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<SEC-DOCUMENT>0000897101-08-001173.txt : 20080523
<SEC-HEADER>0000897101-08-001173.hdr.sgml : 20080523
<ACCEPTANCE-DATETIME>20080523124413
ACCESSION NUMBER:		0000897101-08-001173
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080521
ITEM INFORMATION:		Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080523
DATE AS OF CHANGE:		20080523

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INSIGNIA SYSTEMS INC/MN
		CENTRAL INDEX KEY:			0000875355
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS MANUFACTURING INDUSTRIES [3990]
		IRS NUMBER:				411656308
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13471
		FILM NUMBER:		08857226

	BUSINESS ADDRESS:	
		STREET 1:		6470 SYCAMORE COURT NORTH
		CITY:			MAPLE GROVE
		STATE:			MN
		ZIP:			55369
		BUSINESS PHONE:		7633926200

	MAIL ADDRESS:	
		STREET 1:		6470 SYCAMORE COURT NORTH
		CITY:			MAPLE GROVE
		STATE:			MN
		ZIP:			55369
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>insignia082315_8k.htm
<DESCRIPTION>FORM 8-K DATED MAY 21, 2008
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<TITLE>INSIGNIA SYSTEMS, INC. FORM 8-K DATED MAY 21, 2008</TITLE>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=4>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Washington, DC 20549-1004</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:6pt; margin-top:6pt;text-align:center;'><B><font SIZE=6>FORM 8-K</font></B></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>THE SECURITIES EXCHANGE ACT OF 1934</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>Date of Report:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>May 21, 2008</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:center;'><B><font SIZE=6>INSIGNIA SYSTEMS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Exact name of registrant as specified in its chapter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p   align=center style='text-align:center'><b><font size=3>Minnesota</font></b></p>  </td>
        <td width="239" style='padding:0in 1.85pt 0in 1.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=3>1-13471</font></b></p> </td>
        <td width="239" style='padding:0in 1.85pt 0in 1.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=3>41-1656308</font></b></p> </td> </tr>
    <tr >
        <td width="247" valign=top style='padding:0in 1.85pt 0in 1.85pt'>
            <p   align=center style='margin-right:0in;text-align:center'><font size=2>(State or other jurisdiction</font><br> <font size=2>of incorporation)</font></p>  </td>
        <td width="239" valign=top style='padding:0in 1.85pt 0in 1.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Commission </font><br> <font size=2>File Number)</font></p> </td>
        <td width="239" valign=top style='padding:0in 1.85pt 0in 1.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(IRS Employer </font><br> <font size=2>Identification No.)</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p   align=center style='text-align:center'><b><font size=3>6470 Sycamore Court North, Maple Grove, Minnesota</font></b></p>  </td>
        <td width="265" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=3>55369</font></b></p> </td> </tr>
    <tr >
        <td width="455" valign=top >
            <p   align=center style='text-align:center'><font size=2>(Address of principal executive offices)</font></p>  </td>
        <td width="265" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Zip Code)</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>Registrant&#146;s telephone number, including area code&nbsp;&nbsp;&nbsp;</font><b><font size=3>(763) 392-6200</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="720" >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Former name or former address, if changed since last report)</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=3>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=3>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=3>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=3>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=3>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="3"><B>Item 5.02.</B> </FONT></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=3>Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</font></b></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>On March 25, 2008, the Company&#146;s Board of Directors adopted the Senior Management Litigation Incentive Plan (&#147;Plan&#148;), which was approved by the shareholders at the Annual Shareholders&#146; Meeting on May 21, 2008. The purpose of the Plan is to encourage senior management to remain with the Company and use their best efforts to achieve favorable results for the Company in the litigation between the Company and News America Marketing In-Store, Inc. and Albertson&#146;s, Inc. (&#147;Litigation&#148;). The Board believes that giving senior management the opportunity to earn incentive compensation if the Company achieves favorable results in the Litigation will motivate senior management to use their best efforts to achieve those results, which will benefit the Company and the shareholders.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>Incentive compensation is payable under the Plan only if the Company receives a &#147;Recovery&#148; in the Litigation in excess of $10,000,000. The term &#147;Recovery&#148; is defined in the Plan as all cash payments received by the Company in the Litigation, minus any contingent attorney&#146;s fees payable to any of the law firms representing the Company in the Litigation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Administration of the Plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The Plan will be administered by the Company&#146;s Compensation Committee, which will have the authority to determine the eligibility of employees for benefits, to make allocations under the Plan, calculate amounts payable under the Plan, and construe and interpret the Plan. The members of the Compensation Committee are not eligible to receive benefits under the Plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Eligibility and Participation for the Plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The employees eligible to participate in the Plan are members of senior management of the Company who are designated by the Compensation Committee as a participant. If a participant&#146;s employment with the Company is terminated before a Recovery due to voluntary resignation or by the Company for cause, his or her participation in the Plan will automatically terminate. In the case of termination prior to Recovery because of death, disability or by the Company without cause, the Compensation Committee will determine whether the participant shall continue to participate in the Plan and at what level.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>If a participant&#146;s employment with the Company is terminated after a Recovery due to voluntary resignation or by the Company with cause, his or her right to receive any future payments under the Plan will automatically terminate. Termination of a participant&#146;s employment after a Recovery for any other reason will not affect his or her right to continue as a participant in the Plan and receive payments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Payments Under the Plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The total amount payable to all participants under the Plan will be 5% of total Recoveries over $10,000,000. The Compensation Committee will allocate the 5% among the members of senior management after consultation with the Chief Executive Officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The Compensation Committee will
calculate the amount payable to each participant as soon as administratively feasible after the Company first receives Recoveries
over $10,000,000. The amount payable to each participant will be paid in four equal installments, with the first installment
payable within 60 days after the calculation is completed, and the remaining three installments payable, without interest, on each
of the three succeeding anniversaries of the first payment. The Board expects that making the payments in installments over three
years will create a strong incentive for the participants to remain with the Company until all of their payments have been
received, because participants must generally remain employed through the date of each payment to receive the payment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Duration of Plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The Plan became effective on May 21, 2008, the date it was approved by the shareholders and will continue in effect until all Recoveries have been obtained and all amounts payable under the Plan have been paid in full, or until earlier terminated by the Board of Directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Amendment and Termination</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The Plan may be amended by the Board of Directors at any time, except that no amendment may increase the maximum amount payable without shareholder approval. The Plan may also be terminated by the Board at any time. No amendment or termination can eliminate or reduce any amount then quantifiable and payable to any participant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Binding Effect</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>The Plan is binding upon the successors and assigns of the Company. In addition, if the Company becomes a party to a transaction which results in resolution or termination of the Litigation without the payment of any Recovery to the Company, but at a time that the Company has reasonable prospects of receiving a Recovery, the Compensation Committee may take any action it deems necessary to pay benefits to the participants equivalent to the benefits the participants would have received if the Company had received the Recovery, and that are fair and reasonable under the circumstances.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Tax Treatment</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.48in;text-align:left;'><font size=2>Payments to participants will be considered compensation and taxable to the participants as ordinary income. The Company is entitled to deduct the payments as ordinary and necessary business expenses, except that no payment to any participant in any year in excess of $1,000,000 will be deductible.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="3"><B>Item 9.01.</B> </FONT></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=3>Financial Statements and Exhibits.</font></b></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td width="69" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibits</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>10.1</font></p> </td>
        <td width="289" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Senior Management Litigation Incentive Plan</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:center;'><B><font SIZE=3>SIGNATURES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Insignia Systems, Inc.</font></b></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>(Registrant)</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><br> <font size=2>Date:&nbsp;&nbsp;&nbsp; May 23, 2008</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By&nbsp;</font></p> </td>
        <TD WIDTH="288" VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><br> <font size=2>/s/ Scott F. Drill</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Scott F. Drill, President and Chief Executive Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>insignia082315_ex10-1.htm
<DESCRIPTION>SENIOR MANAGEMENT LITIGATION INCENTIVE PLAN
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<TITLE>INSIGNIA SYSTEMS, INC. EXHIBIT 10.1 TO FORM 8-K DATED MAY 21, 2008</TITLE>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><B><font SIZE=3>EXHIBIT 10.1</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>INSIGNIA SYSTEMS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>SENIOR MANAGEMENT LITIGATION INCENTIVE PLAN</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>1.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Purpose</font></b></u><b><font size=2>. </font></b><font size=2>The purpose of this Plan is to encourage senior management to remain with the Company, and motivate them to use their best efforts to achieve favorable results for the Company in the Litigation (as defined below), which will benefit the Company and all of its shareholders. This Plan shall be in addition to any other current plans or plans that are adopted in the future for senior management of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>2.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Definitions</font></b></u><b><font size=2>.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Litigation</font></u><font size=2>. &#147;Litigation&#148; means the case of </font><u><font size=2>Insignia Systems, Inc., et al., v. News America Marketing In-Store, Inc., and Albertsons, Inc.</font></u><font size=2>, U.S. District Court, District of Minnesota, Case No. 04 4213, and any other case which is a successor or related to such case.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Recovery</font></u><font size=2>. &#147;Recovery&#148; means:  (a)&nbsp;all cash consideration received by the Company (by reason of an award or judgment in the Litigation, or any settlement or other disposition of the Litigation); minus (b)&nbsp;the contingent attorney&#146;s fees payable to any of the law firms representing the Company in the Litigation. There may be more than one Recovery.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>3.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Eligibility</font></b></u><b><font size=2>. </font></b><font size=2>The employees eligible to participate in the Plan are those members of senior management of the Company who are designated by the Compensation Committee as participants. In the case of termination of a participant&#146;s employment with the Company due to voluntary resignation or by the Company for cause prior to the date of a ruling by the trial court awarding a Recovery or the execution of a settlement agreement providing for a Recovery, the participant&#146;s participation in the Plan shall automatically terminate. For purposes of this Plan, &#147;cause&#148; is defined as any of the following by a participant:  (a) conviction of a felony or gross misdemeanor; (b) fraud, embezzlement or other dishonesty in
connection with the affairs of Employer; (c) material or repeated breach of any Company policy or procedure or any agreement between the Company and the participant; or (d) material or repeated failure to perform assigned duties in accordance with accepted professional standards. In the case of termination of a participant&#146;s employment because of death, disability, or by the Company without cause, prior to the date of a ruling by the trial court awarding a Recovery or the execution of a settlement agreement providing for a Recovery, the Compensation Committee shall, within ninety (90) days of such termination, determine whether the participant shall continue to participate in the Plan and at what level.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>4.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Duration of Plan</font></b></u><b><font size=2>. </font></b><font size=2>This Plan shall become effective when it is approved by the Board of Directors, and by the shareholders at an Annual or Special Meeting. The Plan shall continue until all Recoveries have been obtained and all amounts payable under the Plan have been paid in full.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>5.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Administration</font></b></u><b><font size=2>. </font></b><font size=2>The Plan shall be administered by the Company&#146;s Compensation Committee, which shall have the authority to make allocations under the Plan, construe and interpret the Plan, determine the eligibility of employees for benefits, and calculate amounts payable under the Plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>6.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Amounts Payable</font></b></u><b><font size=2>. </font></b><font size=2>The total amount payable to all participants under the Plan shall be five percent of total Recoveries over $10,000,000. The Compensation Committee shall allocate the five percent among the participating members of senior management. The allocations shall be made by the Compensation Committee in its discretion after consultation with the Chief Executive Officer of the Company. Allocation to a participant shall not be reduced except in connection with termination of the participant&#146;s employment with the Company as set forth in Section 3, or based on the vesting provision in Section 7. Benefits shall be paid to participants net of taxes and other legally required withholdings. Benefits paid under the Plan
shall be in addition to any other compensation or benefits a participant may be entitled to receive.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>7.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Vesting</font></b></u><b><font size=2>. </font></b><font size=2>A participant shall become one-third vested under the Plan on the date of a ruling by the trial court awarding a Recovery or the execution of a settlement agreement providing for a Recovery. A participant shall become fully vested in each payment payable under Section 8 after a Recovery only if the participant is employed on the date of each payment, or if the participant&#146;s employment terminates as a result of death, disability or termination by the Company without cause. A participant whose employment terminates due to voluntary resignation after he is one-third vested shall receive one-third of his allocation of each payment made under
Section 8 after his employment terminates, and no additional portion of any payment. A participant whose employment is terminated by the Company for cause at any time shall forfeit all of his rights to any payments under the Plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>8.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Time and Manner of Payment</font></b></u><b><font size=2>. </font></b><font size=2>The Compensation Committee shall calculate the amount payable to each participant as soon as administratively feasible after the Company first receives Recoveries over $10,000,000. After the amount payable to each participant is calculated by the Compensation Committee, it shall be paid in four equal installments, with the first installment payable within 60 days after the calculation is completed, and the remaining three installments payable, without interest, on each of the three succeeding anniversaries of the first payment. If additional Recoveries are received by the Company during the period in which payments are being made to a participant, the participant&#146;s vested allocation of the
additional Recoveries shall be divided equally over his remaining payments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><font size=2>A participant who is one-third vested must be employed on a payment date to become fully vested in the payment and to receive the entire payment, except that termination of a participant&#146;s employment due to death, disability or by the Company without cause shall not affect a participant&#146;s right to continue as a participant in the Plan and receive his entire allocation of each payment. After the death of a participant, any amount payable to the participant shall be paid to his heirs. If a participant&#146;s employment with the Company is terminated due to voluntary resignation after he becomes one-third vested under Section 7, his right to receive any portion of any payment after his termination shall be limited to his vested percentage.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>9.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Conduct of the Litigation</font></b></u><b><font size=2>. </font></b><font size=2>The Board of Directors shall have absolute discretion at all times to conduct the Litigation including, without limitation, to retain counsel on terms of its choosing, to make, approve, and refuse settlement and compromise offers, and to pursue Recoveries. Nothing herein gives any participant the right to participate directly in the Litigation (unless he is a party) or bring a cause of action based on the Company&#146;s conduct of the Litigation (including, without limitation, a claim that Recovery was not maximized).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>10.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Non-Assignability</font></b></u><b><font size=2>. </font></b><font size=2>A participant may not assign or transfer his right to payment under this Plan, except to his heirs in the event of his death, and a participant&#146;s right to payment may not be attached by his creditors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>11.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>No Continued Employment</font></b></u><b><font size=2>. </font></b><font size=2>Nothing contained in this Plan shall be construed as guaranteeing continued employment to any participant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>12.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Amendment and Termination</font></b></u><b><font size=2>. </font></b><font size=2>The Plan may be amended or terminated by the Board of Directors in its sole discretion. No such action shall eliminate or reduce any amount then quantifiable and payable to any participant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>13.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Binding Effect</font></b></u><b><font size=2>. </font></b><font size=2>This Plan is binding upon, and shall inure to the benefit of, the heirs, representatives, successors and assigns of the Company. If the Company becomes a party to a transaction which results in resolution or termination of the Litigation without the payment of any Recovery to the Company, but at a time that the Company has reasonable prospects of receiving a Recovery, the Compensation Committee may take any action it deems necessary to pay  benefits to the participants equivalent to the benefits the participants would have received if the Company had received the Recovery, and that are fair and reasonable under the circumstances.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.51in;text-align:justify;'><b><font size=2>14.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font size=2>Arbitration</font></b></u><b><font size=2>. </font></b><font size=2>Any controversy or claim arising out of or relating to this Plan will be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, in Minneapolis, Minnesota.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>016071/204342/684406_13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

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