and Restated as of November 1,
LSI Industries Inc.
each Employer hereby amend and restate the Plan
effective as of November 1, 2006 as set forth herein. The Plan was
originally effective as of September 15, 1996. The Plan was amended and
restated as of July 1, 1998, July 1, 2002 and April 27, 2004, and September
2005. This amendment and restatement is intended to bring the Plan
document into compliance with Section 409A of the Internal Revenue Code of
and all regulations thereunder. This Plan is an unfunded deferred
compensation arrangement for a select group of management or highly compensated
employees who are rendering service to an Employer.
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
time to time by the Participant.
the Internal Revenue Code of 1986 as amended.
mean the Compensation Committee of the Board of
Directors of LSI Industries Inc.
which is responsible for the administration
this Plan in accordance with the provisions of the Plan as set forth in this
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
Section 401(k) plan or Section 125 plan.
Account" shall mean the account to be established
by an Employer as a book reserve to reflect the amounts deferred by a
Participant, the amounts credited by the Employer, and the earnings adjustment
under Article VI. A Participant's Deferred Compensation Account shall be
reduced by distributions under Section 6.2, Article VII and Article VIII.
"Effective Date" shall
mean the close of business on November 1, 2006 for
purposes of this amendment and restatement. The provisions of the Plan
that have been amended for compliance with Section 409A of the Code shall be
effective for deferrals made on or after January 1, 2005, unless otherwise
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.
mean any Executive who has a right to a benefit under
the Plan and a person who was such at the time of the Executive’s death or
termination of service and who retains, or whose Beneficiary retains, a benefit
under the Plan which has not been distributed.
"Plan Year" shall
mean the 12-consecutive month period beginning on July
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
Committee, and provided to the Committee by such date as the Committee shall
specify, but in all events before the first day of the Plan Year to which such
election is to apply. In the event an Executive first becomes eligible
during the course of a Plan Year on or after January 1, 2005, rather than on
first day of the Plan Year, the Executive’s election for deferrals must be
provided no later than 30 days following the date the Executive first becomes
eligible, and such election will only be effective with regard to Compensation
earned following the election.
A deferral election
shall be effective with respect to the entire Plan Year to
which it relates and may not be modified or terminated for that Plan Year;
provided, however, in the Plan Year beginning July 1, 2002, Participants may
increase their deferral election during a two week period designated by the
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
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
period of at least 12 months must be made no later than 6 months before the
of the service period.
If because of an
election under Article II, a Participant receives a smaller
allocation of Employer contributions and/or forfeitures under the LSI Industries
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
the Participant's Deferred Compensation Account an amount equal to the amount
which bears the same relationship to the amounts deferred under Article II
credited to the Participant's Deferred Compensation Account during the Plan
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
Committee shall determine.
(a) If, by reason of
of the compensation limitation imposed by Section 401(a)(17) of the Code of
(or any corresponding successor provision), including any provision in the
Industries Inc. Retirement Plan providing such limitation, a Participant
receives a smaller allocation of Employer contributions and/or forfeitures
the LSI Industries Inc. Retirement Plan for any plan year of that plan than
would have received had no such limitation been in effect, then there shall
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.
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
must be employed by an Employer at the time the Committee
determines that the Performance Goal (defined below) was satisfied for the
shall mean a Return on Beginning Shareholders' Equity as
determined in the sole discretion of the Committee each year based on the
operating plan for the relevant fiscal year.
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:
on Average Shareholders'
least Performance Goal
less than Performance
least Performance Goal plus 0.5% but less than Performance
Goal plus 1.0%
1.0% or more
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
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
such time as the Committee shall determine.
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
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.
be credited to the Deferred Compensation
Account of each Participant an additional amount of earnings (or losses)
determined under this Article VI.
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
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.
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.
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
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.
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.
At the time an Executive
makes the first deferral election under Article II, the
Executive shall also elect to have the amounts represented by the Executive’s
Deferred Compensation Account paid in one of the following two forms commencing
as soon as administratively feasible upon the Executive’s termination of service
with all Employers:
a single lump sum
annual installments to last not more than 10 years.
If installment payments are in effect,
Participant's Deferred Compensation Account shall continue to be credited with
earnings (or losses) under Article VI until payment of the final
not be effective until at least 12 months following the date of
the election is made.
For all elections
for payments other than because of disability, death or an
unforeseeable emergency, the first payment may not be made for a period of
less than 5 years from the date such payment would otherwise have been made
in the case of installment payments, 5 years from the date the first amount
scheduled to be paid).
If a Participant
has no election concerning the form of benefit payment under
this Paragraph 7.2 in effect at the time the Participant terminates service
all Employers, payment shall be made in a single lump sum payment.
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.
Participant’s payment election under this Paragraph 7.2 for
a Participant who is a “key employee” as defined in Section 409A of the Code, a
distribution may not be made before the date which is 6 months after the date
termination of service of such Participant (or if earlier, the date of death
the Participant). The determination of “key employee” shall include a
Participant who is a “key employee” at any time during the 12-month period
ending on June 30 of each year. This limitation on distributions
shall only be applicable if Employer’s stock is publicly traded on an
established securities market or otherwise.
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.
to the approval of the Committee, a
Participant may withdraw all or a portion of the Participant’s Deferred
Compensation Account in the event of a hardship. The distribution shall be
made in the form of whole shares of LSI Common Shares. Any fractional
shares shall be paid in cash. A hardship distribution shall only be made
in the event of an unforeseeable emergency that would result in severe financial
hardship to the Participant if hardship distributions were not permitted.
Withdrawals of amounts because of an unforeseeable emergency shall only be
permitted to the extent reasonably needed to satisfy the emergency need.
An unforeseeable emergency is defined as severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or a dependant of the Participant, loss of the Participant's
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. An unforeseeable emergency shall also include the death of
the Participant. The circumstances that will constitute an unforeseeable
emergency will depend upon the facts of each case, but, in any case, payment
not be made to the extent such hardship is or may be received (1) through
reimbursement or compensation by insurance or otherwise or (2) by cessation
deferrals under the Plan.
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
credited but not yet credited under Article II, Article III or Article IV shall
be payable to the Participant's Beneficiary as soon as administratively feasible
in the form of distribution elected by the Participant pursuant to Paragraph
7.2(a). If the Participant has already commenced receiving the amounts
represented by the Participant's Deferred Compensation Account in the
installment payment form, the installment payments shall continue to be paid
the Participant's Beneficiary. The Beneficiary shall receive any benefit
payments in the form of whole shares of LSI Common Shares. The Beneficiary
shall be eligible to request a Hardship Withdrawal pursuant to Paragraph 7.4,
otherwise shall be able to request a change to a final single lump sum
withdrawal provided that a written request is made 12 months in advance of
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.
This Plan shall be construed under the laws
the Code and to the extent not preempted by federal law, according to the
of the State of <?xml:namespace prefix = st1 ns =
. 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.
XI. AMENDMENT OR TERMINATION OF
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));
any such amendment shall be binding on each Employer, Participant and designated
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.
Inc. and the Participant's Employer shall have the right to
deduct from all payments and amounts credited hereunder any taxes required
law to be withheld with respect to any benefits under this Plan.
IN WITNESS WHEREOF, LSI Industries Inc. and each Employer, with
consent of LSI Industries Inc., have caused this amended and restated Plan
executed as of this 25thday of
October , 2006.