INSIGNIA SYSTEMS, INC. (NASDAQ:ISIG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02.Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On June 30, 2017, Jeffrey Jagerson was appointed Chief Financial
Officer of Insignia Systems, Inc. (the Company), effective as of
July 17, 2017. Mr. Jagerson will also serve in the roles of
principal financial officer, principal accounting officer and
treasurer. In connection with Mr. Jagersons appointment, the
Company and Mr. Jagerson entered into an Employment Agreement and
a Change in Control Agreement, each to be effective as of July
17, 2017. The material terms of the Employment Agreement and the
Change in Control Agreement are described below.
Officer of Insignia Systems, Inc. (the Company), effective as of
July 17, 2017. Mr. Jagerson will also serve in the roles of
principal financial officer, principal accounting officer and
treasurer. In connection with Mr. Jagersons appointment, the
Company and Mr. Jagerson entered into an Employment Agreement and
a Change in Control Agreement, each to be effective as of July
17, 2017. The material terms of the Employment Agreement and the
Change in Control Agreement are described below.
Mr. Jagerson, 50, brings with him 29 years of accounting and
finance experience. During that time, his roles have included
Vice President of Finance and Corporate Controller at Digital
River, and Chief Financial Officer at Christiansen Farms. Mr.
Jagerson graduated with a B.S. in Accounting from Minnesota State
University, Mankato and an MBA from the Carlson School of
Business at the University of Minnesota.
finance experience. During that time, his roles have included
Vice President of Finance and Corporate Controller at Digital
River, and Chief Financial Officer at Christiansen Farms. Mr.
Jagerson graduated with a B.S. in Accounting from Minnesota State
University, Mankato and an MBA from the Carlson School of
Business at the University of Minnesota.
Mr. Jagerson has not been a participant in, or is to be a
participant in, any related-person transaction or proposed
related-person transaction required to be disclosed by Item
404(a) of Regulation S-K under the Securities Exchange Act of
1934.
participant in, any related-person transaction or proposed
related-person transaction required to be disclosed by Item
404(a) of Regulation S-K under the Securities Exchange Act of
1934.
Employment Agreement
The Employment Agreement has an initial term of three years
ending on July 17, 2020, provided that beginning on July 17, 2020
and on each anniversary date thereafter, the term will be
automatically renewed for an additional one-year period unless
either party notifies the other in writing, at least one-hundred
and twenty days in advance of the relevant anniversary date, of
its intent not to renew for the additional one-year period. to
the Employment Agreement, Mr. Jagerson will be entitled to:
ending on July 17, 2020, provided that beginning on July 17, 2020
and on each anniversary date thereafter, the term will be
automatically renewed for an additional one-year period unless
either party notifies the other in writing, at least one-hundred
and twenty days in advance of the relevant anniversary date, of
its intent not to renew for the additional one-year period. to
the Employment Agreement, Mr. Jagerson will be entitled to:
an annual base salary of $235,000, subject to increase by the
Companys Board of Directors (the Board) from time to time;
Companys Board of Directors (the Board) from time to time;
earn a target annual incentive compensation award, beginning
with the 2017 fiscal year, of 50% of his base salary based on
the achievement of performance targets set by the Board; and
with the 2017 fiscal year, of 50% of his base salary based on
the achievement of performance targets set by the Board; and
participate in all employee benefit plans and programs
maintained by the Company and made available to employees
generally, to the extent he is eligible under the terms of
such plans.
maintained by the Company and made available to employees
generally, to the extent he is eligible under the terms of
such plans.
The Employment Agreement also provides for a grant of 60,000
shares of time-vesting restricted stock (the Inducement
Restricted Stock) on September 1, 2017. One-half of the shares
will vest on the first anniversary of the grant date and one-half
of the shares will vest on the second anniversary of the grant
date. The Inducement Restricted Stock will be governed by the
terms of the Companys 2013 Omnibus Stock and Incentive Plan.
shares of time-vesting restricted stock (the Inducement
Restricted Stock) on September 1, 2017. One-half of the shares
will vest on the first anniversary of the grant date and one-half
of the shares will vest on the second anniversary of the grant
date. The Inducement Restricted Stock will be governed by the
terms of the Companys 2013 Omnibus Stock and Incentive Plan.
The Employment Agreement includes a clawback provision providing
that if there is a restatement of the Companys 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. Jagerson was awarded or determined based on such material
noncompliance, the Board or a committee thereof may recover any
compensation granted to Mr. Jagerson (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. Jagerson under the accounting
restatement.
that if there is a restatement of the Companys 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. Jagerson was awarded or determined based on such material
noncompliance, the Board or a committee thereof may recover any
compensation granted to Mr. Jagerson (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. Jagerson under the accounting
restatement.
In the event of Mr. Jagersons involuntary termination without
cause or voluntary termination with good reason, Mr. Jagerson
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 Companys actual performance
for that year relative to the performance goals applicable to Mr.
Jagerson, 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 Mr. Jagersons 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. Jagersons
death, disability (as defined in the Employment Agreement),
involuntary termination for cause or voluntary termination
without Good Reason, Mr. Jagerson will be entitled to accrued and
unpaid compensation as provided in the Employment Agreement.
cause or voluntary termination with good reason, Mr. Jagerson
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 Companys actual performance
for that year relative to the performance goals applicable to Mr.
Jagerson, 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 Mr. Jagersons 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. Jagersons
death, disability (as defined in the Employment Agreement),
involuntary termination for cause or voluntary termination
without Good Reason, Mr. Jagerson will be entitled to accrued and
unpaid compensation as provided in the Employment Agreement.
During the one year period following Mr. Jagersons cessation of
employment with the Company he will be subject to a covenant not
to compete with the Company and a covenant not to solicit
employees or customers of the Company.
employment with the Company he will be subject to a covenant not
to compete with the Company and a covenant not to solicit
employees or customers of the Company.
A copy of the Employment Agreement is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is incorporated herein by
reference.
this Current Report on Form 8-K and is incorporated herein by
reference.
Change in Control Agreement
The Change in Control has an initial term of three years ending
on July 17, 2020, provided that beginning on July 17, 2020, and
on each anniversary date thereafter, the term will be
automatically renewed for an additional one-year period unless
either party notifies the other in writing, at least one-hundred
and twenty days in advance of the relevant anniversary date, of
its intent not to renew for the additional one-year period.
Additionally, if a change in control (as defined in the Change in
Control Agreement) occurs during the term of the Change in
Control Agreement, such agreement will continue in effect for a
period of not less than twenty-four (24) months beyond the month
in which the change in control occurred.
on July 17, 2020, provided that beginning on July 17, 2020, and
on each anniversary date thereafter, the term will be
automatically renewed for an additional one-year period unless
either party notifies the other in writing, at least one-hundred
and twenty days in advance of the relevant anniversary date, of
its intent not to renew for the additional one-year period.
Additionally, if a change in control (as defined in the Change in
Control Agreement) occurs during the term of the Change in
Control Agreement, such agreement will continue in effect for a
period of not less than twenty-four (24) months beyond the month
in which the change in control occurred.
Under the Change in Control Agreement, upon a qualifying
termination (as defined in the Change in Control Agreement) Mr.
Jagerson will be entitled to the following, conditioned on the
execution of a release and subject to offset by the amount of any
severance previously paid to him under any employment agreement
with the Company: (1) a lump sum severance payment equal to
seventy-five percent of his base salary, (2) cash payment equal
to the sum of (x) unpaid incentive compensation that has been
allocated or awarded to Mr. Jagerson for a completed fiscal year
preceding the Date of the Qualifying Termination which is
contingent only upon the continued employment to a subsequent
date plus (y) a pro rata portion to the date of the Qualifying
Termination of his target bonus for the year calculated through
the date of the Qualifying Termination, (3) welfare benefit
continuation for a period of 6 months, (4) certain
post-retirement health care or life insurance benefits if Mr.
Jagerson would have become eligible for such benefits during the
24 months after the date of termination, (5) a lump sum payment
equal to all earned but unused paid time off days, and (6)
outplacement fees not to exceed $5,000. In addition, any amounts
paid under the Change in Control Agreement will be reduced to the
maximum amount that can be paid without being subject to the
excise tax imposed under Internal Revenue Code Section 4999, but
only if the after-tax benefit of the reduced amount is higher
than the after-tax benefit of the unreduced amount. For purposes
of the Change in Control Agreement, a Qualifying Termination
means a termination by the Company without cause (as defined in
the Change in Control Agreement) or a termination by Mr. Jagerson
with good reason (as defined in the Change in Control Agreement),
in each case either concurrent with or within 24 months following
a change in control, or a termination by the Company without
cause within six months prior to a change in control if
termination is in connection with or in anticipation of the
change in control.
termination (as defined in the Change in Control Agreement) Mr.
Jagerson will be entitled to the following, conditioned on the
execution of a release and subject to offset by the amount of any
severance previously paid to him under any employment agreement
with the Company: (1) a lump sum severance payment equal to
seventy-five percent of his base salary, (2) cash payment equal
to the sum of (x) unpaid incentive compensation that has been
allocated or awarded to Mr. Jagerson for a completed fiscal year
preceding the Date of the Qualifying Termination which is
contingent only upon the continued employment to a subsequent
date plus (y) a pro rata portion to the date of the Qualifying
Termination of his target bonus for the year calculated through
the date of the Qualifying Termination, (3) welfare benefit
continuation for a period of 6 months, (4) certain
post-retirement health care or life insurance benefits if Mr.
Jagerson would have become eligible for such benefits during the
24 months after the date of termination, (5) a lump sum payment
equal to all earned but unused paid time off days, and (6)
outplacement fees not to exceed $5,000. In addition, any amounts
paid under the Change in Control Agreement will be reduced to the
maximum amount that can be paid without being subject to the
excise tax imposed under Internal Revenue Code Section 4999, but
only if the after-tax benefit of the reduced amount is higher
than the after-tax benefit of the unreduced amount. For purposes
of the Change in Control Agreement, a Qualifying Termination
means a termination by the Company without cause (as defined in
the Change in Control Agreement) or a termination by Mr. Jagerson
with good reason (as defined in the Change in Control Agreement),
in each case either concurrent with or within 24 months following
a change in control, or a termination by the Company without
cause within six months prior to a change in control if
termination is in connection with or in anticipation of the
change in control.
The Change in Control Agreement also provides for certain
non-severance payments to Mr. Jagerson if he fails to perform his
full-time duties as a result of a disability (as defined in the
Change in Control Agreement). In such a case, the Company will
pay his current base salary and all compensation and benefits
payable to his under any compensation or benefit plan the Company
maintains during that period, until is employment is terminated.
Additionally, if Mr. Jagersons employment is terminated for any
reason following a change in control and during the term of the
Change in Control Agreement, the Company will pay his base salary
through the date of termination and all compensation and benefits
to which he is entitled for all periods preceding the date of
termination under the terms of our compensation and benefit
plans.
non-severance payments to Mr. Jagerson if he fails to perform his
full-time duties as a result of a disability (as defined in the
Change in Control Agreement). In such a case, the Company will
pay his current base salary and all compensation and benefits
payable to his under any compensation or benefit plan the Company
maintains during that period, until is employment is terminated.
Additionally, if Mr. Jagersons employment is terminated for any
reason following a change in control and during the term of the
Change in Control Agreement, the Company will pay his base salary
through the date of termination and all compensation and benefits
to which he is entitled for all periods preceding the date of
termination under the terms of our compensation and benefit
plans.
During the one year period following Mr. Jagersons cessation of
employment with the Company he will be subject to a covenant not
to compete with the Company and a covenant not to solicit
employees or customers of the Company.
employment with the Company he will be subject to a covenant not
to compete with the Company and a covenant not to solicit
employees or customers of the Company.
A copy of the Change in Control Agreement is filed as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated
herein by reference.
10.2 to this Current Report on Form 8-K and is incorporated
herein by reference.
As previously announced, Mark Cherreys departure from the Company
was effective on June 30, 2017. In connection with Mr. Cherreys
departure, the Board of Directors of the Company appointed
Kristine Glancy to serve in the additional positions of interim
principal financial officer, interim principal accounting
officer, and interim treasurer effective June 30, 2017 and until
Mr. Jagerson assumes such roles on July 17, 2017.
was effective on June 30, 2017. In connection with Mr. Cherreys
departure, the Board of Directors of the Company appointed
Kristine Glancy to serve in the additional positions of interim
principal financial officer, interim principal accounting
officer, and interim treasurer effective June 30, 2017 and until
Mr. Jagerson assumes such roles on July 17, 2017.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit Number
|
Description
|
|
|
10.1
|
Employment Agreement, dated June 30, 2017, between
Insignia Systems, Inc. and Jeffrey Jagerson |
|
|
10.2
|
Change in Control Agreement, dated June 30, 2017, between
Insignia Systems, Inc. and Jeffrey Jagerson |
INSIGNIA SYSTEMS INC/MN ExhibitEX-10.1 2 isig_ex10120170630.htm EMPLOYMENT AGREEMENT Blueprint EMPLOYMENT AGREEMENT THIS AGREEMENT (the “Agreement”) is hereby entered into as of June 30,…To view the full exhibit click here About INSIGNIA SYSTEMS, INC. (NASDAQ:ISIG)
Insignia Systems, Inc. (Insignia) is a developer and marketer of in-store products, programs and services for consumer goods manufacturers and retail partners drive sales at the point of purchase. The Company’s products include the Insignia Point-of-Purchase Services (POPS) in-store marketing program, thermal sign card supplies for the Company’s Impulse Retail System, laser printable cardstock and label supplies, and The Like Machine. Its POPS program is an account-specific, shelf-edge advertising and promotion tactic. The program allows manufacturers to deliver product information to consumers at the point-of-purchase and to leverage the local retailer brand and store-specific prices to provide a call to action that draws attention to the featured brand and triggers a purchase decision. It focuses on managing a retail network, made up of over 22,000 store locations, for the purpose of providing at-shelf market access for consumer packaged goods manufacturers’ marketing programs.