Document:

ex101111909.htm

    Exhibit 10.1

    
 

    

     

    

     

    LSI
INDUSTRIES INC.

     

    2003
EQUITY COMPENSATION PLAN

     

    As
Amended and Restated Through November 19, 2009

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            

            

            Table of
Contents

            

            Page           

            

          

        

      

    

     

    

      
        	
                Article
      1  OBJECTIVES

              	1
	
                Article
      2  DEFINITIONS

              	1
	
                Article
      3  ADMINISTRATION

              	3
	 
      	
                3.1

              	
                The
      Committee

              	
                3

              
	 
      	
                3.2

              	
                Awards

              	
                4

              
	 
      	
                3.3

              	
                Guidelines

              	
                4

              
	 
      	
                3.4

              	
                Delegation
      of Authority

              	
                4

              
	 
      	
                3.5

              	
                Decisions
      Final

              	
                4

              
	
                Article
      4  COMMON
      SHARES SUBJECT TO PLAN

              	5
	 
      	
                4.1

              	
                Common
      Shares

              	
                5

              
	 
      	
                4.2

              	
                Adjustment
      Provisions.

              	
                5

              
	 
      	
                4.3

              	
                Merger,
      Dissolution or Liquidation

              	
                5

              
	 
      	
                4.4

              	
                Change
      of Control

              	
                5

              
	
                Article
      5  DURATION OF
      PLAN

              	6
	
                Article
      6  STOCK
      OPTIONS

              	6
	 
      	
                6.1

              	
                Grants

              	
                6

              
	 
      	
                6.2

              	
                Incentive
      Options

              	
                6

              
	 
      	
                6.3

              	
                Replacement
      Options

              	
                7

              
	 
      	
                6.4

              	
                Terms
      of Options

              	
                7

              
	 
      	
                6.5

              	
                Award
      of Options to Non-Employee Directors.

              	
                8

              
	
                Article
      7  STOCK
      APPRECIATION RIGHTS

              	9
	 
      	
                7.1

              	
                Grants

              	
                9

              
	 
      	
                7.2

              	
                Term

              	
                9

              
	 
      	
                7.3

              	
                Exercise

              	
                9

              
	 
      	
                7.4

              	
                Payment

              	
                9

              
	 
      	
                7.5

              	
                Transferability
      and Termination

              	
                9

              
	
                Article
      8   RESTRICTED AND UNRESTRICTED
      STOCK AWARDS

              	9
	 
      	
                8.1

              	
                Grants
      of Restricted Stock Awards

              	
                9

              
	 
      	
                8.2

              	
                Terms
      and Conditions of Restricted Awards

              	
                10

              
	 
      	
                8.3

              	
                Unrestricted
      Stock Awards

              	
                10

              
	
                Article
      9  PERFORMANCE
      AWARDS

              	
                10

              
	 
      	
                9.1

              	
                Performance
      Awards.

              	
                10

              
	 
      	
                9.2

              	
                Terms
      and Conditions of Performance Awards

              	
                11

              

         

         

         

        
          

          
            
              
                 

              

              
                 

                
                  

                

              

              
                 

                
                  

                  

                  Table of
Contents

                  

                  Page             

                  

                

              

            

          

        

         

         

        	
                Article
      10  OTHER STOCK
      UNIT AWARDS

              	11
	
                Article
      11  TRANSFERABILITY OF
      AWARDS

              	12
	
                Article
      12  TERMINATION
      OF AWARDS

              	12
	 
      	
                12.1

              	
                Termination
      of Awards

              	
                12

              
	 
      	
                12.2

              	
                Acceleration
      of Vesting and Extension of Exercise Period Upon
    Termination.

              	
                13

              
	
                Article
      13  DEFERRALS

              	14
	
                Article
      14  TERMINATION
      OR AMENDMENT OF PLAN

              	14
	
                Article
      15  GENERAL
      PROVISIONS

              	14
	 
      	
                15.1

              	
                No
      Right to Continued Employment or Business Relationship

              	
                14

              
	 
      	
                15.2

              	
                Other
      Plans

              	
                14

              
	 
      	
                15.3

              	
                Withholding
      of Taxes

              	
                14

              
	 
      	
                15.4

              	
                Reimbursement
      of Taxes

              	
                14

              
	 
      	
                15.5

              	
                Governing
      Law

              	
                15

              
	 
      	
                15.6

              	
                Liability

              	
                15

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

LSI
INDUSTRIES INC.

     

    2003
EQUITY COMPENSATION PLAN

     

    As
Amended and Restated November 19, 2009

     

    ARTICLE
1

    OBJECTIVES

     

    LSI
Industries Inc. has established this 2003 Equity Compensation Plan effective
November 13, 2003.  This Plan was Amended and Restated as of November
19, 2009 to reflect  a change in the number of Shares authorized to be
issued hereunder. The purposes of this Plan are to enable LSI and its
Subsidiaries to compete successfully in retaining and attracting key employees,
directors and advisors of outstanding ability, to stimulate the efforts of such
persons toward LSI’s objectives and to encourage the identification of their
interests with those of LSI’s shareholders.

     

    ARTICLE
2

    DEFINITIONS

     

    For
purposes of this Plan, the following terms shall have the following
meanings:

     

    2.1           “Advisor”
means anyone who provides bona fide advisory or consultation services to LSI
other than the offer or sale of securities in a capital-raising
transaction.

     

    2.2           “Award”
means any one or more of the following:  (a) Stock Options, (b) Stock
Appreciation Rights, in tandem with Stock Options or free-standing; (c)
Restricted Stock; (d) performance Shares conditioned upon meeting performance
criteria; and (e) other awards based in whole or in part by reference to or
otherwise based on LSI Common Shares, or other securities of LSI or any
Subsidiary.

     

    2.3           “Award
Agreement” means a written agreement setting forth the terms of an
Award.

     

    2.4           “Award
Date” or “Grant Date” means the date designated by the Committee as the date
upon which an Award is granted.

     

    2.5           “Award
Period” or “Term” means the period beginning on an Award Date and ending on the
expiration date of such Award.

     

    2.6           “Board”
means the Board of Directors of LSI.

     

    2.7           “Code”
means the Internal Revenue Code of 1986, as amended, or any successor
legislation.

     

    2.8           “Committee”
means the committee appointed by the Board and consisting of one or more
Directors, none of whom shall be eligible to receive any Award except as
provided in Subsection
6.5.  Members of the Committee must qualify as Non-Employee Directors
as defined by Rule 16b-3(b)(3)(i).  To the extent that it is desired
that compensation resulting from an Award be excluded from the deduction
limitation of Section 162(m) of the Code, all members of the Committee granting
an Award also shall be “outside directors” within the meaning of Section
162(m).

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    2.9           
“Disability” means a “permanent and total disability” within the meaning of
Section 22(e)(3) of the Code.

     

    2.10           “Eligible
Employee” means anyone, other than one who receives retirement benefits,
consulting fees, honorariums, and the like from LSI who performs services for
LSI or a Subsidiary, including an officer or director of LSI or a Subsidiary;
and is compensated on a regular basis by LSI or a Subsidiary. 

     

    2.11           “Fair
Market Value” means the last closing price for a Common Share on the Nasdaq or
any stock exchange or national trading or quotation system on which such sales
are reported.  If the Common Shares are not so traded or reported,
Fair Market Value shall be set under procedures established by the
Committee.

     

    2.12           “Incentive
Option” means any Stock Option intended to be and designated as an “Incentive
Stock Option” within the meaning of Section 422 of the Code or any successor
provision.

     

    2.13           “Non-Employee
Director” means each director of LSI or its subsidiaries, now serving as a
director or elected hereafter, who is not also an employee of LSI or any of its
subsidiaries.

     

    2.14           “Non-Tandem
SAR” means a Stock Appreciation Right granted without reference to a Stock
Option.

     

    2.15           “Non-Qualified
Option” means any Stock Option that is not an Incentive Stock
Option.

     

    2.16           “Officer”
means a person who is considered to be an officer of LSI under Rule
16a-1(f).

     

    2.17           “Other
Stock Unit Awards” shall have the meaning set forth in Section 10.1
hereof.

     

    2.18           
“Reference Option” shall have the meaning set forth in Section
7.1 hereof.

     

    2.19           “Option
Price” or “Exercise Price” means the price per Common Share at which a Common
Share may be purchased upon the exercise of an Option or an Award.

     

    2.20           “Participant”
means a person to whom an Award has been made pursuant to this
Plan.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    2.21           “Replacement
Option” means a Non-Qualified Option granted pursuant to Subsection 6.3, upon
the exercise of a Stock Option granted pursuant to this Plan where the Option
Price is paid with previously owned Common Shares.

     

    2.22           “Restricted
Stock” means Common Shares issued pursuant to a Restricted Stock Award which are
subject to the restrictions set forth in the related Award
Agreement.

     

    2.23           “Restricted
Stock Award” means an award of a fixed number of Common Shares to a Participant
which is subject to forfeiture provisions and other conditions set forth in the
Award Agreement.

     

    2.24           “Retirement”
means termination of employment or service on the Board, other than a
termination for the reasons specified in Sections 12.13 or 12.14, and other than
by death or Disability by an employee or a director who is at least 65 years of
age, or 55 years of age with at least ten years of employment with, or service
on the Board of, LSI or a Subsidiary.

     

    2.25           “Rule
16b-3” and “Rule 16a-1(f)” mean Securities and Exchange Commission Regulations
Sect. 240.16b-3 and Sect. 240.16a-1(f) or any corresponding successor
regulations.

     

    2.26           
“Stock Appreciation Right” or “SAR” means the right to receive, for each unit of
the SAR, cash and/or Common Shares equal in value to the excess of the Fair
Market Value of one Common Share on the date of exercise of the SAR over the
reference price per Common Share established on the date the SAR was
granted.

     

    2.27           “Stock
Option” or “Option” means the right to purchase Common Shares, including a
Replacement Option, granted pursuant to Article 6.

     

    2.28           “Subsidiary”
means any corporation, partnership, joint venture, or other entity of which LSI
owns or controls, directly or indirectly, 25% or more of the outstanding voting
stock, or comparable equity participation and voting power, or which LSI
otherwise controls, by contract or any other means.  However, when the
term “Subsidiary” is used in the context of an Award of an Incentive Option, the
applicable percentage shall be 50%.  “Control” means the power to
direct or cause the direction of the management and policies of a corporation or
other entity.

     

    2.29           “Tandem
SAR” shall mean a Stock Appreciation Right granted with reference to a Stock
Option.

     

    2.30           “Transfer”
means alienation, attachment, sale, assignment, pledge, encumbrance, charge or
other disposition; and the terms “Transferred” or “Transferable” have
corresponding meanings.

     

    ARTICLE
3

    ADMINISTRATION

     

    3.1           The
Committee.  This Plan shall be administered and interpreted by
the Committee.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    3.2           Awards.  The
Committee is authorized to grant (i) Stock Options; (ii) Stock Appreciation
Rights, in tandem with Stock Options or free-standing; (iii) Restricted Stock;
(iv) performance Shares conditioned upon meeting performance criteria; and (v)
other awards based in whole or in part by reference to or otherwise based on LSI
Common Shares, or other securities of LSI or any Subsidiaries (collectively, the
“Awards”).  In particular, the Committee shall has the
authority:

     

    3.2.1           to
select the Eligible Employees and Advisors to whom Awards may be
granted;

     

    3.2.2           to
determine the types and combinations of Awards to be granted;

     

    3.2.3           to
determine the number of Common Shares or monetary units which may be subject to
each Award;

     

    3.2.4           to
determine the terms and conditions, not inconsistent with the terms of this
Plan, of any Award, including, but not limited to, the term, price,
exercisability, method of exercise, any restriction or limitation on transfer,
any vesting schedule or acceleration, or any forfeiture provisions or waiver,
regarding any Award, and the related Common Shares, based on such factors as the
Committee shall determine; and

     

    3.2.5           to
modify or waive any restrictions or limitations contained in, and grant
extensions to the terms of or accelerate the vestings of, any outstanding Award,
other than Performance Awards, as long as such modifications, waivers,
extensions or accelerations are not inconsistent with the terms of this Plan,
but no such changes shall impair the rights of any Participant without his or
her consent.

     

    3.3           Guidelines.  The
Committee is authorized to adopt, alter and repeal administrative rules,
guidelines and practices governing this Plan and perform all acts, including the
delegation of its administrative responsibilities, as it deems advisable; to
construe and interpret the terms and provisions of this Plan and any Award
issued under this Plan; and to otherwise supervise the administration of this
Plan.  The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Plan or in any related Award Agreement in
the manner and to the extent it deems necessary to carry this Plan into
effect.

     

    3.4           Delegation of
Authority.  The Committee may delegate its authority to
Officers of LSI and its administrative duties to Officers or employees of LSI
except with respect to persons who are Senior Officers of LSI as defined by the
Committee and except where performance goals for particular compensation grants
are intended to be excluded from the deduction limitation imposed by Section
162(m) of the Code.

     

    3.5           Decisions
Final.  Any action, decision, interpretation or determination
by or at the direction of the Committee concerning the application or
administration of this Plan shall be final and binding upon all persons and need
not be uniform with respect to its determination of recipients, amount, timing,
form, terms or provisions.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    ARTICLE
4

    COMMON
SHARES SUBJECT TO PLAN

     

    4.1           Common
Shares.  Subject to adjustment as provided in Subsection 4.2,
the number of Common Shares which may be issued under this Plan shall not exceed
two million eight hundred thousand (2,800,000) Common Shares.  If any
Award granted under this Plan shall expire, terminate or be canceled for any
reason without having been exercised in full, the number of unacquired Common
Shares subject to such Award shall again be available for future
grants.  The Committee may make such other determinations regarding
the counting of Common Shares issued pursuant to this Plan as it deems necessary
or advisable, provided that such determinations shall be permitted by
law.  Common Shares underlying a canceled Option shall be counted
against the maximum number of Common Shares for which Options may be granted to
an employee.  The repricing of an Option shall be treated as a
cancellation of the Option and the grant of a new Option.

     

    4.2           Adjustment
Provisions.

     

    4.2.1           If
LSI shall at any time change the number of issued Common Shares without new
consideration to LSI by stock dividend, split, combination, recapitalization,
reorganization, exchange of Common Shares, liquidation or other change in
corporate structure affecting the Common Shares or make a distribution of cash
or property which has a substantial impact on the value of issued Common Shares,
the total number of Common Shares reserved for issuance under the Plan shall be
appropriately adjusted and the number of Common Shares covered by each
outstanding Award and the reference price or Fair Market Value for each
outstanding Award shall be adjusted so that the aggregate consideration payable
to LSI and the value of each such Award shall not be changed.

     

    4.2.2           The
Committee may authorize the issuance, continuation or assumption of Awards or
provide for other equitable adjustments after changes in the Common Shares
resulting from any merger, consolidation, sale of assets, acquisition of
property or stock, recapitalization, reorganization or similar occurrence in
which LSI is the continuing or surviving corporation, upon such terms and
conditions as it may deem equitable and appropriate.

     

    4.3           Merger, Dissolution or
Liquidation.  In the event of the dissolution or liquidation of
LSI or any merger, consolidation, exchange or other transaction in which LSI is
not the surviving corporation or in which 75% or more of the outstanding Common
Shares of LSI are converted into cash, other securities or other property, each
outstanding Award shall terminate as of a date fixed by the Committee provided
that not less than 20 days’ written notice of the date of expiration shall be
given to each holder of an Award and each outstanding Award shall be fully
vested and each such holder shall have the right during such period following
notice to exercise the Award as to all or any part of the Common Shares for
which it is exercisable.

     

    4.4           Change of
Control.  All outstanding Awards shall become immediately
exercisable in full if a change in control of LSI occurs.  For
purposes of this Agreement, a “change in control of LSI” shall be deemed to have
occurred if (a) any “person,” as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, other than a trustee or other fiduciary
holding securities under an employee benefit plan of LSI becomes the “beneficial
owner,” as defined in Rule 13d-3 under that Act, directly or indirectly,

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    of
securities of LSI representing 25% or more of the combined voting power of LSI’s
then outstanding securities; or (b) during any period of one year (not including
any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board of Directors and any new director
whose election by the Board or nomination for election by LSI’s shareholders was
approved by a vote of at least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof.

     

    ARTICLE
5

    DURATION OF
PLAN

     

    This Plan
shall continue in effect until November 12, 2013, unless terminated sooner by
the Board pursuant to Article 15.

     

    ARTICLE
6

    STOCK
OPTIONS

     

    6.1           Grants.  Stock
Options may be granted alone or in addition to other Awards granted under this
Plan.  Each Option granted shall be designated as either a
Non-Qualified Option or an Incentive Option and in each case such Option may or
may not include Stock Appreciation Rights.  One or more Stock Options
and/or Stock Appreciation Rights may be granted to any Eligible Employee or
Advisor, except that no person shall receive during any 12 month period
Non-Qualified Stock Options and Stock Appreciation Rights covering more than
75,000 Common Shares and except that only Non-Qualified Options may be granted
to Advisors.

     

    6.2           Incentive
Options.  Any option designated by the Committee as an
Incentive Stock Option will be subject to the general provisions applicable to
all Options granted under the Plan plus the following specific
provisions:

     

    6.2.1           If
an Incentive Stock Option is granted to a person who owns, directly or
indirectly, stock representing more than 10% of (i) the total combined voting
power of all classes of stock of LSI and its Subsidiaries, or (ii) a corporation
that owns 50% or more of the total combined voting power of all classes of stock
of LSI, then

     

    6.2.1.1                      the
Option Price must equal at least 110% of the Fair Market Value on the date of
grant; and

     

    6.2.1.2                      the
term of the Option shall not be greater than five years from the date of
grant.

     

    6.2.2           The
aggregate Fair Market Value of Common Shares, determined at the date of grant,
with respect to which Incentive Stock Options that may be exercised for the
first time by any individual during any calendar year under this Plan or any
other plan maintained by LSI and its Subsidiaries shall not exceed
$100,000.  To the extent that the aggregate fair market value of
Common Shares with respect to which Incentive Options are exercisable for the
first time by
any individual during any calendar year, under all plans of LSI and its
Subsidiaries, exceeds $100,000, such Options shall be treated as Nonqualified
Options.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    6.2.3           Qualification under the
Code.  Notwithstanding anything in this Plan to the contrary,
no term of this Plan relating to Incentive Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code, or,
without the consent of the Participants affected, to disqualify any Incentive
Option under Section 422 of the Code.

     

    6.3           Replacement
Options.  The Committee may provide either at the time of grant
or subsequently that an Option shall include the right to acquire a Replacement
Option upon the exercise of such Option, in whole or in part, prior to an
Eligible Employee’s termination of employment if the payment of the Option Price
is paid in Common Shares.  In addition to any other terms and
conditions the Committee deems appropriate, the Replacement Option shall be
subject to the following terms:

     

    6.3.1           the
number of Common Shares subject to the Replacement Option shall not exceed the
number of whole Common Shares used to satisfy the Option Price of the original
Option and the number of whole Common Shares, if any, withheld by LSI as payment
for withholding taxes in accordance with Subsection 15.3;

     

    6.3.2           the
Replacement Option Grant Date will be the date of the exercise of the original
Option;

     

    6.3.3           the
Option Price per share shall be the Fair Market Value of a Common Share on the
Replacement Option Grant Date;

     

    6.3.4           the
Replacement Option shall be exercisable no earlier than one year after the
Replacement Option Grant Date; and

     

    6.3.5           the
Term of the Replacement Option will not extend beyond the Term of the original
Option.

     

    The
Committee may, without the consent of the Eligible Employee, rescind the right
to receive a Replacement Option at any time prior to an Option being
exercised.

     

    6.4           Terms of
Options.  Except as otherwise required by Subsections 6.2, 6.3
or 6.5, Options granted under this Plan shall be subject to the following terms
and conditions and shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem desirable:

     

    6.4.1           Option
Price.  The Option Price shall be determined by the Committee
at the time of grant, except that no Incentive Option may be granted for an
Option Price less than 100% of Fair Market Value on the Grant Date.

     

    6.4.2           Option
Term.  The Option Term shall be fixed by the Committee, but no
Incentive Option shall be exercisable more than ten years after its Award Date,
and no Non-Qualified Option shall be exercisable more than ten years after its
Award Date.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    6.4.3           Exercisability.  A
Stock Option shall be exercisable at such time or times and subject to such
terms and conditions as shall be specified in the Award Agreement, provided,
however, that an Option may not be exercised in an amount less than One Hundred
Common Shares at any one time, unless the total number available for exercise at
that time is less than One Hundred Common Shares.

     

    6.4.4           Method of
Exercise.  Stock Options may be exercised in whole or in part
at any time during the Option Term by giving written notice of exercise to LSI
specifying the number of Common Shares to be purchased.  Such notice
shall be accompanied by payment in full of the Option Price in cash unless some
other form of consideration is approved by the Committee at or after the
grant.

     

    6.4.5           Transferability of
Options.  Stock Options shall be Transferable as provided in
Article 11.

     

    6.4.6           Termination.  Stock
Options shall terminate in accordance with Article 11.

     

    6.4.7           Repricing, Replacement and
Regranting.  Without the prior approval of LSI’s shareholders,
Options issued under any of LSI’s existing stock option plans will not be
repriced, replaced, or regranted through cancellation, or by lowering the Option
exercise price of a previously granted award.

     

    6.5           Award of Options to
Non-Employee Directors.

     

    6.5.1           Grants.  Each
Non-Employee Director shall be granted a Non-Qualified Option for 1,500 Common
Shares upon appointment or election as a Director and immediately after each
subsequent Annual Shareholders’ Meeting if such person is serving as a Director
at such time either by virtue of being re-elected or by virtue of serving a term
in excess of one year.  All grants shall be made on the date of the
event giving rise to the option.  Such grants shall continue until the
number of Common Shares provided for in this Plan in Article 4 are
exhausted.

     

    6.5.2           Terms and Conditions of
Options Granted to Non-Employee Directors.

     

    6.5.2.1               The
Term of all Options shall be 10 years from the Award Date.

     

    6.5.2.2               The
Option Price of all Options shall be the Fair Market Value of a Common Share on
the Award Date.

     

    6.5.2.3               All
Options shall become vested to the extent of 25% at the completion of each
ninety day period following the date of grant.

     

    6.5.2.4               All
Options shall be exercisable in the manner provided in Subsections 6.4.3 and
6.4.4.

     

    6.5.2.5               All
Options shall be Transferable as provided in Article 11 and shall terminate only
upon the expiration of their term or in accordance with Section
6.5.3.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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             6.5.3            Automatic Termination of
Option.  Notwithstanding anything contained herein to the
contrary, if at any time a holder of an option granted under this Plan becomes
an employee, officer or director of or a consultant to an entity which the
Compensation Committee determines is a competitor of LSI, such option shall
automatically terminate as of the date such conflicting relationship was
established.

     

    6.5.4           The
provisions of this Section 6.5 replace the 1995 Directors’ Stock Option
Plan.

     

    ARTICLE
7

    STOCK APPRECIATION
RIGHTS

     

    7.1           Grants.  The
Committee may, in its discretion, grant Stock Appreciation Rights to any
Eligible Employee or Advisor or Non-Employee Director.  A Stock
Appreciation Right may be granted either with or without reference to all or any
part of a Stock Option.  A “Tandem SAR” is an SAR granted with
reference to a Stock Option (the “Reference Option”).  A “Non-Tandem
SAR” is an SAR granted without reference to a Stock Option.  If the
Reference Option is a Non-Qualified Option, a Tandem SAR may be granted at or
after the date of the Reference Option; if the Reference Option is an Incentive
Option, the Grant Date of a Tandem SAR must be the same as the Grant Date of the
Reference Option.  Any SAR shall have such terms and conditions, not
inconsistent with this Plan, as are established by the Committee in connection
with the Award.

     

    7.2           Term.  A
Tandem SAR shall terminate and no longer be exercisable upon the termination of
its Reference Option.  A Non-Tandem SAR may have a term no longer than
10 years from its Grant Date.

     

    7.3           Exercise.  A
Tandem SAR may only be exercisable at the times and, in whole or in part, to the
extent that its Reference Option is exercisable.  The exercise of a
Tandem SAR shall automatically result in the surrender of the applicable portion
of its Reference Option.  A Non-Tandem SAR shall be exercisable in
whole or in part as provided in its Award Agreement.  Written notice
of any exercise must be given in the form prescribed by the
Committee.

     

    7.4           Payment.  For
purposes of payment of an SAR, the reference price per Common Share shall be the
Option Price of the Reference Option in the case of a Tandem SAR and shall be
the Fair Market Value of a Common Share on the Grant Date in the case of a
Non-Tandem SAR.  The Committee shall determine the form of
payment.

     

    7.5           Transferability and
Termination.  Stock Appreciation Rights shall be Transferable
as provided in Article 11 and shall terminate in accordance with Article
14.

     

    ARTICLE
8

    RESTRICTED AND UNRESTRICTED
STOCK AWARDS

     

    8.1           Grants of Restricted Stock
Awards.  The Committee may, in its discretion, grant one or
more Restricted Stock Awards to any Eligible Employee or Advisor or Non-Employee
Director.  Each Restricted Stock Award shall specify the number of
Common Shares to be issued to the
Participant, the date of such issuance, the price, if any, to be paid for such
Common Shares by the Participant and the restrictions imposed on such Common
Shares.  The Committee may grant Awards of Restricted Stock subject to
the attainment of specified performance goals, continued employment or such
other limitations or restrictions as the Committee may
determine.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            -  10
-

             

          

        

      

    

    

     

    8.2           Terms and Conditions of
Restricted Awards.  Restricted Stock Awards shall be subject to
the following provisions:

     

    8.2.1           Issuance of Common
Shares.  Common Shares of Restricted Stock may be issued
immediately upon grant or upon vesting as determined by the
Committee.

     

    8.2.2           Stock Powers and
Custody.  If Common Shares of Restricted Stock are issued
immediately upon grant, the Committee may require the Participant to deliver a
stock power, endorsed in blank, relating to the Restricted Stock covered by such
an Award.  The Committee may also require that the certificates
evidencing Restricted Stock be held in custody by LSI until the restrictions on
them shall have lapsed.

     

    8.2.3           Shareholder
Rights.  Unless otherwise determined by the Committee at the
time of grant, Participants receiving Restricted Stock Awards shall not be
entitled to dividend or voting rights for the Restricted Common Shares until
they are fully vested.

     

    8.2.4           Termination of
Employment.  Upon termination of employment during the
restricted period, all Restricted Stock shall be forfeited, subject to such
exceptions, if any, as are authorized by the Committee, as to termination of
employment, retirement, disability, death or special circumstances.

     

    8.3           Unrestricted Stock
Awards.  The Committee may make awards of unrestricted Common
Shares to key Eligible Employees, Advisors and or Non-Employee Directors in
recognition of outstanding achievements or contributions by such employees and
advisors.  Unrestricted Common Shares issued on a bonus basis may be
issued for no cash consideration.  Each certificate for unrestricted
Common Shares shall be registered in the name of the Participant and delivered
to the Participant.

     

    ARTICLE
9

    PERFORMANCE
AWARDS

     

    9.1           Performance
Awards.

     

    9.1.1           Grant.  The
Committee may, in its discretion, grant Performance Awards to Eligible Employees
and Advisors.  A Performance Award shall consist of the right to
receive either Common Shares or cash of an equivalent value, or a combination of
both, at the end of a specified Performance Period (defined below) or a fixed
dollar amount payable in cash or Common Shares, or a combination of both, at the
end of a specified Performance Period.  The Committee shall determine
the Eligible Employees and Advisors to whom and the time or times at which
Performance Awards shall be granted, the number of Common Shares or the amount
of cash to be awarded to any person, the duration of the period during which,
and the conditions under which, a Participant’s Performance Award will vest, and
the other terms and conditions of the Performance Award in addition to those set
forth in Subsection 9.2.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            -  11
-

             

          

        

      

    

    

    9.1.2           Criteria for
Award.  The Committee may condition the grant or vesting of a
Performance Award upon the attainment of specified performance goals; the
appreciation in the Fair Market Value, book value or other measure of value of
the Common Shares; the performance of LSI based on earnings or cash flow; or
such other factors or criteria as the Committee shall determine.

     

    9.2           Terms and Conditions of
Performance Awards.  Performance Awards shall be subject to the
following terms and conditions:

     

    9.2.1           Dividends.  Unless
otherwise determined by the Committee at the time of the grant of the Award,
amounts equal to dividends declared during the Performance Period with respect
to any Common Shares covered by a Performance Award will not be paid to the
Participant.

     

    9.2.2           Payment.  Subject
to the provisions of the Award Agreement and this Plan, at the expiration of the
Performance Period, share certificates, cash or both as the Committee may
determine shall be delivered to the Participant, or his or her legal
representative or guardian, in a number or an amount equal to the vested portion
of the Performance Award.

     

    9.2.3           Transferability.  Performance
Awards shall be Transferable as provided in Article 11.

     

    9.2.4           Termination of Employment or
Advisory Relationship.  Subject to the applicable provisions of
the Award Agreement and this Plan, upon termination of a Participant’s
employment or advisory relationship with LSI or a Subsidiary for any reason
during the Performance Period for a given Award, the Performance Award in
question will vest or be forfeited in accordance with the terms and conditions
established by the Committee.

     

    ARTICLE
10

    OTHER STOCK UNIT
AWARDS

     

    10.1           The
Committee is authorized to grant to employees of LSI and its affiliates, either
alone or in addition to other Awards granted under the Plan, Awards of Common
Shares or other securities of LSI or any Subsidiary of LSI and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Common Shares or other securities of LSI or any subsidiary of LSI (“Other Stock
Unit Awards”).  Other Stock Unit Awards may be paid in cash, Common
Shares, other property or in a combination thereof, as the Committee shall
determine.

     

    10.2           The
Committee shall determine the employees to whom Other Stock Unit Awards are to
be made, the times at which such Awards are to be made, the number of Common
Shares to be granted pursuant to such Awards and all other conditions of such
Awards.  The provisions of Other Stock Unit Awards need not be the
same with respect to each recipient.  The recipient shall not be
permitted to sell, assign, transfer, pledge, or otherwise encumber the Common
Shares or other securities prior to the later of the date on which the Common
Shares or other securities are issued, or the date on which any applicable
restrictions, performance or deferral period lapses.  Common Shares
(including securities convertible into Common Shares) and other securities
granted pursuant to Other Stock Unit Awards may be issued for no cash
consideration or for such minimum consideration 

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            - 12
-

             

          

        

      

    

    

    as may be
required by applicable law.  Common Shares (including securities
convertible into Common Shares) and other securities purchased pursuant to
purchase rights granted pursuant to Other Stock Unit Awards may be purchased for
such consideration as the Committee shall determine, which price shall not be
less than the fair market value of such Common Shares or other securities on the
date of grant, unless the Committee otherwise elects.

     

    ARTICLE
11

    TRANSFERABILITY OF
AWARDS

     

    Awards
and the benefits payable under this Plan shall not be Transferable by the
Participant during his or her lifetime and may not be assigned, exchanged,
pledged, transferred or otherwise encumbered or disposed of except by will or
the laws of descent and distribution or, in the case of an Incentive Stock
Option, except by a domestic relations order pursuant to Section 414(p)(1)(B) of
the Code.  Awards shall be exercisable during a Participant’s lifetime
only as set forth in the preceding sentence by the Participant or, if
permissible under applicable law, by the Participant’s guardian or legal
representative.

     

    Notwithstanding
the above, the Committee may, with respect to particular Awards, other than
Incentive Stock Options, establish or modify the terms of the Awards to allow
the Awards to be transferred at the request of the grantee of the Awards to
trusts established by the grantee or as to which the grantee is a grantor or to
family members of the grantee or otherwise for personal and tax planning
purposes of the grantee.  If the committee allows such transfer, such
Options shall not be exercisable for six months following the action of the
Committee.

     

    ARTICLE
12

    TERMINATION OF
AWARDS

     

    12.1           Termination of
Awards.  All Awards issued under this Plan, except for those
issued to Non-Employee Directors as provided in Section 6.5, shall terminate as
follows:

     

    12.1.1           At Expiration of
Term.  During any period of continuous employment or business
relationship with LSI or a Subsidiary, an Award will be terminated only if it is
fully exercised or if it has expired by its terms or by the terms of this
Plan.  For these purposes, any leave of absence approved by LSI shall
not be deemed to be a termination of employment.

     

    12.1.2           Death, Disability or
Retirement.  If a Participant’s employment by LSI or a
Subsidiary terminates by reason of death, Disability or Retirement, or in the
case of an advisory relationship if such business relationship terminates by
reason of death or Disability, any Award held by such Participant, unless
otherwise determined by the Committee at grant, shall be fully vested and may
thereafter be exercised by the Participant or by the Participant’s beneficiary
or legal representative, for a period of one year following termination of
employment, in the case of death or disability, and 90 days in the case of
Retirement, or such longer period as the Committee may specify at or after grant
in all cases other than Incentive Options, or until the expiration of the stated
term of such Award, whichever period is shorter.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            - 13
-

             

          

        

      

    

    

    12.1.3           Termination for
Cause.  Awards shall terminate immediately if employment is
terminated for cause or by voluntary action of the grantee without the consent
of LSI.  Cause is defined as including, but not limited to, theft of
or intentional damage to LSI property, intentional harm to LSI’s reputation,
material breach of the optionee’s duty of fidelity to LSI, excessive use of
alcohol, the use of illegal drugs, the commission of a criminal act, willful
violation of LSI policies, or trading in Common Shares for personal gain based
on knowledge of LSI’s activities or results when such information is not
available to the general public.

     

    12.1.4           Employment and
Noncompetition Agreements.  If an individual holding an Award
violates any term of any written employment, confidentiality or noncompetition
agreement between LSI and that person, all existing Awards held by such person
will terminate.  In addition, if at any time of such violation such
person has exercised an Award for Common Shares but has not received
certificates for the Common Shares to be issued, LSI may void the Award and its
exercise.  Any such actions by LSI shall be in addition to any other
rights or remedies available to LSI in such circumstances.

     

    12.1.5           Other.  Except
as provided above in this Section 12.1, unless otherwise determined by the
Committee at or after grant, if a Participant’s employment by, or business
relationship with, LSI or a Subsidiary terminates for any reason other than
death or Disability, as provided above, the Award will terminate on the earlier
to occur of the stated expiration date or 90 days after termination of the
employment or business relationship.  If a Participant dies during the
90 day period following the termination of the employment or business
relationship, any unexercised Award held by the Participant, or transferred by
the Participant in accordance with Article 11, shall be exercisable, to the full
extent that such Award was exercisable at the time of death, for a period of one
year after the date of termination of employment of the Participant or until the
expiration of the stated term of the Award, whichever occurs first.

     

    12.2           Acceleration of Vesting and
Extension of Exercise Period Upon Termination.

     

    12.2.1           Notwithstanding
anything contained in this Article 12, upon the termination of employment of a
Participant who is not an Officer or Director of LSI, for reasons other than
those provided in Sections 12.13 and 12.14, the Committee may, in its sole
discretion, accelerate the vesting of all or part of any Awards held by such
terminated Participant, or transferred by the Participant in accordance with
Article 11, so that such Awards are fully or partially exercisable as of the
date of termination, and may also extend the permitted exercise period of such
Awards for up to five years from the date of termination, but in no event longer
than the original expiration date of such Award.

     

    12.2.2           Except
as provided in Section 12.2.1 or Section 4.2, in no event will the continuation
of the exercisability of an Award beyond the date of termination of employment
allow the Eligible Employee, or his or her beneficiaries or heirs, to accrue
additional rights under the Plan, or to purchase more Common Shares through the
exercise of an Award than could have been purchased on the date that employment
was terminated.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            - 14
-

             

          

        

      

    

    ARTICLE
13

    DEFERRALS

     

    The
Committee may permit recipients of Awards to defer the distribution of all or
part of any Award in accordance with such terms and conditions as the Committee
shall establish.

     

    ARTICLE
14

    TERMINATION OR AMENDMENT OF
PLAN

     

    Notwithstanding
any other provisions hereof to the contrary, the Board may assume
responsibilities otherwise assigned to the Committee and may at any time, amend,
in whole or in part, any provisions of this Plan, or suspend or terminate it
entirely; provided, however, that, unless otherwise required by law, the rights
of a Participant with respect to any Awards granted prior to such amendment,
suspension or termination may not be impaired without the consent of such
Participant.  No amendment shall, without shareholder approval,
increase the number of Common Shares available under the Plan, cause the Plan or
any Award granted under the Plan to fail to meet the conditions for exclusion of
application of the $1 million deduction limitation imposed by the Section 162(m)
of the Code or cause any Incentive Stock Option to fail to qualify as an
Incentive Stock Option as defined by Section 422 of the Code.

     

    ARTICLE
15

    GENERAL
PROVISIONS

     

    15.1           No Right to Continued
Employment or Business Relationship.  Neither the establishment
of the Plan nor the granting of any Award hereunder shall confer upon any
Participant any right to continue in the employ of, or in any business
relationship with, LSI or any Subsidiary, or interfere in any way with the right
of LSI or any Subsidiary to terminate such employment or business relationship
at any time.

     

    15.2           Other
Plans.  The value of, or income arising from, any Awards issued
under this Plan shall not be treated as compensation for purposes of any
pension, profit sharing, life insurance, disability or other retirement or
welfare benefit plan now maintained or hereafter adopted by LSI or any
Subsidiary, unless such plan specifically provides to the contrary.

     

    15.3           Withholding of
Taxes.  LSI may deduct from any payment to be made pursuant to
this Plan, or to otherwise require, prior to the issuance or delivery of any
Common Shares or the payment of any cash to a Participant, payment by the
Participant of any Federal, state, local or foreign taxes required by law to be
withheld.  The Committee may permit any such withholding obligation to
be satisfied by reducing the number of Common Shares otherwise deliverable or by
accepting the delivery of previously owned Common Shares.  Any
fraction of a Common Share required to satisfy such tax obligations shall be
disregarded and the amount due shall be paid instead in cash by the
Participant.

     

    15.4           Reimbursement of
Taxes.  The Committee may provide in its discretion that LSI
may reimburse a Participant for federal, state, local and foreign tax
obligations incurred as a result of the grant or exercise of an Award issued
under this Plan.

     

    
 

    
      
        
           

        

        
           

          
            

          

        

        
           

          
            - 15
-

             

          

        

      

    

    

    15.5           Governing
Law.  This Plan and actions taken in connection with it shall
be governed by the laws of Ohio, without regard to the principles of conflict of
laws.

     

    15.6           Liability.  No
employee of LSI nor member of the Committee or the Board shall be liable for any
action or determination taken or made in good faith with respect to the Plan or
any Award granted hereunder and, to the fullest extent permitted by law, all
employees and members shall be indemnified by LSI for any liability and expenses
which may occur through any claim or cause of action arising under or in
connection with this Plan or any Awards granted under this Plan.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

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