Registration of Securities to be Offered to Employees Pursuant to an Employee Benefit Plan — Form S-8 Filing Table of Contents
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1: S-8 Registration of Securities to be Offered to HTML 46K
Employees Pursuant to an Employee
Benefit Plan
2: EX-5.1 Opinion re: Legality HTML 10K
3: EX-23.1 Consent of Experts or Counsel HTML 7K
4: EX-99.1 Miscellaneous Exhibit HTML 98K
5: EX-99.2 Miscellaneous Exhibit HTML 37K
(as
Amended and Restated by Board of Directors May 21,2018)
1. Establishment of Plan. Insignia
Systems, Inc. (hereinafter referred to as the
“Company”) proposes to grant to certain employees of
the Company the opportunity to purchase common stock of the
Company. Such common stock shall be purchased pursuant to the plan
herein set forth which shall be known as the “INSIGNIA
SYSTEMS, INC. EMPLOYEE STOCK PURCHASE PLAN” (hereinafter
referred to as the “Plan”). The Company intends that
the Plan shall qualify as an “Employee Stock Purchase
Plan” under Section 423 of the Internal Revenue Code of 1986,
as amended, and shall be construed in a manner consistent with the
requirements of said Section 423 and the regulations
thereunder.
2.
Purpose. The Plan is intended
to encourage stock ownership by employees of the Company, and as an
incentive to them to remain in employment, improve operations,
increase profits, and contribute more significantly to the
Company’s success.
3.
Administration. The Plan shall
be administered by a stock purchase committee (hereinafter referred
to as the “Committee”) consisting of not less than
three directors or employees of the Company, as designated by the
Board of Directors of the Company (hereinafter referred to as the
“Board of Directors”). The Board of Directors shall
fill all vacancies in the Committee and may remove any member of
the Committee at any time, with or without cause. The Committee
shall select its own chairman and hold its meetings at such times
and places as it may determine. All determinations of the Committee
shall be made by a majority of its members. Any decision which is
made in writing and signed by a majority of the members of the
Committee shall be effective as fully as though made by a majority
vote at a meeting duly called and held. The determinations of the
Committee shall be made in accordance with its judgment as to the
best interests of the Company, its employees and it shareholders
and in accordance with the purposes of the Plan; provided, however,
that the provisions of the Plan shall be construed in a manner
consistent with the requirements of Section 423 of the Internal
Revenue Code, as amended. Such determinations shall be binding upon
the Company and the participants in the Plan unless otherwise
determined by the Board of Directors. The Company shall pay all
expenses of administering the Plan. No member of the Board of
Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
option granted under it.
4.
Duration and Phases of the
Plan.
(a) The Plan will commence
on January 1, 1993, and will continue until terminated by the Board
pursuant to Section 15, except that any phase commenced prior to
such termination shall, if necessary, be allowed to continue beyond
such termination until completion.
(b) The Plan shall be
carried out in one or more phases, each phase being for a period of
one year. Each phase shall commence immediately after the
termination of the preceding phase. The existence and date of
commencement of a phase (the “Commencement Date”) shall
be determined by the Committee, provided that the commencement of
the first phase shall be within twelve (12) months before or after
the date of approval of the Plan by the shareholders of the
Company. In the event all of the stock reserved for grant of
options hereunder is issued pursuant to the terms hereof prior to
the commencement of one or more phases scheduled by the Committee
or the number of shares remaining is so small, in the opinion of
the Committee, as to render administration of any succeeding phase
impracticable, such phase or phases shall be canceled. Phases shall
be numbered successively as Phase 1, Phase 2 and Phase
3.
(c)
The Board of Directors may
elect to accelerate the termination date of any phase effective on
the date specified by the Board of Directors in the event of (i)
any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which
shares would be converted into cash, securities or other property,
other than a merger of the Company in which shareholders
immediately prior to the merger have the same proportionate
ownership of stock in the surviving corporation immediately after
the merger; (ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, or (iii) any plan
or liquidation or dissolution of the Company.
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C:
5. Eligibility. All Employees, as
defined in Paragraph 19 hereof, who are employed by the Company at
least one day prior to the Commencement Date of a phase shall be
eligible to participate in such phase.
6.
Participation. Participation in
the Plan is voluntary. An eligible Employee may elect to
participate in any phase of the plan, and thereby become a
“Participant” in the Plan, by completing the Plan
payroll deduction form provided by the Company and delivering it to
the Company or its designated representative prior to the
Commencement Date of that phase. Payroll deductions for a
Participant shall commence on the first payday after the
Commencement Date of the phase and shall terminate on the last
payday immediately prior to or coinciding with the termination date
of that phase unless sooner terminated by the Participant as
provided in Paragraph 9 hereof.
7. Payroll
Deductions.
(a) Upon enrollment, a
Participant shall elect to make contributions to the Plan by
payroll deductions (in full dollar amounts and in amounts
calculated to be as uniform as practicable throughout the period of
the phase), in the aggregate amount not in excess of 10% of such
Participant’s Base Pay for the term of the Phase, as
determined according to Paragraph 19 hereof.
The
minimum authorized payroll deduction must aggregate to not less
than $10 per pay period.
(b) In the event that the
Participant’s compensation for any pay period is terminated
or reduced from the compensation rate for such a period as of the
Commencement Date of the phase for any reason so that the amount
actually withheld on behalf of the Participant as of the
termination date of the phase is less than the amount anticipated
to be withheld over the phase year as determined on the
Commencement Date of the phase, then the extent to which the
Participant may exercise his option shall be based on the amount
actually withheld on his behalf. In the event of a change in the
pay period of any Participant, such as from bi-weekly to monthly,
an appropriate adjustment shall be made to the deduction in each
new pay period so as to ensure the deduction of the proper amount
authorized by the Participant.
(c) All payroll deductions
made for Participants shall be credited to their accounts under the
Plan. A Participant may not make any separate cash payments into
such account.
(d) Except for his right to
discontinue participation in the Plan as provided in Paragraph 9,
no Participant shall be entitled to increase or decrease the amount
to be deducted in a given phase after the Commencement
Date.
8.
Options.
(a) Grant of Option.
(i) A Participant who is
employed by the Company as of the Commencement Date of a phase
shall be granted an option as of such date to purchase a number of
full shares of Company common stock to be determined by dividing
the total amount to be credited to that Participant’s account
under Paragraph 7 hereof by the option price set forth in Paragraph
8(a)(ii)(A) hereof, subject to the limitations of Paragraph 10
hereof.
(ii) The option price for
such shares of common stock shall be the lower of:
A. Eighty-five
percent (85%) of the fair market value of such shares of common
stock on the Commencement Date of the phase; or
B. Eighty-five
percent (85%) of the fair market value of such shares of common
stock on the termination date of the phase.
(iii) The fair market value of shares of
common stock of the Company shall be determined by the Committee
for each valuation date in a manner acceptable under Section 423 of
the Internal Revenue Code of 1986.
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(iv) Anything herein to
the contrary notwithstanding, no Employee shall be granted an
option hereunder:
A. Which exceeds a
10,000-share limit per Employee for each plan phase;
B. Which permits his rights
to purchase stock under all employee stock purchase plans of the
Company, its subsidiaries or its parent, if any, to accrue at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the
fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is
outstanding at any time;
C. If immediately after the
grant such Employee would own and/or hold outstanding options to
purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the
Company, its parent, if any, or of any subsidiary of the Company.
For purposes of determining stock ownership under this Paragraph,
the rules of Section 424(d) of the Internal Revenue Code, as
amended, shall apply; or
D. Which can be exercised
after the expiration of 27 months from the date the option is
granted.
(b) Exercise of
Option.
(i) Unless a Participant
gives written notice to the Company pursuant to Paragraph 8(b)(ii)
or Paragraph 9 prior to the termination date of a phase, his option
for the purchase of shares will be exercised automatically for him
as of such termination date for the purchase of the number of full
shares of Company common stock which the accumulated payroll
deductions in his account at that time will purchase at the
applicable option price, subject to the limitations set forth in
Paragraph 10 hereof.
(ii) A Participant may, by
written notice to the Company at any time during the thirty (30)
day period immediately preceding the termination date of a phase,
elect, effective as of the termination date of that phase, to
exercise his option for a specified number of full shares less than
the maximum number which may be purchased under his
option.
(iii) As promptly as
practicable after the termination date of any phase, the Company
will deliver to each Participant herein the common stock purchased
upon the exercise of his option, together with a cash payment equal
to the balance, if any, of his account which was not used for the
purchase of common stock with interest accrued
thereon.
9. Withdrawal or Termination of
Participation.
(a)
A Participant may, at any time
prior to the termination date of a phase, withdraw all payroll
deductions then credited to his account by giving written notice to
the Company. Promptly upon receipt of such notice of withdrawal,
all payroll deductions credited to the Participant’s account
will be paid to him with interest accrued thereon and no further
payroll deductions will be made during the phase. In such event,
the option granted the Participant under that phase of the Plan
shall lapse immediately. Partial withdrawals of payroll deductions
hereunder may not be made.
(b)
In the event of the death of a
Participant, the person or persons specified in Paragraph 14 may
give notice to the Company within sixty (60) days of the death of
the Participant electing to purchase the number of full shares
which the accumulated payroll deductions in the account of such
deceased Participant will purchase at the option price specified in
Paragraph 8(a)(ii) and have the balance in the account distributed
in cash with interest accrued thereon. If no such notice is
received by the Company within said sixty (60) days, the
accumulated payroll deductions will be distributed in full in cash
with interest accrued thereon.
(c)
Upon termination of
Participant’s employment for any reason other than death of
the Participant, the payroll deductions credited to his account,
plus interest, shall be returned to him.
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10.
Stock Reserved for
Options.
(a)
One Million Seven Hundred
Thousand (1,700,000)1 shares of the Company’s common
stock are reserved for issuance upon the exercise of options to be
granted under the Plan. Shares subject to the unexercised portion
of any lapsed or expired option may again be subject to option
under the Plan.
(b)
If the total number of shares
of the Company common stock for which options are to be granted for
a given phase as specified in Paragraph 8 exceeds the number of
shares then remaining available under the Plan (after deduction of
all shares for which options have been exercised or are then
outstanding) and if the Committee does not elect to cancel such
phase pursuant to Paragraph 4, the Committee shall make a pro rata
allocation of the shares remaining available in as uniform and
equitable a manner as it shall consider practicable. In such event,
the options to be granted and the payroll deductions to be made
pursuant to the Plan which would otherwise be effected may, in the
discretion of the Committee, be reduced accordingly. The Committee
shall give written notice of such reduction to each Participant
affected.
(c) The Participant (or a
joint tenant named pursuant to Paragraph 10(d) hereof) shall have
no rights as a shareholder with respect to any shares subject to
the Participant’s option until the date of the issuance of a
stock certificate evidencing such shares. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for
which the record date is prior to the date such stock certificate
is actually issued, except as otherwise provided in Paragraph 12
hereof.
(d)
The shares of the Company
common stock to be delivered to a Participant pursuant to the
exercise of an option under the Plan will be registered in the name
of the Participant or, if the Participant so directs by written
notice to the Committee prior to the termination date of that phase
of the Plan, in the names of the Participant and one other person
the Participant may designate as his joint tenant with rights of
survivorship, to the extent permitted by law.
11. Accounting and Use of Funds.
Payroll deductions for each Participant shall be credited to an
account established for him under the Plan. A Participant may not
make any separate case payments into such account. Such account
shall be solely for bookkeeping purposes and no separate fund or
trust shall be established hereunder and the Company shall not be
obligated to segregate such funds. All funds from payroll
deductions received or held by the Company under the Plan may be
used, without limitation, for any corporate purpose by the
Company.
12.
Adjustment
Provision.
(a) Subject to any required
action by the shareholders of the Company, the number of shares
covered by each outstanding option, and the price per share thereof
in each such option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of the Company
common stock resulting from a subdivision or consolidation of
shares or the payment of a share dividend (but only on the shares)
or any other increase or decrease in the number of such shares
effected without receipt of consideration by the
Company.
(b)
In the event of a change in the
shares of the Company as presently constituted, which is limited to
a change of all its authorized shares with par value into the same
number of shares with a different part value or without par value,
the shares resulting from any such change shall be deemed to be the
shares within the meaning of this Plan.
13. Non-Transferability of
Options.
(a) Options granted under
any phase of the Plan shall not be transferable except under the
laws of descent and distribution and shall be exercisable only by
the Participant during his lifetime and after his death only by his
beneficiary of the representative of his estate as provided in
Paragraph 9(b) hereof.
(b) Neither payroll
deductions credited to a Participant’s account, nor any
rights with regard to the exercise of an option or to receive
common stock under any phase of the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the
Participant. Any such attempted assignment, transfer, pledge
or
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other
disposition shall be null and void and without effect, except that
the Company may, at its option, treat such act as an election to
withdraw funds in accordance with Paragraph 9.
14.
Designation of Beneficiary. A
Participant may file a written designation of a beneficiary who is
to receive any cash to the Participant’s credit plus interest
thereon under any phase of the Plan in the event of such
Participant’s death prior to exercise of his option pursuant
to Paragraph 9(b) hereof, or to exercise his option and become
entitled to any stock and/or cash upon such exercise in the event
of the Participant’s death prior to exercise of the option
pursuant to Paragraph 9(b) hereof. The beneficiary designation may
be changed by the Participant at any time by written notice to the
Company.
Upon
the death of a Participant and upon receipt by the Company of proof
deemed adequate by it of the identity and existence at the
Participant’s death of a beneficiary validly designated under
the Plan, the Company shall in the event of the Participant’s
death under the circumstances described in Paragraph 9(b) hereof,
allow such beneficiary to exercise the Participant’s option
pursuant to Paragraph 9(b) if such beneficiary is living on the
termination date of the phase and deliver to such beneficiary the
appropriate stock and/or cash after exercise of the option. In the
event there is no validly designated beneficiary under the Plan who
is living at the time of the Participant’s death under the
circumstances described in Paragraph 9(b) or in the event the
option lapses, the Company shall deliver the cash credited to the
account of the Participant with interest to the executor or
administrator of the estate of the Participant, or if no such
executor or administrator has been appointed to the knowledge of
the Company, it may, in its discretion, deliver such cash to the
spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
The Company will not be responsible for or be required to give
effect to the disposition of any cash or stock or the exercise of
any option in accordance with any will or other testamentary
disposition made by such Participant or in accordance with the
provision of any law concerning intestacy, or otherwise. No
designated beneficiary shall, prior to the death of a Participant
by whom he has been designated, acquire any interest in any stock
or in any option or in the cash credited to the Participant under
any phase of the Plan.
15.
Amendment and Termination. The
Plan may be terminated at any time by the Board of Directors
provided that, except as permitted in Paragraph 4(c) with respect
to an acceleration of the termination date of any phase, no such
termination will take effect with respect to any options then
outstanding. Also, the Board may, from time to time, amend the Plan
as it may deem proper and in the best interests of the Company or
as may be necessary to comply with Section 423 of the Internal
Revenue Code of 1986, as amended, or other applicable laws or
regulations; provided, however, that no such amendment shall,
without prior approval of the shareholders of the Company (1)
increase the total number of shares for which options may be
granted under the Plan (except as provided in Paragraph 12 herein),
(2) permit aggregate payroll deductions in excess of ten percent
(10%) of a Participant’s compensation as of the Compensation
Date of a phase, or (3) impair any outstanding option.
16. Interest. In any situation
where the Plan provides for the payment of interest on a
Participant’s payroll deductions, such interest shall be
determined by averaging the month-end balances in the
Participant’s account for the period of his participation and
computing interest thereon at the initial rate of three percent
(3%) per annum. This interest rate may be adjusted periodically by
the Committee as it deems appropriate.
17.
Notices. All notices or other
communications in connection with the Plan or any phase thereof
shall be in the form specified by the Committee and shall be deemed
to have been duly given when received by the Participant or his
designated personal representative or beneficiary or by the Company
or its designated representative, as the case may be.
18. Participation of Subsidiaries.
The Employees of any Subsidiary of the Company shall be entitled to
participate in the Plan on the same basis as Employees of the
Company, unless the Board of Directors determines otherwise.
Effective as of the date of coverage of any Subsidiary, any
references herein to the “Company” shall be interpreted
as referring to such Subsidiary as well as to Insignia Systems,
Inc.
In the
event that any Subsidiary which is covered under the Plan ceases to
be a Subsidiary of Insignia Systems, Inc. the employees of such
Subsidiary shall be considered to have terminated their employment
for purposes of Paragraph 9 hereof as of the date such Subsidiary
ceases to be such a Subsidiary.
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19. Definitions.
(a)
“Subsidiary” shall
include any corporation defined as a subsidiary of the Company in
Section 424(f) of the Internal Revenue Code of 1986, as
amended.
(b)
“Employee” shall
mean any employee, including an officer, of the Company who as of
the day immediately preceding the Commencement Date of a phase is
customarily employed by the Company for more than twenty (20) hours
per week and more than five (5) months in a calendar
year.
(c)
“Base Pay” is the
regular pay for employment for each employee as annualized for a
twelve (12) month period, exclusive of overtime, commissions,
bonuses, disability payments, shift differentials, incentives and
other similar payments, determined as of the Commencement Date of
each phase.
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Dates Referenced Herein and Documents Incorporated by Reference
