Exhibit 10.1
 
LSI INDUSTRIES INC.
NAMED EXECUTIVE OFFICER INCENTIVE COMPENSATION PLAN
Fiscal 2014
August 21, 2013

 
A.
The Incentive Compensation Plan for Fiscal 2014 is designed as a plan with a
structure that is driven by achievement of one Key Performance
Indicator.  Consistency of plan design, simplicity, measurability, and the
ability to communicate the plan so that each Named Executive Officer understands
how it works is considered to be very important.

 
B.
This Incentive Compensation Plan covers the Named Executive Officers as
disclosed in the Proxy Statement.

 
C.
The Fiscal 2014 Incentive Plan is a Plan that has been approved by the
Compensation Committee of the LSI Board of Directors.  This Plan provides for
bonus awards that are driven by achievement of a defined Key Performance
Indicator.  The Key Performance Indicator will reflect LSI total results
regarding achievement of Planned Operating Income.  This incentive plan is not a
discretionary plan.

A graduated scale of bonus potential (stated as a percentage of annual base
salary) is identified at the indicated levels of achievement of the incentive
plan Key Performance Indicator  --  See paragraph O on page two of this
document.

 
D.
The performance driver for calculation of the bonus shall be as follows:

     Named Executive
Officers                                                      
100%     Corporate Performance (Operating Income)

 
E.
Named Executive Officers hired after the beginning of the fourth quarter of the
fiscal year shall not participate in the incentive plan.  All Named Executive
Officers hired during the first three quarters of the fiscal year shall receive
the same bonus percentage as all other Named Executive Officers, but the total
bonus shall be calculated on the salary actually paid to the Named Executive
Officer in fiscal 2014.

 
F.
Bonus recipients must be employed in August on the day when bonus checks are
issued for the fiscal year just recently ended.  Named Executive Officers who
terminate on or before the August bonus payment date are generally not eligible
for a bonus, unless a discretionary decision is made.

 
G.
Any type of lengthy leave of absence could result in a pro-rata reduction of the
calculated bonus award.  Leaves of absence include time away from work for
reasons of short term disability, FMLA leave, military leave, or other leave of
absence.

 
H.
Named Executive Officers who retire at normal retirement age or under an LSI
approved plan of retirement will be eligible to receive a pro-rated bonus
payment based upon the actual amount of base salary received in the fiscal year.

 
 

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I.
If a Named Executive Officer becomes disabled (as defined by Social Security) or
dies during a fiscal year, the Named Executive Officer’s beneficiary will be
considered for a pro-rata bonus payment based upon the actual amount of base
salary received in the fiscal year.

 
J.
Bonus payments are subject to assignment laws or 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.

 
K.
Although LSI and the Compensation Committee of the Board of Directors currently
intend and expect to continue the incentive compensation program, they reserve
the right to amend, reduce, modify, interpret or discontinue all or part of it
at the beginning of a new fiscal year with or without reason as the Committee
deems advisable.

 
L.
The bonus should not be construed to create or imply the existence of a contract
of employment, other than with respect to the bonus for the current fiscal year.

 
M.
The Named Executive Officers’ base salary rate in effect April 30th shall be
used to calculate the bonus amount.

 
N.
Determination of achievement of LSI’s Operating Income will be calculated based
upon actual reported results.  There is to be straight line interpolation of
actual achievement as compared to plan when determining the Calculated Bonus %.

 
O.
FY 2014 Incentive Plan – Named Executive Officers   --  Bonus Potentials

% Plan
Achievement
Potential
Bonus %
100%
10%
110%
15%
120%
20%
150%
40%

The bonus potential shall be interpolated on a linear basis in between stated
levels of Plan achievement.

File:  FY 2014 Incentive Plan – Named Executive Officers

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COMPUTATIONAL EXAMPLE

As an example, consider a Named Executive Officer who was hired on October 1st
of the current fiscal year, whose annual base salary is $300,000 and whose total
bonus potential at the indicated levels of plan achievement are as follows:

%
Achievement
 
100%
10% bonus potential
110%
15% bonus potential
120%
20% bonus potential
123%
22% bonus potential (calculated on a linear basis between 120% and 140%)
150%
40% bonus potential

The following example would represent a bonus payment given 123% achievement of
Corporate operating income for this Named Executive Officer who has a base
salary of $300,000 and who worked with LSI for the last nine months of the
fiscal year (therefore salary paid was $225,000):

Bonus
   
LSI’s Operating Income (123% achievement)
$ 49,500
100% weighting  x  22% bonus  x  $225,000 salary paid

File:  FY 2014 Incentive Plan – Named Executive Officers

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