ex102111909.htm


    Exhibit 10.2

     

    
 

    LSI INDUSTRIES
INC.

    NONQUALIFIED DEFERRED
COMPENSATION PLAN

    
      	
               
      

            	
              (Amended
      and Restated as of November 19,
2009)

            


    

     

    
      	
               
      

            	
              PREAMBLE

            


    

     

    LSI Industries Inc. and each Employer
hereby amend and restate the Plan effective as of November 19, 2009 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, April 27, 2004, September 9, 2005, November 1, 2006 and December 31,
2008.  This amendment and restatement is intended to bring the Plan
document into compliance with Section 409A of the Internal Revenue Code of 1986
and the final regulations issued 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 Code
      Section 401(k) plan or Code 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 Paragraph 6.2, Article VII and Article
      VIII.

            


    

     

    
      	
              1.6

            	
              “Effective Date”
      shall mean December 31, 2008 for purposes of this amendment and
      restatement.  The provisions of the Plan that have been amended
      for compliance with Code Section 409A shall be effective for deferrals
      made on or after January 1, 2005, unless otherwise
    provided.

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              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 Separation
      from 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 December 31,
      2008, and, as may be amended
thereafter.

            


    

     

    
      	
              1.11

            	
              “Plan Year”
      shall mean the 12-consecutive month period beginning on July
      1.

            


    

     

    
      	
              1.12

            	
              “Separation from
      Service” shall mean a “separation from service” within the meaning
      of Code Section 409A and the rules and regulations promulgated
      thereunder.

            


    

     

    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 no later than
      the end of the calendar year preceding the first day of the Plan Year to
      which such election is to apply.  In the event an Executive
      first becomes eligible to participate in the Plan on or after January 1,
      2005, 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, (1) in the Plan Year beginning July 1, 2002,
      Participants may increase their deferral election during a two week period
      designated by the Committee, and (2) for periods on or after January 1,
      2005, in the event of an unforeseeable emergency (as defined in Paragraph
      7.4),
      a Participant’s deferral election shall be terminated for the remainder of
      the respective Plan Year.

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
    

     

    
      	
              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.

            


    

     

    
      	
              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, provided the Executive performs services
      continuously from the later of the beginning of the performance period or
      the date the performance criteria are established through the date an
      election is made under this Paragraph 2.5, and provided further that in no
      event may an election to defer Compensation from a performance-based bonus
      payment be made after such Compensation has become readily
      ascertainable.

            


    

     

    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
      Code Section 401(a)(17) (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 Average 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%

            


    

    


     

    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.

    ADDITIONAL LSI
ALLOCATIONS

     

    The
Employer may make additional discretionary allocations to certain
Participants.  Such additional discretionary allocations must be
approved by the Committee and shall be credited to the Participants’ Deferred
Compensation Accounts at such time as the Committee shall
determine.


     

    ARTICLE
VI.

    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
VII.

    CREDITING OF
EARNINGS

     

    
      	
              7.1

            	
              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.

            


    

     

    
      	
              7.2

            	
              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.

            


    

     

    
      	
              7.3

            	
              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.

            


    

     

    
      	
              7.4

            	
              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.

            


    

     

    
      	
              7.5

            	
              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.

            


    

     

    ARTICLE
VIII.

    PLAN
BENEFITS

     

    
      	
              8.1

            	
              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.

            


    

     

    
      	
              8.2

            	
              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
      Separation from
      Service but in all events within 90 days following the date of such
      Separation from Service:

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (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 Paragraph 8.2b).  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, subsequent elections to change 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 the
      election is made.

            


    

     

    
      	
               
      

            	
              (2)

            	
              For
      all elections for payments other than because of death or an unforeseeable
      emergency (as such term is defined in Paragraph 7.4), 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).

            


    

     

    Notwithstanding
the preceding sentence, effective for deferrals made on or after January 1,
2005, a Participant shall be permitted to make a subsequent election to change
the form of payment during 2008, provided such election is made on or before
December 31, 2008, and provided further that such election may apply only to
amounts that would not otherwise be payable in 2008 and may not cause an amount
to be paid in 2008 that would not otherwise be payable in 2008.

     

    
      	
               
      

            	
              (c)

            	
              If
      a Participant has no election concerning the form of benefit payment under
      this Paragraph 7.2 in effect at the time of the Participant’s Separation
      from Service, 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 “specified employee” as defined in Code Section 409A
      and the rules and regulations promulgated thereunder, a distribution may
      not be made before the date which is 6 months after the date of the
      Participant’s Separation from Service (or if earlier, the date of death of
      the Participant).

            


    

     

    
      	
              8.3

            	
              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.

            


    

     

    
      	
              8.4

            	
              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, the
      Participant’s spouse, the Participant’s Beneficiary, or the Participant’s
      dependent (as defined in Code Section 152, without regard to Code Section
      152(b)(1), (b)(2) and (d)(1)(B)), 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.  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
      relieved (1) through reimbursement or compensation by insurance or
      otherwise (2) liquidation of the Participant’s assets (to the extent the
      liquidation of such assets would not cause severe financial hardship, or
      (3) by cessation of deferrals under the Plan.  In the event of
      an unforeseeable emergency (regardless of whether a hardship distribution
      is made), a Participant’s deferral election under Paragraph 2.1 shall
      terminate and no further deferrals shall be made for such Participant for
      the remainder of the Plan Year.

            


    

     

    ARTICLE
IX.

    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
following the date of the Participant’s death but in all events within 90 days
following such date 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.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    ARTICLE
X.

    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
XI.

    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 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
XII.

    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
XIII.

    MISCELLANEOUS

     

    
      	
              13.1

            	
              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.

            


    

     

    
      	
              13.2

            	
              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 19th day of November,
2009.

     

    
      
        	 	
                LSI INDUSTRIES
      INC.

                 

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	 /s/Ronald
      S. Stowell	 
	 	 	 Ronald S. Stowell	 
	 	 	 Vice President, Chief Financial Officer
      and Treasurer