Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
On September 10, 2021, the Governance, Compensation and Nominating Committee
(the "Committee") of the Board of Directors (the "Board") of Insignia Systems,
Inc. (the "Company") approved, and the Company entered into, an employment
agreement with Zackery A. Weber, the Company's interim principal accounting
officer. The employment agreement comprises terms substantially similar to those
in employment agreements with the Company's other executive officers and
generally provides that he will continue to serve as the Senior Director of
Financial Planning and Analysis of the Company until September 10, 2024 (the
"Initial Term") at his current annual base salary of $145,000, subject to
increase from time to time unless earlier terminated. Following the Initial
Term, the employment agreement will renew automatically for one-year terms
unless terminated by either party upon written notice given at least 120 days in
advance of the anniversary date of the effective date. Additionally, beginning
December 31, 2022, Mr. Weber will be entitled to a target annual cash incentive
compensation payout equal to at least 50% of his annual salary.
The employment agreement includes a clawback provision providing that if there
is a restatement of the Company's financial results (other than a prophylactic
or voluntary restatement due to a change in applicable accounting rules or
interpretations) due to material noncompliance with financial reporting
requirements and the Board determines in good faith that any compensation
granted to Mr. Weber was awarded or determined based on such material
noncompliance, the Board or a committee thereof may recover any compensation
granted to Mr. Weber (or reduce any compensation not yet paid) 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 Mr. Weber under the accounting
restatement.
In the event of Mr. Weber's involuntary termination of employment without
"cause" or voluntary termination of employment with "good reason", he will be
entitled to accrued and unpaid compensation as provided in the employment
agreement as well as the following severance pay and benefits, conditioned on
the execution and continued effectiveness of a release: (1) the annual incentive
compensation he would have been entitled to receive for the year in which his
termination occurs as if he had continued until the end of that fiscal year,
determined based on the Company's actual performance for that year relative to
the performance goals applicable to Mr. Weber, prorated for the number of days
in the fiscal year through his termination date and generally payable in a cash
lump sum at the time such incentive awards are payable to other participants;
(2) fifty percent (50%) of his annual base salary as in effect at the time of
termination, payable in a single lump sum payment no later than 60 days
following the termination date; and (3) welfare benefit continuation for three
months following termination. In the event of Mr. Weber's death, "disability"
(as defined in the employment agreement), involuntary termination for "cause" or
voluntary termination without "good reason," Mr. Weber would be entitled to
accrued and unpaid compensation as provided in the employment agreement.
The foregoing description of the employment agreement is intended to be a
summary only and is qualified by reference to the text of the employment
agreement, which is filed as Exhibit 10.1 to this current report and
incorporated by reference as if fully set forth herein.
On September 10, 2021, the Committee also approved, and the Company entered into
letter agreements with each of Kristine A. Glancy, the Company's President,
Chief Executive Officer and principal financial officer, Adam D. May, Chief
Operating Officer, and Mr. Weber (collectively, the "Retention Agreements").
Each Retention Agreement entitles the executive to receive and retain a cash
bonus so long as the executive remains employed by the Company through December
31, 2022. The first 50% of the retention bonus amount will be paid to the
executive on March 31, 2022 and the remaining 50% will be paid to the executive
of September 30, 2022. If the executive's employment is terminated by the
Company for "Cause" (as defined in the Company's 2018 Equity Incentive Plan, the
"Plan") or by the executive for any reason before December 31, 2022, then all
amounts previously paid must be repaid to the Company and all amounts not yet
paid will be forfeit. If, however, the executive's employment is terminated by
the Company without Cause or as a result of a "Change in Control" (as defined in
the Plan), then the executive will be entitled to retain all amount previously
paid under the Retention Agreement. Further, if a Change in Control occurs and
the executive's employment with the Company is subsequently terminated before
March 31, 2022, then the executive will earn and receive a pro rata amount based
on the number of days continuously employed from September 10, 2021 to March 31,
2022. The total target retention payment amounts for Ms. Glancy, Mr. May, and
Mr. Weber under the Retention Agreements are $200,000; $115,000; and $55,000,
respectively.
The foregoing description of the Retention Agreements is qualified by reference
to the form of Retention Agreement, the text of which is filed as Exhibit 10.2
to this current report and incorporated by reference as if fully set forth
herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Method of
Exhibit No. Description Filing
10.1 Employment Agreement with Zackery A. Weber dated Filed
September 10, 2021 Electronically
10.2 Form of Retention Agreement Filed
Electronically
104 Cover Page Interactive Data File Filed
Electronically
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