8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 Or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)  June 21, 2013

Image Sensing Systems, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	000-26056	41-1519168
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
Spruce Tree Centre, 1600 University Avenue West, St. Paul, Minnesota		500 55104
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code  (651) 603-7700

(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 (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 5 – Corporate Governance and Management

Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)          On June 24, 2013, Gregory R. L. Smith’s resigned as the Chief Financial Officer and Treasurer of Image Sensing Systems, Inc. (the “Company”).

(c)           On June 21, 2013, the Company’s Board of Directors appointed Dale E. Parker as the Company’s Chief Operating Officer, Chief Financial Officer and Treasurer, effective on June 25, 2013. Mr. Parker, age 62, has been a director of the Company since August 2012. He has been a director of HickoryTech Corporation, a publicly-held company, since 2006 and has served as Chair of HickoryTech Corporation’s Board of Directors since January 2011. From 2011 to 2012, he served as interim Chief Financial Officer (CFO) for Ener1, Inc., an energy storage technology company that develops lithium-ion-powered storage solutions for application in the electric utility, transportation and industrial electronics markets. Mr. Parker was the Chief Financial Officer of Neenah Enterprises, Inc., an independent foundry, in 2010. From 2009 to 2010, Mr. Parker was the Vice President of Finance for Paper Works, a producer of coated recycled paper board. He was Chief Financial Officer at Forest Resources, LLC, a company focused on paper product production and conversion, from 2007 to October 2008. Mr. Parker is a Certified Public Accountant.

Mr. Parker will continue to serve on the Company’s Board of Directors but has resigned from the Board’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and the Special Subcommittee appointed by the Audit Committee on January 17, 2013 (the “Special Subcommittee”).

(d)          On June 21, 2013, the Company’s Board of Directors appointed Paul F. Lidsky to the Company’s Board. Mr. Lidsky, age 59, was elected as a director of Datalink Corporation in June 1998 and became its President and Chief Executive Officer in July 2009. Mr. Lidsky was the President and Chief Executive Officer of Calabrio, Inc. from October 2007 until July 2009, and he is currently a member of Calabrio, Inc.'s Board of Directors. From December 2005 until September 2007, Mr. Lidsky served as Chief Operating Officer for Spanlink Communications, Inc. Between 2003 and 2004, Mr. Lidsky was President and Chief Executive Officer of Computer Telephony Solutions. From 2002 to 2003, Mr. Lidsky was President and Chief Executive Officer of VigiLanz Corporation. From 1997 until 2002, Mr. Lidsky was the President and Chief Executive Officer of OneLink Communications, Inc. Between 1985 and 1997, Mr. Lidsky was employed by Norstan, Inc., most recently as Executive Vice President of Strategy and Business Development.

Mr. Lidsky was appointed to serve on the Company’s Audit Committee as Chair, its Compensation Committee, its Nominating and Corporate Governance Committee and the Special Subcommittee.

Mr. Lidsky will be compensated as a non-employee director in accordance with the Company’s non-employee director compensation program. Under the program, for 2013, he will receive a pro-rated portion of the $50,000 annual retainer paid to all non-employee directors, of which half will be paid in cash and half as a stock award. In addition, as Chair and a member of the Audit Committee, he will receive a pro-rated portion of the $12,000 annual retainer; as a member of the Compensation Committee, he will receive a pro-rated portion of the $5,000 annual retainer; and as a member of the Nominating and Corporate Governance Committee, he will receive a pro-rated portion of the $4,000 annual retainer.

(e)          Effective as of June 25, 2013, the Company entered into an Employment Agreement with Mr. Parker as the Company’s Chief Financial Officer and Treasurer. Under the Employment Agreement, Mr. Parker will receive an annual base salary of $200,000.00 and will participate in the Company’s incentive cash bonus plan for 2013. Under the bonus plan, as disclosed in the Company’s Current Report on Form 8-K dated April 12, 2013, the participants will beome eligible to receive bonus award payments if the Company’s actual revenue and operating profit each exceeds the target revenue (the “Target Revenue”) and target operating profit for the year ending December 31, 2013. The amount of the bonus pool would be equal to 3.5 percent of the difference between actual revenue and the Target Revenue, assuming that the actual operating profit is equal to at least approximately 6.3 percent of the actual revenue for 2013. Mr. Parker would be entitled to 15 percent of any bonus pool, pro-rated based on the days in 2013 he is an employee of the Company. The amounts of any bonus award payments payable to Mr. Parker cannot be determined at this time. The Employment Agreement with Mr. Parker contains standard confidentiality, non-competition, non-solicitation and invention assignment provisions.

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In addition, effective on June 25, 2013, the Company’s Board of Directors granted to Mr. Parker a 10-year non-qualified stock option to purchase 50,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on June 25, 2013 as quoted on The NASDAQ Capital Market. The option becomes exercisable in four equal installments on each of the first, second, third and fourth anniversary dates of the date of grant.

The foregoing description of the terms of the Employment Agreement is qualified in its entirety by reference to the copy of the Employment Agreement, which will be filed as an Exhibit to the Company’s next Quarterly Report on Form 10-Q.

Section 7 – Regulation FD

Item 7.01.  Regulation FD Disclosure

On June 21, 2013, James W. Bracke, Chair of the Company’s Board of Directors, was appointed as Chair of the Special Subcommittee. He has served as a member of the Special Subcommittee since its creation on January 17, 2013.

Section 9 – Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits.

(d)	Exhibits.  The following document is hereby filed as an exhibit to this Current Report on Form 8-K:
	Exhibit No.
	99.1	Press Release dated June 24, 2013.

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.

	Image Sensing Systems, Inc.
Date:  June 24, 2013
	By:	/s/ Kris B. Tufto
	President and Chief Executive Officer (Principal Executive Officer)

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Exhibit Index

Exhibit No.
99.1	Press Release dated June 24, 2013.

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EX-99.1

Exhibit 99.1

500 Spruce Tree Centre 1600 University Avenue West St. Paul, Minnesota 55104-3825 USA 651.603.7700 Fax: 651.603.7795 www.imagesensing.com

NEWS RELEASE

Contacts:	INVESTORS Kris B. Tufto, Chief Executive Officer Image Sensing Systems, Inc. Phone: 651.603.7700
	MEDIA Al Galgano Padilla Speer Beardsley Phone: 612.455.1720

FOR IMMEDIATE RELEASE

Image Sensing Systems Names Dale E. Parker as Chief Operating Officer
and Chief Financial Officer

Paul F. Lidsky joins Board of Directors

Saint Paul, Minn., June 24, 2013 ― Image Sensing Systems, Inc. (NASDAQ: ISNS) announced today that it has named Dale E. Parker as its Chief Operating Officer, Chief Financial Officer and Treasurer, effective June 25, 2013. Parker will continue to serve on the Image Sensing Systems board. Parker replaces Gregory R. L. Smith, whose resigned his position with Image Sensing Systems. The resignation of Smith’s employment was not related to any issue with respect to Image Sensing Systems’ financial statements.

Parker has extensive experience working in senior executive positions for both public and private companies in a variety of industries in addition to his expertise with financial statement preparation and SEC reporting. He has served on the board of directors of HickoryTech Corporation, a communications service provider, since 2006, and has chaired that corporation’s board since January 2011. He served as interim chief financial officer of Ener1, Inc., an energy storage technology company, from 2011 until 2012. Previously he served in numerous chief financial officer and vice president roles for manufacturing companies.

Kris Tufto, Image Sensing Systems CEO, said: “We are pleased and fortunate to have Dale Parker step into executive positions with our organization. Having been on our board for the past year, Dale already knows our company, growth strategies and culture. With a strong public company background, he is an ideal choice for COO and CFO.”

The company also announced that it has added Paul F. Lidsky as a board director, replacing Parker on the three board committees. Lidsky has been President and Chief Executive Officer of

Datalink Corporation since July 2009 and a member of its board of directors since June 1998. He was the President and Chief Executive Officer of Calabrio, Inc. from October 2007 until July 2009 and he is currently a member of Calabrio, Inc.'s Board of Directors. From December 2005 until September 2007, Lidsky served as Chief Operating Officer for Spanlink Communications, Inc.

According to Tufto, “Paul Lidsky is a proven technology innovator and leader. He has established a growth track record at Datalink, and we look forward to leveraging his knowledge and industry experience for the benefit of Image Sensing Systems and our shareholders.”

About Image Sensing Systems

Image Sensing Systems, Inc. is a provider of above ground detection and information management solutions for the Intelligent Transportation Systems (ITS) sector and adjacent markets including security, police and parking. We have sold more than 135,000 units of our industry leading Autoscope® machine-vision, RTMS® radar and CitySync automatic number plate recognition (ANPR) products in over 60 countries worldwide. This depth of our experience coupled with the breadth of our product portfolio uniquely positions us to provide powerful hybrid technology solutions and to exploit the convergence of the traffic, security and environmental management markets. We are headquartered in St. Paul, Minnesota. Visit us on the web at imagesensing.com.

Safe Harbor Statement: Statements made in this release concerning the Company’s or management’s intentions, expectations, or predictions about future results or events are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current expectations or beliefs, and are subject to risks and uncertainties that could cause actual results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce such a variation include, but are not limited to, the following: the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the Company’s control; developments in the demand for the Company’s products and services; relationships with the Company’s major customers and suppliers; the mix of and margins on the products we sell; unanticipated delays, costs and expenses inherent in the development and marketing of new products and services, including ANPR products; adverse weather conditions in our markets; the impact of governmental laws and regulations; the effects of legal matters in which the Company may become involved; increased international presence; our success in integrating acquisitions; and competitive factors. Our forward-looking statements speak only as of the time made, and we assume no obligation to publicly update any such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the Company’s current expectations are contained in the Company’s reports and other documents filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012 filed in March 2013.