Exhibit 10.1 - 9/30/2006


    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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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).

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    


    (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