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 Act of 1934

Date of Report (Date of earliest event reported):  June 13, 2017


LSI INDUSTRIES INC.
(Exact name of Registrant as specified in its Charter)


Ohio
 
01-13375
 
31-0888951
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
 
(IRS Employer Identification No.)

10000 Alliance Road, Cincinnati, Ohio
 
45242
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant's telephone number, including area code     (513) 793-3200



(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 Instruction 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))
   
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐


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

On June 13, 2017, LSI Industries Inc. ("LSI" or the "Company") announced that it has appointed James E. Galeese as LSI's Executive Vice President and Chief Financial Officer and recognized the transition of Ronald S. Stowell who has been LSI's Vice President and Chief Financial Officer since 1992 and Treasurer since 1993, to LSI's Chief Financial Officer Emeritus and Treasurer. Mr. Stowell has informed LSI that he intends to serve in the capacities of Chief Financial Officer Emeritus and Treasurer until December 31, 2017.

Mr. Galeese, age 60, has significant experience as a financial executive. Since January 2014, he served Universal Trailer Holding Company as its Vice President and Chief Financial Officer and also as a member of its Board of Directors. From October 2010 to December 2013, Mr. Galeese served as Senior Vice President and CFO of Lighting North America, a division of Phillips Electronics NV. Prior to December 2013 Mr. Galeese held several other positions with Phillips.

The Company and Mr. Galeese have entered into an employment offer letter that provides for annual base salary of $320,000, a signing bonus of $50,000, options to purchase 60,000 shares of LSI's common stock vesting over a four year period, eligibility to participate in LSI's short term and long term incentive plans, relocation expenses and other benefits.

Also on June 13, 2017, LSI announced that it appointed Jeffrey S. Bastian, CPA, as Vice President and Chief Accounting Officer. Mr. Bastian, age 56, has been employed with LSI since 1989. Prior to his appointment as Vice President and Chief Accounting Officer, Mr. Bastian held the position of Vice President and Controller since 2004 and prior to that other positions in LSI's accounting department.

The press release and employment letter are attached to this Form 8-K as exhibits and incorporated herein by reference. The disclosures in this Item 5.02 are qualified in their entirety to such exhibits.

Item 9.01 Financial Statements and Exhibits.
  
 
(d)
Exhibits
 
 
Exhibit No .
 
  
 
Description
 
     
10.1
  
Employment Offer Letter between LSI Industries Inc. and James E. Galeese.
99.1
 
Press Release dated June 13, 2017.


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.
   
LSI INDUSTRIES INC.
     
   
BY: /s/ Howard E. Japlon
   
Howard E. Japlon
   
Executive Vice President, Human Resources & General Counsel
     

June 13, 2017

EXHIBIT 10.1
 

Sent Via Email:
May 22, 2017
Mr. James E. Galeese
10170 Northridge Court
Bonita Springs, Florida 34135
Re:   Employment Offer
Dear Mr. Galeese:
We are very pleased to extend to you an offer of employment with LSI Industries as Executive Vice President, Chief Financial Officer.  The position will report to the President and Chief Executive Officer.  The following is a brief description of the compensation, health and welfare benefits, and other Company plans and programs offered in connection with your employment.
1.
Base Salary .  The annual base salary for this position is $320,000.  As you know, the position is a full-time, exempt salaried position for purposes of federal wage-hour laws, which means that you will not be eligible for overtime pay for hours actually worked in excess of forty hours in a given workweek.
2.
Short-Term Incentive Compensation .  The position will be eligible to participate in the LSI Industries Inc. Short Term Incentive Plan for fiscal year 2018, which covers the period of July 1, 2017 through June 30, 2018.  The 2018 Plan and its applicable targets are subject to review and approval by the Compensation Committee of the LSI Board of Directors.  As a reference, the 2017 Plan is based on the achievement of net sales and operating income targets approved by the Compensation Committee.  It is anticipated that the 2018 Plan will be structured similarly with a range of payout based on the percentage achievement of the 2018 Plan targets.  The position will be eligible to participate in the 2018 Plan at the "Named Executive Officer" level.  As a point of reference, at the "Named Executive Officer" level, the 2017 Plan provides for a cash payout of 30% of base salary for 100% Plan achievement and up to a maximum cash payout of 60% of base salary for 130% Plan achievement.
3.
Long-Term Incentive Compensation .  The position will be eligible to participate in the LSI Industries Inc. Long Term Incentive Plan for fiscal year 2018.  The Plan generally contemplates the issuance of service-based stock option grants, restricted stock units and performance-based stock option grants.  The service-based stock option grants and restricted stock units awarded under the 2017 Plain have a four year ratable vesting period.  The performance-based stock option grants awarded under the 2017 Plan vest on a three-year basis subject to achievement of the 2017 adjusted operating income target established in the 2017 Plan.  The 2018 Plan and its targets are subject to review and approval by the Compensation Committee.
4.
Stock Option Award .  In connection with the commencement of your employment, the Company will award a service-based stock option to purchase 60,000 shares of LSI Common Stock with a four year ratable vesting period.  The grant will be made effective on your first day of employment with LSI and the option price per share will be equal to the closing price for a share of LSI Common Stock on such date.
5.
The LSI Health Benefits Plan .  LSI offers a full coverage preferred provider network health plan with three plan choices to select from.
6.
The LSI Dental Plan .  LSI offers a full coverage plan, including preventative care benefits, for all covered family members.
7.
Prescription Benefits .  Employee co-payment for prescriptions is based upon the health benefits plan option selected.
8.
Flexible Spending Accounts .  Health Care and Dependent Care Flexible Spending Accounts are available.
9.
Disability Insurance .  The Company covers the cost of both short term disability insurance and long-term disability insurance.
10.
Accidental Death and Dismemberment Insurance .  LSI covers the cost of accidental death and dismemberment insurance.
11.
Term Life Insurance .  The Company covers the cost of term life insurance up to a maximum specified benefit level.
12.
Dependent Life Insurance .  LSI covers the cost of dependent life insurance, under which your spouse is covered for $10,000 and your dependent children (6 months to 19 years) are covered for $5,000 each.
The items noted in paragraph 5 through paragraph 12 above become effective on the first day of the month following 30 days of continuous employment with the Company.  Information relevant to each of these items is set forth in the attached benefits summary.
13.
Relocation; Temporary Living Arrangements .  If you choose to relocate, the Company will provide financial assistance in accordance with its standard relocation assistance program, a copy of which is attached.  The Company will cover the cost of three round trips for your spouse, Janet, to travel from your Florida residence to Cincinnati to join you in searching for longer term housing.  In the interim, the Company will extend the month to month rental of the Bishop's Gate apartment through August 2017 for your use and the Company will cover the cost of rent, utilities, cable and internet for the apartment.  If you determine that you want to continue to rent a residence following the termination of the Bishop's Gate apartment lease, then the Company will reimburse your rental expense in the amount of $2,000 per month for up to twelve (12) months thereafter.
14.
Signing Bonus .  The Company will pay you a signing bonus of $50,000, of which $20,000 will be paid as soon as possible after you begin your employment with LSI.  The remaining $30,000 will be paid on March 31, 2018.  In the event that you voluntarily leave the employment of LSI within one year of your start date, then you agree to repay the total $50,000 signing bonus, prorated to reflect the actual amount of time spent in the employment of LSI in such year.
15.
LSI Retirement Plan .  The position is eligible to participate in the LSI Retirement Plan effective on the first date to occur of January 1, April 1, July 1 or October 1 following three months of service with the Company.
16.
LSI 401(K) Savings Plan .  Employees may contribute up to 75% of salary, subject to all applicable IRS annual limits.  All contributions are made by the employee.
17.
LSI Non-Qualified Deferred Compensation Plan .  The position is eligible to participate in the LSI Deferred Compensation Plan.  A summary description of the Plan is attached.
18.
Paid vacation time .  The Company offers three weeks of paid vacation time per year.
19.
Holidays .  The Company offers ten paid designated holidays per calendar year, which includes one floating personal holiday (renewed each January 1).
This offer is contingent upon successful completion of a post-offer employment drug test and a background check.  You will also be required to sign an Employee Confidentiality/Non-Compete Agreement, which I am enclosing for your review.
We look forward to your joining us as a member of the LSI team.  However, we recognize that you retain the option, as does the Company, of ending your employment with the Company at any time, with or without notice and with or without cause.  As such, your employment with the Company is at-will and neither this letter nor any other oral or written representations constitutes a contract for any specific period of time.  In addition, LSI Industries reserves the right to change its compensation arrangements, benefit plans and other programs at any time.  If you have any questions, please contact me at 513-372-3042.
Sincerely,
/s/ Dennis Wells
Dennis Wells
Chief Executive Officer
LSI Industries Inc.
Please sign below to confirm that you are accepting this offer of employment and agree to the terms of employment set forth above.  Your signature also confirms that your employment and duties with LSI Industries will not violate any contractual or other legal obligation with any prior employer.  You further confirm that you have not misappropriated and will not use any prior employer's proprietary information or trade secrets in connection with your LSI Industries employment.
   
/s/ James E. Galeese
5/31/17
Employee
Date

EXHIBIT 99.1
 
FOR IMMEDIATE RELEASE
CONTACT:  DENNIS WELLS
DATE:  JUNE 13, 2017
(513) 793-3200

LSI INDUSTRIES INC. ANNOUNCES THE APPOINTMENT OF JAMES E. GALEESE
AS CHIEF FINANCIAL OFFICER; APPOINTS RONALD S. STOWELL
AS CHIEF FINANCIAL OFFICER EMERITUS AND TREASURER; AND PROMOTES
 JEFFERY S. BASTIAN, CPA, TO CHIEF ACCOUNTING OFFICER

Cincinnati, OH; June 13, 2017 – LSI Industries Inc. (NASDAQ:  LYTS)   today :  announced the appointment of James E. Galeese as Executive Vice President and Chief Financial Officer, succeeding Ronald S. Stowell, who has been named Chief Financial Officer Emeritus and Treasurer and will remain a key part of LSI's financial leadership team.  Jeffery S. Bastian, CPA, Vice President and Controller, has been promoted to the role of Vice President and Chief Accounting Officer.

Mr. Galeese most recently, from 2014 to present, served as Vice President, Chief Financial Officer, and a Director of privately-held Universal Trailer Holding Corporation (manufacturer of trailers for the hauling requirements of businesses and individuals).  He was with Philips Electronics NV from 1998 to 2014 as Senior Vice President and Chief Financial Officer for its North American Lighting business and its Electronics business.  Prior to that Mr. Galeese served in the financial Controllership organization of Square D Company / Schneider Electric.  He graduated from Miami University with a degree in Business Administration and obtained an MBA from Xavier University.

Dennis W. Wells, Chief Executive Officer and President, commented, "I look forward to Jim Galeese joining the executive management team of LSI.  His extensive years of financial leadership experience in large company environments and in the lighting business make him uniquely qualified for this position of Chief Financial Officer.  His experience will enable him to contribute to the business and financial leadership of LSI with an immediate impact as we grow beyond the roughly $400 million company that we are today.

Dennis Wells continued, "I am pleased that Jeff Bastian has accepted the role of Vice President and Chief Accounting Officer at LSI.  During Mr. Bastian's 28-year tenure with the Company he has assumed increasing levels of responsibility, and currently oversees both the internal and external financial reporting for LSI.  Mr. Bastian's familiarity with reporting requirements, combined with his impeccable attention to detail, provides me with confidence that our Accounting Department will remain in good hands moving forward.

Dennis Wells added, "This is a planned transition as Mr. Stowell, who has been Chief Financial Officer for nearly twenty-five years, has discussed his desire to retire at the end of calendar 2017.  Ron's contributions since joining LSI in 1992 as Chief Financial Officer cannot be overstated and I am very pleased he has agreed to remain an important part of our financial leadership team.   We wish to thank Ron for his many years of leadership as LSI more than quadrupled in size through both organic growth as well as several acquisitions.  He has been instrumental in all of the Company's internal financial reporting practices, the external financial and other SEC reporting, developed and trained the Company's Controllers and senior financial management team, worked with the administration of compensation and benefit programs, and advised the Board of Directors and the Chief Executive Officer on many business matters.  In his new role he will manage the Company's treasury and tax functions, and will be a resource for Jim Galeese and the LSI Corporate financial management team over the next six months."


"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This document contains certain forward-looking statements that are subject to numerous assumptions, risks or uncertainties.  The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements.  Forward-looking statements may be identified by words such as "estimates," "anticipates," "projects," "plans," "expects," "intends," "believes," "seeks," "may," "will," "should" or the negative versions of those words and similar expressions, and by the context in which they are used.


Such statements, whether expressed or implied, are based upon current expectations of the
Company and speak only as of the date made.  Actual results could differ materially from those contained in or implied by such forward-looking statements as a result of a variety of risks and uncertainties over which the Company may have no control.  These risks and uncertainties include, but are not limited to, the impact of competitive products and services, product demand and market acceptance risks, potential costs associated with litigation and regulatory compliance, reliance on key customers, financial difficulties experienced by customers, the cyclical and seasonal nature of our business, the adequacy of reserves and allowances for doubtful accounts, fluctuations in operating results or costs whether as a result of uncertainties inherent in tax and accounting matters or otherwise, failure of an acquisition or acquired company to achieve its plans or objectives generally, unexpected difficulties in integrating acquired businesses, the ability to retain key employees of acquired businesses, unfavorable economic and market conditions, the results of asset impairment assessments, the ability to maintain an effective system of internal control over financial reporting, the ability to remediate any material weaknesses in internal control over financial reporting and any other risk factors that are identified herein.  You are cautioned to not place undue reliance on these forward-looking statements.  In addition to the factors described in this paragraph, the risk factors identified in our Form 10-K and other filings the Company may make with the SEC constitute risks and uncertainties that may affect the financial performance of the Company and are incorporated herein by reference.  The Company does not undertake and hereby disclaims any duty to update any forward-looking statements to reflect subsequent events or circumstances.


About the Company

We are a customer-centric company that positions itself as a value-added, trusted partner in developing superior image solutions through our world-class lighting, graphics, and technology capabilities.  Our core strategy of "Lighting + Graphics + Technology = Complete Image Solutions" differentiates us from our competitors.

We are committed to advancing solid-state LED technology to make affordable, high performance, energy-efficient lighting and custom graphic products that bring value to our customers.  We have a vast offering of innovative solutions for virtually any lighting or graphics application.  In addition, we provide sophisticated lighting and energy management control solutions to help customers manage their energy performance.  Further, we provide a full range of design support, engineering, installation and project management services to our customers.

We are a vertically integrated U.S.-based manufacturer concentrating on serving customers in North America and Latin America.  Our major markets include commercial / industrial lighting, petroleum / convenience store and multi-site retail (including automobile dealerships, restaurants and national retail accounts).  Headquartered in Cincinnati, Ohio, LSI has facilities in Ohio, California, Kentucky, New York, North Carolina and Texas.  The Company's common shares are traded on the NASDAQ Global Select Market under the symbol LYTS.


For further information, contact Dennis Wells, Chief Executive Officer and President
at (513) 793-3200.


Additional note:    Today's news release, along with past releases from LSI Industries, is available on the Company's internet site at www.lsi-industries.com or by email or fax, by calling the Investor Relations Department at (513) 793-3200.