8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549-1004

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report:

February 20, 2007

INSIGNIA SYSTEMS, INC.

(Exact name of registrant as specified in its chapter)

Minnesota	1-13471	41-1656308
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6470 Sycamore Court North, Maple Grove, Minnesota	55369
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code       (763) 392-6200

(Former name or former address, if changed since last report)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.    Results of Operations and Financial Condition.

On February 21, 2007, the registrant issued a press release disclosing financial information regarding the quarter and twelve months ended December 31, 2006. A copy of the press release is attached as Exhibit 99.1.

Item 5.02.    Compensatory Arrangements of Certain Officers.

On February 20, 2007, the registrant’s Compensation Committee approved amendments to the Change in Control Severance Agreement for Scott Simcox to increase benefit payments and to require a signed release in exchange for benefit payments.

On February 20, 2007, the registrant’s Compensation Committee also approved the Annual Executive Incentive Plan. The employees eligible to participate in the Plan are the Vice President of Finance, Senior Vice President of Marketing Services, Vice President of Operations, Vice President of Technology Development and Controller. Under the terms of the Plan, eligible employees may receive annual bonuses between 2% and 45% of base salary if the registrant achieves targets relating to Insignia POPS revenue and corporate net income.

Item 5.03.    Amendments to Articles of Incorporation or Bylaws.

On February 20, 2007, the registrant’s Board of Directors approved amendments to the Bylaws, Article 6, Shares and Their Transfer, to permit participation in the Direct Registration System. This amendment is necessary to comply with recently adopted Nasdaq rules that mandate companies become eligible to participate in the Direct Registration System by January 1, 2008.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

3.1 Amended and Restated Bylaws of Insignia Systems, Inc.

10.1 Amended Change in Control Severance Agreement for Scott Simcox.

99.1 Press Release dated February 21, 2007.

SIGNATURES

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.

	Insignia Systems, Inc.
	(Registrant)
Date:   February 23, 2007	By	/s/   Scott F. Drill
		Scott F. Drill, Chief Executive Officer

EX-3.1

EXHIBIT 3.1

2-20-07

AMENDED AND RESTATED BYLAWS

OF

INSIGNIA SYSTEMS, INC.

ARTICLE 1.

OFFICES

1.1Offices. The address of the registered office of the corporation shall be designated in the Articles of Incorporation, as amended from time to time or a statement of the Board of Directors filed with the Secretary of State of Minnesota changing the registered office in the manner prescribed by law. The corporation may have offices at such places within or without the State of Minnesota as the Board of Directors shall from time to time determine or the business of the corporation requires.

ARTICLE 2.

MEETINGS OF SHAREHOLDERS

2.1        Regular Meetings. Regular meetings of the shareholders of the corporation entitled to vote shall be held on an annual or other less frequent basis as shall be determined by the Board of Directors or by the chief executive officer. At each regular meeting, the shareholders, voting as provided in the Articles of Incorporation and these Bylaws, shall elect qualified successors for directors whose terms are due to expire, and shall transact such other business as shall come before the meeting. No meeting shall be considered a regular meeting unless specifically designated as such in the notice of meeting.

2.2        Special Meetings. Special meetings of the shareholders entitled to vote may be called at any time by the Chairman of the Board (if any has been elected), the Chief Executive Officer, the Chief Financial Officer, or any two or more directors.

2.3        Meetings Held Upon Shareholder Demand. Regular meetings of shareholders may be demanded by a shareholder or shareholders pursuant to the provisions of Minnesota Statutes, Sections 302A.431, Subd. 2. Special meetings of shareholders may be called by one or more shareholders holding not less than ten percent (10%) of the voting power of all shares of the corporation entitled to vote, except that a special meeting for the purpose of considering any action to directly or indirectly facilitate or effect a business combination, including any action to change or otherwise affect the composition of the Board of Directors, for that purpose, when called by shareholders, must be called by shareholders holding twenty-five percent (25%) or more of the voting power of all shares entitled to vote.

2.4          Place of Meetings. Meetings of the shareholders shall be held at the principal executive office of the corporation or at such other place, within or without the State of Minnesota, as is designated by the Board of Directors, except that a regular or special meeting called by or at the demand of a shareholder shall be held in the county where the principal executive office of the corporation is located.

2.5          Notice of Meetings. Except as otherwise specified in Section 2.6 or required by law, a written notice setting out the place, date and hour of any regular or special meeting shall be given to each holder of shares entitled to vote not less than ten (10) days nor more than sixty (60) days prior to the date of the meeting. Notice of any special meeting shall state the purpose or purposes of the proposed meeting, and the business transacted at all special meetings shall be confined to the purposes stated in the notice.

2.6          Waiver of Notice. A shareholder may waive notice of any meeting before, at or after the meeting, in writing, orally or by attendance. Attendance at a meeting by a shareholder is a waiver of notice of that meeting unless the shareholder objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened, or objects before a vote on an item of business because the item may not be lawfully considered at such meeting, and does not participate in the consideration of the item of such meeting.

2.7          Quorum and Adjourned Meeting. The holders of majority of the voting power of the shares entitled to vote at a meeting, represented either in person or by proxy, shall constitute a quorum for the transaction of business at any regular or special meeting of shareholders. If a quorum is present when a duly called or held meeting is convened, the shareholders present may continue to transact business until adjournment, even though a withdrawal of a number of shareholders originally present leaves less than the proportion or number otherwise required for a quorum. In case a quorum is not present at any meeting, those present shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite number of shares entitled to vote shall be represented. At such adjourned meeting at which the required amount of shares entitled to vote shall be represented, any business may be transacted which might have been transacted at the original meeting.

2.8          Voting. At each meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person or by proxy duly appointed by an instrument in writing subscribed by such shareholder. Each shareholder shall have one (1) vote for each share having voting power standing in the shareholder’s name on the books of the corporation except as may be otherwise provided in the terms of the share. Upon the demand of any shareholder, the vote for directors or the vote upon any question before the meeting shall be by ballot. All elections shall be determined and all questions decided by a majority vote of the number of shares entitled to vote and represented at any meeting at which there is a quorum except in such cases as shall otherwise be required by statute, the Articles of Incorporation or these Bylaws. Directors shall be elected by a plurality of the votes cast by holders of shares entitled to vote thereon.

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2.9          Properly Brought Business. At the regular meeting, the shareholders shall elect directors of the corporation and shall transact such other business as may properly come before them. To be properly brought before the meeting, business must be of a nature that is appropriate for consideration at a regular meeting and must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Boar of Directors, or (iii) otherwise properly brought before the meeting by a shareholder. In addition to any other applicable requirements, for business to be properly brought before the regular meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, each such notice must be given, either by personal delivery or by United States mail, postage prepaid, to the secretary of the corporation, not less than sixty (60) days nor more than ninety (90) days prior to a meting date corresponding to the previous year’s regular meeting. Each such notice to the secretary shall set forth as to each matter the shareholder proposes to bring before the regular meeting (a) a brief description of the business desired to be brought before the regular meeting and the reasons for conducting such business at the regular meeting, (b) the name and address of record of the shareholders proposing such business, (c) the class or series (if any) and number of shares of the corporation which are owned by the shareholder, and (d) any material interest of the shareholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be transacted at the regular meeting except in accordance with the procedures set forth in this Article; provided, however, that nothing in this Article shall be deemed to preclude discussion by any shareholder of any business properly brought before the regular meeting, in accordance with these Bylaws. The amendment or repeal of this section or the adoption of any provision inconsistent therewith shall require the approval of the holders of shares representing at least two-thirds of the outstanding shares of the common stock.

2.10       Parliamentary Procedure. Meetings of shareholders generally shall follow accepted rules of parliamentary procedure, subject to the following:

(a)          The chairman of the meeting shall have absolute authority over matters of procedure, and there shall be no appeal from the ruling of the chairman. If, in his or her absolute discretion, the chairman deems it advisable to dispense with the rules of parliamentary procedure as to any one meeting of shareholders or part thereof, he or she shall so state and shall clearly state the rules under which the meeting or appropriate part thereof shall be conducted.

(b)          If disorder should arise which prevents the continuation of the legitimate business of the meeting, the chairman may quit the chair and announce the adjournment of the meeting; and upon his or her so doing, the meeting is immediately adjourned.

(c)          The chairman may ask or require that anyone not a bona fide shareholder or proxy leave the meeting.

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(d)          A resolution or motion shall be considered for vote only if proposed by a shareholder or a duly authorized proxy and seconded by a shareholder or a duly authorized proxy other than the individual who proposed the resolution or motion.

2.11       Tabulation of Proxies. In the tabulation of votes cast by proxies, it shall not be necessary for proxies to execute a ballot on matters, voting instructions for which are contained on the form of proxy itself, and in the absence of a ballot executed by such proxies, the proxy itself will be deemed a written ballot and tabulated in accordance with the directions contained thereon. Where the proxy statement soliciting such proxy indicates that returned proxies containing no voting instructions regarding a particular item will be voted in a certain manner, then returned, executed proxies containing no voting instructions with respect to such item will be deemed written ballots voted in accordance with the recommendation contained on such proxy statement.

2.12       Closing of the Polls. The person presiding at the meeting of the shareholders may close the polls after the request for submission of proxies and ballots, upon the temporary adjournment of the meeting called to tabulate the proxies and ballots, or within a reasonable time thereafter. After the pools are closed, no proxy, revocation of proxy or ballot shall be accepted by or considered in the tabulation of proxies and ballots.

2.13       Adjourned Meeting to Report Election Result. In the event it becomes necessary to adjourn a meeting of shareholders beyond the day of the scheduled meeting in order to determine the results of any election or vote, said meeting may be adjourned from time to time by the person presiding or entitled to preside, with such meeting to be reconvened at the principal offices of the corporation. The only matter to be acted upon at such reconvened meeting shall be the acceptance and filing of the report from the inspectors of election.

ARTICLE 3.

DIRECTORS

3.1          General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors.

3.2          Number, Term and Qualifications. The Board of Directors consists of not less than two or more than seven directors, as may be designated by resolution of the Board of Directors from time to time. Each director shall serve until a successor shall have been duly elected and qualified, unless the director shall retire, resign, die or be removed.

3.3          Vacancies. Any vacancies occurring in the Board of Directors for any reason, and any newly created directorships resulting from an increase in the number of directors, may be filled by a majority of the directors then in office. Any directors so chosen shall hold office until their successors shall be elected and qualified subject, however, to prior retirement, resignation, death or removal from office.

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3.4          Quorum and Voting. A majority of the directors currently holding office shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the directors present may adjourn a meeting from time to time until a quorum is present. If a quorum is present when a duly called or held meeting is convened, the directors present may continue to transact business until adjournment even though the withdrawal of a number of directors originally present leaves less than the proportion or number otherwise required for a quorum. Except as otherwise required by law or the Articles of Incorporation, the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors.

3.5          Board Meetings; Place and Notice. Meetings of the Board of Directors may be held form time to time at any place within or without the State of Minnesota that the Board of Directors may designate. In the absence of designation by the Board of Directors, Board meetings shall be held at the principal executive office of the corporation, except as may be otherwise unanimously agreed orally, or in writing, or by attendance. Any director may call a Board meeting by giving at least 24 hours notice to all directors of the date and time of the meeting. The notice need not state the purpose of the meeting, and may be given by mail, telephone, facsimile transmission, telegram, or in person. If a meeting schedule is adopted by the Board, or if the date and time of a Board meeting has been announced at a previous meeting, no notice is required.

3.6          Waiver of Notice. A director may waive notice of any meeting before, at or after the meeting, in writing, orally or by attendance. Attendance at a meeting by a director is a waiver of notice of that meeting unless the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate thereafter in the meeting.

3.7          Absent Directors. A director may give advance written consent or opposition to a proposal to be acted on at a Board meeting. If the director is not present at the meeting, consent or opposition to a proposal does not constitute presence for purposes of determining the existence of a quorum, but consent or opposition shall be counted as a vote in favor of or against the proposal and shall be entered in the minutes of the meeting, if the proposal acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the director has consented or objected.

3.8          Compensation. Directors who are not salaried officers of the corporation shall receive such fixed sum and expenses per meeting attended or such fixed annual sum or both as shall be determined from time to time by resolution of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving this corporation in any other capacity and receiving proper compensation therefore.

3.9          Committees. The Board of Directors may, by resolution approved by affirmative vote of a majority of the Board, establish committees having the authority of the Board in the management of the business of the corporation only to the extent provided in the resolution.

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Committees may include a special litigation committee consisting of one or more independent directors or other independent persons to consider legal rights or remedies of the corporation and whether those rights and remedies should be pursued. Each such committee shall consist of one or more natural persons (who need not be direct0rs) appointed by the affirmative vote of a majority of the directors present. With the exception of special litigation committees and other special committees which under Minnesota law are not to be subject at all times to the direction and control of the Board. A majority of the members of a committee present at a committee meeting shall constitute a quorum for the transaction of business.

3.10       Telephone Meetings and Participation. A conference among directors by any means of communication through which the directors may simultaneously hear each other during the conference constitutes a Board meeting, if the same notice is given of the conference as would be required for a meeting, and if the number of directors participating in the conference would be sufficient to constitute a quorum at a meeting. Participation in a meeting by that means constitutes presence in person at the meeting. A director may participate in a Board meeting not heretofore described in this paragraph, by any means of communication through which the director, other directors so participating, and all directors physically present at the meeting may simultaneously hear each other during the meeting. Participation in a meeting by that means constitutes presence in person at the meeting. The provisions of this section shall apply to committees and members of committees to the same extent as they apply to the Board of Directors.

3.11       Authorization Without Meeting. Any action of the Board of Directors, or any committee of the Board, which may be taken at a meeting thereof, may be taken without a meeting if authorized by a writing signed by all of the directors, or in cases where the action need not be approved by the shareholders, by a written action signed by the number of directors that would be required to take the same action at a meeting of the Board or a committee thereof at which all directors were present.

3.12       Nomination for Election. Subject to the rights of holders of any class or series of stock having a preference over the common shares as to dividends or upon liquidation, nominations for the election of directors may be made by the Board of Directors or a committee appointed by the Board of Directors or by any shareholder entitled to vote generally in the election of directors. However, any shareholder entitled to vote generally in the election of directors may nominate one or more persons for election as directors at a meeting only if written notice of such shareholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the secretary of the corporation not less than sixty (60) days nor more than ninety (90) days prior to a meeting date corresponding to the previous year’s regular meeting. Each such notice to the Secretary shall set forth: (i) the name and address of record of the shareholder who intends to make the nomination; (ii) a representation that the shareholder is a holder of record of shares of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) the name, age, business and residence

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addresses, and principal occupation or employment of each nominee; (iv) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (v) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; and (vi) the consent of each nominee to serve as a director of the corporation if so elected. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the corporation. The presiding officer of the meting may, if the facts warrant, determine that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. The amendment or repeal of this section or the adoption of any provision inconsistent therewith shall require the approval of the holders of shares representing at least two-thirds of the outstanding shares of the common stock.

ARTICLE 4.

OFFICERS

4.1          Number and Designation. The corporation shall have one or more natural persons exercising the functions of the offices of chief executive officer and chief financial officer. The Board of Directors may elect or appoint such other officers or agents as it deems necessary for the operation and management of the corporation including, but not limited to, a Chairman of the Board, a President, one or more Vice Presidents, a Secretary and a Treasurer, each of whom shall have the powers, rights, duties and responsibilities set forth in these Bylaws unless otherwise determined by the Board. Any of the offices or functions of those offices may be held by the same person.

4.2          Election, Term of Office and Qualification. At the first meeting of the Board following each election of directors, the Board shall elect officers, who shall hold office until the next election of officers or until their successors are elected or appointed and qualify; provided, however, that any officer may be removed with or without cause by the affirmative vote of a majority of the Board of Directors present (without prejudice, however, to any contract rights of such officer).

4.3          Resignation. Any officer may resign at any time by giving written notice to the corporation.

4.4          Vacancies in Office. If there is a vacancy in any office of the corporation, by reason of death, resignation, removal or otherwise, such vacancy may, or in the case of a vacancy in the office of chief executive officer or chief financial officer shall, be filled for the unexpired term by the Board of Directors.

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4.5          Chief Executive Officer. Unless provided otherwise by a resolution adopted by the Board of Directors, the chief executive officer (a) shall have general active management of the business of the corporation; (b) shall, when present and in the absence of the Chairman of the Board, preside at all meetings of the shareholders and Board of Directors; (c) shall see that all orders and resolutions of the Board are carried into effect; (d) shall sign and deliver in the name of the corporation any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Articles, these Bylaws or the Board to some other officer or agent of the corporation; (e) shall maintain records of and certify proceedings of the Board and shareholders; and (f) shall perform such other duties as may from time to time be assigned to him by the Board.

4.6          Chief Financial Officer. Unless provided otherwise by a resolution adopted by the Board of Directors, the chief financial officer: (a) shall keep accurate financial records for the corporation; (b) shall deposit all monies, drafts and checks in the name of and to the credit of the corporation in such banks and depositories as the Board of Directors shall designate from time to time; (c) shall endorse for deposit all notes, checks and drafts received by the corporation as ordered by the Board, making proper vouchers therefore; (d) shall disburse corporate funds and issue checks and drafts in the name of the corporation, as ordered by the Board; (e) shall render to the chief executive officer and the Board of Directors, whenever requested, an account of all of his transactions as chief financial officer and of the financial condition of the corporation; and (f) shall perform such other duties as may be prescribed by the Board of Directors or the chief executive officer from time to time.

4.7          Chairman of the Board. The Board of Directors may, at its discretion, elect a Chairman of the Board. The Chairman of the Board shall not be the chief executive officer of the Company unless he or she is so designated by the Board. If a Chairman of the Board is elected, he or she shall preside at all meetings of the shareholders and of the Board, unless the Board otherwise determines.

4.8          President. Unless otherwise determined by the Board, the President shall be the chief executive officer. If an officer other than the President is designated chief executive officer, the President shall perform such duties as may from time to time be assigned to the President by the Board. If the office of Chairman of the Board is not filled, the President shall also perform the duties set forth in Section 4.7.

4.9          Vice President. Each Vice President shall have such powers and shall perform such duties as may be specified in these Bylaws or prescribed by the Board of Directors. In the event of absence or disability of the President, the Board of Directors may designate a Vice President or Vie Presidents to succeed to the power and duties of the President.

4.10       Secretary. The Secretary shall, unless otherwise determined by the Board, be secretary or and attend all meetings of the shareholders and Board of Directors, and may record the proceedings of such meetings in the minute book of the corporation and, whenever necessary,

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certify such proceedings. The Secretary shall give proper notice of meetings of shareholders and shall perform such other duties as may be prescribed by the Board of Directors or the chief executive officer from time to time.

4.11       Treasurer. Unless otherwise determined by the Board, the Treasurer shall be the chief financial officer of the corporation. If an officer other than the Treasurer is designated chief financial officer, the Treasurer shall perform such duties as may be prescribed by the Board of Directors or the chief executive officer from time to time.

4.12       Delegation. Unless prohibited by the Articles of Incorporation, these Bylaws or a resolution approved by the affirmative vote of a majority of the directors present, an officer elected or appointed by the Board may, without the approval of the Board, delegate some or all of the duties and power of his office to other persons.

ARTICLE 5.

INDEMNIFICATION

5.1          Liability and Indemnification. No director shall be personally liable to the corporation or to its shareholders for monetary damages for any breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the laws of the State of Minnesota as the same may exist or may hereafter be amended.

Any person (an “Indemnitee”) who at any time shall serve or shall have served as a director, officer, employee or agent of the corporation, or of any other enterprise at the request of the corporation, and the heirs, executors and administrators of such person shall be indemnified by the corporation in accordance with, and to the fullest extent permitted by, the provisions of the Minnesota Business Corporation Act, as it may be amended from time to time.

5.2          Insurance. The corporation shall have power to purchase and maintain insurance on behalf of any Indemnitee, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the Minnesota Business Corporation Act.

5.3          Prepayment of Expenses. The corporation shall pay the expenses (including attorneys’ fees) incurred by the Indemnitee in defending any proceeding in advance of its final disposition, provided, however, that to the extent required by law such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Indemnitee to repay all amounts advanced if it should be ultimately determined that the Indemnitee is not entitled to be indemnified under this Article 5 or otherwise.

5.4          Claims. If a claim for indemnification or payment of expenses under this Article 5 is not paid in full within sixty (6) days after written claim therefore by the Indemnitee has been received by the corporation, the Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that the

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Indemnitee is not entitled to the required indemnification or payment of expenses under applicable law.

5.5          Nonexclusivity of Rights. The rights conferred on any Indemnitee by this Article 5 shall not be exclusive of any other rights which such Indemnitee may have or hereafter acquire under any statute, provision of the articles of incorporation, these Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.

5.6          Amendment or Repeal. Any repeal or modification of the provisions of this Article 5 shall not adversely affect any right or protection hereunder of any Indemnitee in respect of any act or omission occurring prior to the time of such repeal or modification.

5.7          Other Indemnification and Prepayment of Expenses. This Article 5 shall not limit the right of the corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Indemnitees when and as authorized by appropriate corporate action.

ARTICLE 6.

SHARES AND THEIR TRANSFER

6.1          Certificate of Stock. Shares of the corporation’s stock may be certificated or uncertificated, as provided under Minnesota law. All certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued. They shall exhibit the holder’s name and shares and shall be signed by the Chairman and by the President. Any or all of the signatures on the certificate may be a facsimile.

6.2          Stock Record. As used in these Bylaws, the term “shareholder” shall mean the person, firm or corporation in whose name outstanding shares of capital stock of the corporation are currently registered on the stock record books of the corporation. The corporation shall keep, at its principal executive office or at another place or places within the Untied States determined by the Board, a share register not more than one year old containing the names and addresses of the shareholders and the number and classes of shares held by each shareholder. The corporation shall also keep at its principal executive office or at another place or places within the United States determined by the Board, a record of the dates on which certificates representing shares were issued. Every certificate surrendered to the corporation for exchange or transfer shall be cancelled and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled (except as provided for in Section 6.4 of this Article 6).

6.3          Transfers of Stock. Transfer of stock shall be made on the books of the corporation only by the record holder of such stock, or by attorney lawfully constituted in writing, and, in the case of stock represented by a certificate, upon surrender of the certificate.

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6.4          Lost Certificate. Any shareholder claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact in such form as the Board of Directors may require, and shall, if the directors so require, give the corporation a bond of indemnity in form and with one or more sureties satisfactory to the Board of at least double the value, as determined by the Board, of the stock represented by such certificate in order to indemnify the corporation against any claim that may be made against it on account of the alleged loss or destruction of such certificate, whereupon a new certificate may be issued in the same tenor and for the same number of shares as the one alleged to have been destroyed or lost.

ARTICLE 7.

GENERAL PROVISIONS

7.1          Record Dates. In order to determine the shareholders entitled to notice of and to vote at a meeting, or entitled to receive payment of a dividend or other distribution, the Board of Directors may fix a record date which shall not be more than sixty (60) days preceding the date of such meeting or distribution. In the absence of action by the Board, the record date for determining shareholders entitled to notice of and to vote at a meeting shall be at the close of business on the tenth day preceding the day on which notice is given, and the record date for determining shareholders entitled to receive a distribution shall be at the close of business on the day on which the Board of Directors authorizes such distribution.

7.2          Distributions; Acquisitions of Shares. Subject to the provisions of law, the Board of Directors may authorize the acquisition of the corporation’s shares and may authorize distribution whenever and in such amounts as, in its opinion, the condition of the affairs of the corporation shall render it advisable.

7.3          Fiscal Year. The fiscal year of the corporation shall be established by the Board of Directors.

7.4          Seal. The corporation shall have no corporate seal.

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ARTICLE 8.

AMENDMENTS OF BYLAWS

8.1          Amendments. Unless the Articles of Incorporation provide otherwise, these Bylaws may be altered, amended, added to or repealed by the affirmative vote of a majority of the members of the Board of Directors. Such authority in the Board of Directors is subject to the power of the shareholders to change or repeal such Bylaws. The Board of Directors shall not make or alter any Bylaws fixing a quorum for meetings of shareholders, prescribing procedures for removing directors or filling vacancies on the Board, or fixing the number of directors or their classifications, qualifications or terms of office, but the Board may adopt or amend a Bylaw to increase the number of directors.

The undersigned Secretary of Insignia Systems, Inc. hereby certifies that the foregoing Bylaws were duly adopted by the Board of Directors on February 20, 2007 as the Restated Bylaws of the corporation.

/s/   Scott F. Drill

Scott F. Drill, Secretary

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EX-10.1

EXHIBIT 10.1

AMENDED CHANGE IN CONTROL SEVERANCE AGREEMENT

AGREEMENT made as of this 20^th day of February, 2007 by and between Insignia Systems, Inc., a Minnesota corporation (the “Company”), and Scott Simcox (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:

(a) the closing of the sale of all or substantially all of the assets of the Company;

(b) 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;

(c) 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

(d) 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.

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 not be obligated to make any lump sum severance payment under this Agreement if, following a Change in Control, Executive ceased to be employed by the Company due to:

(a) Executive's death;

(b) termination of Executive by the Company for Cause (as defined below); or

(c) resignation by Executive for any reason other than a Good Reason (as defined below).

For purposes of this Section 4, the following defined terms have the meanings indicated:

“Cause” means termination by the Company of Executive's employment due to:

(1) conviction of a felony;

(2) the willful and continued failure of Executive to perform his essential duties; or

(3) gross misconduct which is materially injurious to the Company;

provided, however, that the matters referred to in clause (2) or (3) shall not be deemed to constitute “Cause” unless the Company has first given Executive written notice specifying the conduct by Executive that constitutes such failure or gross misconduct and Executive has failed to remedy the same to the reasonable satisfaction of the Company's Board of Directors.

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“Good Reason” shall mean any of the following, unless Executive gives his or her prior written consent:

(1) the assignment to Executive of any duties inconsistent with Executive's status or position with the Company, or a substantial reduction in the nature or status of Executive's responsibilities from those in effect immediately prior to the Change in Control;

(2) a reduction by the Company in Executive's annual base salary in effect immediately prior to the Change in Control;

(3) the relocation of the Company's principal executive offices to a location more than fifty miles from Minneapolis, Minnesota or the Company requiring Executive to be based anywhere other than the Company's principal executive offices, except for required travel on the Company's business to an extent substantially consistent with Executive's prior business travel obligations;

(4) the failure by the Company to continue to provide Executive with benefits at least as favorable to those enjoyed by Executive under any of the Company's pension, life insurance, medical, health and accident, disability, deferred compensation, incentive awards, incentive stock options, or savings plans in which Executive was participating at the time of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive Executive of any material fringe benefit enjoyed at the time of the Change in Control, or the failure by the Company to provide Executive with the number of paid vacation days to which Executive is entitled at the time of the Change in Control, provided, however, that the Company may amend any such plan or programs as long as such amendments do not reduce any benefits to which Executive would be entitled upon termination; or

(5) any termination of Executive's employment which is not made pursuant to a Notice of Termination satisfying the requirements in Section 5 below.

5.Notice of Termination. Any termination of Executive's employment by the Company or by Executive shall be communicated by written Notice of Termination to the other party hereto in accordance with the notice provisions of Section 6. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which indicates the specific facts and circumstances claimed to provide the basis for termination.

6.Method of Giving Notice. All notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage pre-paid, addressed to the last known residence address of the Executive, or in the case of the Company, to its principal office to the attention of each of the then directors of the Company with a copy to its Secretary, or to such other address as either party may have

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furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

7.Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the parties. No waiver by either party thereto at any time of any breach by the other party to this Agreement, or of compliance with any condition or provision of this Agreement to be performed by such other party, shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or similar time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. This Agreement shall be governed by the laws of the State of Minnesota. This Agreement supersedes all prior agreements on this subject matter.

8.Arbitration of Disputes. Any and all disputes between the parties relating to this Agreement or any alleged breach of this Agreement shall be resolved by binding arbitration held in the City of Minneapolis pursuant to the Commercial Arbitration Rules of the American Arbitration Association before a single arbitrator. In the event that Executive is determined by the arbitrator to be the prevailing party in such an arbitration, the arbitrator shall award Executive, as an additional element of damages, his or her attorneys' fees and legal expenses actually incurred in the enforcement of this Agreement and in the arbitration proceeding. Judgment on the arbitration award may be entered by any court having jurisdiction.

9.Successors. This Agreement shall be binding upon and inure to the benefit of the respective heirs, personal representatives, successors and assigns of the parties hereto.

10.Executive Benefits. The benefits provided by this Agreement are in lieu of all other severance, change in control, or similar benefits payable to Executive due to termination following a Change in Control.

11.Release. As a condition to receiving any benefits under this Agreement, Executive shall be required to deliver a release to the Company releasing the Company and its shareholder, directors, officers, employees, agents and affiliates from any and all claims relating to Executive’s employment and termination of employment.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

EXECUTIVE:	INSIGNIA SYSTEMS, INC.
/s/   Scott J. Simcox	By	/s/   Scott F. Drill
	Its	President and CEO

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EX-99.1

EXHIBIT 99.1

Contact:   Scott Drill, President and CEO
(763) 392-6200; (800) 874-4648

FOR IMMEDIATE RELEASE

Insignia Systems, Inc. Reports Fourth Quarter Net Income of $580,000;
POPS Revenue Increases 55% to $4,925,000

MINNEAPOLIS – February 21, 2007 – Insignia Systems, Inc. (Nasdaq: ISIG) today reported net sales of $5,507,000 for the fourth quarter ended December 31, 2006, an increase of 39.6%, compared to net sales of $3,945,000 for the fourth quarter of 2005. Net income for the fourth quarter of 2006 was $580,000 or $0.04 per share, compared to a net loss of $(1,311,000), or $(0.09) per share, for the fourth quarter of 2005. Insignia Point-of-Purchase Services^® (POPS) revenue for the fourth quarter was $4,925,000, an increase of 55.4%, compared to the fourth quarter 2005 POPS revenue of $3,169,000. Stock-based compensation expense of $68,000 was recognized during the fourth quarter ended December 31, 2006 resulting from the Company’s adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R effective January 1, 2006.

For the year ended December 31, 2006, net sales were $21,894,000, an increase of 11.7%, compared to net sales of $19,598,000 for 2005. Net income for the year ended December 31, 2006 was $2,396,000 or $0.16 per basic share ($0.15 per fully diluted share), compared to a net loss of $(3,308,000), or $(0.22) per share (basic and fully diluted) for the same period of 2005. Insignia POPS revenue for the year ended December 31, 2006 was $19,219,000, an increase of 16.9%, compared to POPS revenue of $16,445,000 for 2005. Stock-based compensation expense of $259,000 was recognized during 2006.

CEO Scott Drill commented, “We made substantial progress on multiple fronts in 2006 to position Insignia’s POPSign program for continued growth. The strategic alliance with Valassis is one of the most significant developments of the year. The relationship is working extremely well and continues to result in the highest level of sales activity in the history of POPS. Valassis recently established a new business unit devoted solely to the in-store advertising and promotion market. Other key achievements include the renewal of our agreements with Kroger, Safeway and A&P, a 20 percentage point improvement in POPS gross margin, and an $884,000 reduction in operating expenses.”

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 21, 2007 Insignia Systems, Inc. Reports Fourth Quarter Results Page 2

Drill continued, “On the legal front, the most important development was the denial of News America’s and Albertson’s Amended Motions to Dismiss on June 30, 2006. In addition, the intervention of the Minnesota Attorney General as a co-plantiff in the business disparagement portion of our case strengthens our legal position. We are now in the early stage of discovery in the Minnesota case. The schedule calls for us to be ready for trial by July 1, 2008.”

Drill went on to state, “We expect to be profitable again in the first quarter of 2007 in that we have POPS customer orders of approximately $5,100,000 with two weeks of selling time left. First quarter 2006 POPS revenue was $4,720,000. Our cash position at December 31, 2006 was $3,785,000. Legal expense for the 2006 fourth quarter was $310,000 versus $357,000 in the fourth quarter of 2005. For the year 2006, legal expense was $1,143,000 versus $1,352,000 in 2005.”

Conference Call

The Company will host a conference call today, February 21, at 4:00 p.m. Central Time. To access the live call, dial 800-474-8920. The conference code is 8149104. Please be sure to call in about 5-10 minutes before the call is scheduled to begin. Audio replay will be available approximately three hours after the call through March 1, 2007. To access the replay, dial 888-203-1112 and reference the passcode 8149104.

Insignia Systems, Inc. is an innovative developer and marketer of in-store advertising products, programs and services to retailers and consumer goods manufacturers. Through its Point-Of-Purchase Services (POPS) business, Insignia is contracted with more than 9,000 chain retail supermarkets and drug stores, including A&P, Kroger, Pathmark and Safeway. Through the nationwide POPS network, over 190 major consumer goods manufacturers, including General Mills, Reckitt Benckiser, Kellogg Company, Nestlé, Pfizer, S.C. Johnson & Son and Tyson Foods, have taken their brand messages to the point-of-purchase. For additional information, contact (888) 474-7677, or visit the Insignia POPS Web site at www.insigniapops.com.

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 21, 2007 Insignia Systems, Inc. Reports Fourth Quarter Results Page 3

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements. The Company’s actual results could differ materially from these forward-looking statements as a result of a number of factors, including risks and uncertainties as described in the Company’s SEC Form 10-K for the year ended December 31, 2005 and other recent filings with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 21, 2007 Insignia Systems, Inc. Reports Fourth Quarter Results Page 4

Insignia Systems, Inc.

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31,					Year Ended December 31,
	2006		2005			2006			2005
Net Sales	$	5,507,000	$	3,945,000		$	21,894,000		$	19,598,000
Cost of Sales(1)		2,473,000		2,686,000			10,054,000			12,519,000
Gross Profit		3,034,000		1,259,000			11,840,000			7,079,000
Operating Expenses:
Selling(1)		1,223,000		1,381,000			4,838,000			5,697,000
Marketing(1)		297,000		224,000			1,051,000			1,135,000
General & administrative(1)		951,000		963,000			3,637,000			3,578,000
Operating Income (Loss)		563,000		(1,309,000	)		2,314,000			(3,331,000	)
Other Income (Expense)		17,000		(2,000	)		82,000	(2)		23,000
Net Income (Loss)	$	580,000	$	(1,311,000	)	$	2,396,000		$	(3,308,000	)
Net Income (Loss) Per Share
Basic	$	0.04	$	(0.09	)	$	0.16		$	(0.22	)
Diluted	$	0.04	$	(0.09	)	$	0.15		$	(0.22	)
Shares used in calculation of net income (loss) per share:
Basic		15,150,000		15,002,000			15,093,000			15,002,000
Diluted		15,917,000		15,002,000			15,556,000			15,002,000

(1) Includes stock-based compensation expense of:

Cost of Sales	$	18,000	$	61,000
Selling		15,000		55,000
Marketing		9,000		32,000
General & Administrative		26,000		111,000
	$	68,000	$	259,000

(2) Includes $100,000 related to the settlement with the founder of VALUStix.

SELECTED BALANCE SHEET DATA

	December 31, 2006		December 31, 2005
Cash and cash equivalents	$	3,785,000	$	2,711,000
Working capital		5,017,000		2,592,000
Total assets		8,583,000		6,673,000
Total liabilities		3,721,000		4,601,000
Shareholders’ equity		4,862,000		2,072,000

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com