminate ten years after the date of its adoption by
the Board of Directors, unless sooner terminated by issuance of all
shares reserved for issuance hereunder, or by the Board of
Directors pursuant to Section 13. No option shall be granted under
the Plan after such termination date.


14. Termination
or Amendment of the Plan


. The
Board of Directors may at any time terminate the Plan, or make such
modifications to the Plan as it shall deem advisable. No
termination or amendment of the Plan may, without the consent of
the optionee to whom any option shall previously have been granted,
adversely affect the rights of such optionee under such
option.


15. Shareholder
Approval


. The
Board of Directors shall submit the Plan to the shareholders for
their approval within 12 months of the date of its adoption by the
Board. Options granted prior to such approval are contingent on
receipt of such approval, and shall automatically lapse if such
approval is not granted. The Board shall also submit any amendments
to the shareholders for approval if required by applicable law or
regulation.


16. Interpretation


. The
Plan shall be interpreted in accordance with Minnesota
law.