Exhibit 10.1

 

 

 

LSI INDUSTRIES INC.

 

2003 EQUITY COMPENSATION PLAN

 

As Amended and Restated Through November 19, 2009

 

 

LSI INDUSTRIES INC.

 

2003 EQUITY COMPENSATION PLAN

 

As Amended and Restated November 19, 2009

 

ARTICLE 1

OBJECTIVES

 

LSI Industries Inc. has established this 2003 Equity Compensation Plan effective November 13, 2003.  This Plan was Amended and Restated as of November 19, 2009 to reflect  a change in the number of Shares authorized to be issued hereunder. The purposes of this Plan are to enable LSI and its Subsidiaries to compete successfully in retaining and attracting key employees, directors and advisors of outstanding ability, to stimulate the efforts of such persons toward LSI’s objectives and to encourage the identification of their interests with those of LSI’s shareholders.

 

ARTICLE 2

DEFINITIONS

 

For purposes of this Plan, the following terms shall have the following meanings:

 

2.1            “Advisor” means anyone who provides bona fide advisory or consultation services to LSI other than the offer or sale of securities in a capital-raising transaction.

 

2.2            “Award” means any one or more of the following:  (a) Stock Options, (b) Stock Appreciation Rights, in tandem with Stock Options or free-standing; (c) Restricted Stock; (d) performance Shares conditioned upon meeting performance criteria; and (e) other awards based in whole or in part by reference to or otherwise based on LSI Common Shares, or other securities of LSI or any Subsidiary.

 

2.3            “Award Agreement” means a written agreement setting forth the terms of an Award.

 

2.4            “Award Date” or “Grant Date” means the date designated by the Committee as the date upon which an Award is granted.

 

2.5            “Award Period” or “Term” means the period beginning on an Award Date and ending on the expiration date of such Award.

 

2.6            “Board” means the Board of Directors of LSI.

 

2.7            “Code” means the Internal Revenue Code of 1986, as amended, or any successor legislation.

 

2.8            “Committee” means the committee appointed by the Board and consisting of one or more Directors, none of whom shall be eligible to receive any Award except as provided in Subsection 6.5.  Members of the Committee must qualify as Non-Employee Directors as defined by Rule 16b-3(b)(3)(i).  To the extent that it is desired that compensation resulting from an Award be excluded from the deduction limitation of Section 162(m) of the Code, all members of the Committee granting an Award also shall be “outside directors” within the meaning of Section 162(m).

 

 

2.9             “Disability” means a “permanent and total disability” within the meaning of Section 22(e)(3) of the Code.

 

2.10            “Eligible Employee” means anyone, other than one who receives retirement benefits, consulting fees, honorariums, and the like from LSI who performs services for LSI or a Subsidiary, including an officer or director of LSI or a Subsidiary; and is compensated on a regular basis by LSI or a Subsidiary. 

 

2.11            “Fair Market Value” means the last closing price for a Common Share on the Nasdaq or any stock exchange or national trading or quotation system on which such sales are reported.  If the Common Shares are not so traded or reported, Fair Market Value shall be set under procedures established by the Committee.

 

2.12            “Incentive Option” means any Stock Option intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code or any successor provision.

 

2.13            “Non-Employee Director” means each director of LSI or its subsidiaries, now serving as a director or elected hereafter, who is not also an employee of LSI or any of its subsidiaries.

 

2.14            “Non-Tandem SAR” means a Stock Appreciation Right granted without reference to a Stock Option.

 

2.15            “Non-Qualified Option” means any Stock Option that is not an Incentive Stock Option.

 

2.16            “Officer” means a person who is considered to be an officer of LSI under Rule 16a-1(f).

 

2.17            “Other Stock Unit Awards” shall have the meaning set forth in Section 10.1 hereof.

 

 

2.19            “Option Price” or “Exercise Price” means the price per Common Share at which a Common Share may be purchased upon the exercise of an Option or an Award.

 

2.20            “Participant” means a person to whom an Award has been made pursuant to this Plan.

 

2.21            “Replacement Option” means a Non-Qualified Option granted pursuant to Subsection 6.3, upon the exercise of a Stock Option granted pursuant to this Plan where the Option Price is paid with previously owned Common Shares.

 

2.22            “Restricted Stock” means Common Shares issued pursuant to a Restricted Stock Award which are subject to the restrictions set forth in the related Award Agreement.

 

2.23            “Restricted Stock Award” means an award of a fixed number of Common Shares to a Participant which is subject to forfeiture provisions and other conditions set forth in the Award Agreement.

 

2.24            “Retirement” means termination of employment or service on the Board, other than a termination for the reasons specified in Sections 12.13 or 12.14, and other than by death or Disability by an employee or a director who is at least 65 years of age, or 55 years of age with at least ten years of employment with, or service on the Board of, LSI or a Subsidiary.

 

2.25            “Rule 16b-3” and “Rule 16a-1(f)” mean Securities and Exchange Commission Regulations Sect. 240.16b-3 and Sect. 240.16a-1(f) or any corresponding successor regulations.

 

2.26             “Stock Appreciation Right” or “SAR” means the right to receive, for each unit of the SAR, cash and/or Common Shares equal in value to the excess of the Fair Market Value of one Common Share on the date of exercise of the SAR over the reference price per Common Share established on the date the SAR was granted.

 

2.27            “Stock Option” or “Option” means the right to purchase Common Shares, including a Replacement Option, granted pursuant to Article 6.

 

2.28            “Subsidiary” means any corporation, partnership, joint venture, or other entity of which LSI owns or controls, directly or indirectly, 25% or more of the outstanding voting stock, or comparable equity participation and voting power, or which LSI otherwise controls, by contract or any other means.  However, when the term “Subsidiary” is used in the context of an Award of an Incentive Option, the applicable percentage shall be 50%.  “Control” means the power to direct or cause the direction of the management and policies of a corporation or other entity.

 

2.29            “Tandem SAR” shall mean a Stock Appreciation Right granted with reference to a Stock Option.

 

2.30            “Transfer” means alienation, attachment, sale, assignment, pledge, encumbrance, charge or other disposition; and the terms “Transferred” or “Transferable” have corresponding meanings.

 

ARTICLE 3

ADMINISTRATION

 

3.1             The Committee .  This Plan shall be administered and interpreted by the Committee.

 

3.2             Awards .  The Committee is authorized to grant (i) Stock Options; (ii) Stock Appreciation Rights, in tandem with Stock Options or free-standing; (iii) Restricted Stock; (iv) performance Shares conditioned upon meeting performance criteria; and (v) other awards based in whole or in part by reference to or otherwise based on LSI Common Shares, or other securities of LSI or any Subsidiaries (collectively, the “Awards”).  In particular, the Committee shall has the authority:

 

 

3.2.4            to determine the terms and conditions, not inconsistent with the terms of this Plan, of any Award, including, but not limited to, the term, price, exercisability, method of exercise, any restriction or limitation on transfer, any vesting schedule or acceleration, or any forfeiture provisions or waiver, regarding any Award, and the related Common Shares, based on such factors as the Committee shall determine; and

 

3.2.5            to modify or waive any restrictions or limitations contained in, and grant extensions to the terms of or accelerate the vestings of, any outstanding Award, other than Performance Awards, as long as such modifications, waivers, extensions or accelerations are not inconsistent with the terms of this Plan, but no such changes shall impair the rights of any Participant without his or her consent.

 

3.3             Guidelines .  The Committee is authorized to adopt, alter and repeal administrative rules, guidelines and practices governing this Plan and perform all acts, including the delegation of its administrative responsibilities, as it deems advisable; to construe and interpret the terms and provisions of this Plan and any Award issued under this Plan; and to otherwise supervise the administration of this Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in this Plan or in any related Award Agreement in the manner and to the extent it deems necessary to carry this Plan into effect.

 

3.4             Delegation of Authority .  The Committee may delegate its authority to Officers of LSI and its administrative duties to Officers or employees of LSI except with respect to persons who are Senior Officers of LSI as defined by the Committee and except where performance goals for particular compensation grants are intended to be excluded from the deduction limitation imposed by Section 162(m) of the Code.

 

3.5             Decisions Final .  Any action, decision, interpretation or determination by or at the direction of the Committee concerning the application or administration of this Plan shall be final and binding upon all persons and need not be uniform with respect to its determination of recipients, amount, timing, form, terms or provisions.

 

ARTICLE 4

COMMON SHARES SUBJECT TO PLAN

 

4.1             Common Shares .  Subject to adjustment as provided in Subsection 4.2, the number of Common Shares which may be issued under this Plan shall not exceed two million eight hundred thousand (2,800,000) Common Shares.  If any Award granted under this Plan shall expire, terminate or be canceled for any reason without having been exercised in full, the number of unacquired Common Shares subject to such Award shall again be available for future grants.  The Committee may make such other determinations regarding the counting of Common Shares issued pursuant to this Plan as it deems necessary or advisable, provided that such determinations shall be permitted by law.  Common Shares underlying a canceled Option shall be counted against the maximum number of Common Shares for which Options may be granted to an employee.  The repricing of an Option shall be treated as a cancellation of the Option and the grant of a new Option.

 

4.2             Adjustment Provisions .

 

4.2.1            If LSI shall at any time change the number of issued Common Shares without new consideration to LSI by stock dividend, split, combination, recapitalization, reorganization, exchange of Common Shares, liquidation or other change in corporate structure affecting the Common Shares or make a distribution of cash or property which has a substantial impact on the value of issued Common Shares, the total number of Common Shares reserved for issuance under the Plan shall be appropriately adjusted and the number of Common Shares covered by each outstanding Award and the reference price or Fair Market Value for each outstanding Award shall be adjusted so that the aggregate consideration payable to LSI and the value of each such Award shall not be changed.

 

4.2.2            The Committee may authorize the issuance, continuation or assumption of Awards or provide for other equitable adjustments after changes in the Common Shares resulting from any merger, consolidation, sale of assets, acquisition of property or stock, recapitalization, reorganization or similar occurrence in which LSI is the continuing or surviving corporation, upon such terms and conditions as it may deem equitable and appropriate.

 

4.3             Merger, Dissolution or Liquidation .  In the event of the dissolution or liquidation of LSI or any merger, consolidation, exchange or other transaction in which LSI is not the surviving corporation or in which 75% or more of the outstanding Common Shares of LSI are converted into cash, other securities or other property, each outstanding Award shall terminate as of a date fixed by the Committee provided that not less than 20 days’ written notice of the date of expiration shall be given to each holder of an Award and each outstanding Award shall be fully vested and each such holder shall have the right during such period following notice to exercise the Award as to all or any part of the Common Shares for which it is exercisable.

 

4.4             Change of Control .  All outstanding Awards shall become immediately exercisable in full if a change in control of LSI occurs.  For purposes of this Agreement, a “change in control of LSI” shall be deemed to have occurred if (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, other than a trustee or other fiduciary holding securities under an employee benefit plan of LSI becomes the “beneficial owner,” as defined in Rule 13d-3 under that Act, directly or indirectly,

 

of securities of LSI representing 25% or more of the combined voting power of LSI’s then outstanding securities; or (b) during any period of one year (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board of Directors and any new director whose election by the Board or nomination for election by LSI’s shareholders was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof.

 

ARTICLE 5

DURATION OF PLAN

 

This Plan shall continue in effect until November 12, 2013, unless terminated sooner by the Board pursuant to Article 15.

 

ARTICLE 6

STOCK OPTIONS

 

6.1             Grants .  Stock Options may be granted alone or in addition to other Awards granted under this Plan.  Each Option granted shall be designated as either a Non-Qualified Option or an Incentive Option and in each case such Option may or may not include Stock Appreciation Rights.  One or more Stock Options and/or Stock Appreciation Rights may be granted to any Eligible Employee or Advisor, except that no person shall receive during any 12 month period Non-Qualified Stock Options and Stock Appreciation Rights covering more than 75,000 Common Shares and except that only Non-Qualified Options may be granted to Advisors.

 

6.2             Incentive Options .  Any option designated by the Committee as an Incentive Stock Option will be subject to the general provisions applicable to all Options granted under the Plan plus the following specific provisions:

 

6.2.1            If an Incentive Stock Option is granted to a person who owns, directly or indirectly, stock representing more than 10% of (i) the total combined voting power of all classes of stock of LSI and its Subsidiaries, or (ii) a corporation that owns 50% or more of the total combined voting power of all classes of stock of LSI, then

 

6.2.1.1                       the Option Price must equal at least 110% of the Fair Market Value on the date of grant; and

 

6.2.1.2                       the term of the Option shall not be greater than five years from the date of grant.

 

6.2.2            The aggregate Fair Market Value of Common Shares, determined at the date of grant, with respect to which Incentive Stock Options that may be exercised for the first time by any individual during any calendar year under this Plan or any other plan maintained by LSI and its Subsidiaries shall not exceed $100,000.  To the extent that the aggregate fair market value of Common Shares with respect to which Incentive Options are exercisable for the first time by any individual during any calendar year, under all plans of LSI and its Subsidiaries, exceeds $100,000, such Options shall be treated as Nonqualified Options.

 

 

6.2.3             Qualification under the Code .  Notwithstanding anything in this Plan to the contrary, no term of this Plan relating to Incentive Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify any Incentive Option under Section 422 of the Code.

 

6.3             Replacement Options .  The Committee may provide either at the time of grant or subsequently that an Option shall include the right to acquire a Replacement Option upon the exercise of such Option, in whole or in part, prior to an Eligible Employee’s termination of employment if the payment of the Option Price is paid in Common Shares.  In addition to any other terms and conditions the Committee deems appropriate, the Replacement Option shall be subject to the following terms:

 

6.3.1            the number of Common Shares subject to the Replacement Option shall not exceed the number of whole Common Shares used to satisfy the Option Price of the original Option and the number of whole Common Shares, if any, withheld by LSI as payment for withholding taxes in accordance with Subsection 15.3;

 

6.3.2            the Replacement Option Grant Date will be the date of the exercise of the original Option;

 

6.3.3            the Option Price per share shall be the Fair Market Value of a Common Share on the Replacement Option Grant Date;

 

6.3.4            the Replacement Option shall be exercisable no earlier than one year after the Replacement Option Grant Date; and

 

6.3.5            the Term of the Replacement Option will not extend beyond the Term of the original Option.

 

The Committee may, without the consent of the Eligible Employee, rescind the right to receive a Replacement Option at any time prior to an Option being exercised.

 

6.4             Terms of Options .  Except as otherwise required by Subsections 6.2, 6.3 or 6.5, Options granted under this Plan shall be subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem desirable:

 

6.4.1             Option Price .  The Option Price shall be determined by the Committee at the time of grant, except that no Incentive Option may be granted for an Option Price less than 100% of Fair Market Value on the Grant Date.

 

6.4.2             Option Term .  The Option Term shall be fixed by the Committee, but no Incentive Option shall be exercisable more than ten years after its Award Date, and no Non-Qualified Option shall be exercisable more than ten years after its Award Date.

 

6.4.3             Exercisability .  A Stock Option shall be exercisable at such time or times and subject to such terms and conditions as shall be specified in the Award Agreement, provided, however, that an Option may not be exercised in an amount less than One Hundred Common Shares at any one time, unless the total number available for exercise at that time is less than One Hundred Common Shares.

 

6.4.4             Method of Exercise .  Stock Options may be exercised in whole or in part at any time during the Option Term by giving written notice of exercise to LSI specifying the number of Common Shares to be purchased.  Such notice shall be accompanied by payment in full of the Option Price in cash unless some other form of consideration is approved by the Committee at or after the grant.

 

6.4.5             Transferability of Options .  Stock Options shall be Transferable as provided in Article 11.

 

 

6.5             Award of Options to Non-Employee Directors .

 

6.5.1             Grants .  Each Non-Employee Director shall be granted a Non-Qualified Option for 1,500 Common Shares upon appointment or election as a Director and immediately after each subsequent Annual Shareholders’ Meeting if such person is serving as a Director at such time either by virtue of being re-elected or by virtue of serving a term in excess of one year.  All grants shall be made on the date of the event giving rise to the option.  Such grants shall continue until the number of Common Shares provided for in this Plan in Article 4 are exhausted.

 

 

6.5.2.2                The Option Price of all Options shall be the Fair Market Value of a Common Share on the Award Date.

 

6.5.2.3                All Options shall become vested to the extent of 25% at the completion of each ninety day period following the date of grant.

 

6.5.2.4                All Options shall be exercisable in the manner provided in Subsections 6.4.3 and 6.4.4.

 

6.5.2.5                All Options shall be Transferable as provided in Article 11 and shall terminate only upon the expiration of their term or in accordance with Section 6.5.3.

 

            6.5.3              Automatic Termination of Option .  Notwithstanding anything contained herein to the contrary, if at any time a holder of an option granted under this Plan becomes an employee, officer or director of or a consultant to an entity which the Compensation Committee determines is a competitor of LSI, such option shall automatically terminate as of the date such conflicting relationship was established.

 

6.5.4            The provisions of this Section 6.5 replace the 1995 Directors’ Stock Option Plan.

 

ARTICLE 7

STOCK APPRECIATION RIGHTS

 

7.1             Grants .  The Committee may, in its discretion, grant Stock Appreciation Rights to any Eligible Employee or Advisor or Non-Employee Director.  A Stock Appreciation Right may be granted either with or without reference to all or any part of a Stock Option.  A “Tandem SAR” is an SAR granted with reference to a Stock Option (the “Reference Option”).  A “Non-Tandem SAR” is an SAR granted without reference to a Stock Option.  If the Reference Option is a Non-Qualified Option, a Tandem SAR may be granted at or after the date of the Reference Option; if the Reference Option is an Incentive Option, the Grant Date of a Tandem SAR must be the same as the Grant Date of the Reference Option.  Any SAR shall have such terms and conditions, not inconsistent with this Plan, as are established by the Committee in connection with the Award.

 

7.2             Term .  A Tandem SAR shall terminate and no longer be exercisable upon the termination of its Reference Option.  A Non-Tandem SAR may have a term no longer than 10 years from its Grant Date.

 

7.3             Exercise .  A Tandem SAR may only be exercisable at the times and, in whole or in part, to the extent that its Reference Option is exercisable.  The exercise of a Tandem SAR shall automatically result in the surrender of the applicable portion of its Reference Option.  A Non-Tandem SAR shall be exercisable in whole or in part as provided in its Award Agreement.  Written notice of any exercise must be given in the form prescribed by the Committee.

 

7.4             Payment .  For purposes of payment of an SAR, the reference price per Common Share shall be the Option Price of the Reference Option in the case of a Tandem SAR and shall be the Fair Market Value of a Common Share on the Grant Date in the case of a Non-Tandem SAR.  The Committee shall determine the form of payment.

 

7.5             Transferability and Termination .  Stock Appreciation Rights shall be Transferable as provided in Article 11 and shall terminate in accordance with Article 14.

 

ARTICLE 8

RESTRICTED AND UNRESTRICTED STOCK AWARDS

 

8.1             Grants of Restricted Stock Awards .  The Committee may, in its discretion, grant one or more Restricted Stock Awards to any Eligible Employee or Advisor or Non-Employee Director.  Each Restricted Stock Award shall specify the number of Common Shares to be issued to the Participant, the date of such issuance, the price, if any, to be paid for such Common Shares by the Participant and the restrictions imposed on such Common Shares.  The Committee may grant Awards of Restricted Stock subject to the attainment of specified performance goals, continued employment or such other limitations or restrictions as the Committee may determine.

 

 

8.2             Terms and Conditions of Restricted Awards .  Restricted Stock Awards shall be subject to the following provisions:

 

8.2.1             Issuance of Common Shares .  Common Shares of Restricted Stock may be issued immediately upon grant or upon vesting as determined by the Committee.

 

8.2.2             Stock Powers and Custody .  If Common Shares of Restricted Stock are issued immediately upon grant, the Committee may require the Participant to deliver a stock power, endorsed in blank, relating to the Restricted Stock covered by such an Award.  The Committee may also require that the certificates evidencing Restricted Stock be held in custody by LSI until the restrictions on them shall have lapsed.

 

8.2.3             Shareholder Rights .  Unless otherwise determined by the Committee at the time of grant, Participants receiving Restricted Stock Awards shall not be entitled to dividend or voting rights for the Restricted Common Shares until they are fully vested.

 

8.2.4             Termination of Employment .  Upon termination of employment during the restricted period, all Restricted Stock shall be forfeited, subject to such exceptions, if any, as are authorized by the Committee, as to termination of employment, retirement, disability, death or special circumstances.

 

8.3             Unrestricted Stock Awards .  The Committee may make awards of unrestricted Common Shares to key Eligible Employees, Advisors and or Non-Employee Directors in recognition of outstanding achievements or contributions by such employees and advisors.  Unrestricted Common Shares issued on a bonus basis may be issued for no cash consideration.  Each certificate for unrestricted Common Shares shall be registered in the name of the Participant and delivered to the Participant.

 

ARTICLE 9

PERFORMANCE AWARDS

 

9.1             Performance Awards .

 

9.1.1             Grant .  The Committee may, in its discretion, grant Performance Awards to Eligible Employees and Advisors.  A Performance Award shall consist of the right to receive either Common Shares or cash of an equivalent value, or a combination of both, at the end of a specified Performance Period (defined below) or a fixed dollar amount payable in cash or Common Shares, or a combination of both, at the end of a specified Performance Period.  The Committee shall determine the Eligible Employees and Advisors to whom and the time or times at which Performance Awards shall be granted, the number of Common Shares or the amount of cash to be awarded to any person, the duration of the period during which, and the conditions under which, a Participant’s Performance Award will vest, and the other terms and conditions of the Performance Award in addition to those set forth in Subsection 9.2.

 

9.1.2             Criteria for Award .  The Committee may condition the grant or vesting of a Performance Award upon the attainment of specified performance goals; the appreciation in the Fair Market Value, book value or other measure of value of the Common Shares; the performance of LSI based on earnings or cash flow; or such other factors or criteria as the Committee shall determine.

 

9.2             Terms and Conditions of Performance Awards .  Performance Awards shall be subject to the following terms and conditions:

 

9.2.1             Dividends .  Unless otherwise determined by the Committee at the time of the grant of the Award, amounts equal to dividends declared during the Performance Period with respect to any Common Shares covered by a Performance Award will not be paid to the Participant.

 

9.2.2             Payment .  Subject to the provisions of the Award Agreement and this Plan, at the expiration of the Performance Period, share certificates, cash or both as the Committee may determine shall be delivered to the Participant, or his or her legal representative or guardian, in a number or an amount equal to the vested portion of the Performance Award.

 

9.2.3             Transferability .  Performance Awards shall be Transferable as provided in Article 11.

 

9.2.4             Termination of Employment or Advisory Relationship .  Subject to the applicable provisions of the Award Agreement and this Plan, upon termination of a Participant’s employment or advisory relationship with LSI or a Subsidiary for any reason during the Performance Period for a given Award, the Performance Award in question will vest or be forfeited in accordance with the terms and conditions established by the Committee.

 

ARTICLE 10

OTHER STOCK UNIT AWARDS

 

10.1            The Committee is authorized to grant to employees of LSI and its affiliates, either alone or in addition to other Awards granted under the Plan, Awards of Common Shares or other securities of LSI or any Subsidiary of LSI and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Common Shares or other securities of LSI or any subsidiary of LSI (“Other Stock Unit Awards”).  Other Stock Unit Awards may be paid in cash, Common Shares, other property or in a combination thereof, as the Committee shall determine.

 

10.2            The Committee shall determine the employees to whom Other Stock Unit Awards are to be made, the times at which such Awards are to be made, the number of Common Shares to be granted pursuant to such Awards and all other conditions of such Awards.  The provisions of Other Stock Unit Awards need not be the same with respect to each recipient.  The recipient shall not be permitted to sell, assign, transfer, pledge, or otherwise encumber the Common Shares or other securities prior to the later of the date on which the Common Shares or other securities are issued, or the date on which any applicable restrictions, performance or deferral period lapses.  Common Shares (including securities convertible into Common Shares) and other securities granted pursuant to Other Stock Unit Awards may be issued for no cash consideration or for such minimum consideration

 

as may be required by applicable law.  Common Shares (including securities convertible into Common Shares) and other securities purchased pursuant to purchase rights granted pursuant to Other Stock Unit Awards may be purchased for such consideration as the Committee shall determine, which price shall not be less than the fair market value of such Common Shares or other securities on the date of grant, unless the Committee otherwise elects.

 

ARTICLE 11

TRANSFERABILITY OF AWARDS

 

Awards and the benefits payable under this Plan shall not be Transferable by the Participant during his or her lifetime and may not be assigned, exchanged, pledged, transferred or otherwise encumbered or disposed of except by will or the laws of descent and distribution or, in the case of an Incentive Stock Option, except by a domestic relations order pursuant to Section 414(p)(1)(B) of the Code.  Awards shall be exercisable during a Participant’s lifetime only as set forth in the preceding sentence by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative.

 

Notwithstanding the above, the Committee may, with respect to particular Awards, other than Incentive Stock Options, establish or modify the terms of the Awards to allow the Awards to be transferred at the request of the grantee of the Awards to trusts established by the grantee or as to which the grantee is a grantor or to family members of the grantee or otherwise for personal and tax planning purposes of the grantee.  If the committee allows such transfer, such Options shall not be exercisable for six months following the action of the Committee.

 

ARTICLE 12

TERMINATION OF AWARDS

 

12.1             Termination of Awards .  All Awards issued under this Plan, except for those issued to Non-Employee Directors as provided in Section 6.5, shall terminate as follows:

 

12.1.1             At Expiration of Term .  During any period of continuous employment or business relationship with LSI or a Subsidiary, an Award will be terminated only if it is fully exercised or if it has expired by its terms or by the terms of this Plan.  For these purposes, any leave of absence approved by LSI shall not be deemed to be a termination of employment.

 

12.1.2             Death, Disability or Retirement .  If a Participant’s employment by LSI or a Subsidiary terminates by reason of death, Disability or Retirement, or in the case of an advisory relationship if such business relationship terminates by reason of death or Disability, any Award held by such Participant, unless otherwise determined by the Committee at grant, shall be fully vested and may thereafter be exercised by the Participant or by the Participant’s beneficiary or legal representative, for a period of one year following termination of employment, in the case of death or disability, and 90 days in the case of Retirement, or such longer period as the Committee may specify at or after grant in all cases other than Incentive Options, or until the expiration of the stated term of such Award, whichever period is shorter.

 

12.1.3             Termination for Cause .  Awards shall terminate immediately if employment is terminated for cause or by voluntary action of the grantee without the consent of LSI.  Cause is defined as including, but not limited to, theft of or intentional damage to LSI property, intentional harm to LSI’s reputation, material breach of the optionee’s duty of fidelity to LSI, excessive use of alcohol, the use of illegal drugs, the commission of a criminal act, willful violation of LSI policies, or trading in Common Shares for personal gain based on knowledge of LSI’s activities or results when such information is not available to the general public.

 

12.1.4             Employment and Noncompetition Agreements .  If an individual holding an Award violates any term of any written employment, confidentiality or noncompetition agreement between LSI and that person, all existing Awards held by such person will terminate.  In addition, if at any time of such violation such person has exercised an Award for Common Shares but has not received certificates for the Common Shares to be issued, LSI may void the Award and its exercise.  Any such actions by LSI shall be in addition to any other rights or remedies available to LSI in such circumstances.

 

12.1.5             Other .  Except as provided above in this Section 12.1, unless otherwise determined by the Committee at or after grant, if a Participant’s employment by, or business relationship with, LSI or a Subsidiary terminates for any reason other than death or Disability, as provided above, the Award will terminate on the earlier to occur of the stated expiration date or 90 days after termination of the employment or business relationship.  If a Participant dies during the 90 day period following the termination of the employment or business relationship, any unexercised Award held by the Participant, or transferred by the Participant in accordance with Article 11, shall be exercisable, to the full extent that such Award was exercisable at the time of death, for a period of one year after the date of termination of employment of the Participant or until the expiration of the stated term of the Award, whichever occurs first.

 

12.2             Acceleration of Vesting and Extension of Exercise Period Upon Termination .

 

12.2.1            Notwithstanding anything contained in this Article 12, upon the termination of employment of a Participant who is not an Officer or Director of LSI, for reasons other than those provided in Sections 12.13 and 12.14, the Committee may, in its sole discretion, accelerate the vesting of all or part of any Awards held by such terminated Participant, or transferred by the Participant in accordance with Article 11, so that such Awards are fully or partially exercisable as of the date of termination, and may also extend the permitted exercise period of such Awards for up to five years from the date of termination, but in no event longer than the original expiration date of such Award.

 

12.2.2            Except as provided in Section 12.2.1 or Section 4.2, in no event will the continuation of the exercisability of an Award beyond the date of termination of employment allow the Eligible Employee, or his or her beneficiaries or heirs, to accrue additional rights under the Plan, or to purchase more Common Shares through the exercise of an Award than could have been purchased on the date that employment was terminated.

 

ARTICLE 13

DEFERRALS

 

The Committee may permit recipients of Awards to defer the distribution of all or part of any Award in accordance with such terms and conditions as the Committee shall establish.

 

ARTICLE 14

TERMINATION OR AMENDMENT OF PLAN

 

Notwithstanding any other provisions hereof to the contrary, the Board may assume responsibilities otherwise assigned to the Committee and may at any time, amend, in whole or in part, any provisions of this Plan, or suspend or terminate it entirely; provided, however, that, unless otherwise required by law, the rights of a Participant with respect to any Awards granted prior to such amendment, suspension or termination may not be impaired without the consent of such Participant.  No amendment shall, without shareholder approval, increase the number of Common Shares available under the Plan, cause the Plan or any Award granted under the Plan to fail to meet the conditions for exclusion of application of the $1 million deduction limitation imposed by the Section 162(m) of the Code or cause any Incentive Stock Option to fail to qualify as an Incentive Stock Option as defined by Section 422 of the Code.

 

ARTICLE 15

GENERAL PROVISIONS

 

15.1             No Right to Continued Employment or Business Relationship .  Neither the establishment of the Plan nor the granting of any Award hereunder shall confer upon any Participant any right to continue in the employ of, or in any business relationship with, LSI or any Subsidiary, or interfere in any way with the right of LSI or any Subsidiary to terminate such employment or business relationship at any time.

 

15.2             Other Plans .  The value of, or income arising from, any Awards issued under this Plan shall not be treated as compensation for purposes of any pension, profit sharing, life insurance, disability or other retirement or welfare benefit plan now maintained or hereafter adopted by LSI or any Subsidiary, unless such plan specifically provides to the contrary.

 

15.3             Withholding of Taxes .  LSI may deduct from any payment to be made pursuant to this Plan, or to otherwise require, prior to the issuance or delivery of any Common Shares or the payment of any cash to a Participant, payment by the Participant of any Federal, state, local or foreign taxes required by law to be withheld.  The Committee may permit any such withholding obligation to be satisfied by reducing the number of Common Shares otherwise deliverable or by accepting the delivery of previously owned Common Shares.  Any fraction of a Common Share required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

 

15.4             Reimbursement of Taxes .  The Committee may provide in its discretion that LSI may reimburse a Participant for federal, state, local and foreign tax obligations incurred as a result of the grant or exercise of an Award issued under this Plan.

 

 

15.5             Governing Law .  This Plan and actions taken in connection with it shall be governed by the laws of Ohio, without regard to the principles of conflict of laws.

 

15.6             Liability .  No employee of LSI nor member of the Committee or the Board shall be liable for any action or determination taken or made in good faith with respect to the Plan or any Award granted hereunder and, to the fullest extent permitted by law, all employees and members shall be indemnified by LSI for any liability and expenses which may occur through any claim or cause of action arising under or in connection with this Plan or any Awards granted under this Plan.

 

Exhibit 10.2

 

 

LSI INDUSTRIES INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

(Amended and Restated as of November 19, 2009)

 

PREAMBLE

 

LSI Industries Inc. and each Employer hereby amend and restate the Plan effective as of November 19, 2009 as set forth herein.  The Plan was originally effective as of September 15, 1996.  The Plan was amended and restated as of July 1, 1998, July 1, 2002, April 27, 2004, September 9, 2005, November 1, 2006 and December 31, 2008.  This amendment and restatement is intended to bring the Plan document into compliance with Section 409A of the Internal Revenue Code of 1986 and the final regulations issued thereunder.  This Plan is an unfunded deferred compensation arrangement for a select group of management or highly compensated employees who are rendering service to an Employer.

 

ARTICLE I. 

DEFINITIONS

 

1.1

“ Beneficiary ” shall mean the person or persons entitled to receive the distributions, if any, payable under the Plan upon or after a Participant’s death, to such person or persons as such Participant’s Beneficiary.  Each Participant may designate a Beneficiary by filing the proper form with the Committee.  A Participant may designate one or more contingent Beneficiaries to receive any distributions after the death of a prior Beneficiary.  A designation shall be effective upon said filing, provided that it is so filed during such Participant’s lifetime, and may be changed from time to time by the Participant.

 

1.2	“ Code ” shall mean the Internal Revenue Code of 1986 as amended.

 

1.3	“ Committee ” shall mean the Compensation Committee of the Board of Directors of LSI Industries Inc. which is responsible for the administration of this Plan in accordance with the provisions of the Plan as set forth in this document.

 

1.4	“ Compensation ” shall mean the total amount of earnings (including bonuses) paid by an Employer to an Executive or which would otherwise be paid but for a deferral election hereunder or a salary reduction election under any Code Section 401(k) plan or Code Section 125 plan.

 

1.5

“ Deferred Compensation Account ” shall mean the account to be established by an Employer as a book reserve to reflect the amounts deferred by a Participant, the amounts credited by the Employer, and the earnings adjustment under Article VI.  A Participant’s Deferred Compensation Account shall be reduced by distributions under Paragraph 6.2, Article VII and Article VIII.

 

1.6	“ Effective Date ” shall mean December 31, 2008 for purposes of this amendment and restatement.  The provisions of the Plan that have been amended for compliance with Code Section 409A shall be effective for deferrals made on or after January 1, 2005, unless otherwise provided.

 

1.7	“ Employer ” shall mean LSI Industries Inc. and any affiliate of LSI Industries Inc. (whether or not incorporated) which has adopted the Plan with the consent of LSI Industries Inc., or any successor or assignee of any of them.

 

1.8	“ Executive ” shall mean any employee designated by the Committee (in conjunction with senior management of LSI Industries Inc.) as a member of the select group of management or highly compensated employees eligible for participation in this Plan.

 

1.9	“ Participant ” shall mean any Executive who has a right to a benefit under the Plan and a person who was such at the time of the Executive’s death or Separation from Service and who retains, or whose Beneficiary retains, a benefit under the Plan which has not been distributed.

 

1.10	“ Plan ” shall mean the LSI Industries Inc. Nonqualified Deferred Compensation Plan as described in this instrument, amended and restated effective December 31, 2008, and, as may be amended thereafter.

 

1.11	“ Plan Year ” shall mean the 12-consecutive month period beginning on July 1.

 

1.12	“ Separation from Service ” shall mean a “separation from service” within the meaning of Code Section 409A and the rules and regulations promulgated thereunder.

 

ARTICLE II. 

PARTICIPANT’S ELECTION TO DEFER

 

2.1	Each Executive may elect to have up to 100% of the Executive’s Compensation (in whole percentages) for a Plan Year deferred and credited with earnings in accordance with the terms and conditions of the Plan.  The Committee may allow separate elections with respect to regular earnings and bonuses.

 

2.2

An Executive desiring to exercise an election under Paragraph 2.1 shall notify the Committee of his deferral election.  Such notice must be in writing on a form provided by the Committee, or in a manner otherwise satisfactory to the Committee, and provided to the Committee by such date as the Committee shall specify, but in all events no later than the end of the calendar year preceding the first day of the Plan Year to which such election is to apply.  In the event an Executive first becomes eligible to participate in the Plan on or after January 1, 2005, the Executive’s election for deferrals must be provided no later than 30 days following the date the Executive first becomes eligible, and such election will only be effective with regard to Compensation earned following the election.

 

2.3

A deferral election shall be effective with respect to the entire Plan Year to which it relates and may not be modified or terminated for that Plan Year; provided, however, (1) in the Plan Year beginning July 1, 2002, Participants may increase their deferral election during a two week period designated by the Committee, and (2) for periods on or after January 1, 2005, in the event of an unforeseeable emergency (as defined in Paragraph 7.4), a Participant’s deferral election shall be terminated for the remainder of the respective Plan Year.

 

 

2.4	The Compensation otherwise payable to the Executive during the Plan Year shall be reduced pursuant to the Executive’s election under this Article II.  Such amounts shall be credited to the Executive’s Deferred Compensation Account.

 

2.5

For deferrals on or after January 1, 2005, an Executive’s election relating to Compensation from a performance-based bonus payment based on services over a period of at least 12 months must be made no later than 6 months before the end of the service period, provided the Executive performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date an election is made under this Paragraph 2.5, and provided further that in no event may an election to defer Compensation from a performance-based bonus payment be made after such Compensation has become readily ascertainable.

 

ARTICLE III. 

EMPLOYER MAKE-UP ALLOCATIONS

 

3.1

If because of an election under Article II, a Participant receives a smaller allocation of Employer contributions and/or forfeitures under the LSI Industries Inc. Retirement Plan for a Plan Year of that plan than the Participant would have received had no such election been made, then there shall be credited to the Participant’s Deferred Compensation Account an amount equal to the amount which bears the same relationship to the amounts deferred under Article II and credited to the Participant’s Deferred Compensation Account during the Plan Year as the Participant’s allocations (of Employer contributions and/or forfeitures) under the LSI Industries Inc. Retirement Plan bear to the Participant’s compensation taken into account under that plan.  Such amount shall be credited to the Participant’s Deferred Compensation Account at such time as the Committee shall determine.

 

 

(b)

The amount hereunder shall be equal to the amount which is the same percentage of the Participant’s compensation (as defined in the LSI Industries Inc. Retirement Plan) in excess of the compensation limitation referred to in (a) above as the percentage allocated under the LSI Industries Inc. Retirement Plan on compensation in excess of the Social Security taxable wage base (but not in excess of the limitation referred to in (a) above).

 

 

ARTICLE IV.

LSI INCENTIVE ALLOCATIONS

 

4.1	Subject to Paragraph 4.2, each Participant shall be eligible for an Employer incentive allocation for a Plan Year, to be determined in accordance with Paragraph 4.3, if the Participant satisfies both of the following requirements:

 

(a)

The Participant must have elected to make Compensation deferrals under the Plan for the Plan Year of the LSI incentive allocation, the immediately preceding Plan Year and/or the second preceding Plan Year; and

 

(b)

The Participant must be employed by an Employer at the time the Committee determines that the Performance Goal (defined below) was satisfied for the Plan Year.

 

 

(b)

“Performance Goal” shall mean a Return on Average Shareholders’ Equity as determined in the sole discretion of the Committee each year based on the annual operating plan for the relevant fiscal year.

 

4.3	If the Performance Goal (defined above) is met for a Plan Year, those Participants eligible for an Employer incentive allocation under Paragraph 4.1 above shall receive such an allocation determined by the Committee as follows:

 

(a)

The Committee shall determine the number of LSI Common Shares deemed to have been acquired during the Plan Year and each of the two immediately preceding Plan Years with the Compensation deferrals for such years.  In making that determination, the Committee shall consider only Compensation deferrals for a Plan Year up to 40% of the Participant’s Compensation.

 

(b)

The Committee shall determine the percentages applicable to each eligible Participant for the current Plan Year and for each of the two preceding Plan Years from the following:

 

 

 

 

 

 

The Participant’s status (as a “corporate officer” or “top executive”) as determined by the Committee at the end of the Plan Year in which the Participant makes Compensation deferrals will determine the level of Employer allocations under this Paragraph attributable to such Compensation deferrals for that Plan Year.

 

(c)

The applicable percentages determined for a Participant for the Plan Year and the two immediately preceding Plan Years shall be applied against the number of LSI Common Shares determined for the respective Plan Years (under (a) above).  The resulting number shall be rounded to the nearest whole share.

 

(d)

The Committee shall determine the value of the number of LSI Common Shares (determined under (c) above) as of such date as it deems appropriate.  That amount shall be credited to the Participant’s Deferred Compensation Account at such time as the Committee shall determine.

 

ARTICLE V.

ADDITIONAL LSI ALLOCATIONS

 

The Employer may make additional discretionary allocations to certain Participants.  Such additional discretionary allocations must be approved by the Committee and shall be credited to the Participants’ Deferred Compensation Accounts at such time as the Committee shall determine.

 

ARTICLE VI.

PARTICIPANT’S INTEREST

 

Neither a Participant nor a Participant’s designated Beneficiary shall acquire any property interest in the Participant’s Deferred Compensation Account or any other assets of the Employer, their rights being limited to receiving from the Employer a deferred payment as set forth in this Plan, and these rights are conditioned upon continued compliance with the terms and conditions of this Plan.  To the extent that any Participant or Beneficiary acquires a right to receive benefits under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer.

 

 

ARTICLE VII.

CREDITING OF EARNINGS

 

7.1	General .  There shall be credited to the Deferred Compensation Account of each Participant an additional amount of earnings (or losses) determined under this Article VI.

 

7.2

Investment of Compensation Deferrals in LSI Common Shares .  All Compensation deferrals for a Plan Year shall be credited with earnings (or losses) as though invested primarily in LSI Common Shares.  Participants who, prior to the amendment and restatement, had amounts attributable to their Deferred Compensation Account credited with earnings or losses based on any investment election other than the LSI Common Shares investment election shall receive a cash distribution before July 1, 1998 equal to such value of all accounts subject to such other investment elections under the Plan as it then existed.

 

7.3	Employer Allocations .  Employer allocations under Article III and Article IV shall be credited with earnings (or losses) as if it were invested primarily in LSI Common Shares.  The Participant shall have no right to elect that alternative investments be used.

 

7.4	Determination of Rate of Return .  The Committee shall determine the rate of return throughout each Plan Year quarter or other period for the investment in LSI Common Shares and any other investment required to maintain the liquidity of the Plan.

 

7.5

Investment Adjustment .  For each Plan Year quarter or other period, the Participant’s Deferred Compensation Account shall be increased or decreased as if it had earned the rate of return corresponding to the amount determined by the Committee under Paragraph 6.5.  Such increase or decrease shall be based on the balance in the Deferred Compensation Account throughout the Plan Year quarter or other period and shall be credited at such time as the Committee in its sole discretion shall determine.

 

ARTICLE VIII.

PLAN BENEFITS

 

8.1	Vesting .  Effective as of September 9, 2005, a Participant’s rights to the Participant’s Deferred Compensation Account (as adjusted for earnings and losses) shall be fully vested and nonforfeitable at all times.

 

8.2	Distribution of Benefit .

 

(a)

At the time an Executive makes the first deferral election under Article II, the Executive shall also elect to have the amounts represented by the Executive’s Deferred Compensation Account paid in one of the following two forms commencing as soon as administratively feasible upon the Executive’s Separation from Service but in all events within 90 days following the date of such Separation from Service:

 

 

(1)

a single lump sum payment, or

 

(2)

approximately equal annual installments to last not more than 10 years.

 

If installment payments are in effect, the Participant’s Deferred Compensation Account shall continue to be credited with earnings (or losses) under Article VI until payment of the final installment.

 

(b)

A Participant may change the election referred to in (a) above only in accordance with this Paragraph 8.2b).  Effective for deferrals made before January 1, 2005, payment shall be made in accordance with any such changed election only if the Participant terminates service with all Employers at least 12 months following the date of the election.  Otherwise, the payment shall be made in accordance with the election (if any) in effect immediately prior to the changed election.  Effective for deferrals made on or after January 1, 2005, subsequent elections to change the time and form of payment must meet the following requirements:

 

(1)

Elections shall not be effective until at least 12 months following the date the election is made.

 

(2)

For all elections for payments other than because of death or an unforeseeable emergency (as such term is defined in Paragraph 7.4), the first payment may not be made for a period of not less than 5 years from the date such payment would otherwise have been made (or in the case of installment payments, 5 years from the date the first amount was scheduled to be paid).

 

Notwithstanding the preceding sentence, effective for deferrals made on or after January 1, 2005, a Participant shall be permitted to make a subsequent election to change the form of payment during 2008, provided such election is made on or before December 31, 2008, and provided further that such election may apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

 

(c)

If a Participant has no election concerning the form of benefit payment under this Paragraph 7.2 in effect at the time of the Participant’s Separation from Service, payment shall be made in a single lump sum payment.

 

(d)

Elections shall be made in writing, on a form provided by the Committee, and shall be made in accordance with the rules established by the Committee.

 

(e)

Notwithstanding the Participant’s payment election under this Paragraph 7.2 for a Participant who is a “specified employee” as defined in Code Section 409A and the rules and regulations promulgated thereunder, a distribution may not be made before the date which is 6 months after the date of the Participant’s Separation from Service (or if earlier, the date of death of the Participant).

 

8.3	Distribution of LSI Common Shares .  Participants shall receive benefit payments in the form of whole shares of LSI Common Shares.  Any fractional shares shall be paid in cash.  Any expenses attributable to such payment may be deducted from the Participant’s Deferred Compensation Account.

 

8.4

Hardship Distribution .  Subject to the approval of the Committee, a Participant may withdraw all or a portion of the Participant’s Deferred Compensation Account in the event of a hardship.  The distribution shall be made in the form of whole shares of LSI Common Shares.  Any fractional shares shall be paid in cash.  A hardship distribution shall only be made in the event of an unforeseeable emergency that would result in severe financial hardship to the Participant if hardship distributions were not permitted.  Withdrawals of amounts because of an unforeseeable emergency shall only be permitted to the extent reasonably needed to satisfy the emergency need.  An unforeseeable emergency is defined as severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Code Section 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent such hardship is or may be relieved (1) through reimbursement or compensation by insurance or otherwise (2) liquidation of the Participant’s assets (to the extent the liquidation of such assets would not cause severe financial hardship, or (3) by cessation of deferrals under the Plan.  In the event of an unforeseeable emergency (regardless of whether a hardship distribution is made), a Participant’s deferral election under Paragraph 2.1 shall terminate and no further deferrals shall be made for such Participant for the remainder of the Plan Year.

 

ARTICLE IX.

DEATH

 

Upon the death of a Participant prior to commencement of payment under Article VII, the amounts represented by the Participant’s Deferred Compensation Account, increased by any amounts due to be credited but not yet credited under Article II, Article III or Article IV shall be payable to the Participant’s Beneficiary as soon as administratively feasible following the date of the Participant’s death but in all events within 90 days following such date in the form of distribution elected by the Participant pursuant to Paragraph 7.2(a).  If the Participant has already commenced receiving the amounts represented by the Participant’s Deferred Compensation Account in the installment payment form, the installment payments shall continue to be paid to the Participant’s Beneficiary.  The Beneficiary shall receive any benefit payments in the form of whole shares of LSI Common Shares.

 

 

ARTICLE X.

NON-ASSIGNABLE/NON-ATTACHMENT

 

Except as required by law, no right of the Participant or designated Beneficiary to receive payments under this Plan shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law and any attempt, voluntary or involuntary, to effect any such action shall be null and void and of no effect.  An Employer may not assign its obligations hereunder.

 

ARTICLE XI.

CONSTRUCTION

 

This Plan shall be construed under the laws of the Code and to the extent not preempted by federal law, according to the laws of the State of Ohio.  Article headings are for convenience only and shall not be considered as part of the terms and provisions of the Plan.  The Committee shall have full power and authority to interpret, construe and administer this Plan.

 

ARTICLE XII.

AMENDMENT OR TERMINATION OF PLAN

 

The Plan may be terminated at any time or amended in whole or in part from time to time by LSI Industries Inc. provided that no such termination or amendment may directly or indirectly reduce a Participant’s Deferred Compensation Account (other than through a distribution thereof to the Participant (or his Beneficiary in the event of his death)); and any such amendment shall be binding on each Employer, Participant and designated Beneficiary.

 

ARTICLE XIII.

MISCELLANEOUS

 

13.1	Neither this Plan, nor any action of LSI Industries Inc., an Employer or the Committee, nor any election to defer Compensation hereunder shall be held or construed to confer on any person any legal right to be continued as an employee of LSI Industries Inc. or any Employer.

 

13.2	LSI Industries Inc. and the Participant’s Employer shall have the right to deduct from all payments and amounts credited hereunder any taxes required by law to be withheld with respect to any benefits under this Plan.

 

IN WITNESS WHEREOF, LSI Industries Inc. and each Employer, with the consent of LSI Industries Inc., have caused this amended and restated Plan to be executed as of this 19th day of November, 2009.