IMAGE SENSING SYSTEMS, INC.
                         EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT ("Agreement") is effective as of June 12, 2000 by and between
Image Sensing Systems, Inc. ("the Corporation"), a Minnesota corporation with
its principal offices at 500 Spruce Tree Centre, 1600 University Avenue West,
St. Paul, MN 55104-3825, and William L. Russell ("Employee") a Minnesota
resident, whose residence address is 1770 Delaware Street, West Saint Paul, MN
55118.

                                    RECITALS

         A. Employee possesses certain skills, talents, contacts, judgement and
knowledge of the Corporation's industry, including its various businesses,
technology strategies and objectives.

         B. The Corporation desires to extend the employment term to Employee,
and Employee desires to accept such extension employment, subject to the terms
and conditions herein.

NOW, THEREFORE, in consideration of the foregoing premises and the parties'
mutual covenants and undertakings contained in this Agreement, the Corporation
and Employee hereby agree as follows:

ARTICLE 1.0       DEFINITIONS

         Capitalized terms used in this Agreement shall have their defined
meaning throughout the Agreement. The following terms shall have the meaning set
forth below, unless the context clearly requires otherwise.

         1.1 BOARD. "Board" shall mean the Board of Directors of the
Corporation.

         1.2 CHANGE IN CONTROL. "Change In Control" shall mean any of the
following: (i) a public announcement that any person has acquired or has the
right to acquire beneficial ownership of fifty-one percent (5.1 %) or more of
the then outstanding share of common stock of the Corporation and, for this
purpose, the terms "person" and "beneficial ownership" shall have the meanings
provided in Section 13(d) of the Securities and Exchange Commission; (ii) the
commencement of or public announcement of an intention to make a tender or
exchange offer for fifty-one percent (5.1 %) or more of the then outstanding
shares of the common stock of the Corporation; (iii) a sale of all or
substantially all of the assets of the Corporation; or (iv) the Board of
Directors of the Corporation, in its sole and absolute discretion, determines
that there has been a sufficient change in the stock ownership of the
Corporation to constitute a change in control of the Corporation.

         1.3 CONFIDENTIAL INFORMATION. "Confidential Information" shall mean
information that is proprietary to the Corporation or its members or others and
that is


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entrusted to the Corporation, whether or not trade secrets. Confidential
Information includes, but is not limited to, information relating to designs,
software (in source and object code), technology strategies, business plans and
to the business as conducted or anticipated to be conducted by the Corporation
or its members, and to past or current or anticipated products or services of
the Corporation of its members. Confidential Information also includes, without
limitation, information concerning research, development, purchasing,
accounting, marketing, selling and services. All information that Employee has a
reasonable basis to consider confidential is Confidential Information, whether
or not originated by Employee and without regard to the manner in which Employee
obtains access to this and any other proprietary information.

         1.4 DISABILITY. "Disability" shall mean the unwillingness or inability
of Employee to perform his duties on a full-time basis under this Agreement
because of continuous incapacity due to physical or mental illness, bodily
injury or disease for a period of three (3) months or more.

         1.5 EFFECTIVE DATE. "Effective Date" shall mean the date on page 1
hereof.

         1.6 INVENTIONS. "Inventions" shall mean ideas, improvements and
discoveries, whether or not such are patentable or copyrightable, and whether or
not in writing or reduced to practice.

         1.7 WORKS OF AUTHORSHIP. "Works of Authorship" shall mean any writings,
drawings, diagrams, charts, tables, databases, software (in object or source
code and recorded on any medium), and any other works of authorship, whether or
not such are copyrightable.

ARTICLE 2.0       EMPLOYMENT

         2.1 EMPLOYMENT Upon the terms and conditions set forth herein and his
appointment by the Board of Directors, the Corporation hereby employs Employee,
and Employee accepts such employment, as President and CEO, commencing on June
12, 2000 at the Corporation's principal place of business in St, Paul, Minnesota
until such time as this agreement is terminated by the Company with not less
than twelve months notice in writing or the Employee giving not less than twelve
months notice. (Termination of this Agreement by either party or by mutual
agreement of the parties under Article 4.0 below shall also terminate Employee's
employment by the Corporation.)

ARTICLE 3.0       COMPENSATION AND BENEFITS

         3.1 BASE SALARY. The Corporation shall pay Employee a Base Salary at an
annual rate of One Hundred Fifty Seven Thousand Five Hundred Dollars (US$). Such
Base Salary shall be paid in accordance with the Corporation's regular payroll
practices and subject to any applicable income tax, Social Security or other
withholding.


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Employee's Base Salary shall be reviewed for potential adjustment on the basis
of performance on an annual basis.

         3.2 INCENTIVE COMPENSATION. The Corporation shall make Employee
eligible for incentive compensation ("Incentive Compensation"), in addition to
the Base Salary then applicable. Payment of Incentive Compensation will be
subject to Employee's achieving certain objectives set annually by Employee and
the Board.

         3.3 EQUITY PARTICIPATION. The Corporation shall make employee eligible
to receive options to purchase stock in the Corporation, subject to the terms
and conditions of the Corporation's Incentive and Non-Incentive Stock Option
Plan and/or Agreement. This grant shall be a combination of options outside the
Company's Option Plan and the Company's Option plan and shares shall be
registered. The Corporation shall offer Employee an initial stock option of
135,000 common shares at an exercise price to the fair market value of common
shares as of the close of trading on June 12, 2000 ($6 7/8) with the first
15,000 shares vesting one year from the effective date of the agreement and
shall be non-incentive options. The remaining 120,000 shares shall be incentive
options subject to shareholder approval or non-incentive in the event of
shareholder refusal. Twenty Thousand shares shall vest on the second and third
anniversary of the date of the Agreement, Twenty Five Thousand shares on the
fourth and fifth anniversary and Thirty Thousand on the sixth anniversary of the
date of this agreement. The options shall expire 10 years from the date of the
grant. If at any time, the Employee's employment with the Corporation is
terminated for any reason all unvested options will be canceled immediately. Any
vested options that have not been exercised by Employee will be canceled if not
exercised by Employee within 90 days. If at any time during the term of this
Agreement a Change In Control occurs, all unvested options will vest immediately
and unexercised options may be exercised in full on or after the eleventh
business day following the date of the Change in Control.

         3.4 HEALTH, DEATH, DISABILITY, AND RETIREMENT BENEFITS. Employee shall
also be entitled to participate in the health and group life insurance benefit
plans of the Corporation to the extent that his position, title, tenure, salary,
age, health, and other qualifications make him eligible to participate. Employee
shall also be entitled to participate in disability programs and employee
pension plans of the Corporation to the extent the Corporation establishes these
plans and to the extent that his position, title tenure, salary, age, health,
and other qualifications make him eligible to participate. The Corporation does
not guarantee the adoption or continuance of any particular employee benefit
plan or program during the term of this Agreement, and the Employee's
participation in any such plan or program shall be subject to the provisions,
rules, and regulations applicable thereto. Employee will receive not less than
20 days vacation allotment per year.

ARTICLE 4.0       TERM; TERMINATION

         4.1 TERM. Employee's employment under this Agreement shall commence
upon the Effective Date and shall continue for not less than six years, after
which time it


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shall be terminable by either party for any reason or no reason upon a notice of
twelve months.

         4.2 TERMINATION BY THE CORPORATION FOR GOOD CAUSE. Notwithstanding
Section 4.1 above, the Corporation may terminate this Agreement at any time with
notice for Good Cause. For purposes of this Agreement, "Good Cause" shall mean:

         (a)      repeated violations by Employee of any of his duties or
                  repeated failures or omissions to carry out lawful and
                  reasonable orders of the Corporation's Board which, in the
                  reasonable judgement of the President, are willful and
                  deliberate and which are not cured within reasonable period
                  after Employee's receipt of written notice thereof from the
                  Corporation.

         (b)      any absence from Employee's regular full-time employment in
                  excess of two (2) weeks that is not due to a vacation, bona
                  fide illness, disability, death or other reason expressly
                  authorized by the board; or

         (c)      any act or acts of (i) personal dishonesty by Employee and
                  intended to result in substantial personal enrichment of
                  Employee at the expense of the Corporation; (ii) any willful
                  and deliberate misconduct that is materially and demonstrably
                  injurious to the Corporation; or (iii) any criminal
                  indictment, presentment or conviction for a felony, whether or
                  not the Corporation is the victim of such offense.

         4.3 TERMINATION IN THE EVENT OF EMPLOYEE'S DEATH OR DISABILITY.
Notwithstanding Section 4.1 above, Employee's employment under this Agreement
shall terminate in the event of his death or disability.

         4.4 TERMINATION BY MUTUAL AGREEMENT. Notwithstanding Section 4.1 above,
the parties may terminate this Agreement at any time and upon any other terms or
conditions by mutual written agreement.

         4.5 COMPENSATION UPON TERMINATION BY THE CORPORATION. As Employee's
sole and exclusive compensation for his termination by the Corporation, the
Corporation shall pay Employee as follows:

         Within ten (10) days after the termination date, the Corporation shall
         pay Employee any amounts due to him for salary through the termination
         date together with any other unpaid and pro rata amounts of accrued
         vacation pay, sick leave, and/or business expense reimbursements that
         may be due. Additionally, the Corporation shall pay one years salary at
         the rate in effect at the time of termination along with the full
         benefits in effect at


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         time of notice. It is the intention of both employee and the Company
         that at the end of year five, notice of intent to renew this agreement
         or not to renew will be given in writing. If the Employee gives notice,
         and the Company chooses not to continue employment through the notice
         period, then the severance shall be paid as above equal to the notice
         period less any payments made from the written notice date.

         4.6 SURVIVAL. The provisions of Article 4.0 (relating to termination
rights and the provision of compensation and benefits beyond the termination of
this Agreement), the provisions of Article 6.0 (relating to Confidential
Information and intellectual property rights of the Corporation), the provisions
of Article 7.0 (relating to non-competition and no solicitations), the
provisions of Article 8.0 (relating to dispute resolution) and the provisions of
Article 9.0 (relating to miscellaneous terms and conditions) shall survive
termination of this Agreement for any reason.

ARTICLE 5.0       EMPLOYMENT UPON A CHANGE IN CONTROL

         5.1 CONTINUED EMPLOYMENT. If a Change In Control occurs and the
Corporation or its successor desires that Employee remain in his employment with
the Corporation or its successor, Employee agrees to remain in the employment of
the Corporation or its successor for a term not to exceed one (1) year at the
compensation rate in effect at the Change In Control, or as mutually agreed upon
by the parties. If at the end of one year the Corporation elects not continue
the Employees employment then the provision of paragraph 5.2 shall take effect.

         5.2 CONTINUED COMPENSATION. If a Change In Control occurs and the
Corporation or its successor does not desire that Employee remain in his
employment with the Corporation or its successor, the Corporation or its
successor agrees to pay Employee his salary in effect at the termination date
for a term of one (1) year from the termination date plus benefits continued for
one year, subject to withholding, deductions and taxation in accordance with
applicable law.

ARTICLE 6.0       CONFIDENTIAL INFORMATION; INTELLECTUAL, PROPERTY

         6.1 PROHIBITIONS AGAINST UNAUTHORIZED USE. Employees shall not use or
disclose, other than in connection with Employee's employment with the
Corporation, any Confidential Information to any person not employed by the
Corporation or not authorized by the Corporation to receive such Confidential
Information, without the prior written consent of the Corporation during the
term of this Agreement or at any time thereafter. Employee shall use reasonable
and prudent care to safeguard and protect and prevent the unauthorized use and
disclosure of Confidential Information.

         6.2 EXCLUSION. The obligations under Section 6.1 above shall not apply
to any information that:



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         (a)      is now or becomes generally available to the public through no
                  fault of Employee;

         (b)      was already known to Employee, as shown by his books and
                  records, prior to disclosure of same by the Corporation;

         (c)      is or was independently developed or acquired by Employee
                  without any use of or reliance on Confidential Information;

         (d)      is or was provided to Employee by a third party not under any
                  obligation of confidentiality to the Corporation; or

         (e)      is required to be disclosed by law, provided, however,
                  employee shall render reasonable cooperation, at the
                  Corporation's expense, to lawfully prevent or minimize any
                  such public disclosure of Confidential Information through
                  protective orders or other similar measures.

         6.3 OWNERSHIP AND RETURN OF CORPORATION PROPERTY. All Confidential
Information or other Corporation property in Employee's possession, custody or
control, including without limitation, all documents, reports, manuals, business
plans, minutes, memoranda, computer software, computer databases, computer
print-outs, member or customer lists, credit cards, keys, identification,
products, access cards, and all other tangible or intangible property relating
in any way to the business of the Corporation are the exclusive property of the
Corporation, even if Employee authored, created or assisted in authoring or
creating such property. Employee shall return to the Corporation all such
Confidential Information or other property immediately upon termination of
employment for any reason whatsoever or at such earlier time as the Corporation
may reasonably request.

         6.4 DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND OTHER WORKS. Employee
shall promptly disclose to the Corporation in writing all Inventions and Works
of Authorship which are conceived, made, discovered, written or created by
Employee alone or jointly with another person, group or entity, whether during
the normal hours of his employment at the Corporation or on Employee's own time,
during the term of this Agreement and for one (1) year after termination of this
Agreement. Employee hereby assigns all rights to all such Inventions and Works
of Authorship to the Corporation. Employee shall give the Corporation all the
assistance is reasonably requires for the Corporation to perfect, protect, and
use its rights to such Inventions and Works of Authorship. Employee shall sign
all such documents, take all such actions and supply all such information that
the Corporation considers necessary or desirable to transfer or record the
transfer of Employee's entire, right, title and interest in such Inventions and
Works of Authorship and to enable the Corporation to obtain exclusive patent,
copyright, or other legal protection for Inventions and Works of Authorship
anywhere in the world, provided, the Corporation shall bear all reasonable
expenses of Employee in such rendering cooperation.


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         6.5 EXCLUSIONS. Notwithstanding Section 6.4 above, the following shall
not be deemed Inventions or Works of Authorship assigned to Corporation by
Employee hereunder:

         (a)      Any invention or work of authorship for which no equipment,
                  supplies, facility, or Confidential Information of the
                  Corporation was used and which was developed entirely on
                  Employee's own time, and which (i) does no relate (1) directly
                  to the business of the Corporation or (2) to the Corporation's
                  actual or demonstrably anticipated research or development, or
                  (ii) which does not result from any work performed by Employee
                  for the Corporation.

ARTICLE 7.0       NON-COMPETITION AND NO RAID COVENANTS

         7.1 NON-COMPETITION COVENANT. Subject to Section 7.2 and 7.3 below,
during the term of this Agreement and for a period of one (1) year following
termination of his employment with the Corporation for any reason, Employee
shall not directly or indirectly engage in any business activity on his own
behalf or as a partner, shareholder, director, trustee, principal, agent,
officer, employee, consultant, or otherwise of any person or entity the business
of which is the same as, similar to, or competitive of any business of the
Corporation, or which is engaged in the development or production of products
intended to compete with the Corporation, or assist, solicit, entice, or induce
any other person to engage in any such activity. For purpose hereof,
"shareholder" shall not included beneficial ownership of less that five percent
(5%) of the combined voting power of all issued and outstanding voting
securities of a publicly held corporation whose stock is traded on a major stock
exchange or quoted on NASDAQ.

         7.2 CORPORATION'S OPTION TO REVISE. At its sole option, the Corporation
may, by written notice to Employee, within thirty (30) days after the effective
date of the termination of Employee's employment, waive or limit the line of
business, time period, and/or geographic area in which Employee is prohibited
from engaging in competitive activity under Section 7.1 above.

         7.3 COVENANT NOT TO RECRUIT. Employee hereby acknowledges that the
corporation's employees, consultants and other contractors constitute vital and
valuable aspects of its business and missions on a world-wide basis. In
recognition of that fact, for a period of one (1) year following the termination
of the Agreement for any reason whatsoever, Employee shall not solicit, or
assist anyone else in the solicitation of, any of the Corporation's then-current
employees, consultants or other contractors to terminate their respective
relationships with the Corporation and to become employees, consultants or
contractors by any enterprise with which the Employee may then be associated,
affiliated or connected.

         7.4 COVENANT NOT TO SOLICIT. Employee hereby acknowledges that the
Corporation's customers constitute vital and valuable aspects of its business on
a world-


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wide basis. In recognition of that fact, for a period of one (1) year following
the termination of this Agreement for any reason whatsoever, Employee shall not
solicit, or assist anyone else in the solicitation of, any of the Corporation's
then-current customers to terminate their respective relationships with the
Corporation and to become customers of any enterprise with which the Employee
may then be associated, affiliated or connected.

ARTICLE 8.0       DISPUTE RESOLUTION

         8.1 PROCEDURE FOR ARBITRATION. Except as provided in Section 8.2 below,
any dispute, claim or controversy arising out of or in connection with this
Agreement which has not been settled through negotiation within a period of
thirty (30) day after the date on which either party shall first have notified
the other party in writing of the existence of a dispute shall be settled by
final and binding arbitration under the then-applicable Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). Any such arbitration
shall be conducted by one (1) neutral arbitrator appointed by mutual agreement
of the parties or, failing such agreement, in accordance with said Rules. Such
arbitrator shall be an experienced attorney with a background in employment law.
Any such arbitration shall be conducted in St. Paul, Minnesota. An arbitral
award may be enforced in any court of competent jurisdiction. Notwithstanding
any contrary provision in the AAA Rules, the following additional procedures and
rules shall apply to any such arbitration:

         (a)      Each party shall have the right to request from the
                  arbitrator, and the arbitrator shall order upon good cause
                  shown, reasonable and limited pre-hearing discovery, including
                  (i) exchange of witness lists, (ii) depositions under oath of
                  named witnesses at a mutually convenient location, (iii)
                  written interrogatories, and (iv) document requests.

         (b)      Upon conclusion of the pre-hearing discovery, the arbitrator
                  shall promptly hold a hearing upon the evidence to be adduced
                  by the parties and shall promptly render a written opinion and
                  award.

         (c)      The arbitrator shall adhere strictly to the sole and exclusive
                  remedies set forth in Article 4.0 above and may not award or
                  assess punitive damages against either party.

         (d)      Each party shall bear its own costs and expenses of the
                  arbitration and one-half (1/2) of the fees and costs of the
                  arbitrator, subject to the power of the arbitrator, in his or
                  her sold discretion, to award all such reasonable costs,
                  expenses and fees to the prevailing party.

         8.2 LITIGATION RIGHTS RESERVED. If any dispute arises with regard to
the unauthorized use or infringement of Confidential Information by Employee or
with regard to Employee's breach or threatened breach of covenants in Article
7.0, the


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Corporation may seek any available remedy at law or in equity from a court of
competent jurisdiction.

ARTICLE 9.0       GENERAL PROVISIONS

         9.1 INDEMNIFICATION. To the fullest extent required by law, the
Corporation shall indemnify employee with respect to any actions commenced
against employee in his capacity as an officer or director of the Corporation,
and the Corporation shall advance on a timely basis any costs or expenses
(including legal fees) incurred in defending such actions, subject only to
Employee's agreement to repay such amount if later found not entitled to be
indemnified. The obligation to indemnify hereunder shall survive the termination
of this Agreement. The Corporation acknowledges that the indemnification
obligations generally available to directors, officers or employees of the
Corporation pursuant to the Corporation's articles of incorporation or bylaws
will be available to Employee.

         9.2 SUCCESSORS AND ASSIGNS. This Agreement constitutes a personal
service agreement on the part of Employee and his duties hereunder may not be
assigned or delegated to any other person without the prior written consent of
the Corporation, but all rights of Employee hereunder shall inure to the benefit
of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If Employee should die while any amounts would still be payable to
Employee hereunder if Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee, or other designee or, it there be no
such designee, to Employee's estate.

         9.3 NOTICES. All notices, requests and demands required or permitted
hereunder shall be in writing and be personally or courier delivered or mailed
postage prepaid, registered or certified U.S. mail to the other party at its
address set forth on the last page of this Agreement. Either party may, by
notice hereunder, designate a changed address. Any notice hereunder shall be
deemed effectively given and received: (a) if personally or courier delivered,
upon delivery; or (b) if mailed, on the third (3rd) day after deposit in the
mail.

         9.4 CAPTIONS. The various heading or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.

         9.5 GOVERNING LAW; CHOICE OF FORUM. The validity, interpretation,
construction, performance, enforcement and remedies of or relating to this
Agreement, and the rights and obligations of the parties hereunder, shall be
governed by the substantive laws of the State of Minnesota (without regard to
the conflict of laws ruled or statutes of any jurisdiction), and, expressly
subject to the dispute resolution mechanism in Article 8.0 above, any and every
other legal proceeding arising our of or in connection with this Agreement shall
be brought in the appropriate courts of the State of Minnesota,



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each of the parties hereby consenting to the exclusive jurisdiction of said
courts for this purpose.

         9.6 CONSTRUCTION. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

         9.7 WAIVERS. No failure on the part of either party to exercise and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.

         9.8 MODIFICATION. This Agreement may not be modified or amended except
by written instrument signed by Employee and another senior Executive of the
Corporation who is a member of the Board and is acting pursuant to the authority
of the Board.

         9.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto in reference to all the matters
herein agreed upon. This Agreement replaced in full all prior employment offers,
discussions, requests, agreements or understandings of the parties hereto, and
any and all such prior offers, discussions, requests, agreements or
understandings are hereby rescinded by mutual agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written in St. Paul,
Minnesota.

                                 IMAGE SENSING SYSTEMS, INC.

                                   By /s/ Richard P. Braun

                                 Its ______COMP COMM CHAIR________

                                   By /s/ William L. Russell

                                 Its ____________________________




                                                            /s/ Richard P. Braun
                                                            --------------------
                                                             Its Comp Comm Chair


                                                                        Address:

                                                          500 Spruce Tree Centre
                                                     1600 University Avenue West
                                                         St. Paul, MN 55104-3825

                                                         /s/ William L. Russell
                                                    ____________________________
                                                                        Employee