Document:

ex101031408.htm

    
      Exhibit 10.1

      AMENDMENT
TO CREDIT AGREEMENT

       

      LSI INDUSTRIES INC.,
an Ohio corporation (the "Borrower"),
the financial institutions listed on the signature pages hereto (individually a
"Lender"
and collectively the "Lenders"),
and PNC BANK, NATIONAL ASSOCIATION as the administrative agent and the
syndication agent (in such capacity the "Administrative
Agent" or “Agent”) hereby agree as follows:

       

      1.        
Recitals .

       

      1.1       On
March 30, 2001, Agent, Borrower and Lenders entered into a Credit Agreement (as
previously amended, the "Credit Agreement").  Capitalized terms used herein
and not otherwise defined will have the meanings given such terms in the Credit
Agreement.

       

      1.2       Borrower,
Agent and Lenders desire to amend the Credit Agreement pursuant to this
Amendment to Credit Agreement (the "Amendment").

       

      2.        
Amendments .

       

      2.1       Section
1.1of the Credit Agreement is amended to change the definition of Revolving
Credit Termination date to provide as follows:        

       

      Revolving
Credit Termination Date:  March 31, 2011 as to the Three Year Notes
and the Swingline Note and March 18, 2009 as to the 364 Day
Notes.

       

      3.        
Representations and Warranties .  To induce
Lenders and Agent to enter into this Amendment, Borrower represents and warrants
as follows:

       

      3.1      
The representations and warranties of Borrower contained in the Credit
Agreement are deemed to have been made again on and as of the date of execution
of this Amendment.

       

      3.2      
No Event of Default (as such term is defined in the Credit Agreement) or
event or condition which with the lapse of time or giving of notice or both
would constitute an Event of Default exists on the date hereof.

       

      3.3      
The person executing this Amendment and the loan documents to be executed
in connection herewith is a duly elected and acting officer of Borrower and is
duly authorized by the Board of Directors of Borrower to execute and deliver
such documents on behalf of Borrower.

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      4.         Genral.

       

      4.1      
Except as expressly modified herein, the Credit Agreement, as amended, is
and remains in full force and effect.

       

      4.2      
Nothing contained herein will be construed as waiving any default or
Event of Default under the Credit Agreement or will affect or impair any right,
power or remedy of Lenders or Agent under or with respect to the Credit
Agreement, as or any agreement or instrument guaranteeing, securing or otherwise
relating to any of the Credit Agreement.

       

      4.3      
This Amendment will be binding upon and inure to the benefit of Borrower,
Agent and Lenders and their respective successors and assigns.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.4      
All representations, warranties and covenants made by Borrower herein
will survive the execution and delivery of this Amendment.

       

      4.5      
This Amendment will in all respects be governed and construed in
accordance with the laws of the State of Ohio.

       

      Executed as of March 14,
2008.

       

      LSI
INDUSTRIES INC.

       

      By: /s/Ronald
S. Stowell              

                              Name:
Ronald S. Stowell

                              Title:
Vice President, Chief Financial Officer and Treasurer

       

       

       

      PNC
BANK, NATIONAL ASSOCIATION,

      in its capacity as the
Administrative Agent and

      the Syndication Agent
hereunder

      By: /s/Gregory
S. Buchanan            

      Name: Gregory S.
Buchanan

      Title: Vice
President

       

      PNC
BANK, NATIONAL ASSOCIATION,

      in its capacity as a
Lender

       

      By: /s/Gregory
S. Buchanan            

      Name: Gregory S.
Buchanan

      Title: Vice
President

      THE
FIFTH THIRD BANK, in its capacity as a Lender

      By: /s/
Christopher R. Ramos                          
 

      Name:  Christopher R.
Ramos

      Title: Vice
Presidentexv10w40

 

Exhibit 10.40

Description of Non-Employee Director Compensation

As Amended on December 20, 2007

Retainers

     Each of our non-employee directors receives an annual retainer of $25,000 for his service as a
director. The Lead Independent Director receives an additional annual retainer of $15,000, the
Chairman of the Audit Committee receives an additional annual retainer of $12,500, the Chairman of
the Compensation Committee receives an additional annual retainer of $7,500, the Chairman of the
Nominating and Corporate Governance Committee receives an additional annual retainer of $7,500 and
each member of the Audit Committee receives an additional annual retainer of $2,500.

     The additional annual retainers are cumulative for any director who serves in multiple
capacities for which such director is entitled to more than one additional annual retainer (for
example, because the Lead Independent Director also serves as Chairman of the Nominating and
Corporate Governance Committee and currently is a member of the Audit Committee, he is entitled to
receive an aggregate annual retainer of $50,000, equal to the base annual retainer of $25,000 plus
an aggregate additional annual retainer of $25,000).

     All annual retainers are paid quarterly in arrears. For the quarters ended September 30, 2006
and December 31, 2006, the year ended December 31, 2007 and the year ending December 31, 2008, all
of our non-employee directors have elected to receive 100% of their retainers in the form of
deferred stock units (DSUs) rather than cash, pursuant to our Non-Employee Director DSU Program
described below.

Meeting Fees

     Each non-employee director also receives $1,000 for each in person meeting of our Board of
Directors or any committee thereof in which he participates and an additional payment of $500 for
each telephonic meeting of our Board of Directors or any committee thereof in which he
participates. The meeting fees apply to meetings of the Board, the Board’s three standing
committees (i.e., Audit Committee, Compensation Committee and Nominating and Corporate Governance
Committee) and any special committees established by the Board. For the quarters ended September
30, 2006 and December 31, 2006, the year ended December 31, 2007 and the year ending December 31,
2008, all of our non-employee directors have elected to receive 100% of their meeting fees in the
form of DSUs rather than cash, pursuant to our Non-Employee Director DSU Program described below.

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Non-Employee Director DSU Program

     On May 18, 2006, our Board of Directors adopted a Non-Employee Director DSU Program. The
purposes of the Program are to: (i) enable us to conserve cash that otherwise would be used to pay
retainers and meeting fees to our non-employee directors; and (ii) enable non-employee directors to
obtain equity on a tax-deferred basis. In addition, the Non-Employee Director DSU Program further
aligns participants’ interests with those of our stockholders.

     Elections to participate in the Program are made on an annual basis. A participating director
receives a percentage (minimum of 25% and maximum of 100%) of the director’s retainers and meeting
fees for the relevant year in the form of DSUs. Participating directors will select the percentage
at the time of electing to participate in the Program for the relevant year. For 2006, the
election deadline was June 17, 2006. Elections made for 2006 applied to retainers and meeting fees
earned in the final two quarters of 2006. The election deadline applicable to 2007 and subsequent
years is December 31 of the immediately preceding year.

     Each DSU represents the right to receive one share of our common stock in the future on the
DSU “payout date,” as described below.

     On the fifth trading day of each calendar quarter, each participating director is granted
fully vested DSUs equal in value to the amount of retainers and meeting fees earned for the
immediately preceding quarter, based on the closing stock price on the date of grant.

     Ultimately, each director’s DSUs will be “paid out” to the director through the issuance to
the director of a corresponding number of shares of our common stock. At the time of making an
annual election to participate in the Program, the director selects as the “payout date” one of the
following three options: (i) a predetermined date at least two years after the applicable election
deadline (the date would be specified by the director in the director’s election form); (ii) the
termination of the director’s service; or (iii) the earlier of (i) or (ii); provided, however, that
if the termination of the director’s service occurs earlier than two years after the applicable
election deadline, then any issuance of shares that would otherwise be triggered by such
termination will be deferred until the date that is two years after the applicable election
deadline. In any event, the “payout date” would be accelerated in the case of a change of control
of the company or the director’s death. The director may elect to have a portion (up to 50%) of
his DSUs settled in cash (rather than stock) to enable the director to pay taxes resulting from the
share issuance.

     For the quarters ended September 30, 2006 and December 31, 2006, the year ended December 31,
2007 and the year ending December 31, 2008, all of our non-employee directors have elected to
receive 100% of their retainers and meeting fees in the form of DSUs rather than cash.

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     A copy of the Non-Employee Director DSU Program is attached as Exhibit 10.2 to the Current
Report on Form 8-K that we filed with the SEC on May 22, 2006.

     In order to satisfy certain regulatory requirements in preparation for the planned listing of
our common stock on The NASDAQ Capital Market, on August 6, 2007 we amended the Non-Employee
Director DSU Program to impose a maximum 10-year term for the program (from the original adoption
date, which was May 18, 2006) and establish a maximum number of shares that may be issued under the
program, which is 400,000 shares.

Non-Employee Director RSU Program

     On December 20, 2007, the Board, at the recommendation of the Compensation Committee, adopted
a Non-Employee Director Restricted Stock Unit Program (the “Director RSU Program”) under our 2004
Stock Incentive Plan to replace the prior Non-Employee Director Option Program, which the Board
terminated. The Director RSU Program is subject to the terms and conditions of the 2004 Stock
Incentive Plan. Under the Director RSU Program, each non-employee director initially elected or
initially appointed to the Board after the effective date of the Director RSU Program will be
granted $60,000 worth of RSUs on the first trading day after he or she joins the Board. In
addition, each non-employee director who is reelected to the Board receives a grant of $40,000
worth of RSUs on the date of each annual meeting of stockholders at which he or she is reelected.
No reelection grant is made to any director who has not served on the Board for at least six months
prior to the reelection. To address the fact that there is a period of time between the Company’s
prior annual director equity grant date of January 10 and the date of the 2008 Annual Meeting, on
January 10, 2008 each non-employee director was granted $13,333 worth of RSUs. All RSUs granted
under the Director RSU Program are valued based on the closing price of our common stock on the
grant date. A copy of the Director RSU Program is attached as Exhibit 10.41 to our annual report
on Form 10-K for the year ended December 31, 2007.

Expense Reimbursement

     Directors are reimbursed for reasonable expenses incurred in connection with serving as
directors.

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