Exhibit 10.1


AMENDED CHANGE IN CONTROL SEVERANCE

AGREEMENT


          AGREEMENT
made as of May 1, 2012, by and between Insignia Systems, Inc., a Minnesota
corporation (the “Company”), and Scott F. Drill (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 

 


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 owning less than 50% of the combined voting power of the Company’s
 capital stock immediately following such event;

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 (as defined below) if (a) the Change in Control is a
“hostile takeover” and the Executive ceases to be employed for any reason
(including voluntary resignation) other than death or cause (as defined below),
or (b) the Change in Control is not a “hostile takeover” and the Executive
ceases to be employed due to a reason not precluding payment under Section 4.
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.


          For
purposes of this Section 3, the terms “base salary” and “hostile takeover” are
defined as follows. “Base salary” means either $316,200 or the Executive’s
annual base salary in effect immediately prior to the Change in Control,
whichever is higher. “Hostile takeover” means a Change in Control (a) that is
not approved in advance of a public announcement by the Company’s Board of
Directors or a committee of the Board of Directors authorized by the Board to
consider the Change in Control, or (b) in which the acquiring entity is a
direct competitor of the Company, including but not limited to Valassis Sales
and Marketing Services, Inc., News America Marketing In-Store, Inc., and
Vestcom International, Inc., and their affiliated companies.


          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(b) 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:


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 (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;

 
	
  

 	
  

 	
  

 
	
 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 

 


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 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.


          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.


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          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.


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


	
  

 	
  

 	
  

 	
  

 	
  

 
	
 EXECUTIVE:

 	
 INSIGNIA
 SYSTEMS, INC.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 /s/ Scott F.
 Drill



 	
  

 	
 By: 

 	
 /s/ John
 Gonsior



 	
  

 
	
 Scott F.
 Drill

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Its:

 	
 Vice
 President of Finance and

 
	
  

 	
  

 	
  

 	
 Chief
 Financial Officer

 


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