Ohio
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0-13375
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31-0888951
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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10000 Alliance Road, Cincinnati, Ohio
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45242
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code
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(513) 793-3200
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Executive
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Type of
Award |
Number of Shares Underlying Award
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Dennis W. Wells
|
Service-Based
Stock Options |
45,000
|
Dennis W. Wells
|
RSUs
|
10,000
|
Dennis W. Wells
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Performance-Based Stock Options
|
90,000
|
Ronald S. Stowell
|
Service-Based
Stock Options |
40,000
|
Ronald S. Stowell
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RSUs
|
5,000
|
Ronald S. Stowell
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Performance-Based Stock Options
|
60,000
|
David W. McCauley
|
Service-Based
Stock Options |
30,000
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David W. McCauley
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RSUs
|
5,000
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David W. McCauley
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Performance-Based Stock Options
|
10,000
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Shawn M. Toney
|
Service-Based
Stock Options |
30,000
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Shawn M. Toney
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RSUs
|
5,000
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Shawn M. Toney
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Performance-Based Stock Options
|
60,000
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Andrew J. Foerster
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Service-Based
Stock Options |
30,000
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Andrew J. Foerster
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RSUs
|
5,000
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Andrew J. Foerster
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Performance-Based
Stock Options |
50,000
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Exhibit Number
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Description
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10.1
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LSI Industries Inc. Long Term Incentive Plan FY2016 for Named Executive Officers
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10.2
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LSI Industries Inc. Short Term Incentive Plan FY2016 for Named Executive Officers
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10.3
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Form of Restricted Stock Unit Award Agreement
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10.4
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Form of Nonqualified Stock Option Award Agreement - - Performance-Based
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10.5
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Form of Nonqualified Stock Option Award Agreement - - Service-Based
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10.6
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Form of Incentive Stock Option Award Agreement
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LSI INDUSTRIES INC.
BY:
/s/ Ronald S. Stowell
Ronald S. Stowell
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial and Accounting Officer)
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1.
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Service –Based Stock Options
– From time to time LSI issues stock options to named executive officers at the beginning of each fiscal year to motivate them to achieve the business plan resulting in higher stock prices, thereby creating value in the stock options that they have been awarded. This arrangement will continue in FY2016. Stock options will be issued to all named executive officers as approved by the Compensation Committee. These stock options are service-based awards, with a ten year exercise term, four year ratable vesting period and stated and fixed exercise price set by the Compensation Committee at the date of the grant. The exercise price will be the closing price on the day of grant, July 1, 2015.
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2.
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Service-Based Restricted Stock Units
– In order to encourage named executive officers towards long-term employment, LSI will award between 3,000 and 5,000 restricted stock units (RSUs) to each of the named executive officers. The RSUs are service-based and have a four year ratable vesting period. The RSUs are non-voting, but shall accrue cash dividends at the same per share rate (one RSU = one LSI common share) as those cash dividends are declared and paid on LSI common shares. The payout when vested will be in LSI common shares.
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3.
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Performance-Based Stock Options
– In order to align named executive officer incentives with shareholders' interests, and to encourage named executive officers towards long term employment, LSI will grant them performance-based stock options. These options will vest based upon the attainment of the Adjusted Operating Income goals set for fiscal 2016 in 33.33% increments. The first 33.33% will vest at the end of fiscal 2016 assuming the planned Adjusted Operating Income is achieved. The second 33.33% will vest at the end of fiscal 2017 and the third 33.33% will vest at the end of fiscal 2018. The Operating Income goal and the vesting schedule are set forth below.
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FY 2016 Plan
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Operating Income Goal
as a % of Planned Net Sales
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4.4%
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Grant Date
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July 1, 2015
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33% Vesting Date
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June 30, 2016
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33% Vesting Date
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June 30,2017
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33% Vesting Date
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June 30, 2018
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95-100% attainment
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100% vesting
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90-94% attainment
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90% vesting
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85-89% attainment
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80% vesting
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a.
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This LTIP is a pay-for-performance plan designed to incentivize named executive officers to lead LSI towards the achievement of superior operating results and to maintain long-term employment with LSI.
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b.
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This LTIP covers only named executive officers as identified by the Compensation Committee.
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c.
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This LTIP has been approved by the Compensation Committee.
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d.
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Determination of achievement of LSI's Adjusted Operating Income will be calculated based upon actual reported results with adjustments for certain unusual or non-recurring items as approved by the Compensation Committee.
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e.
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Each named executive officer qualified for this LTIP must be employed at LSI on the vesting dates in order to exercise the stated award. Vesting will also be in accordance with "retirement eligibility" rules as defined in the 2012 Stock Incentive Plan.
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f.
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Any type of lengthy leave of absence may result in an adjustment of the calculated award. Leaves of absence include time away from work for reasons of short term disability, FMLA leave, military leave, or other leave of absence.
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g.
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Named executive officers who retire during the plan period at normal retirement age or under an LSI approved plan of retirement may receive a pro-rated award based upon the actual amount of base salary received in the plan period, subject to the terms and conditions of the 2012 Stock Incentive Plan.
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h.
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If a named executive officer becomes disabled (as defined by Social Security) or dies during the plan period, his beneficiary may be considered for an adjusted award, subject to the terms and conditions of the 2012 Stock Incentive Plan.
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i.
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Some incentive awards are subject to assignment laws and other laws that require payment to someone other than the employee (IRS tax levies, child support arrearages, etc.). LSI will comply with all applicable assignment laws.
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j.
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LSI reserves the right to amend, reduce, modify, interpret or discontinue all or part of it with or without reason as the Compensation Committee deems advisable, subject to the terms and conditions of the 2012 Stock Incentive Plan.
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k.
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This LTIP does not create or imply the existence of a contract of employment.
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1.
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Bonus Potential
determines the percentage payout to named executive officers based on the attainment of the 2016 Business Plan goals and as approved by the Compensation Committee in the table below.
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90% Plan
Achievement |
100% Plan
Achievement |
110% Plan
Achievement |
120% Plan
Achievement |
150% Plan
Achievement |
17%
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25%
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35%
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45%
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65%
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2.
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Performance Mix
determines the percentage assigned to the performance of the total company vs. the employees Business Unit.
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3.
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Metrics
determine the percentage assigned to Sales vs. Operating Income. In 2015 the STIP was 100% based upon attainment of the Operating Income goals. For 2016 LSI is shifting 30% of this metric to Sales to place emphasis on increasing the size of LSI's business.
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Metrics %
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2015
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2016
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Sales
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0%
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30%
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Operating Inc
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100%
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70%
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Total
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100%
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100%
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A.
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This STIP covers only named executive officers as identified by the Compensation Committee.
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B.
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This STIP will take into account LSI total results. The intent of having corporate performance as a determinant of the incentive payment is to provide motivation for named executive officers to work for the good of the whole corporation, not only for the good of a Business Unit.
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C.
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The Compensation Committee may make modifications of the calculated bonus award to decrease or increase a named executive officer's bonus for special objectives or subjective circumstances.
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D.
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Determination of achievement of LSI's Sales and Operating Income will be calculated based upon actual reported fiscal 2016 results and may be adjusted for certain unusual or non-recurring items as approved by the Compensation Committee. There will be a straight line interpolation of actual achievement as compared to the fiscal 2016 business goals when determining the actual incentive payment percentage.
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E.
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Incentive pay recipients must be employed at LSI in August 2016 on the day when incentive checks are issued for the fiscal year just recently ended. Named executive officers who terminate employment on or before the August bonus payment date are not eligible for a bonus.
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F.
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Any type of lengthy leave of absence could result in a pro-rata reduction of the calculated award. Leaves of absence include time away from work for reasons of short term disability, FMLA leave, military leave, or other leave of absence.
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G.
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Named executive officers who retire during the fiscal year at normal retirement age or under an LSI approved plan of retirement will be considered for a pro-rated payment based upon the actual amount of base salary received in the fiscal year.
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H.
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If a named executive officer becomes disabled (as defined by Social Security) or dies during a fiscal year, his beneficiary will be considered for a pro-rata payment based upon the actual amount of base salary received in the fiscal year.
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I.
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Incentive payments are subject to assignment laws and other laws that require payment of the bonus to someone other than the named executive officer (IRS tax levies, child support arrearages, etc.). LSI will comply with all applicable assignment laws.
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J.
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LSI reserves the right to amend, reduce, modify, interpret or discontinue all or part of this STIP with or without reason as the Compensation Committee deems advisable in its sole and absolute discretion.
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K.
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This STIP does not create or imply the existence of a contract of employment.
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L.
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The named executive officer's base salary rate as of April 30,
2016 shall be used to calculate the bonus amount.
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Name of Grantee:
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Number of Units:
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Grant Date:
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July 1, 2015
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Vesting Date(s):
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July 1, 2016
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July 1, 2017
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July 1, 2018
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July 1, 2019
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(i)
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the Vesting Date identified on the first page hereof under "Summary of Restricted Share Unit Award Grant";
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(ii)
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the date of the Grantee's death;
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(iii)
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the date of the Grantee's Disability, provided such Disability also constitutes a "disability" within the meaning of Section 409A of the Code with respect to a Grantee whose Restricted Units are subject to Section 409A of the Code;
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(iv)
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the date of Grantee's termination of employment with the Company as a result of Retirement or a Change in Control event described in Section 2(g)(i) or (ii) of the Plan, provided such termination of employment also constitutes a "separation from service" within the meaning of Section 409A of the Code with respect to a Grantee whose Restricted Units are subject to Section 409A of the Code; or
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(v)
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the date of an event described in Section 2(g)(iii) or (iv) of the Plan, provided such event also constitutes a "change in control event" within the meaning of Section 409A of the Code with respect to a Grantee whose Restricted Units are subject to Section 409A of the Code.
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LSI INDUSTRIES INC.
By:
________________________
Name: Dennis W. Wells
Title: Chief Executive Officer
GRANTEE
_________________________________________
Name:
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Name of Grantee:
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Number of Underlying Shares:
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Exercise Price Per Share:
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Grant Date:
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July 1, 2015
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June 30, 2016
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June 30, 2017
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Vesting Date(s):
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June 30, 2018
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Expiration Date:
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July 1, 2025
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LSI INDUSTRIES INC.
By:
_______________________
Name: Dennis W. Wells
Title: Chief Executive Officer
GRANTEE
_________________________________________
Name:
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Name of Grantee:
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Number of Underlying Shares:
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Exercise Price Per Share:
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Grant Date:
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July 1, 2015
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June 30, 2016
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June 30, 2017
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June 30, 2018
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Vesting Date(s): | June 30, 2019 | |
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Expiration Date: |
July 1, 2025
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LSI INDUSTRIES INC.
By:
______________________
Name: Dennis W. Wells
Title: Chief Executive Officer
GRANTEE
_________________________________________
Name:
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Name of Grantee:
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Number of Underlying Shares:
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Exercise Price Per Share:
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Grant Date:
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July 1, 2015
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June 30, 2016
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June 30, 2017
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June 30, 2018
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Vesting Date(s):
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June 30, 2019
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Expiration Date:
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July 1, 2025
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LSI INDUSTRIES INC.
By:
Name: Dennis W. Wells
Title: Chief Executive Officer
GRANTEE
_________________________________________
Name:
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