EXHIBIT 10.1
 
LSI INDUSTRIES INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
(Amended and Restated as of November 1, 2006)
PREAMBLE
            LSI Industries Inc. and each Employer hereby amend and restate the
Plan effective as of November 1, 2006 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 and April 27, 2004, and September 9,
2005.  This amendment and restatement is intended to bring the Plan document
into compliance with Section 409A of the Internal Revenue Code of 1986 and all
regulations 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
Section 401(k) plan or 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 Section 6.2, Article VII and Article VIII.
1.6       "Effective Date" shall mean the close of business on November 1, 2006
for purposes of this amendment and restatement.  The provisions of the Plan that
have been amended for compliance with Section 409A of the Code shall be
effective for deferrals made on or after January 1, 2005, unless otherwise
provided.

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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
termination of 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 November 1, 2006, and, as may be amended thereafter.
1.11     "Plan Year" shall mean the 12-consecutive month period beginning on
July 1.
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 before the first day of the Plan Year
to which such election is to apply.  In the event an Executive first becomes
eligible during the course of a Plan Year on or after January 1, 2005, rather
than on the first day of the Plan Year, 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, in the Plan Year beginning July 1, 2002, Participants
may increase their deferral election during a two week period designated by the
Committee.
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.
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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.
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.
3.2       (a)        If, by reason of the application of the compensation
limitation imposed by Section 401(a)(17) of the Code of 1986 (or any
corresponding successor provision), including any provision in the LSI
Industries Inc. Retirement Plan providing such limitation, a Participant
receives a smaller allocation of Employer contributions and/or forfeitures under
the LSI Industries Inc. Retirement Plan for any plan year of that plan than he
would have received had no such limitation been in effect, then there shall be
credited to his Deferred Compensation Account the amount determined under (b)
below.  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.
4.2       (a)        The Employer shall make an incentive allocation determined
under Paragraph 4.3 below only if the Performance Goal (defined below) is met
for the Plan Year as determined in the sole discretion of the Committee.
(b)        "Performance Goal" shall mean a Return on Beginning 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:
 
 
Return on Average Shareholders' Equity
 
At least Performance Goal
but less than Performance
Goal plus 0.5%
At least Performance Goal plus 0.5% but less than Performance Goal plus 1.0%
Performance Goal
plus 1.0% or more
Corporate Officers
and Top Executives
20%
25%
30%
All Other Employees
10%
12.5%
15%

 
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           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.  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 VI.  CREDITING OF EARNINGS
6.1       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.
6.2       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.
6.3       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.
6.4       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.
6.5       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.
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ARTICLE VII.  PLAN BENEFITS
7.1       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.
7.2       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
termination of service with all Employers:
(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 Section 7.2(b).  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, all
elections regarding 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 of the election is made.
(2)        For all elections for payments other than because of disability,
death or an unforeseeable emergency, 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).
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(c)        If a Participant has no election concerning the form of benefit
payment under this Paragraph 7.2 in effect at the time the Participant
terminates service with all Employers, 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 “key employee” as defined in Section
409A of the Code, a distribution may not be made before the date which is 6
months after the date of termination of service of such Participant (or if
earlier, the date of death of the Participant).  The determination of “key
employee” shall include a Participant who is a “key employee” at any time during
the 12-month period ending on June 30 of each year.  This limitation on
distributions shall only be applicable if Employer’s stock is publicly traded on
an established securities market or otherwise.
7.3       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.
7.4       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 or a
dependant of the Participant, 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.  An unforeseeable
emergency shall also include the death 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 received (1) through reimbursement or compensation by insurance or
otherwise or (2) by cessation of deferrals under the Plan.
 
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ARTICLE VIII.  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 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.  The Beneficiary shall be eligible to request a Hardship Withdrawal
pursuant to Paragraph 7.4, or otherwise shall be able to request a change to a
final single lump sum withdrawal provided that a written request is made 12
months in advance of such withdrawal. 
ARTICLE IX.  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 X.  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 <?xml:namespace
prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />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 XI.  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 XII.  MISCELLANEOUS
12.1     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.
12.2     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  25thday of   October  , 2006.
LSI INDUSTRIES INC.
By:    /s/  Ronald S. Stowell