UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , DC 20549
FORM 8-K
CURRENT REPORT
Purs uant to Section 13 or 15(d) of t he Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 16, 2019
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 3.02. Unregistered Sale of Equity Securities.
The disclosure contained in Item 5.02 of this Current Report on Form 8-K regarding the issuance of an inducement grant in the form of an option to purchase shares of LSI Industries Inc. (“ LSI ” or the “ Company ”) common stock to Michael C. Beck, in connection with his employment, is incorporated by reference. The inducement grant is exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 16, 2019 LSI Industries Inc. issued a press release announcing the appointment of Michael C. Beck as Senior Vice President - Operations, effective February 11, 2019. Mr. Beck, age 61, from 2017 to the present served as Vice President, North Region of Simpler Consulting (an IBM company). From 2014 to 2017 Mr. Beck held other positions of increasing management responsibility at Simpler Consulting. Prior to his service with Simpler Consulting Mr. Beck held various executive positions in Manufacturing, Lean and Operational Excellence at United Technologies, Terex and Caesars Entertainment.
LSI and Mr. Beck executed an Employment Offer Letter which provides that his employment with LSI shall begin on February 11, 2019. The Employment Offer Letter also provides:
- |
Mr. Beck shall receive an annual base salary of $325,000, a signing bonus of $45,000, and relocation expense package of $50,000; |
- |
Mr. Beck shall be eligible to receive incentive compensation under LSI’s Short Term Incentive Plan for Fiscal Year 2020 (“ 2020 STIP ”). At the threshold level of performance, his 2020 STIP opportunity is expected to be 25% of base salary. At the target level of performance, his 2020 STIP opportunity is expected to be 50% of base salary. At the maximum level of performance, his 2020 STIP opportunity is expected to be 100% of base salary; and |
|
- |
Mr. Beck shall receive a non-statutory stock option (the “ Option ”) with a term of ten years to purchase 50,000 shares of the Company’s common stock which shall vest on the third anniversary of the grant date. The effective date of grant shall be the date of Mr. Beck’s first day of employment with LSI and the exercise price shall be the closing price per share of the Company’s common stock on the NASDAQ Global Select Market on that same date. The Option is intended to qualify as an “inducement grant” under NASDAQ Listing Rule 5635(c)(4) and shall not be granted pursuant to the Company’s Amended and Restated 2012 Stock Incentive Plan. |
This summary of the Employment Offer Letter described above does not purport to be complete and is qualified in its entirety by reference to the Employment Offer Letter, a copy of which is filed with this report as Exhibit 10.1 and is incorporated herein by reference. Please see this exhibit for further information.
LSI will require Mr. Beck to execute the LSI’s Restrictive Covenant and Confidentiality Agreement effective February 11, 2019 pursuant to which he shall be subject to customary confidentiality restrictions that apply during his employment, an intellectual property assignment provision, and a covenant not to compete.
LSI’s press release is furnished with this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(a) |
Financial statements of business acquired. Not applicable. |
(b) |
Pro forma financial information. Not applicable. |
(c) |
Shell company transactions. Not applicable. |
(d) |
Exhibits. |
Exhibit No |
|
Description |
10.1 |
LSI Industries Inc. Employment Offer Letter with Michael Beck |
|
99.1 |
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 |
||
January 16, 2019
Exhibit 10.1
Sent Via Email:
January 7, 2019
Mr. Michael C. Beck
Re: Employment Offer
Dear Mike:
We are very pleased to extend this offer of employment to join LSI Industries as Senior Vice President - Operations. The position will report to me in my role as President and Chief Executive Officer. The following is a summary description of the compensation, health and welfare benefits, and other Company plans and programs offered in connection with your employment.
1. |
Base Salary; Start Date. The annual base salary for the position is $325,000. Any adjustment to base salary is subject to approval by the Compensation Committee of the Board of Directors. We anticipate that your first day employment with the Company will be February 11, 2019. |
2. |
Short Term Incentive Compensation. The position will be eligible to participate in the Company's Short Term Incentive Plan commencing with the Company's 2020 fiscal year (July 1, 2019 through June 30, 2020) at the "B5A Named Executive Officer" level. The FY20 STIP metrics and related performance objectives, and the determination of FY20 STIP incentive payouts, will be subject in all respects to the review and approval of the Compensation Committee and to the terms and conditions of the FY20 STIP document which will govern all matters associated with the FY20 STIP. |
The following summary is provided to help familiarize you with the current structure of the STIP. The Company's FY19 STIP (July 1, 2018 through June 30, 2019) was approved by the Compensation Committee and provides for the payment of a cash incentive, subject to the achievement of the FY19 STIP performance objectives. The FY19 STIP metrics, performance objectives and the potential bonus percentage opportunity of each executive officer were reviewed and approved by the Compensation Committee. The 2019 STIP is based on corporate performance as measured by the achievement of two corporate metrics, net sales and operating income. The net sales and operating income performance objectives are each weighted at 50%. These metrics and their respective weightings have been employed in the STIP since FY18.
The Board of Directors approves the Company's annual operating plan and, in general, the operating plan net sales and operating income objectives have been used in setting STIP targets. However, the Compensation Committee considers a wide range of factors and exercises its discretion in setting STIP thresholds, targets, and payout percentages, in order to balance executive officer interests and shareholder interests. Assuming the FY20 STIP maintains the same structure as the FY19 STIP, at the threshold level of performance, it is anticipated that your FY20 STIP bonus opportunity will be 25% of base salary; at the target level of performance, the bonus opportunity will be 50% of base salary; and at the maximum level of performance, the bonus opportunity will be 100% of base salary.
3. |
Long-Term Incentive Compensation. The Board of Directors has approved the Company's Long Term Incentive Plan. The SVP - Operations position is eligible to participate in the LTIP, subject to review and approval of the Compensation Committee. Your participation in the LTIP will commence with FY20 LTIP awards made in or about August 2019. At that time, you will have the opportunity to receive equity-based awards to be issued under the Company's Amended and Restated 2012 Stock Incentive Plan (or any successor plan), pursuant to and in accordance with the terms of the LTIP document which governs all matters associated with the LTIP. In connection with this offer of employment and as an inducement to your agreement to join the Company, the Board of Directors has approved an inducement award of stock options for the purchase of shares of the Company's common stock on the terms and conditions as set forth in Exhibit A to this letter. |
4. |
Signing Bonus: Relocation Expense: Temporary Housing Expense. In connection with this offer of employment, the Company will pay a lump sum of $45,000 to you as a signing bonus (the "Signing Bonus"). In addition, in connection with this offer of employment, the Company will pay a lump sum of $50,000 to you for purposes of covering all out-of-pocket expenses incurred in connection with your relocation to the Cincinnati area, including, without limitation, expenses for temporary housing (the "Relocation Amount"). The position is based at the Company's Cincinnati headquarters and it is expected that you will perform the duties of the position at our Cincinnati offices. The Signing Bonus and the Relocation Amount will be paid to you within thirty (30) days after the first day of your employment with the Company. In the event that the Signing Bonus and the Relocation Amount are taxable as income under applicable federal, state or local law, the Company will not "gross-up" such payments and you shall be solely responsible for any such tax. If you voluntarily terminate your employment within one (1) year of your start date with the Company, or if the Company terminates your employment for cause within one (1) year of your start date with the Company, then you will be obligated to repay the Signing Bonus and the Relocation Package not later than thirty (30) days after the date of such termination of employment. |
5. |
LSI 401(K) Savings Plan. Employees may contribute up to 75% of salary, subject to all applicable IRS annual limits, in accordance with the terms of the Company's 401(K) Plan. The Company currently provides a 50% matching contribution on the first 5% contributed by an employee. A summary description of the Plan will be provided. |
6. |
LSI Non-Qualified Deferred Compensation Plan. You will be eligible to participate in the LSI Deferred Compensation Plan which permits the deferral of salary and / or incentive compensation in accordance with the terms of the Plan. A summary description of the Plan will be provided. |
7. |
Paid time off. You will be eligible for four weeks of paid time off per fiscal year. |
8. |
Holidays. The Company has ten paid designated holidays per calendar year, which includes one floating personal holiday. |
9. |
The LSI Health Benefits Plan. LSI currently offers a preferred provider network health plan with three plan choices (High PRO, Low PRO and HDHP) from which to select. A summary of the Company's health benefits plan will be provided. |
10. |
The LSI Dental and Vision Plans. LSI currently offers a dental plan with two plan choices (High PPO, Low PPO) from which to select, including preventative care benefits, as well as a vision care plan, for all covered family members. |
11. |
Prescription Drug Card. Employee prescription co-payments are based upon the Health Benefits Plan choice selected. |
12. |
Flexible Spending Accounts. You may elect to establish Health Care and Dependent Care Flexible Spending Accounts under the PPO option health plan choices, or to establish a Health Savings Account under the HDHP option choice. |
13. |
Disability Insurance. The Company covers the cost of both short-term and long-term disability insurance coverage. |
14. |
Accidental Death and Dismemberment Insurance. LSI covers the cost of accidental death and dismemberment insurance coverage. |
15. |
Basic Life Insurance. The Company covers the cost of basic term life insurance coverage up to a maximum specified benefit level. |
16. |
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. |
17. |
Optional Insurance. You may also secure additional insurance coverage at your option and cost for term life, accidental injury and critical illness. |
A copy of our Restrictive Covenant Agreement for your review. The Restrictive Covenant Agreement covers matters related to confidentiality, non-competition and non-solicitation. This offer of employment is subject to your execution and delivery of the Restrictive Covenant Agreement on your first day of employment by the Company. We will also work through the details of the public announcement, press release, SEC filings and other matters associated with the start of your employment with the Company. This offer is also contingent upon successful completion of a background check.
We're very pleased to make this proposal for you to assume this important role for the Company, Mike. If you have any questions, please contact me at 513-372-3600 or 860-830-0672.
Sincerely,
James A. Clark
President and 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/ Michael Beck
Date: January 11, 2019
Exhibit A
Stock Option Inducement Award Summary
The Company will award at the close of business on your first day of employment with the Company a nonqualified stock option, which will be intended to qualify as an "inducement grant" under NASDAQ Listing Rule 5635(c)(4) and which will not be granted pursuant to the Company's 2012 Stock Incentive Plan. The stock option award will grant the right to purchase 50,000 shares of the Company's common stock at a per share exercise price equal to the fair market value of the Company's common stock as of the date of grant (i.e., the closing price per share on the NASDAQ Global Select Market on your first day of employment). The stock option will have a term of ten (10) years and shall vest only if you are employed by the Company for a period of three (3) years following the date of grant.
5
Exhibit 99.1
FOR IMMEDIATE RELEASE |
CONTACT: |
JIM GALEESE |
DATE: JANUARY 16, 2019 | (513) 793-3200 |
LSI INDUSTRIES INC. ANNOUNCES THE APPOINTMENT OF MICHAEL C. BECK AS
SENIOR VICE PRESIDENT - OPERATIONS; PROMOTES SAM SARSALARI TO
VICE PRESIDENT – MANUFACTURING
CINCINNATI, January 16, 2019 (GLOBE NEWSWIRE) - - LSI Industries Inc. (NASDAQ: LYTS) today announced the appointment of Michael C. Beck as Senior Vice President - Operations, effective February 11, 2019.
Mr. Beck most recently, from 2017 to the present, has served as Vice President, North Region of Simpler Consulting (an IBM company) which he joined in 2014. He has led and managed numerous engagements for industrial clients requiring expertise in Strategy Deployment, Daily Management, Problem Solving and Organizational Transformation. He began his career as an automotive design engineer, transitioned to a Continuous Improvement specialist under W. Edwards Deming at GM Powertrain Division and subsequently led the division in manufacturing, supply chain and engineering applications of the Deming management method. He then joined Toyota Motor Manufacturing with responsibility for strategic quality, learned Lean from its inventors and applied the Toyota Production System both internally and with Toyota suppliers. He then held executive positions in Manufacturing, Lean and Operational Excellence at United Technologies, Terex and Caesars Entertainment and also consulted in a variety of industries. Mr. Beck’s scope of responsibility will include Manufacturing, Global Sourcing, Materials, Continuous Improvement, Safety and Quality. Mr. Beck holds a B.S. in Mechanical Engineering from Michigan State University, a Master of Management degree from the Kellogg School at Northwestern University, and an M.S. in Applied Statistics from Oakland University.
James A. Clark, President and Chief Executive Officer, commented, “We look forward to Mike Beck joining the LSI executive management team on February 11. His extensive experience in manufacturing leadership and his impressive background in Continuous Improvement and Toyota Production System will enhance our focus on operational excellence. We are delighted to have Mike join the team.”
In a related organizational move, Sam Sarsalari, currently plant manager of LSI’s New Windsor, New York facility, has been promoted to Vice President – Manufacturing, effective immediately. Mr. Sarsalari held increasingly significant operations leadership roles with Modine Manufacturing, ASL Holdings, and Pregis prior to joining LSI in October 2016. His core competencies include quality systems (ISO / TS), CI (Lean / TPS), Six Sigma, supply chain management and project management. Mr. Sarsalari has handled significant operations and distribution assignments across North America. He succeeds Tom Palmer who will retire from LSI on March 31, 2019. Mr. Sarsalari holds a B.S. degree in Electronics Computer Engineering and an M.S. in Industrial Engineering from the University of Rhode Island.
LSI Industries Inc. Announces New Senior Vice President - Operations
January 16, 2019
About the Company
LSI Industries Inc. is a U.S.-based designer, manufacturer and marketer of lighting, graphics and technology solutions for both indoor and outdoor applications. The Company is a leader in the primary markets it serves including petroleum, automotive, quick serve restaurants, grocery, banking, retail, renovation, parking and warehousing. Products are marketed throughout North America by a network of independent sales representatives and distributors, as well as through national accounts. LSI partners with its customers to provide a full range of design support, engineering, installation and project management services. Headquartered in Blue Ash, Ohio, LSI currently employs over 1,200 employees and operates eight facilities throughout the U.S. The Company’s common shares are traded on the NASDAQ Global Select Market under the symbol LYTS. Additional information can be found on the Investor Relations page at www.lsi-industries.com.
Forward-Looking Statements
For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, visit http://www.lsi-industries.com/fls as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors.
For further information, contact: Jim Galeese, Executive Vice President and Chief Financial Officer at (513) 793-3200.
Additional note: Today’s news release, along with past releases from LSI Industries, are available on the Company’s internet site at www.lsi-industries.com or by calling the Investor Relations Department at
(513) 793-3200.
Page 2 of 2