EXHIBIT 10.10
AMENDED CHANGE IN CONTROL SEVERANCE
AGREEMENT
AGREEMENT
made as of this 20 th day of December, 2005 by and
between Insignia Systems, Inc., a Minnesota corporation (the
“Company”), and Scott F. Drill (the
“Executive”).
WHEREAS,
the Company, as a publicly held corporation, recognizes the
possibility of a change in control of the Company, and that such
possibility and the uncertainty and questions which it may raise
could result in Executive leaving the Company or in distraction of
Executive in the performance of Executive’s duties to the
detriment of the Company and its shareholders; and
WHEREAS,
it is in the best interests of the Company and its shareholders to
encourage the availability of Executive’s services to parties
who may in the future acquire control of the Company and to provide
an incentive for Executive to remain with the Company during any
period of uncertainty leading up to a change in control;
WHEREAS,
based on the foregoing, the Company wishes to provide that, in the
event of a change in control of the Company, Executive will receive
certain benefits if Executive’s employment by the Company
ceases for certain reasons within a specified period following the
change in control;
NOW,
THEREFORE, in consideration of the foregoing and the provisions of
this Agreement, the parties hereto agree as follows:
1.
General Provisions . This Company shall pay
Executive a lump sum severance payment if Executive ceases to be
employed by the Company within two years following a Change in
Control (as defined below) for certain reasons specified in this
Agreement. Nothing in this Agreement alters the “at
will” nature of Executive’s employment by the Company.
This means that either before or after a Change in Control, either
the Company or the Executive may terminate Executive’s
employment by the Company, either with or without cause, for any
reason or no reason. This Agreement relates only to whether
Executive shall be entitled to certain severance payments following
cessation of employment. No right to severance payments shall arise
under this Agreement unless and until there occurs a Change in
Control.
2.
Definition of Change in Control . For
purposes of this Agreement, a “Change in Control” shall
be considered to occur if any of the following occurs after the
date of this Agreement:
|
|
(a)
|
|
the closing of
the sale of all or substantially all of the assets of the
Company;
|
|
|
(b)
|
|
the closing of
a merger, consolidation or corporate reorganization of the Company
which results in the stockholders of the Company immediately prior
to such event owning less than 50% of the combined voting power of
the Company’s capital stock immediately following such
event;
|
1
|
|
(c)
|
|
the acquisition
by any person (or persons who would be considered a group under the
federal securities laws) who as of the date of this Agreement own
less than 25% of the voting power of the Company’s
outstanding voting securities, of beneficial ownership of
securities representing 40% or more of the combined voting power or
the Company’s then outstanding securities; or
|
|
|
(d)
|
|
the election to
the Company’s board of directors of persons who constitute a
majority of the board of directors and who were not nominated for
election by the board of directors as part of a management
slate.
|
3.
Amount of Severance Payment. If a Change
in Control occurs after the date of this Agreement and Executive
subsequently ceases to be employed by the Company prior to the
second anniversary of the Change in Control, then the Company shall
pay Executive a lump sum severance payment equal to twenty-four
(24) months of Executive’s gross base salary which was in
effect immediately prior to the Change in Control, if (a) the
Change in Control is a “hostile takeover” and the
Executive ceases to be employed for any reason (including voluntary
resignation) other than death or cause (as defined below), or (b)
the Change in Control is not a “hostile takeover” and
the Executive ceases to be employed due to a reason not precluding
payment under Section 4. The Company shall be entitled to deduct
from the lump sum severance payment any amounts which the Company
is required by law to withhold from such a payment.
For
purposes of this Section 3 a “hostile takeover” means a
Change in Control (a) that is not approved in advance of a public
announcement by the Company’s Board of Directors or a
committee of the Board of Dir
