Document:

Blueprint

 

Exhibit
4.1

 

 

DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Insignia Systems, Inc., a Minnesota corporation (the
“Corporation,” “we,” “us” and
“our”), has one class of securities registered under
Section 12 of the Securities Exchange Act of 1934, as amended,
namely its common stock, par value $.01 per share (“common
stock”).

 

The following description of the common stock is a summary and does
not purport to be complete. It is subject to and qualified by
reference to our Articles of Incorporation, as amended (the
“Articles”), and Bylaws, as amended (the
“Bylaws”). You are encouraged to read the Articles,
Bylaws, and applicable law, including the Minnesota Business
Corporation Act (“MBCA”).

 

Authorized Shares

 

The Corporation’s authorized capital stock consists solely of
40,000,000 shares of common stock.

 

Common Stock

 

No outstanding share of common stock is entitled to preference over
any other share, and each share is equal to any other share in all
respects. Holders of shares of common stock are entitled to one
vote for each share held of record at each meeting of shareholders.
Holders of shares of common stock are not entitled to any
preemptive, subscription, conversion, redemption or sinking fund
rights. The absence of preemptive rights could result in a dilution
of the interest of shareholders should additional common shares be
issued.

 

Holders of common stock are entitled to receive dividends in the
form of cash, property or shares of capital stock of the
Corporation, when and as declared by the Board, provided there are
sufficient earnings or surplus legally available for that purpose.
In any distribution of capital assets, such as liquidation, whether
voluntary or involuntary, holders of shares of common stock are
entitled to receive pro rata the assets remaining after creditors
have been paid in full. All of the issued and outstanding shares of
common stock are non-assessable.

 

Anti-Takeover Provisions

 

Statutory Provisions

 

Section 302A.671 of the MBCA applies, with certain exceptions,
to any acquisitions of our voting stock from a person other than
us, and other than in connection with certain mergers and exchanges
to which we are a party and certain tender offers or exchange
offers approved in advance by a disinterested board committee,
resulting in the beneficial ownership of 20% or more of the voting
power of our then-outstanding stock.

 

Section 302A.671 requires approval of the granting of voting
rights for the shares received pursuant to any such acquisitions by
a vote of our shareholders holding a majority of the voting power
of our outstanding shares and a majority of the voting power of our
outstanding shares that are not held by the acquiring person, our
officers or those non-officer employees, if any, who are also our
directors. Similar voting requirements are imposed for acquisitions
resulting in beneficial ownership of 331⁄3% or more or a
majority of the voting power of our then-outstanding stock. In
general, shares acquired without this approval are denied voting
rights in excess of the 20%, 331⁄3% or 50% thresholds and, to
that extent, can be called for redemption at their then fair market
value by us within 30 days after the acquiring person has failed to
deliver a timely information statement to us or the date our
shareholders voted not to grant voting rights to the acquiring
person’s shares. At a meeting held on July 20, 2018, our
shareholders approved voting rights for shares held by Air T, Inc.,
Groveland Capital LLC, and Nicholas J. Swenson constituting up to
an aggregate of 331⁄3% of our outstanding shares.

 

 

 

 

Section 302A.673 of the MBCA generally prohibits any business
combination by us, or any subsidiary of ours, with any shareholder
that beneficially owns 10% or more of the voting power of our
outstanding shares (an “interested shareholder”) within
four years following the time the interested shareholder crosses
the 10% stock ownership threshold, unless the business combination
is approved by a committee of disinterested members of our board of
directors before the time the interested shareholder crosses the
10% stock-ownership threshold.

 

Section 302A.675 of the MBCA generally prohibits an offeror
from acquiring our shares within two years following the
offeror’s last purchase of our shares pursuant to a takeover
offer with respect to that class, unless our shareholders are able
to sell their shares to the offeror upon substantially equivalent
terms as those provided in the earlier takeover offer. This statute
will not apply if the acquisition of shares is approved by a
committee of disinterested members of our board of directors before
the purchase of any shares by the offeror pursuant to the earlier
takeover offer.

 

Nomination and Proposal Procedures

 

Our Bylaws establish advance-notice procedures with regard to the
nomination by shareholders of candidates for election as directors.
A shareholder of record must provide a written request of its
candidate to our secretary not less than 60 nor more than 90 days
before the first anniversary date of the preceding year’s
annual meeting of shareholders, which notice must include certain
information and representations regarding the shareholder and the
candidate and the consent of such candidate to serve as a director
if elected.

 

Our Bylaws establish procedures, including advance-notice
procedures, with regard to shareholder proposals to be considered
at an annual meeting of shareholders. In general, a shareholder
must submit a written notice of the proposal to our secretary not
less than 60 nor more than 90 days before the first anniversary
date of the preceding year’s annual meeting of shareholders,
which notice must include certain information and representations
regarding the shareholder and the proposal.

 

Special Meetings of Shareholders; Shareholder Action by Written
Consent

 

Section 302A.433 of the MBCA and our Bylaws provide that special
meetings of the Company’s shareholders may be called by the
Company’s Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, two or more directors, or shareholders
holding 10% or more of the voting power of all shares entitled to
vote, except that a special meeting called by shareholders for the
purpose of considering any action to directly or indirectly
facilitate or effect a business combination, including any action
to change or otherwise affect the composition of our board of
directors for that purpose, must be called by 25% or more of the
voting power of all shares entitled to vote. Section 302A.441 of
the MBCA also provides that action may be taken by shareholders
without a meeting only by unanimous written consent.

 

Amendment of Bylaws

 

Our board of directors can adopt, amend or repeal our Bylaws,
subject to limitations under the MBCA. Under the MBCA, our
shareholders also have the power to change or repeal our
Bylaws.isig_form10kexh1018

 

EXHIBIT 10.18

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the "Agreement") is hereby entered into as of
December 20, 2019 (the "Execution Date") and is effective as of
December 20, 2019 (the "Effective Date"), by and between Insignia
Systems, Inc. (the "Company") and Adam May ("Executive") (each
hereinafter referred to as a "party" and collectively as the
"parties").

 

In consideration of the respective agreements of the parties
contained herein, it is agreed as follows:

 

1.

Term. The
initial term of Executive's employment under this Agreement shall
be for the period commencing on the Effective Date and ending,
subject to earlier termination as set forth in Section 6, on the
third anniversary of the Effective Date (such term, as may be
hereafter extended, the "Employment Term"); provided, however, that
commencing with the third anniversary of the Effective Date and on
each anniversary thereof (each an "Anniversary Date"), the
Employment Term shall be automatically renewed for one (1)
additional year beyond the term otherwise established, unless one
party provides written notice to the other party, at least
one-hundred and twenty (120) days in advance of an Anniversary
Date, of its intent not to renew the Employment Term for an
additional one year period.

 

2.

Employment. During
the Employment Term:

 

(a) 

Executive
shall (i) serve as the Chief Growth Officer of the Company, with
such authority, power, duties and responsibilities as are
commensurate with such position and as are customarily exercised by
a person situated in a similar executive capacity at a similar
company; and (ii) report directly to the Chief Executive Officer of
the Company (the "CEO").

 

(b) 

Executive
shall devote his full-time business attention to the business and
affairs of the Company and he shall perform his duties faithfully
and efficiently subject to the directions of the CEO. Executive may
manage personal and family investments and affairs, participate in
industry organizations and deliver lectures at educational
institutions, so long as such activities do not interfere with the
performance of Executive's responsibilities hereunder. Executive
shall be subject to and shall abide by each of the Company's
personnel policies applicable to other senior
executives.

 

3.

Annual Compensation.

 

(a) 

Base
Salary. The
Company agrees to pay or cause to be paid to Executive during the
Employment Term a base salary at the annual rate of $220,000 or
such increased amount as the Board may from time to time determine
(hereinafter referred to as the "Base Salary."); provided however,
that the Base Salary may be reduced by no more than fifteen percent
(15%) in connection with an across the board salary reduction by
the Company similarly effecting all senior executives of the
Company. The Base Salary shall be payable in accordance with the
Company's customary practices applicable to its executives. Such
Base Salary shall be reviewed at least annually by the Board of
Directors of the Company (the "Board") pursuant to the Company's
normal performance review policies for senior
executives.

 

(b) 

Annual
Incentive Compensation. For
each fiscal year of the Company ending during the Employment Term,
beginning with the 2020 fiscal year, Executive shall be eligible to
receive a target annual cash incentive compensation of $126,000 as
in effect on the final day of such fiscal year as approved by the
Board in its sole discretion if the Company and Executive achieve
certain performance targets as proposed by management and approved
by the Board. Such annual incentive compensation ("Annual Incentive
Compensation") shall be paid in no event later than the 15th day of
the third month following the end of the taxable year (of the
Company or Executive, whichever is
later).

 

 

1

 

 

4.        

Other Benefits.

 

(a) 

Employee
Benefits. During
the Employment Term and any renewals, Executive shall be entitled
to participate in all employee benefit plans, practices and
programs maintained by the Company and made available to employees
of the Company generally (other than plans in effect on the date
hereof that are closed to new participants), to the extent
Executive is eligible under the terms of such plans. Executive's
participation in such plans, practices and programs shall be on the
same basis and terms as are applicable to employees of the Company
generally.

 

(b) 

Business
Expenses. Upon
submission of proper invoices in accordance with the Company's
policies, Executive shall be entitled to receive prompt
reimbursement of all reasonable out-of-pocket business,
entertainment and travel expenses incurred by Executive in
connection with the performance of Executive's duties hereunder and
otherwise incurred in accordance with the Company's travel and
entertainment policy in effect from time to time. Such
reimbursement shall be made as soon as practicable and in no event
later than the end of the calendar year following the calendar year
in which the expenses were incurred.

 

(c) 

Paid
Time Off (PTO).
Executive shall receive paid time off in accordance with the
Company's leave policies and procedures, along with eight (8) paid
Holidays subject to the Company's Leave policies and
procedures.

 

5. 

Recoupment. In the
event of a restatement of the Company's financial results (other
than a prophylactic or voluntary restatement due to a change in
applicable accounting rules or interpretations) due to material
noncompliance with financial reporting requirements, with respect
to any compensation granted (whether already paid or only
calculated as payable and yet to be paid) to Executive if the Board
determines in good faith that such compensation was awarded (or in
the case of unpaid compensation, determined for award) based on
such material noncompliance then the Board or a committee thereof
comprised of independent (as defined under the rules of the NASDAQ
Stock Market) Board members shall be entitled on behalf of the
Company to recover all of the Executive's compensation (or in the
case of unpaid compensation, to reduce such compensation) based on
the erroneous financial data in excess of what would have been paid
(or in the case of unpaid compensation, what should be paid) to the
Executive under the accounting restatement. Such recovery period
shall comprise up to the three (3) completed fiscal years preceding
the date on which the Company is required to prepare the accounting
restatement.

 

In determining whether to seek recovery of compensation, the Board
or applicable committee thereof may take into account any
considerations it deems appropriate, including whether the
assertion of a claim may violate applicable law or adversely impact
the interests of the Company in any related proceeding or
investigation and the extent to which the Executive was responsible
for the error that resulted in the restatement. This Section 5
shall be deemed amended to the extent reasonably necessary to
conform to any applicable law or to any Company recoupment policy
adopted by the Board for its senior executives.

 

6. 

Termination. The
Employment Term and Executive's employment hereunder may be
terminated under the circumstances set forth below; provided,
however, that notwithstanding anything contained herein to the
contrary, Executive shall not have any duties or responsibilities
to the Company after Executive's termination of employment during
the Employment Term or upon expiration of the Employment Term that
would preclude Executive from having a "separation from service"
from the Company within the meaning of Section 409A of the Internal
Revenue Code (the "'Code"), upon expiration of the Employment
Term.

 

(a)

Disability. The
Company may terminate the Employment Term and Executive's
employment hereunder, on written notice to Executive after having
reasonably established Executive's Disability. For purposes of this
Agreement, Executive will be deemed to have a "Disability" if, as a
result of the Executive's incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time
performance of the Executive's duties with the Company for a period
of three (3) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within
thirty (30) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of
the Executive's duties. Executive shall be entitled to the
compensation and benefits provided for under this Agreement for any
period prior to Executive' s termination by reason of Disability
during which Executive is unable to work due to a physical or
mental infirmity in accordance with the Company's policies for
similarly-situated executives.

 

 

2

 

 

(b)

Death. The
Employment Term and Executive's employment hereunder shall be
terminated as of the date of Executive's
death.

 

(c)

Cause. The
Company may terminate the Employment Term and Executive's
employment hereunder for "Cause" by providing a Notice of
Termination (as defined in Section 7 below) that notifies Executive
of his termination for Cause, effective as of the date of such
notice. "Cause" shall mean, for purposes of this Agreement: (a) the
deliberate and continued failure to substantially perform
Executive's duties and responsibilities under this Agreement; (b)
the criminal felony conviction of, or a plea of guilty or nolo
contendere by, Executive; (c) the material violation of Company
policy; (d) the act of fraud or dishonesty resulting or intended to
result in personal enrichment at the expense of the Company; (e)
the gross misconduct in performance of duties that results in
material economic harm to the Company; or (f) the material breach
of this Agreement by Executive. Notwithstanding the foregoing, in
order to establish "Cause" for Executive's termination for purposes
of clauses (a), (c) and (f) above, the Company must deliver a
written demand to Executive which specifically identifies the
conduct that may provide grounds for Cause, and the Executive must
have failed to cure such conduct within thirty (30) days after such
demand. Reference in this paragraph to the Company shall also
include direct and indirect subsidiaries of the
Company.

 

(d)

Without Cause. The
Company may terminate the Employment Term
and

 

Executive's employment hereunder other than for Cause, Disability
or death. The Company shall deliver to Executive a Notice of
Termination (as defined in Section 7 below) prior to such
termination other than for Cause, Disability or death, which notice
shall specify the termination date.

 

(e) 

Good Reason.
Executive may terminate the Employment Term and his employment
hereunder with the Company for Good Reason (as defined below) by
delivering to the Company a Notice of Termination not less than
thirty (30) days prior to such termination for Good Reason. The
Company shall have the option of terminating Executive's duties and
responsibilities prior to the expiration of such thirty-day notice
period. For purposes of this Agreement, "Good Reason" means any of
the following: (a) a material and adverse change in Executive's
duties, title or position, provided, however, that a change in the
Company's status as a publicly held corporation filing reports with
the Securities and Exchange Commission shall not be deemed to
constitute Good Reason hereunder; (b) a reduction of fifteen
percent (15%) or more by the Company in the Executive's Base Salary
except for across-the-board salary reductions similarly affecting
all senior executive officers of the Company; or (c) a material
breach by the Company of its obligations under this Agreement. Good
Reason shall not exist unless Executive shall provide notice of the
existence of the Good Reason condition within ninety (90) days of
the date Executive learns of the condition. The Company shall have
a period of thirty (30) days during which it may remedy the
condition, and in case of full remedy such condition shall not be
deemed to constitute Good Reason
hereunder.

 

(f) 

Without Good Reason.
Executive may voluntarily terminate the Employment Term and
Executive's employment hereunder without Good Reason by delivering
to the Company a Notice of Termination not less than thirty (30)
days prior to such termination and the Company shall have the
option of terminating Executive's duties and responsibilities, but
not the employment relationship, prior to the expiration of such
thirty-day notice period.

 

 

3

 

 

7. 

Notice of Termination. Any
purported termination by the Company or by Executive shall be
communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice that indicates a termination date, the specific
termination provision in this Agreement relied upon and sets forth
in reasonable detail the facts and circumstances claimed to provide
a basis for termination of Executive's employment under the
provision so indicated. For purposes of this Agreement, no such
purported termination of Executive's employment hereunder shall be
effective without such Notice of Termination (unless waived by the
party entitled to receive such notice, in the manner described in
Section 16(f).

 

8. 

Compensation
upon Termination. Upon
termination of Executive's employment during the Employment Term,
Executive shall be entitled to the following
benefits:

 

(a) 

Termination by the Company for Cause or by Executive without Good
Reason. If
Executive's employment is terminated by the Company for Cause or by
Executive without Good Reason, the Company shall provide Executive
with the following payments and benefits (collectively, the
"Accrued Compensation"):

 

(i)

any accrued and unpaid Base Salary;

 

(ii)

any Annual Incentive Compensation earned but unpaid in respect of
any completed fiscal year preceding the termination
date;

 

(iii)

reimbursement for any and all monies advanced or expenses incurred
in connection with Executive's employment for reasonable and
necessary expenses incurred by Executive on behalf of the Company
for the period ending on the termination date;

 

(iv)

any previous compensation that Executive has previously deferred
(including any interest earned or credited thereon), in accordance
with the terms and conditions of the applicable deferred
compensation plans or arrangements then in effect, to the extent
vested as of Executive's termination date; and

 

(v)

any amount or benefit as provided under any plan, program,
agreement or corporate governance document of the Company or its
affiliates that are then-applicable (the "Company Arrangements"),
in accordance with the terms thereof.

 

(b) 

Termination
by the Company for Disability. If
Executive's employment is terminated by the Company for Disability,
Executive shall be entitled to the Accrued
Compensation.

 

(c) 

Termination
by Reason of Death. If
Executive's employment is terminated by reason of Executive's
death, Executive shall be entitled to the Accrued
Compensation.

 

(d) 

Termination
by the Company Other Than for Cause. Disability or Death, or by
Executive with Good Reason. If
Executive's employment with the Company shall be terminated (x) by
the Company other than for Cause, Disability or death, or (y) by
Executive with Good Reason, Executive shall be entitled to the
following payments and benefits; provided that, in the case of
clauses (ii), (iii) and (iv) below, Executive shall have executed
and not revoked a release of claims in substantially the form set
forth in 
Exhibit A hereto:

 

(i)

the Accrued Compensation;

 

(ii)

an amount equal to the product of (A) the Annual Incentive
Compensation that Executive would have been entitled to receive in
respect of the fiscal year in which Executive' s termination date
occurs, had Executive continued in employment until the end of such
fiscal year, which amount shall be determined based on the
Company's actual performance for such year relative to the Company
performance goals applicable to Executive without any exercise of
negative discretion with respect to Executive in excess of that
applied either to senior executives of the Company generally for
the applicable performance period or in accordance with the
Company's historical past practice), and (B) a fraction (x) the
numerator of which is the number of days in such fiscal year
through the termination date and (y) the denominator of which is
365; such amount shall be payable in a cash lump sum payment at the
time such incentive awards are payable to other participants (but
no later than the fifteenth day of the third month of the following
fiscal year of the Company);

 

 

4

 

 

(iii)

in lieu of any further Base Salary or other compensation or
benefits not described in clauses (i), (ii), or (iv) for periods
subsequent to the termination date, an amount in cash equal to
fifty percent (50%) of Executive's annual Base Salary as in effect
at the time of Termination which amount shall be payable in a
single lump sum payment no later than 60 days following the
termination date; and

 

(iv)

the Company shall provide Executive and Executive's dependents with
continued coverage under any health, medical, dental, vision or
life insurance program or policy in which Executive was eligible to
participate as of the time of Executive's employment termination,
for three (3) months following such termination on terms no less
favorable to Executive and Executive's dependents (including with
respect to payment for the costs thereof) than those in effect
immediately prior to such termination, which coverage shall cease,
on a benefit-by-benefit basis, once any coverage is made available
to Executive by a subsequent employer. COBRA continuation coverage
shall run concurrently with such four-month period. Following the
four-month continuation period, Executive will be eligible to
receive COBRA benefits for any remaining portion of the applicable
COBRA period at normal COBRA rates. Anything herein to the contrary
notwithstanding, the terms of this Section 8(d)(iv) shall be
modified to the extent required to meet the provisions of any
federal law applicable to the healthcare plans and arrangements of
the Company, including to the extent required to maintain the
grandfathered status of such plans or arrangements under federal
law. Any failure to provide the coverage specified herein shall not
in and of itself constitute a breach of this Agreement, provided,
however, that the Company shall use its reasonable efforts to
provide economically equivalent payments or benefits to Executive
to the extent possible without adverse effects on the Company, to
the extent permitted by law.

 

(e) 

Expiration
of Employment Term After Notice of Non-Renewal by the
Company. If the
Executive's employment terminates at the end of the Employment Term
because the Company has delivered a notice of non-renewal (as
described in Section l), Executive shall be entitled to the
following payments and benefits:

 

(i)

the Accrued Compensation; and

 

(ii)

COBRA benefits for the applicable COBRA period at normal COBRA
rates.

 

(f) 

No
Mitigation.
Executive shall not be required to mitigate the amount of any
payment provided for under this Agreement by seeking other
employment or otherwise and, except as provided in Section 8(d)(iv)
above, no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to Executive in any
subsequent employment.

 

9. 

Section 409A.
Notwithstanding anything contained herein to the contrary, to the
extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A of the Code, (i) no amounts shall be
paid to Executive under Section 8 of this Agreement until Executive
would be considered to have incurred a separation from service from
the Company within the meaning of Section 409A of the Code, and
(ii) amounts that would otherwise be payable and benefits that
would otherwise be provided pursuant to this Agreement during the
six-month period immediately following Executive's separation from
service shall instead be paid on the first business day after the
date that is six months following Executive's separation from
service (or death, if earlier). Each amount to be paid or benefit
to be provided to Executive pursuant to this Agreement, which
constitutes deferred compensation subject to Section 409A, shall be
construed as a separate identified payment for purposes of Section
409A. To the extent required to avoid an accelerated or additional
tax under Section 409A, amounts reimbursable to Executive under
this Agreement shall be paid to Executive on or before the last day
of the year following the year in which the expense was incurred
and the amount of expenses eligible for reimbursement (and in-kind
benefits provided to Executive) during any one year may not effect
amounts reimbursable or provided in any subsequent year; provided,
however, that with respect to any reimbursements for any taxes
which Executive would become entitled to under the terms of this
Agreement, the payment of such reimbursements shall be made by the
Company no later than the end of the calendar year following the
calendar year in which Executive remits the related
taxes.

 

 

5

 

 

10.

Records and Confidential Data.

 

(a) 

Executive
acknowledges that in connection with the performance of Executive's
duties during the Employment Term, the Company will make available
to Executive, or Executive will develop and have access to, certain
Confidential Information (as defined below) of the Company and its
subsidiaries. Executive acknowledges and agrees that any and all
Confidential Information learned or obtained by Executive during
the course of Executive's employment by the Company or otherwise,
whether developed by Executive alone or in conjunction with others
or otherwise, shall be and is the property of the Company and its
subsidiaries.

 

(b) 

Executive
shall keep confidential all Confidential Information, shall not use
Confidential Information in any manner that is detrimental to the
Company, shall not use Confidential Information other than in
connection with Executive's discharge of Executive's duties
hereunder, and shall safeguard the Confidential Information from
unauthorized disclosure; provided, however, that Confidential
Information may be disclosed by Executive (i) to the Company and
its affiliates, or to any authorized agent or representative of any
of them, (ii) in connection with performing his duties hereunder,
(iii) subject to Section 11(c), when required to do so by law or by
a court, governmental agency, legislative body, arbitrator or other
person with apparent jurisdiction to order him to divulge, disclose
or make accessible such information, provided that Executive notify
the Company prior to such disclosure, (iv) in the course of any
proceeding under Sections 12 or 13 of this Agreement or (v) in
confidence to an attorney or other professional advisor for the
purpose of securing professional advice, so long as such attorney
or advisor is subject to confidentiality restrictions no less
restrictive than those applicable to Executive
hereunder.

 

(c) 

As
soon as possible following the termination of Executive's
employment hereunder, Executive shall return to the Company all
written Confidential Information that is in his possession or
control and destroy all of his copies of any analyses,
compilations, studies or other documents containing or reflecting
any Confidential Information. Within five (5) business days of the
receipt of such request by Executive, Executive shall, upon written
request of the Company, deliver to the Company a document
certifying that such written Confidential Information has been
returned or destroyed in accordance with this Section
10(c).

 

(d) 

For
the purposes of this Agreement, "Confidential Information" shall
mean all confidential and proprietary information of the Company
and its subsidiaries, including, without
limitation,

 

(i) 

trade
secrets concerning the business and affairs of the Company and its
subsidiaries, product specifications, data, know-how, formulae,
compositions, processes, non-public patent applications, designs,
sketches, photographs, graphs, drawings, samples, inventions and
ideas, past, current, and planned research and development, current
and planned manufacturing or distribution methods and processes,
customer lists, current and anticipated customer requirements,
price lists, market studies, business plans, computer software and
programs (including object code and source code), computer software
and database technologies, systems, structures, and architectures
(and related formulae, compositions, processes, improvements,
devices, know-how, inventions, discoveries, concepts, ideas,
designs, methods and information);

 

 

6

 

 

(ii) 

information
concerning the business and affairs of the Company and its
subsidiaries (which includes unpublished financial statements,
financial projections and budgets, unpublished and projected sales,
capital spending budgets and plans, the names and backgrounds of
key personnel, to the extent not publicly known, personnel training
and techniques and materials) however documented;
and

 

(iii) 

notes,
analysis, compilations, studies, summaries, and other material
prepared by or for the Company or its subsidiaries containing or
based, in whole or in part, on any information included in the
foregoing. For purposes of this Agreement, the Confidential
Information shall not include and Executive's obligations shall not
extend to (i) information that is generally available to the
public, (ii) information obtained by Executive other than pursuant
to or in connection with his employment and (iii) information that
is required to be disclosed by law or legal
process.

 

11. 

Covenant Not to Solicit, Not to Compete, Not to Disparage and to
Cooperate in Litigation.

 

(a)

Covenant Not to Solicit. To
protect the Confidential Information and other trade secrets of the
Company as well as the goodwill and competitive business of the
Company, Executive agrees, during the Employment Term and for a
period of twelve (12) months after Executive's cessation of
employment with the Company, (i) not to solicit or participate in
or assist in any way in the solicitation of any employees of the
Company and (ii) not to solicit, influence or attempt to influence
any person who was a customer of the Company or its affiliates
during the period of Executive's employment hereunder or solicit,
influence or attempt to influence potential customers who are or
were identified through leads developed during the course of
employment with the Company, or otherwise divert or attempt to
divert any existing business of the Company and its affiliates. For
purposes of clause (i) of this covenant, "solicit" or
"solicitation" means directly or indirectly influencing or
attempting to influence employees of the Company to cease
employment with the Company (except in the course of Executive's
duties to the Company) or to become employed with any other person,
partnership, firm, corporation or other entity, provided, that
solicitation through general advertising not targeted at the
Company's employees or the provision of references shall not
constitute a breach of such obligations. Executive agrees that the
covenants contained in this Section 11(a) are reasonable and
desirable to protect the Confidential Information of the
Company.

 

(b)

Covenant Not to Compete.

 

(i)

To
protect the Confidential Information and other trade secrets of the
Company as well as the goodwill and competitive business of the
Company, Executive agrees, during the Employment Term and for a
period of twelve (12) months after Executive's cessation of
employment with the Company, that Executive will not, except in the
course of Executive's employment hereunder, directly or indirectly
for the Executive or any third party, manage, operate, control, or
participate in the management, operation, or control of, be
employed by, associated with, or in any manner connected with, lend
Executive's name to, or render services or advice to, any third
party, or any business, whose services or products compete
(including as described below) with the material services or
products of the Company; 
provided,
however, that Executive may in any event (x) own up to a 5% passive
ownership interest in any public or private entity, and (y) be
employed by, or otherwise have material association with, any
business whose services or products compete with the material
services or products of the Company so long as his employment or
association is solely with a separately managed and operated
division or affiliate of such business that does not compete with
the Company.

 

 

7

 

 

(ii)

For
purposes of this Section 11(b), any third party, or any business,
whose products compete includes any entity engaged in any business
or activity which is directly in competition with any services or
products sold by, or any business or activity engaged in by, the
Company or any of its affiliates, or any entity with which the
Company has a product(s) licensing agreement at the end of the
Employment Term and any entity with which the Company is, at the
time of termination, negotiating, and eventually concludes within
twelve (12) months of the Employment Term, a product licensing or
acquisition agreement.

 

(c)

Cooperation in Any Investigations and Litigation.
Executive agrees that Executive will reasonably cooperate with the
Company, and its counsel, in connection with any investigation,
inquiry, administrative proceeding or litigation relating to any
matter in which Executive becomes involved or of which Executive
has knowledge as a result of Executive's service with the Company
by providing truthful information. The Company agrees to promptly
reimburse Executive for reasonable expenses (including
attorney’s fees and other expenses of counsel) reasonably
incurred by Executive, in connection with Executive's cooperation
pursuant to this Section 11(c). Such reimbursements shall be made
as soon as practicable, and in no event later than the calendar
year following the year in which the expenses are incurred.
Executive agrees that, in the event Executive is subpoenaed by any
person or entity (including, but not limited to, any government
agency) to give testimony (in a deposition, court proceeding or
otherwise) which in any way relates to Executive's employment by
the Company, Executive will, to the extent not legally prohibited
from doing so, give prompt notice of such request to the CEO of the
Company so that the Company may contest the right of the requesting
person or entity to such disclosure before making such disclosure.
Nothing in this provision shall require Executive to violate
Executive's obligation to comply with valid legal
process.

 

(d) 

Nondisparagement.
Executive covenants that during and following the Employment Term,
Executive will not willfully and materially disparage or encourage
or induce others to disparage the Company or its subsidiaries,
together with all of their respective past and present directors,
managers, officers, shareholders, partners, employees, agents,
attorneys, servants and customers and each of their predecessors,
successors and assigns; provided that such limitation shall extend
to past and present managers, officers, shareholders, partners,
employees, agents, attorneys, servants and customers only in their
capacities as such or in respect of their relationship with the
Company and its subsidiaries. Nothing in this Agreement is intended
to or shall prevent Executive from providing, or limiting testimony
in response to a valid subpoena, court order, regulatory request or
other judicial, administrative or legal process or otherwise as
required by law.

 

(e) 

Blue
Pencil. It is
the intent and desire of Executive and the Company that the
provisions of this Section 11 be enforced to the fullest extent
permissible under the laws and public policies as applied in each
jurisdiction in which enforcement is sought. If any particular
provision of this Section 11 shall be determined to be invalid or
unenforceable, such covenant shall be amended, without any action
on the part of either party hereto, to delete there from the
portion so determined to be invalid or unenforceable, such deletion
to apply only with respect to the operation of such covenant in the
particular jurisdiction in which such adjudication is
made.

 

(f) 

Survival.
Executive's obligations under this Section 11 shall survive the
termination of the Employment Term.

 

12.

Remedies
for Breach of Obligations under Sections 10 or 11 hereof.
Executive acknowledges that the Company will suffer irreparable
injury, not readily susceptible of valuation in monetary damages,
if Executive breaches Executive's obligations under Sections 10 or
11 hereof. Accordingly, Executive agrees that the Company will be
entitled, in addition to any other available remedies, to obtain
injunctive relief against any breach or prospective breach by
Executive of Executive's obligations under Sections 10 or 11 hereof
in any Federal or state court sitting in the State of Minnesota,
or, at the Company's election, in any other state in which
Executive maintains Executive's principal residence or Executive's
principal place of business. Executive hereby submits to the
non-exclusive jurisdiction of all those courts for the purposes of
any actions or proceedings instituted by the Company to obtain that
injunctive relief, and Executive agrees that process in any or all
of those actions or proceedings may be served by registered mail,
addressed to the last address provided by Executive to the Company,
or in any other manner authorized by law.

 

13.

Resolution of Disputes. Any
claim or dispute arising out of or relating to this Agreement,
including, without limitation, Sections 6 and 7 hereof, any other
Company Arrangement, Executive's employment with the Company, or
any termination thereof (collectively, "Covered Claims") shall
(except to the extent otherwise provided in Section 12 with respect
to certain requests for injunctive relief) be resolved (x) if
mutually agreed by the Company and Executive, by confidential
mediation with the assistance of an independent mediator selected
by mutual agreement of the parties, or (y) if such mediation is not
successful or if such mediation is not mutually agreed by the
Company or Executive, by litigation to occur in the District Court
of the Second Judicial District, County of Ramsey, State of the
Minnesota or the United States District Court for the District of
Minnesota. Each party shall bear its (or his) own costs, including,
without limitation, the fees and expenses of its (or his) own
attorney, and the fees and expenses of the arbitrator shall be
borne equally by each party.

 

 

8

 

 

14.

Representations and Warranties.

 

(a)

The Company represents and warrants that (i) it is fully authorized
by action of the Board of Directors of the Company (and of any
other person or body whose action is required) to enter into this
Agreement and to perform its obligations under it, (ii) the
execution, delivery and performance of this Agreement by it does
not violate any applicable law, regulation, order, judgment or
decree or any agreement, arrangement, plan or corporate governance
document (x) to which it is a party or (y) by which it is bound,
and (iii) upon the execution and delivery of this Agreement by the
parties, this Agreement shall be its valid and binding obligation,
enforceable against it in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally.

 

(b)

Executive represents and warrants to the Company that Executive is
not a party to or otherwise bound by any agreement or arrangement
(including, without limitation, any license, covenant, or
commitment of any nature), or subject to any judgment, decree, or
order of any court or administrative agency, that would conflict
with or will be in conflict with or in any way preclude, limit or
inhibit Executive' s ability to execute this Agreement or to carry
out Executive' s duties and responsibilities
hereunder.

 

15.

Miscellaneous.

 

(a)

Successors and Assigns.

 

(i) 

This
Agreement shall be binding upon and shall inure to the benefit of
the Company, its successors and permitted assigns and the Company
shall require any successor or assign to expressly assume and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession
or assignment had taken place. The Company may not assign or
delegate any rights or obligations hereunder except to a successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company. The term the "Company" as used herein shall
include a corporation or other entity acquiring all or
substantially all the assets and business of the Company (including
this Agreement) whether by operation of law or
otherwise.

 

(ii) 

Neither
this Agreement nor any right or interest hereunder shall be
assignable or transferable by Executive, Executive's beneficiaries
or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive's legal personal
representatives.

 

 

9

 

 

(b) 

Indemnification.
The Company shall indemnify Executive as provided in Company's
by-laws and Articles of Incorporation.

 

(c) 

Right
to Counsel.
Executive acknowledges that Executive has had the opportunity to
consult with legal counsel of Executive's choice in connection with
the drafting, negotiation and execution of this Agreement and
related employment arrangements.

 

(d) 

Notice.
For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice
of Termination) shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other,
provided that all notices to the Company shall be directed to the
attention of the CEO of the Company. All notices and communications
shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof,
except that notice of change of address shall be effective only
upon receipt.

 

(e) 

Withholding.
The Company shall be entitled to withhold the amount, if any, of
all taxes of any applicable jurisdiction required to be withheld by
an employer with respect to any amount paid to Executive hereunder.
The Company, in its sole and absolute discretion, shall make all
determinations as to whether it is obligated to withhold any taxes
hereunder and the amount hereof.

 

(f) 

Modification.
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 Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or 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 subsequent time. No
agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made
by either party which is not expressly set forth in this
Agreement.

 

(g)

Effect of Other Law.
Anything herein to the contrary notwithstanding, the terms of this
Agreement shall be modified to the extent required to meet the
provisions of any federal law applicable to the employment
arrangements between Executive and the Company, Any delay in
providing benefits or payments, any failure to provide a benefit or
payment, or any repayment of compensation that is required under
the preceding sentence shall not in and of itself constitute a
breach of this Agreement, provided, however, that the Company shall
provide economically equivalent payments or benefits to Executive
to the extent permitted by law.

 

(h) 

Governing
Law. This
Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota applicable to
contracts executed in and to be performed entirely within such
State, without giving effect to the conflict of law principles
thereof.

 

(i) 

Inconsistencies.
In the event of any inconsistency between any provision of this
Agreement and any provision of any employee handbook, personnel
manual, program, policy, or arrangement of the Company or its
affiliates (including, without limitation, any provisions relating
to notice requirements and post-employment restrictions), the
provisions of this Agreement and the Exhibits hereto, shall
control, unless the parties otherwise agree in a writing that
expressly refers to the provision of this Agreement whose control
he or it is waiving.

 

 

10

 

 

(j) 

Beneficiaries/References.
In the event of Executive's death or a judicial determination of
his incompetence, references in this Agreement to Executive shall
be deemed, where appropriate, to refer to his beneficiary, estate
or other legal representative.

 

(k) 

Survivorship.
Except as otherwise set forth in this Agreement, the respective
rights and obligations of the parties hereunder shall survive the
Employment Term and any termination of the Executive's
employment.

 

(1)

Severability.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions
hereof.

 

(m) 

Entire
Agreement. Upon
the Execution Date, this Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the
parties hereto with respect to the subject matter hereof; provided,
however, that this
Agreement shall not supersede the Change in Control Severance
Agreement between the Company and the Executive entered into as of
December 20, 2019 (the "Change in Control Agreement").
Notwithstanding anything to the contrary contained herein, no
payments shall be made (nor benefits provided) under Section 8 of
this Agreement in the event that the Executive is entitled to
payments or benefits under the Change in Control
Agreement.

 

(n) 

Counterparts.
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one
and the same agreement.

 

[Remainder of Page Intentionally Left Blank.]

 

 

11

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and Executive has executed
this Agreement as of the day and year first above
written.

 

INSIGNIA SYSTEMS, INC.

By:

/s/ Kristine
Glancy                                           

Name: Kristine Glancy

Title:
President
and CEO

 

 

ADAM MAY

 

By:

/s/ Adam
May                                           

 

12

 

 

EXHIBIT
A

 

FORM OF RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (the "Release") is made as of this ___day of
___________, 20__, by and between Adam May ("Executive") and
Insignia Systems, Inc., a Minnesota corporation (the
"Company").

 

1.

FOR AND
IN CONSIDERATION of the payments and benefits provided in the
Employment Agreement between Executive and the Company dated as of
December 20, 2019, (as such agreement may be amended, restated or
replaced, the "Employment Agreement"), Executive, for himself, his
successors and assigns, executors and administrators, now and
forever hereby releases and discharges the Company, together with
all of its past and present parents, subsidiaries, and affiliates,
together with each of their officers, directors, stockholders,
partners, employees, agents, representatives and attorneys, and
each of their subsidiaries, affiliates, estates, predecessors,
successors, and assigns (hereinafter collectively referred to as
the "Releases")
from any and all rights, claims, charges, actions, causes of
action, complaints, sums of money, suits, debts, covenants,
contracts, agreements, promises, obligations, damages, demands or
liabilities of every kind whatsoever, in law or in equity, whether
known or unknown, suspected or unsuspected, which Executive or
Executive's executors, administrators, successors or assigns ever
had, now has or may hereafter claim to have by reason of any
matter, cause or thing whatsoever; arising from the beginning of
time up to the date of the Release: (i) relating in any way to
Executive's employment relationship with the Company or any of the
Releases, or the termination of Executive's employment relationship
with the Company or any of the Releases; (ii) arising under or
relating to the Employment Agreement; (iii) arising under any
federal, local or state statute or regulation, including, without
limitation, the Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Benefit Protection Act, Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act
of 1990, the Employee Retirement Income Security Act of 1974,
and/or the applicable state law against discrimination, each as
amended; (iv) relating to wrongful employment termination or breach
of contract; or (v) arising under or relating to any policy,
agreement, understanding or promise, written or oral, formal or
informal, between the Company and any of the Releases and
Executive; 
provided, however,
that notwithstanding the foregoing, nothing contained in the
Release shall in any way diminish or impair: (i) any direct or
indirect holdings of equity in the Company; (ii) any claims for
accrued and vested benefits under any of the Company's employee
retirement and welfare benefit plans; and (iii) any rights or
claims Executive may have that cannot be waived under applicable
law; (collectively, the "Excluded
Claims").
Executive further acknowledges and agrees that, except with respect
to Excluded Claims, the Company and the Releases have fully
satisfied any and all obligations whatsoever owed to Executive
arising out of Executive's employment with the Company or any of
the Releases, and that no further payments or benefits are owed to
Executive by the Company or any of the
Releases.

 

2.

Executive understands and agrees that, except for the Excluded
Claims, Executive has knowingly relinquished, waived and forever
released any and all rights to any personal recovery in any action
or proceeding that may be commenced on Executive ' s behalf arising
out of the aforesaid employment relationship or the termination
thereof, including, without limitation, claims for back pay, front
pay, liquidated damages, compensatory damages, general damages,
special damages, punitive damages, exemplary damages, costs,
expenses and attorneys' fees.

 

 

 

 

3.

Executive acknowledges and agrees that Executive has been advised
to consult with an attorney of Executive's choosing prior to
signing the Release. Executive understands and agrees that
Executive has the right and has been given the opportunity to
review the Release with an attorney of Executive's choice should
Executive so desire. Executive also agrees that Executive has
entered into the Release freely and voluntarily. Executive further
acknowledges and agrees that Executive has had at least twenty-one
(21) calendar days to consider the Release, although Executive may
sign it sooner if Executive wishes. In addition, once Executive has
signed the Release, Executive shall have fifteen (15) additional
days from the date of execution to revoke Executive's consent and
may do so by writing to: Insignia Systems, Inc., 8799 Brooklyn
Blvd., Minneapolis, MN 55445, Attention: Kelly Hagglund. The
Release shall not be effective, and no payments shall be due under
Section 8(d)(ii), (iii) and (iv) of the Employment Agreement, until
the sixteenth (16th) day after Executive shall have executed the
Release and returned it to the Company, assuming that Executive had
not revoked Executive's consent to the Release prior to such
date.

 

4.

It is understood and agreed by Executive that the payment made to
Executive is not to be construed as an admission of any liability
whatsoever on the part of the Company or any of the other Releases,
by whom liability is expressly denied.

 

5.

The Release is executed by Executive voluntarily and is not based
upon any representations or statements of any kind made by the
Company or any of the other Releases as to the merits, legal
liabilities or value of Executive's claims. Executive further
acknowledges that Executive has had a full and reasonable
opportunity to consider the Release and that Executive has not been
pressured or in any way coerced into executing the
Release.

 

6.

The exclusive venue for any disputes arising hereunder shall be the
state or federal courts located in the State of Minnesota, and each
of the parties hereto irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Each of the
parties hereto also agrees that any final and unappealable judgment
against a party hereto in connection with any action, suit or other
proceeding may be enforced in any court of competent jurisdiction,
either within or outside of the United States. A certified or
exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or
judgment.

 

7.

The Release and the rights and obligations of the parties hereto
shall be governed and construed in accordance with the laws of the
State of Minnesota. If any provision hereof is unenforceable or is
held to be unenforceable, such provision shall be fully severable,
and this document and its terms shall be construed and enforced as
if such unenforceable provision had never comprised a part hereof,
the remaining provisions hereof shall remain

 

in full force and effect, and the court construing the provisions
shall add as a part hereof a provision as similar in terms and
effect to such unenforceable provision as may be enforceable, in
lieu of the unenforceable provision.

 

8.

The Release shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

 

 

IN WITNESS WHEREOF, Executive and the Company have executed the
Release as of the date and year first written
above.

 

INSIGNIA SYSTEMS, INC.

 

By: ____________________

Name:

Title:

 

 

ADAM MAY

 

 

By: ____________________

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