Document:

EXHIBIT 10.1

LSI INDUSTRIES INC.

LONG TERM INCENTIVE PLAN (LTIP)

FOR NAMED EXECUTIVE OFFICERS

FY 2016

Document Date: July 1, 2015

1

LSI INDUSTRIES INC.

LONG TERM INCENTIVE PLAN (LTIP) FOR NEOs --  FY 2016

July 1, 2015

The LSI Long Term Incentive Plan (LTIP) for Named Executive Officers for FY 2016 contemplates three types of share-based awards.  The LSI Industries Inc. Amended and Restated 2012 Stock Incentive Plan, as of November 20, 2014 authorizes the Compensation Committee of the Board of Directors to issue these awards. All LTIP awards are granted effective July 1, 2015.

	
1.

	
Service –Based Stock Options– From time to time LSI issues stock options to named executive officers at the beginning of each fiscal year to motivate them to achieve the business plan resulting in higher stock prices, thereby creating value in the stock options that they have been awarded.  This arrangement will continue in FY2016.  Stock options will be issued to all named executive officers as approved by the Compensation Committee.  These stock options are service-based awards, with a ten year exercise term, four year ratable vesting period and stated and fixed exercise price set by the Compensation Committee at the date of the grant.  The exercise price will be the closing price on the day of grant, July 1, 2015.

	
2.

	
Service-Based Restricted Stock Units– In order to encourage named executive officers towards long-term employment, LSI will award between 3,000 and 5,000 restricted stock units (RSUs) to each of the named executive officers. The RSUs are service-based and have a four year ratable vesting period.  The RSUs are non-voting, but shall accrue cash dividends at the same per share rate (one RSU = one LSI common share) as those cash dividends are declared and paid on LSI common shares.  The payout when vested will be in LSI common shares.

	
3.

	
Performance-Based Stock Options– In order to align named executive officer incentives with shareholders' interests, and to encourage named executive officers towards long term employment, LSI will grant them performance-based stock options. These options will vest based upon the attainment of the Adjusted Operating Income goals set for fiscal 2016 in 33.33% increments.  The first 33.33% will vest at the end of fiscal 2016 assuming the planned Adjusted Operating Income is achieved.  The second 33.33% will vest at the end of fiscal 2017 and the third 33.33% will vest at the end of fiscal 2018.  The Operating Income goal and the vesting schedule are set forth below.

	 	 

FY 2016 Plan

	
Operating Income Goal

as a % of Planned Net Sales

	
 

4.4%

	 	 
	
Grant Date

	
July 1, 2015

	
33% Vesting Date

	
June 30, 2016

	
33% Vesting Date

	
June 30,2017

	
33% Vesting Date

	
June 30, 2018

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Partial Awards will be vested based upon the following goal attainment schedule:

	
95-100% attainment

	
100% vesting

	
90-94%   attainment

	
  90% vesting

	
85-89%   attainment

	
  80% vesting

The following rules govern the three types of share-based awards contemplated by this LTIP.

	
a.

	
This LTIP is a pay-for-performance plan designed to incentivize named executive officers to lead LSI towards the achievement of superior operating results and to maintain long-term employment with LSI.

	
b.

	
This LTIP covers only named executive officers as identified by the Compensation Committee.

	
c.

	
This LTIP has been approved by the Compensation Committee.

	
d.

	
Determination of achievement of LSI's Adjusted Operating Income will be calculated based upon actual reported results with adjustments for certain unusual or non-recurring items as approved by the Compensation Committee.

	
e.

	
Each named executive officer qualified for this LTIP must be employed at LSI on the vesting dates in order to exercise the stated award.  Vesting will also be in accordance with "retirement eligibility" rules as defined in the 2012 Stock Incentive Plan.

	
f.

	
Any type of lengthy leave of absence may result in an adjustment of the calculated award.  Leaves of absence include time away from work for reasons of short term disability, FMLA leave, military leave, or other leave of absence.

	
g.

	
Named executive officers who retire during the plan period at normal retirement age or under an LSI approved plan of retirement may receive a pro-rated award based upon the actual amount of base salary received in the plan period, subject to the terms and conditions of the 2012 Stock Incentive Plan.

	
h.

	
If a named executive officer becomes disabled (as defined by Social Security) or dies during the plan period, his beneficiary may be considered for an adjusted award, subject to the terms and conditions of the 2012 Stock Incentive Plan.

	
i.

	
Some incentive awards are subject to assignment laws and other laws that require payment to someone other than the employee (IRS tax levies, child support arrearages, etc.).  LSI will comply with all applicable assignment laws.

	
j.

	
LSI reserves the right to amend, reduce, modify, interpret or discontinue all or part of it with or without reason as the Compensation Committee deems advisable, subject to the terms and conditions of the 2012 Stock Incentive Plan.

	
k.

	
This LTIP does not create or imply the existence of a contract of employment.

3EXHIBIT 10.2

LSI INDUSTRIES INC.

SHORT TERM INCENTIVE PLAN (STIP)

FOR NAMED EXECUTIVE OFFICERS

FY 2016

Document date: July 1, 2015

1

          LSI INDUSTRIES INC.

SHORT TERM INCENTIVE PLAN  FOR NEOs --  FY 2016

July 1, 2015

The Short Term Incentive Plan (STIP) for Named Executive Officers for Fiscal 2016 is designed to incentivize named executive officers towards the attainment the 2016 Business Plan goals for sales and operating income. This STIP has been approved by the Compensation Committee of the LSI Board of Directors and provides for cash incentive awards to be paid if the stated 2016 Business Plan objectives are achieved.  There are three elements of this STIP.

	
1.

	
Bonus Potential determines the percentage payout to named executive officers based on the attainment of the 2016 Business Plan goals and as approved by the Compensation Committee in the table below.

	
90% Plan

Achievement

	
100% Plan

Achievement

	
110% Plan

Achievement

	
120% Plan

Achievement

	
150% Plan

Achievement

	 	 	 	 	 
	
17%

	
25%

	
35%

	
45%

	
65%

	
2.

	
Performance Mix determines the percentage assigned to the performance of the total company vs. the employees Business Unit.

     Named Executive Officers

100% Corporate Performance

	
3.

	
Metrics determine the percentage assigned to Sales vs. Operating Income.  In 2015 the STIP was 100% based upon attainment of the Operating Income goals.  For 2016 LSI is shifting 30% of this metric to Sales to place emphasis on increasing the size of LSI's business.

	
Metrics %

	
2015

	
2016

	
Sales

	
   0%

	
30%

	
Operating Inc

	
100%

	
70%

	
Total

	
100%

	
100%

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The following is provided for illustrative purposes:

	
Example Calculation:  Named Executive Officer

	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	
Bonus

	
Performance

	
Sales / OI

	
Incentive

	 	 	
Plan

	
Actual

	
% of Plan

	
Potential

	
Mix

	
Metric

	
Payout

	
Corporate

	 	 	 	 	 	 	 
	
Sales

	 	
 $500,000

	
 $520,000

	
104.0%

	
29.0%

	
100.0%

	
30.0%

	
8.70%

	
Operating Income

	
 $50,000

	
 $51,000

	
102.0%

	
27.0%

	
100.0%

	
70.0%

	
18.90%

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
Total Payout Percentage

	
27.60%

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
Annual Base Salary

	
 $100,000

	 	 	 	 	 	 	
 

	
Bonus Payment

	
 $27,600

The following rules govern this STIP:

	
A.

	
This STIP covers only named executive officers as identified by the Compensation Committee.

	
B.

	
This STIP will take into account LSI total results. The intent of having corporate performance as a determinant of the incentive payment is to provide motivation for named executive officers to work for the good of the whole corporation, not only for the good of a Business Unit.

	
C.

	
The Compensation Committee may make modifications of the calculated bonus award to decrease or increase a named executive officer's bonus for special objectives or subjective circumstances.

	
D.

	
Determination of achievement of LSI's Sales and Operating Income will be calculated based upon actual reported fiscal 2016 results and may be adjusted for certain unusual or non-recurring items as approved by the Compensation Committee.  There will be a straight line interpolation of actual achievement as compared to the fiscal 2016 business goals when determining the actual incentive payment percentage.

	
E.

	
Incentive pay recipients must be employed at LSI in August 2016 on the day when incentive checks are issued for the fiscal year just recently ended.  Named executive officers who terminate employment on or before the August bonus payment date are not eligible for a bonus.

	
F.

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

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G.

	
Named executive officers who retire during the fiscal year at normal retirement age or under an LSI approved plan of retirement will be considered for a pro-rated payment based upon the actual amount of base salary received in the fiscal year.

	
H.

	
If a named executive officer becomes disabled (as defined by Social Security) or dies during a fiscal year, his beneficiary will be considered for a pro-rata payment based upon the actual amount of base salary received in the fiscal year.

	
I.

	
Incentive payments are subject to assignment laws and other laws that require payment of the bonus to someone other than the named executive officer (IRS tax levies, child support arrearages, etc.).  LSI will comply with all applicable assignment laws.

	
J.

	
LSI reserves the right to amend, reduce, modify, interpret or discontinue all or part of this STIP with or without reason as the Compensation Committee deems advisable in its sole and absolute discretion.

	
K.

	
This STIP does not create or imply the existence of a contract of employment.

	
L.

	
The named executive officer's base salary rate as of April 30, 2016 shall be used to calculate the bonus amount.

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