Document:

Blueprint

 

 

EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT (the “Agreement”) is hereby entered into as
of June 30, 2017 (the “Execution Date”) and is
effective as of July 17, 2017 (the “Effective Date”),
by and between Insignia Systems, Inc. (the “Company”)
and Jeffrey Jagerson (“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 8, 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 Financial 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 $235,000 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 2017 fiscal year, Executive shall be eligible to receive a
target annual cash incentive compensation of 50% of Base Salary 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).

 

4.

Inducement Time-Vesting Restricted
Stock Grant. The Company shall grant Executive 60,000 shares
of time-vesting restricted stock (the “Inducement Restricted
Stock”) on September 1, 2017. One-half of these shares
will vest immediately on the first anniversary of the Grant Date
and one-half of these shares will vest on the second anniversary of
the Grant Date. Further terms and conditions of the Inducement
Restricted Stock shall include those terms and conditions set forth
in the Company’s 2013 Omnibus Stock and Incentive Plan and in
Exhibit
A.

 

5.

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.

 

6.

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

 

 

2

 

 

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 6 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.

 

7.

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.

 

 

3

 

 

(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 8 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 8 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.

 

 

4

 

 

(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.

 

8.

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)).

 

9.

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.

 

 

5

 

 

(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) and (iii) below, Executive shall have
executed and not revoked a release of claims in substantially the
form set forth in Exhibit B
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);

 

(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

 

 

6

 

 

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 9(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 1), 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 9(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.

 

10.

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 9 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

 

 

7

 

 

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.

 

11.

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 her duties
hereunder, (iii) subject to Section 12(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 13 or 14 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 11(c).

 

 

8

 

 

(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);

 

(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.

 

12.

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

 

 

9

 

 

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 12(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.

 

(ii)

For
purposes of this Section 12(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
attorneys fees and other expenses of counsel)
reasonably

 

 

10

 

 

incurred by
Executive, in connection with Executive’s cooperation
pursuant to this Section 12(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 12 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
12 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 12 shall
survive the termination of the Employment Term.

 

13.

Remedies for Breach of Obligations
under Sections 11 or 12 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 11 or 12 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 11 or 12 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

 

 

11

 

 

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.

 

14.

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 13 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.

 

15.

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.

 

16.

Miscellaneous.

 

(a)

Successors and
Assigns.

 

 

12

 

 

(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.

 

(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

 

 

13

 

 

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
she is waiving.

 

(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.

 

(l)

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 June 29, 2017 (the “Change in
Control

 

 

14

 

 

Agreement”).
Notwithstanding anything to the contrary contained herein, no
payments shall be made (nor benefits provided) under Section 9
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.]

 

 

15

 

 

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/ Peter
Zaballos

Name:
Peter Zaballos

Title:
Chairman of the Board of Directors

 

 

 

JEFFREY
JAGERSON

 

 

By:
/s/ Jeffrey
Jagerson

 

 

 

 

 

16

 

EXHIBIT A

 

[Representative Terms and Conditions]

 

__________
___, 20__

 

Subject:
Restricted Stock Award

 

Dear
_______:

 

This
letter is to inform you that the Board of Directors of Insignia
Systems, Inc. has granted to you 60,000 shares of Restricted Stock
effective __________ ___, 2017:

 

The
award is subject to the terms of the 2013 Omnibus Stock and
Incentive Plan and this grant letter.

 

Vesting Schedule. Except as otherwise provided herein,
provided that you remain employed with the Company through the
applicable vesting date, the Restricted Stock will vest in
accordance with the following schedule:

 

	

Vesting
Date

 

	

Shares
of Common Stock

 

	

First
Anniversary of Grant Date

 

	

30,000
Shares

 

	

Second
Anniversary of Grant Date

 

	

30,000
Shares

 

 

 

Taxes. The company will use share tax withholding to satisfy
your tax obligations unless you provide a payment to cover the
taxes.

 

Employment Events. The following chart outlines the
provisions which apply to the grant for various employment
events.

 

	

Event

 

	

Restricted
Stock

Provisions

 

	

Voluntary
resignation

 

	

Forfeit unvested
shares

 

	

Termination for
Cause (as defined in the Employment Agreement between you and the
Company dated June 30, 2017 (the “Employment
Agreement”))

 

	

Forfeit unvested
shares

 

 

 

1

 

	
Event

 

	
Restricted Stock

Provision

 

	

Involuntary
termination without Cause

 

	

Pro
rata portion of shares eligible to vest on the next applicable
vesting date (based upon the number of days elapsed since
immediately preceding vesting date and a 365 day year) shall vest,
all other unvested shares forfeited.

 

	

Voluntary
termination for Good Reason (as defined in Employment
Agreement)

 

	

Pro
rata portion of shares eligible to vest on the next applicable
vesting date (based upon the number of days elapsed since
immediately preceding vesting date and a 365 day year) shall vest,
all other unvested shares forfeited.

 

	

Death

 

	

Pro
rata portion of shares eligible to vest on the next applicable
vesting date (based upon the number of days elapsed since
immediately preceding vesting date and a 365 day year) shall vest,
all other unvested shares forfeited.

 

	

Disability (as
defined in the Employment Agreement)

 

	

Pro
rata portion of shares eligible to vest on the next applicable
vesting date (based upon the number of days elapsed since
immediately preceding vesting date and a 365 day year) shall vest,
all other unvested shares forfeited.

 

	

Change
in Control (as defined in the Change in Control Severance Agreement
between you and the Company dated June 30, 2017)

 

	

If the
continuing or successor entity fails to assume or replace awards
with new awards of equivalent value, then accelerated vesting of
all unvested shares

 

 

 

 

Dividends. If the company makes cash dividend payments
during the restriction period, the value of the dividends will
accrue in a non-interest bearing account. You will receive a cash
payment for the accrued dividends at the end of the restriction
period. The payment would be adjusted proportionate to the earned
shares. Please contact Neil Moses-Zirkes if you have
questions.

 

Sincerely,

 

[NAME]

 

[TITLE]

 

 

2

 

EXHIBIT B

 

FORM OF RELEASE AGREEMENT

 

THIS
RELEASE AGREEMENT (the “Release”) is made as of this
30th day
of June, 2017, by and between Jeffrey Jagerson
(“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
June 29, 2017, (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

 

 

1

 

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 forty-five (45) 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 seven (7) 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: Neil Moses-Zirkes. The Release
shall not be effective, and no payments shall be due under Section
9(d)(ii)(iii) of the Employment Agreement, until the eighth (8th)
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

 

 

2

 

 

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.

 

 

3

 

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

 

 

 

INSIGNIA
SYSTEMS, INC.

 

 

By:
/s/ Kristine Glancy

Name:
Kristine Glancy

Title:
President and CEO

 

 

 

JEFFREY
JAGERSON

 

 

By:
/s/ Jeffrey
Jagerson

 

4Blueprint

 

CHANGE IN CONTROL AGREEMENT

 

THIS
AGREEMENT, is hereby entered into on June 30, 2017 and is effective
as of July 17, 2017 (the “Effective Date”), by and
between Insignia Systems, Inc., a Minnesota corporation (the
“Company”), and Jeffrey
Jagerson (the “Executive”).

 

WHEREAS, the Board
of Directors of the Company (the “Board”) recognizes that,
as is the case with many business organizations, the possibility of
a Change in Control exists and that such possibility, and the
uncertainty and questions which it may raise among management, may
result in the departure or distraction of management personnel to
the detriment of the Company; and

 

WHEREAS, the Board
has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of
the Company’s management, including the Executive, to their
assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a Change
in Control.

 

NOW,
THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and Executive hereby agree
as follows:

 

1. Defined Terms. The definitions
of capitalized terms used in this Agreement are provided in the
last Section hereof.

 

2. Term of Agreement. This
Agreement shall commence on the Effective Date and shall continue
in effect for a period of three (3) years thereafter. Commencing on
the third anniversary of the Effective Date and on each anniversary
thereafter (“Anniversary Date”), this
Agreement shall automatically be 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 this Agreement for an additional one year term.
Notwithstanding the foregoing, if a Change in Control shall have
occurred after the Effective Date and during the term of this
Agreement, this Agreement shall continue in effect for a period of
not less than twenty-four (24) months beyond the month in
which a Change in Control occurred.

 

3. Compensation Other Than Severance
Payments.

 

3.1 Following a Change
in Control and during the term of this Agreement, during any period
that the Executive fails to perform the Executive’s full-time
duties with the Company as a result of a “disability”
(as defined in Treas. Reg. § 1.409A-3(i)(4)), the Company
shall pay the Executive’s current base salary to the
Executive at the rate in effect at the commencement of any such
period, together with all compensation and benefits payable to the
Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such
period, until the Executive’s employment is terminated by the
Company.

 

3.2 If the
Executive’s employment shall be terminated for any reason
following a Change in Control and during the term of this
Agreement, the Company shall pay the Executive’s current base
salary through the Date of Termination, together with all
compensation and benefits to which the Executive is entitled in
respect of all periods preceding the Date of

 

 

 

 

Termination
under the terms of the Company’s compensation and benefit
plans, programs or arrangements.

 

4. Severance
Payments.

 

4.1 If a Qualifying
Termination shall occur, in addition to any payments and benefits
to which the Executive is entitled under Section 3 hereof, the
Company shall pay the Executive the payments described in this
Section 4.1 (the “Severance Payments”);
provided, however, that, in the case of clauses (A), (B), (C), (D)
and (F) below, the Executive shall have executed and not revoked a
release of claims in the form set forth in Exhibit A hereto. The
Executive shall also be entitled to the Severance Payments (and any
payments and benefits under Section 3) if the Executive’s
employment is terminated by the Company other than (x) for Cause or
(y) by reason of death or Disability within the six (6) month
period immediately preceding a Change in Control and the Executive
reasonably demonstrates that such termination is otherwise in
connection with or in anticipation of a Change in Control that
actually occurs during the term of the Agreement (a
“Pre-Change in
Control Termination”); provided, however, that, in the
case of clauses (A), (B), (C), (D) and (F) below, Executive shall
have executed and not revoked a release of claims in the form set
forth in Exhibit A hereto; and provided further, however, that any
such payments shall be offset by the amount of severance previously
paid to the Executive under any employment agreement between the
Executive and the Company and, to the extent permitted by Section
409A of the Code, any other severance policy, plan or program of
the Company.

 

(A) In lieu of any
further salary payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance benefit
otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to
seventy-five (75%) of the Executive’s annual base salary then
in effect (or immediately prior to any reduction resulting in a
termination for Good Reason, if applicable) (the
“Change in Control
Salary”).

 

(B)  Notwithstanding
any provision of any annual incentive plan to the contrary, the
Company shall pay to the Executive an amount, in cash, equal to the
sum of (i) any unpaid incentive compensation which has been
allocated or awarded to the Executive for a completed fiscal year
preceding the Date of Termination under any such plan and which, as
of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date, and (ii) a
pro rata portion to the Date of Termination of Executive’s
target bonus for the year in which the Date of Termination occurs
(or the target in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), calculated
by multiplying such target bonus by the fraction obtained by
dividing the number of full months and any fractional portion of a
month during such year through the Date of Termination by twelve
(12).

 

(C) For the
six month period immediately following the Date of
Termination, the Company shall arrange to provide the Executive
(which includes the Executive’s eligible dependents for
purposes of this subsection (C)) with life, disability, accident
and health insurance benefits substantially similar to those which
the Executive was receiving immediately prior to the Date of
Termination (or immediately prior to any reduction resulting
in

 

 

2

 

 

 a
termination for Good Reason, if applicable); provided, however,
that (i) the Executive’s and his qualified dependents’
COBRA eligibility period shall include the period during which the
Company is providing benefits under this subsection (C);
(ii) unless the Executive consents to a different method (or
elects COBRA coverage at applicable COBRA rates), such health
insurance benefits shall be provided through a third-party insurer;
and (iii) the Executive shall be responsible for the payment
of premiums for such benefits in the same amount as active
employees of the Company. Benefits otherwise receivable by the
Executive pursuant to this subsection (C) shall be reduced to the
extent comparable benefits (including continued coverage for any
preexisting medical condition of any person covered by the benefits
provided to the Executive and his eligible dependents immediately
prior to the Date of Termination) are actually received by or made
available to the Executive by a subsequent employer during the
twenty-four month period following the Executive’s Date
of Termination (and any such benefits actually received by or made
available to the Executive shall be reported to the Company by the
Executive). Notwithstanding the foregoing, in the event of a
Pre-Change in Control Termination, on the sixtieth (60th) day
following the Change in Control the Company shall pay or reimburse
the Executive for any amounts or benefits it would have been
responsible to pay or provide to the Executive under this Section
4.1(C) during the period prior to the Change in Control, had the
Change in Control occurred on the Date of Termination.

 

(D) If the Executive
would have become entitled to benefits under the Company’s
post-retirement health care or life insurance plans (as in effect
immediately prior to the Date of Termination (or immediately prior
to any reduction resulting in a termination for Good Reason, if
applicable)) had the Executive’s employment terminated at any
time during the period of twenty four months after the Date of
Termination, the Company shall provide such post-retirement health
care or life insurance benefits to the Executive (subject to any
employee contributions required under the terms of such plans in
the same amounts as active employees of the Company) commencing on
the later of (i) the date that such coverage would have first
become available or (ii) the date that benefits described in
subsection (C) of this Section 4.1 terminate.

 

(E) The Company shall
pay the Executive, at a daily salary rate calculated from the
Executive’s annual base salary in effect immediately prior to
the Date of Termination (or immediately prior to any reduction
resulting in a termination for Good Reason, if applicable), a lump
sum amount equal to all earned but unused paid time off days
through the Date of Termination.

 

(F) The Company shall
pay, no later than the last day of the calendar year in which they
are incurred, the reasonable fees and expenses of a full service
nationally recognized executive outplacement firm until the earlier
of the date the Executive secures new employment or the date which
is twenty-four months following the Executive’s Date of
Termination; provided that in no event shall the aggregate amount
of such payments exceed $5,000.

 

4.2 Benefit
Limitation.

 

(A) Anything
in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment (including any acceleration of
vesting of stock based benefits) or distribution by the Company to
or for the benefit of the Executive (whether paid or

 

 

3

 

 

payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise) (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise
Tax”), the amounts and
benefits payable under this Agreement shall be reduced by an amount
that would result in no Excise Tax being imposed; provided that the
amounts and benefits payable under this Agreement shall not be
reduced unless the amounts and
benefits the Executive would receive after such reduction would be
greater than the amounts and benefits the Executive would receive if there were no reduction and the
Excise Tax were paid by the Executive (such reduction, the
“Cut
Back”). For
purposes of determining whether any Payments should be subject to
the Cut-Back, (i) Executive shall be deemed to pay federal income
tax at the highest marginal rate of federal income taxation in the
calendar year in which the Date of Termination occurs and state and
local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the Date of
Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local
taxes, (ii) no portion of the Payments the receipt or enjoyment of
which the Executive shall have waived at such time and in such
manner as not to constitute a "payment" within the meaning of
section 280G(b) of the Code shall be taken into account, (iii) no
portion of the Payments shall be taken into account which, in the
opinion of the Accounting Firm, does not constitute a "parachute
payment" within the meaning of section 280G(b)(2) of the Code,
including by reason of section 280G(b)(4)(A) of the Code, (iv) the
Severance Payments shall be reduced only to the extent necessary so
that the Payments in their entirety constitute reasonable
compensation for services actually rendered within the meaning of
section 280G(b)(4)(B) of the Code or are otherwise not subject to
disallowance as deductions by reason of section 280G of the Code,
in the opinion of the Accounting Firm, and (v) the value of any
noncash benefit or any deferred payment or benefit included in the
Payments shall be determined by the Accounting Firm in accordance
with the principles of sections 280G(d)(3) and (4) of the Code.
Unless the Executive shall have
given prior written notice to the Company specifying a different
order of payments and benefits to be reduced to achieve the
Cut-Back, any payments and benefits to be reduced hereunder shall
be determined in a manner that has the least economic cost to the
Executive, on an after-tax basis, and to the extent the economic
cost is equivalent, such payments and benefits shall be reduced in
the inverse order of when the payments and benefits would have been
made or provided to the Executive until the reduction specified
herein is achieved. The Executive may specify the order of
reduction of the payments and benefits only to the extent that
doing so does not directly or indirectly alter the time or method
of payment of any amount that is deferred compensation subject to
(and not exempt from) Section 409A of the Code.

 

(B)  All
determinations required to be made under this Section 4.2 shall be
made by a nationally recognized accounting firm designated by the
Company (the “Accounting
Firm”) which shall
provide detailed supporting calculations both to the Company and
the Executive within fifteen (15) business days after there
has been a Cut-Back, or such earlier time as requested by the
Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint another nationally
recognized accounting firm to make the determinations required
hereunder (which accounting firm instead shall be the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the
Executive.

 

4.3 Payment of Severance
Payments.

 

 

4

 

 

(A) Each payment
provided for in Section 4.1 hereof is intended to constitute a
separate payment within the meaning of Section 409A of the
Code. The payments provided for in subsections (A) and (C) of
Section 4.1 hereof shall be made on the sixtieth (60th) day
following the Date of Termination subject to Section 4.3(B) below;
and in the event the Executive becomes entitled to Severance
Payments pursuant to the second sentence of Section 4.1, the
payments provided for in subsections (A) and (C) of Section
4.1 hereof shall be made on the sixtieth (60th) day following the
actual Change in Control that triggered the Severance
Payments.

 

(B) If any payment,
compensation or other benefit provided to the Executive in
connection with his employment termination is determined, in whole
or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the
Code and the Executive is a “specified employee,” as
such term is defined under Section 409A(a)(2)(B)(i) of the Code,
all such payments shall be suspended during the six-month period
following the Executive’s “separation from
service” within the meaning of Treas. Reg.
§ 1.409A-1(h) or any successor thereto. The Company is
entitled to determine whether any amounts under this Agreement are
to be suspended, and the Company shall have no liability to the
Executive for any such determination or any errors made by the
Company in identifying the Executive as a specified employee. If
any amounts are suspended pursuant to the foregoing, such amounts
shall be paid on the earlier of (i) the first business day
following the expiration of the six-month period referred to in the
first sentence of this subsection or (ii) the date of the
Executive’s death. Any amounts so suspended shall earn
interest thereon, if applicable, calculated based upon the then
prevailing monthly short-term applicable federal rate.
Notwithstanding the foregoing, to the extent that the foregoing
applies to the provision of any ongoing welfare benefits to the
Executive that would not be required to be delayed if the premiums
therefor were paid by the Executive, the Executive shall pay the
full cost of premiums for such welfare benefits during the
six-month period and the Company shall pay the Executive an amount
equal to the amount of such premiums paid by the Executive during
such six-month period on the first business day of the month
following the expiration of the six-month period referred to
above.

 

(C) A termination of
employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any
amounts or benefits subject to Section 409A of the Code upon or
following a termination of employment unless such termination is
also a “separation from service” as defined in Treas.
Reg. § 1.409A-1(h) or any successor thereto, including the
default presumptions thereunder, and for purposes of any such
provision of this Agreement, references to a
“resignation,” “termination,”
“terminate,” “termination of employment” or
like terms shall mean separation from service.

 

(D) The parties hereto
acknowledge and agree that the interpretation of Section 409A
of the Code and its application to the terms of this Agreement is
uncertain and may be subject to change as additional guidance and
interpretations become available. Anything to the contrary herein
notwithstanding, all benefits or payments provided by the Company
to the Executive that would be deemed to constitute
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code are intended to comply with
Section 409A of the Code. If, however, any such benefit or
payment is deemed not to comply with Section 409A of the Code,
the Company and the Executive agree to renegotiate in good faith
any such benefit or payment (including, without limitation, as to
the timing of any severance payments payable hereunder)
so

 

 

5

 

 

that
either (i) Section 409A of the Code will not apply or
(ii) compliance with Section 409A of the Code will be
achieved.

 

(E) Notwithstanding
anything to the contrary contained in this Agreement, any
reimbursement for a cost or expense under this Agreement shall be
paid in no event later than the end of the taxable year following
the taxable year in which the Executive incurs such cost or
expense. With regard to any provision herein that provides for
reimbursement of costs and expenses or in-kind benefits, except as
permitted by Section 409A of the Code, (i) the right to
reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and (ii) the
amount of expenses eligible for reimbursements or in-kind benefits
provided during any taxable year shall not affect the expenses
eligible for reimbursement or in-kind benefits to be provided in
any other taxable year; provided, however, that the foregoing
clause (ii) shall not be violated with regard to expenses
reimbursed under any arrangement covered by Section 105(b) of the
Code solely because such expenses are subject to a limit related to
the period the arrangement is in effect.

 

4.4 The Company shall
reimburse the Executive for all reasonable legal fees and expenses
incurred by the Executive in attempting to obtain or enforce rights
or benefits provided by this Agreement, if, with respect to any
such right or benefit, the Executive is successful in obtaining or
enforcing such right or benefit (including by negotiated
settlement).

 

5. Restrictive
Covenants.

 

5.1 During the
Executive’s employment with the Company and for a period of
twelve (12) months thereafter:

 

(A) the Executive shall
not, directly for the Executive or any third party, become 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; provided,
however, that this provision shall not restrict the Executive from
owning or investing in publicly traded securities, so long as the
Executive’s aggregate holdings in any company do not exceed
5% of the outstanding equity of such company and such investment is
passive;

 

(B) the Executive shall
not solicit any person who was a customer of the Company or any of
its affiliates during the period of the Executive’s
employment hereunder, or solicit 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 or any of its
affiliates; and

 

(C) the Executive shall
not, directly for the Executive or any third party, solicit,
induce, recruit or cause another person in the employment of the
Company or any of its affiliates to terminate such employee’s
employment for the purposes of joining, associating, or becoming
employed with any business or activity which is in competition with
any services or products sold, or any business or activity engaged
in, by the Company or any of its affiliates.

 

5.2 The Executive
agrees that he will not, while employed with the Company or at any
time thereafter for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to
any person, firm, corporation or other business entity, in
any

 

 

6

 

 

manner
whatsoever, any confidential information or trade secrets
concerning the business of the Company, including, without limiting
the generality of the foregoing, any customer lists or other
customer identifying information, the techniques, methods or
systems of the Company’s operation or management, any
information regarding its financial matters, or any other material
information concerning the business of the Company, its manner of
operation, its plans or other material data. The provisions of this
Section 5.2 shall not apply to (i) information that is public
knowledge other than as a result of disclosure by the Executive in
breach of this Section 5.2; (ii) information disseminated by
the Company to third parties in the ordinary course of business;
(iii) information lawfully received by the Executive from a
third party who, based upon inquiry by the Executive, is not bound
by a confidential relationship to the Company, or (iv) information
disclosed under a requirement of law or as directed by applicable
legal authority having jurisdiction over the
Executive.

 

5.3 The Executive
agrees that he will not, while employed with the Company or at any
time thereafter for any reason, in any fashion, form or manner,
either directly or indirectly, disparage or criticize the Company,
or otherwise speak of the Company, in any negative or unflattering
way to anyone with regard to any matters relating to the
Executive’s employment by the Company or the business or
employment practices of the Company. The Company agrees that it
will not, in any fashion, form or manner, either directly or
indirectly, disparage or criticize the Executive or otherwise speak
of the Executive in any negative or unflattering way to anyone with
regard to any matters relating to the Executive’s employment
with the Company. This Section shall not operate as a bar to (i)
statements reasonably necessary to be made in any judicial,
administrative or arbitral proceeding, or (ii) internal
communications between and among the employees of the Company with
a job-related need to know about this Agreement or matters related
to the administration of this Agreement.

 

5.4 The Executive
understands that in the event of a violation of any provision of
Section 5, the Company shall have the right to (i) seek
injunctive relief, in addition to any other existing rights
provided in this Agreement or by operation of law, without the
requirement of posting bond and (ii) stop making any future
payments or providing benefits under this Agreement. The remedies
provided in this Section 5.4 shall be in addition to any legal or
equitable remedies existing at law or provided for in any other
agreement between the Executive and the Company or any of its
affiliates, and shall not be construed as a limitation upon, or as
an alternative or in lieu of, any such remedies. If any provisions
of Section 5 shall be determined by a court of competent
jurisdiction to be unenforceable in part by reason of it being too
great a period of time or covering too great a geographical area,
it shall be in full force and effect as to that period of time or
geographical area determined to be reasonable by the
court.

 

5.5 The Executive
acknowledges that the provisions of Section 5 shall extend to any
business that becomes an affiliate of or successor to the Company
or any of its affiliates on account of such Change in
Control.

 

6. Requirement of Release.
Notwithstanding anything in this Agreement to the contrary, the
release of claims referenced in Section 4.1 above shall completely
release the Company, its parent and affiliates and their respective
officers, directors and employees (collectively the
“Released
Parties” and individually a “Released Party”) and
which shall forever waive all claims of any nature that the
Executive may have against any Released Party, including
without

 

 

7

 

 

limitation
all claims arising out of Executive’s employment within the
Company or the termination of that employment. If the Executive
does not execute an effective release, such release does not become
irrevocable or such release is revoked, in each case, prior to the
time of payment prescribed in Section 4.1 above, the
Company’s obligations to provide the benefits described in
Section 4.1(C) hereof shall cease immediately.

 

7. Termination
Procedures.

 

7.1 Notice of Termination. After a
Change in Control and during the term of this Agreement, any
purported termination of the Executive’s employment (other
than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purposes of this
Agreement, a “Notice
of Termination” shall mean a notice which shall
indicate whether the termination is for Cause, without Cause, by
reason of Disability, for Good Reason or otherwise and shall set
forth in reasonable detail the facts and circumstances claimed to
provide the basis for termination of the Executive’s
employment; provided, that the failure of the Executive or the
Company to set forth in the Notice of Termination any particular
facts or circumstances shall not waive any right of such party or
preclude such party from asserting such facts or circumstances in
enforcing his or its rights hereunder.

 

7.2 Date of Termination.
“Date of
Termination,” with respect to any purported
termination of the Executive’s employment after a Change in
Control and during the term of this Agreement, shall mean
(i) if the Executive’s employment is terminated for
Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the
full-time performance of the Executive’s duties during such
thirty (30) day period), and (ii) if the Executive’s
employment is terminated for any other reason, the date specified
in the Notice of Termination (which, in the case of a termination
by the Company, shall not be less than thirty (30) days
(except in the case of a termination for Cause) and, in the case of
a termination by the Executive, shall not be less than fifteen
(15) days nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given).
“Date of
Termination,” with respect to any Pre-Change in
Control Termination shall mean the date of such termination as
reasonably determined by the Company.

 

8. No Mitigation. The Company
agrees that, if the Executive’s employment with the Company
terminates during the term of this Agreement, the Executive shall
not be required to seek other employment or to attempt in any way
to reduce any amounts payable to the Executive by the Company
pursuant to Section 4 hereof. Further, the amount of any payment or
benefit provided for in this Agreement (other than Section 4.1
(C) hereof) shall not be reduced by any compensation earned by
the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

 

9. Successors; Binding
Agreement.

 

9.1 In addition to any
obligations imposed by law upon any successor to the Company, the
Company shall require (i) any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business or assets of the

 

 

8

 

 

Company
(on a consolidated basis) and (ii) in
the case of a disposition of all or substantially all of the
business or assets of the Company (on
a consolidated basis) to more than one entity in a single
transaction or series of related transactions, the entity
that will employ the Executive
immediately after such disposition (such successor or other entity in clause (i) or
(ii), a “Successor”)
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 it if no such succession or disposition had taken place
prior to the effectiveness of any such succession or disposition.
If such assumption and agreement is obtained prior to the
effectiveness of any such succession or disposition and the
Executive accepts employment with the Successor, the
Executive’s employment shall not be treated as a termination
of the Executive’s employment with the Company (unless
otherwise required in order to comply with the definition of
“separation from service” as set forth in Treas. Reg.
§ 1.409A-1(h) or any successor regulation
thereto).

 

9.2 This Agreement
shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts which, by
their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or
administrators of the Executive’s estate.

 

10. Notices. For the purpose of
this Agreement, 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 mail, return receipt requested, postage prepaid,
addressed, if to the Executive, to the address shown for the
Executive in the personnel records of the Company and, if to the
Company, to the address set forth below, 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 actual receipt:

 

To the
Company:

Insignia
Systems, Inc.

8799
Brooklyn Blvd., Minneapolis, MN 55445

Attention:
Neil Moses-Zirkes

 

11. 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 Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of any lack 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 subsequent time. This Agreement supersedes any other agreements
or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either
party; provided,
however, that this
Agreement shall supersede any agreement setting forth the terms and
conditions of the Executive's termination of employment with the
Company only in the event that the Executive's employment with the
Company is terminated on or following a Change in Control, by the
Company without Cause or by the Executive for Good Reason, as
defined herein, or the Executive incurs a Pre-Change in
Control

 

 

9

 

 

Termination,
as defined herein. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Minnesota. All references to sections of the Code shall be
deemed also to refer to any successor provisions to such sections.
Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law
and any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4
and 5 hereof shall survive the expiration of the term of this
Agreement. This Agreement is not intended by the parties hereto to
constitute an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended.

 

12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and
effect.

 

13. Counterparts. This Agreement
may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute
one and the same instrument.

 

14. Settlement of Disputes;
Arbitration. All claims by the Executive for benefits under
this Agreement shall be directed in writing to and determined by
the Committee, which shall give full consideration to the
evidentiary standards set forth in this Agreement. Any denial by
the Committee of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the
specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Committee shall afford a reasonable
opportunity to the Executive for a review of the decision denying a
claim and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60) days
after notification by the Committee that the Executive’s
claim has been denied. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled
exclusively by arbitration in Minneapolis, Minnesota in accordance
with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator’s award in
any court having jurisdiction.

 

15. Definitions. For purposes of
this Agreement, the following terms shall have the meanings
indicated below:

 

(A) “Accounting Firm” shall
have the meaning stated in Section 4.2(B) hereof.

 

(B) “Anniversary Date” shall
have the meaning stated in Section 2 hereof.

 

(C) “Board” shall mean the
Board of Directors of the Company.

 

(D) “Cause” for termination by
the Company of the Executive’s employment shall mean
(i) the deliberate and continued failure by the Executive to
devote substantially all the Executive’s business time and
best efforts to the performance of the Executive’s duties
after a demand for substantial performance is delivered to the
Executive by the Board which specifically identifies the manner in
which the Executive has not substantially performed such duties;
(ii) the deliberate engaging by the Executive in gross
misconduct which is demonstrably

 

 

10

 

 

and
materially injurious to the Company, monetarily or otherwise; or
(iii) the Executive’s conviction of, or plea of guilty
or nolo contendere to, a
felony or any criminal charge involving moral turpitude. For the
purposes of this Agreement, no act, or failure to act, on the part
of the Executive shall be considered “deliberate”
unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that such action or omission
was in the best interests of the Company.

 

(E) A “Change in
Control” shall be deemed
to have occurred if any of the following shall have occurred after
the Effective Date:

 

(i) the closing of the
sale of all or substantially all of the assets of the
Company;

 

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

 

(iii) 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

 

(iv) 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.

 

Notwithstanding anything to the contrary herein, solely for the
purpose of determining the timing of payment or timing of
distribution of any compensation or benefit that constitutes
“non-qualified deferred compensation” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as
amended, a Change in Control shall not be deemed to occur under
this Agreement unless the events that have occurred would also
constitute a “Change in the Ownership or Effective Control of
a Corporation or in the Ownership of a Substantial Portion of the
Assets of a Corporation” under Treasury Department Final
Regulation 1.409A-3(i)(5), or any successor provision.

 

(F)  “Change
in Control Salary” shall have the meaning stated in
Section 4.1(A)(i) hereof.

 

(G) “COBRA” shall mean the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
from time to time.

 

(H) “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to
time.

 

(I) “Committee” shall mean
(i) the individuals (not fewer than three in number) who, on
the date six (6) months before a Change in Control, constitute
the

 

11

 

 

Compensation
Committee of the Board (or its successor), plus (ii) in the
event that fewer than three individuals are available from the
group specified in clause (i) above for any reason, such
individuals otherwise constituting members of the Board as may be
appointed by the individual or individuals so available (including
for this purpose any individual or individuals previously so
appointed under this clause (ii)); provided, that, if after such
appointments fewer than three individuals constitute the Committee,
then the Board shall appoint additional members of the Committee so
that the Committee shall have no fewer than three members, a
majority of which additional appointees, if available, shall be
“independent directors” (as defined under the rules of
the Nasdaq Stock Market).

 

(J) “Company” shall mean Insignia Systems, Inc., as hereinbefore
defined, or any Successor that has assumed this Agreement pursuant
to Section 10.1 hereof.

 

(K) “Cut Back” shall have the
meaning stated in Section 4.2(A) hereof.

 

(L) “Date of Termination”
shall have the meaning stated in Section 7.2
hereof.

 

(M) “Disability” shall be
deemed the reason for the termination by the Company of the
Executive’s employment, 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 six
(6) 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.

 

(N) “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended from time to
time.

 

(O) “Excise Tax” shall have
the meaning stated in Section 4.2(A) hereof.

 

(P) “Good Reason” for
termination by the Executive of the Executive’s employment
shall mean the occurrence (without the Executive’s express
written consent), during the term of this Agreement, of any one of
the following acts by the Company, or failures by the Company to
act:

 

(i)  a material
diminution in the Executive’s authority, duties, or
responsibilities or the assignment to Executive of duties or
responsibilities that are materially inconsistent from those in
effect immediately prior to the Change in Control, provided,
however, that a change in the Company’s status as a publicly
held corporation filing reports under the Exchange Act shall not be
deemed to constitute Good Reason hereunder;

 

(ii)  a
reduction of fifteen percent (15%) or more by the Company in the
Executive’s annual base salary as in effect on the date
hereof or as the same may be increased from time to time except for
across-the-board salary reductions similarly affecting all senior
executive officers of the Company;

 

 

12

 

 

(iii)  the
failure by the Company to continue in effect any compensation plan
in which the Executive participates immediately prior to the Change
in Control which is material to the Executive’s total
compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable in terms
of compensation opportunity (“materially less
favorable” shall be a reduction of fifteen percent (15%) or
more in the compensation opportunity), as existed immediately prior
to the Change in Control except for across-the-board compensation
plan reductions similarly affecting all senior executive officers
of the Company;

 

(iv)  the
failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive
under any of the Company’s retirement, life insurance,
medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change in
Control, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits (a
“material reduction” shall be a reduction of ten
percent (10%) or more in the value of the aggregate benefits), or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of the Change in Control except for
(i) across-the-board benefit reductions similarly affecting
all senior executive officers of the Company or (ii) reduction or
elimination of Executive’s annual comprehensive
“executive” physical examinations, financial planning
or other perquisites; or

 

(v)  a material
breach by the Company of its obligations under this Agreement;
or

 

The
Executive’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any act or failure to
act constituting Good Reason hereunder.

 

The
Executive’s right to terminate employment for Good Reason
shall be subject to the following conditions: (i) any amounts
payable upon a Good Reason termination shall be paid only if the
Executive actually terminates employment within one hundred and
eighty (180) days following the initial existence of the Good
Reason condition and (ii) the amount, time and form of payment
upon a termination of employment for Good Reason shall be the same
as the amount, time and form of payment payable upon an involuntary
termination without Cause. The Executive must also provide notice
to the Company of the Good Reason condition within ninety
(90) days of the initial existence of such condition and the
Company must be given at least thirty (30) days to remedy such
situation.

 

(Q) “Notice of Termination”
shall have the meaning stated in Section 7.1 hereof.

 

(R) “Payment” shall have the
meaning stated in Section 4.2(A) hereof.

 

(S) “Pre-Change in Control
Termination” shall have the meaning stated in Section
4.1 hereof.

 

 

13

 

 

(T) “Qualifying Termination”
shall mean a termination of the Executive’s employment,
concurrent with, or during the twenty-four month period following,
a Change in Control, unless such termination is (i) by the
Company for Cause, (ii) by reason of death or Disability, or
(iii) by the Executive without Good Reason.

 

(U) “Released Parties” or
“Released
Party” shall have the meaning stated in Section 6
hereof.

 

(V) “Severance Payments” shall
mean those payments described in Section 4.1 hereof.

 

(W) “Successor” shall have the
meaning stated in Section 10.1 hereof.

 

 

INSIGNIA SYSTEMS,
INC.

 

 

By:      
/s/ Peter
Zaballos

Name:  Peter
Zaballos

Title:   
Chair of the Board of Directors

 

 

 

Jeffrey
Jagerson

 

/s/ Jeffrey Jagerson

 

 

14

 

EXHIBIT A

 

FORM OF RELEASE AGREEMENT

 

THIS
RELEASE AGREEMENT (the “Release”) is made as of this
30th day
of June, 2017, by and between Jeffrey Jagerson
(“Executive”) and Insignia Systems, Inc. (the
“Company”).

 

1. 

FOR AND IN
CONSIDERATION of the payments and benefits provided in the Change
in Control Agreement between Executive and the Company dated as of
June 30, 2017, (as such agreement may be amended, restated or
replaced, the “Change in Control Agreement”),
Executive, for herself, her 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 “Releasees”) 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 Releasees,
or the termination of Executive’s employment relationship
with the Company or any of the Releasees; (ii) arising under or
relating to the Change in Control 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 Releasees and Executive; provided, however, that notwithstanding
the foregoing, nothing contained in the Release shall in any way
diminish or impair: (i) the Executive's ability to enforce the
provisions of Sections 4.1(C) and (D) of the Change in Control
Agreement, (ii) any direct or indirect holdings of equity in
Insignia Systems, Inc.; (iii) any claims for accrued and vested
benefits under any of the Company's employee retirement and welfare
benefit plans; and (iv) 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
Releasees have fully satisfied any and all obligations whatsoever
owed to Executive arising out of Executive’s employment with
the Company or any of the Releasees, and that no further payments
or benefits are owed to Executive by the Company or any of the
Releasees.

 

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 forty-five (45) 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 seven (7) additional days from the
date of execution to revoke Executive’s consent and may do so
by writing to: Insignia Systems, Inc., 8799 Brooklyn Boulevard,
Minneapolis, Minneapolis, Minnesota 55445. The Release shall not be
effective, and no payments shall be due under Section 4 of the
Change in Control Agreement, until the eighth (8th) 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 Releasees, 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 Releasees 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:      
/s/ Kristine
Glancy                                                      

Name: 
Kristine Glancy

Title:   
President and CEO

 

 

 

Jeffrey
Jagerson

 

/s/ Jeffrey Jagerson

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