EXHIBIT 10.2
AMENDED CHANGE IN CONTROL
SEVERANCE AGREEMENT
AGREEMENT made as of this 23 rd day of
May, 2007 by and between Insignia Systems, Inc., a Minnesota
corporation (the “Company”), and Tom Lucas (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:
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(a)
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the closing of the sale of all or substantially all
of the assets of the Company;
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(b)
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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;
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(c)
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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
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(d)
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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.
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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. 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.
Payment due under this Agreement shall be made
immediately after Executive’s termination of employment
except that if Executive is then a “key employee” of
the Company, as defined in Section 409A of the Internal Revenue
Code, payment shall be made on the date which is six months after
termination of employment, or to his heirs upon his death if
earlier.
4.
Circumstances in Which Severance Shall Not Be
Paid . Notwithstanding the provisions of
Section 3 above, the Company shall n
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