<SEC-DOCUMENT>0000892251-16-000246.txt : 20160705
<SEC-HEADER>0000892251-16-000246.hdr.sgml : 20160705
<ACCEPTANCE-DATETIME>20160705165008
ACCESSION NUMBER:		0000892251-16-000246
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20160701
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160705
DATE AS OF CHANGE:		20160705

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LSI INDUSTRIES INC
		CENTRAL INDEX KEY:			0000763532
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC LIGHTING & WIRING EQUIPMENT [3640]
		IRS NUMBER:				310888951
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13375
		FILM NUMBER:		161751175

	BUSINESS ADDRESS:	
		STREET 1:		10000 ALLIANCE RD
		STREET 2:		P O BOX 42728
		CITY:			CINCINNATI
		STATE:			OH
		ZIP:			45242
		BUSINESS PHONE:		5135796411

	MAIL ADDRESS:	
		STREET 1:		10000 ALLIANCE RD
		STREET 2:		P O BOX 42728
		CITY:			CINCINNATI
		STATE:			OH
		ZIP:			45242

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LSI LIGHTING SYSTEMS INC
		DATE OF NAME CHANGE:	19891121
</SEC-HEADER>
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<FILENAME>form8k070516.htm
<DESCRIPTION>FORM 8-K FOR JULY 1, 2016
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">UNITED STATES</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">SECURITIES AND EXCHANGE COMMISSION</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Washington, D.C. 20549</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">FORM 8-K</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">CURRENT REPORT</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Date of Report (Date of earliest event reported):&#160; July 1, 2016</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">LSI INDUSTRIES INC.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">(Exact name of Registrant as specified in its Charter)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">0-13375</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">31-0888951</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">(Commission File Number)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">(IRS Employer Identification No.)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">10000 Alliance Road, Cincinnati, Ohio</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">45242</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">(Address of Principal Executive Offices)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Registrant's telephone number, including area code</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(513) 793-3200</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">(Former name or former address, if changed since last report.)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">see</font> General Instruction A.2. below):</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 12pt">Section 5 &#8211; Corporate Governance and Management</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 12pt"><u>Item 5.02 &#8211; Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</u></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Effective July 1, 2016 the Compensation Committee (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Committee</font>") of the Board of Directors of LSI Industries Inc. (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Company</font>") adopted the LSI Industries Inc. Long Term Incentive Plan for Named Executive Officers -- FY2017 (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">2017 LTIP</font>"). The 2017 LTIP provides for the issuance of share-based awards to named executive officers of the Company pursuant to the LSI Industries Inc. Amended and Restated 2012 Stock Incentive Plan, as of November 19, 2015 (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">2012 Stock Incentive Plan</font>"). Pursuant to the 2017 LTIP effective July 1, 2016, the Committee awarded to executive officers service-based stock options, service-based restricted stock units ("<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">RSUs</font>") and performance-based stock options as follows:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><u>Named Executive Officer</u></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>Service-Based</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>Stock Options</u></font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><u>RSUs</u></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><u>Performance-Based Stock Options</u></div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Dennis W. Wells</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">60,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">11,700</div>
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<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">60,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Ronald S. Stowell</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">40,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">6,000</div>
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<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">50,000</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Jeff A. Croskey</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">30,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">6,000</div>
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<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">50,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Shawn M. Toney</div>
</td>
<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">30,000</div>
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<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">6,000</div>
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<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">50,000</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Andrew J. Foerster</div>
</td>
<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">30,000</div>
</td>
<td style="VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">5,500</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">40,000</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The service-based stock options and RSUs vest ratably over a four year time period. The performance-based stock options vest based upon the attainment of the Company's adjusted operating income goals established for the 2017 fiscal year in 33.33% increments. Assuming the Company's adjusted operating income goal for fiscal 2017 is achieved, the first 33.33% will vest after the end of the 2017 fiscal year; the second 33.33% will vest after the end of the 2018 fiscal year; and the third 33.33% will vest after the end of the 2019 fiscal year. The service-based stock options and performance-based stock options each have a ten year exercise term. The above summary description of the 2017 LTIP is qualified in its entirety by the full 2017 LTIP filed as an exhibit herewith and incorporated herein by reference.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Also effective July 1, 2016, the Committee&#160; adopted the LSI Industries Inc. Short Term Incentive Plan for Named Executive Officers -- FY2017 (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">2017 STIP</font>"). The 2017 STIP provides for the payment of cash bonuses to named executive officers of the Company if certain sales and operating income goals are met. &#160;A graduated scale of bonus potential stated as a percentage of base salary is identified&#160;&#160;at indicated levels of achievement of key performance indicators.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">&#160;</font>The above summary description of the 2017 STIP is qualified in its entirety by the full 2017 STIP filed as an exhibit herewith and incorporated herein by reference.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Item 9.01. &#8211; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>Financial Statements and Exhibits</u></font>.</div>

<div style="MARGIN-BOTTOM: 12pt; TEXT-ALIGN: justify; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">(d)</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 36pt">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The following have been filed as exhibits to this Form 8-K:</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Description</font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">10.1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">BY:<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> /s/ Ronald S. Stowell</font></div>
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<DESCRIPTION>LSI INDUSTRIES INC. LONG TERM INCENTIVE PLAN FOR NAMED EXECUTIVE OFFICERS -- FY2017
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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">LONG TERM INCENTIVE PLAN (LTIP)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: center">Document Date: July 1, 2016</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">LSI INDUSTRIES INC.</div>

<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><font style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif">LONG TERM </font>INCENTIVE PLAN (LTIP) FOR NEOs --&#160; FY 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The LSI Long Term Incentive Plan (LTIP) for Named Executive Officers for FY 2017 contemplates three types of share-based awards.&#160; The LSI Industries Inc. Amended and Restated 2012 Stock Incentive Plan, as of November 19, 2015 authorizes the Compensation Committee of the Board of Directors to issue these awards. All LTIP awards are granted effective July 1, 2016.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><u>Service &#8211;Based Stock Options</u></font>&#8211; 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.&#160; This arrangement will continue in FY 2017.&#160; Stock options will be issued to all Named Executive Officers as approved by the Compensation Committee.&#160; 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.&#160; The exercise price will be the closing price on the day of grant, July 1, 2016.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><u>Service-Based Restricted Stock Units</u></font>&#8211; In order to encourage named executive officers towards long-term employment, LSI will award between 2,000 and 11,700 restricted stock units (RSUs) to each of the Named Executive Officers. The RSUs are service-based and have a four year ratable vesting period.&#160; 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.&#160; The payout when vested will be in LSI common shares.&#160; Vested RSUs are subject to a one year holding period.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><u>Performance-Based Stock Options</u></font>&#8211; 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 2017 in 33.33% increments.&#160; The first 33.33% will vest at the end of fiscal 2017 assuming the planned Adjusted Operating Income is achieved.&#160; The second 33.33% will vest at the end of fiscal 2018 and the third 33.33% will vest at the end of fiscal 2019.&#160; The exercise price will be the closing price on the day of grant, July 1, 2016.&#160; The Operating Income goal and the vesting schedule are set forth below.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The following rules govern the three types of share-based awards contemplated by this LTIP.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Each Named Executive Officer qualified for this LTIP must be employed at LSI on the vesting dates in order to exercise the stated award.&#160; Vesting will also be in accordance with "retirement eligibility" rules as defined in the 2012 Stock Incentive Plan.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Any type of lengthy leave of absence may result in an adjustment of the calculated award.&#160; Leaves of absence include time away from work for reasons of short term disability, FMLA leave, military leave, or other leave of absence.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.).&#160; LSI will comply with all applicable assignment laws.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Except as may be otherwise determined by the Compensation Committee, the Adjusted Operating Income goal in this LTIP shall exclude the positive and negative effects of extraordinary developments, such as acquisitions, as disclosed in LSI's Form 10-K.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">This LTIP does not create or imply the existence of a contract of employment.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">In the event LSI is required to prepare an accounting restatement due to the material noncompliance of LSI with any financial reporting requirement under the federal securities laws, the Compensation Committee shall require reimbursement to LSI of any performance-based awards granted hereunder where: (i)&#160;the payment was predicated upon achieving certain financial results that were subsequently the subject of a substantial restatement of LSI financial statements filed with the SEC; (ii)&#160;the Compensation Committee determines the officer engaged in intentional misconduct that caused or substantially caused the need for the accounting restatement; and (iii)&#160;a lower payment would have been made to such officer based upon the restated financial results. In each such instance, LSI will, to the extent practicable, seek to recover from the officer the amount by which any performance-based awards paid to such officer for the relevant period exceeded the lower payment that would have been made based on the restated financial results. This compensation recovery policy applies to financial statements for periods ending after June 30, 2016.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">In the event and to the extent LSI common shares are issued pursuant to awards granted under this LTIP, the Named Executive Officers who receive such LSI common shares are required to retain for one year 100% of net after tax shares received upon exercise of the stock options or vesting of RSUs, as the case may be.</div>
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<TYPE>EX-10.2
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<DESCRIPTION>LSI INDUSTRIES INC. SHORT TERM INCENTIVE PLAN FOR NAMED EXECUTIVE OFFICERS -- FY2017
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: bold; FONT-STYLE: normal; TEXT-ALIGN: center">SHORT TERM INCENTIVE PLAN (STIP)</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: bold; FONT-STYLE: normal; TEXT-ALIGN: center">FOR NAMED EXECUTIVE OFFICERS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: bold; FONT-STYLE: normal; TEXT-ALIGN: center">FY 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: bold; FONT-STYLE: normal; TEXT-ALIGN: center">Document date: July 1, 2016</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: bold; FONT-STYLE: normal; TEXT-ALIGN: center">SHORT TERM INCENTIVE PLAN&#160; FOR NEOs --&#160; FY 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left; MARGIN-LEFT: 36pt">The Short Term Incentive Plan (STIP) for Named Executive Officers <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">(NEOs)</font> for Fiscal 2017 is designed to incentivize NEOs towards the attainment the 2017 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 2017 Business Plan objectives are achieved.&#160; There are three elements of this STIP.</div>

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<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 33%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Metrics %</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 34%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">FY 2016</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 32.51%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">FY 2017</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 33%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Sales</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 34%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">30%</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 32.51%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">30%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 33%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Operating Inc</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 34%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">70%</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 32.51%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">70%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 33%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 34%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">100%</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 32.51%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">100%</div>
</td>
</tr>
</table>

<div><br>
</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageBreak" style="PAGE-BREAK-AFTER: always">
<hr style="BORDER-LEFT-WIDTH: 0px; HEIGHT: 2px; BORDER-RIGHT-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; COLOR: #000000; CLEAR: both; MARGIN: 4px 0px; BORDER-TOP-WIDTH: 0px; WIDTH: 100%" noshade="noshade">
</div>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left">The following is provided for illustrative purposes:</div>

<table id="7a15c7f504014d68b511911400b6cdcd" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 47.7%" colspan="5">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Example Calculation:&#160; </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Named Executive Officer</font></div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Bonus</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Performance</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Sales / OI</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Incentive</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Plan</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Actual</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 9.58%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">% of Plan</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 10.04%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Potential</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 13.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Mix</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Metric</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Payout</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: black 2px solid; WIDTH: 14.88%" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">Corporate</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Sales</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">&#160;$500,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">&#160;$520,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">104.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">34.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">100.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: center">30.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">10.20%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 14.88%" colspan="2">
<div>&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Operating Income</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">&#160;$50,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">&#160;$51,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">102.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">32.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">100.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: center">70.0%</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">22.40%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: right">Total Payout Percentage</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: right">32.60%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 13.48%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: right">Annual Base Salary</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">&#160;$100,000</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 12.5%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 2.38%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 11.62%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 9.58%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 10.04%">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; WIDTH: 13.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; WIDTH: 17.18%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: right">Bonus Payment</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; WIDTH: 11.6%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">&#160;$32,600</div>
</td>
</tr>
</table>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left; MARGIN-LEFT: 36pt">The following rules govern this STIP:</div>

<div><br>
</div>

<div>
<table id="7589d86b052c49899606514db28972e3" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 36pt; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">A.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">This STIP covers only <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officers </font>as identified by the Compensation Committee.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="51f66458a778429486368db1ea18c25a" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 36pt; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">B.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="831871b2ca774aa28a801b9d951b79ed" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 36pt; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">C.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The Compensation Committee may make modifications of the calculated bonus award to decrease or increase a <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officer's</font> bonus for special objectives or subjective circumstances.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="ba9e088197d64820950e05ca524b4756" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 36pt; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">D.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Determination of achievement of LSI's Sales and Operating Income will be calculated based upon actual reported fiscal 2017 results and may be adjusted for certain unusual or non-recurring items as approved by the Compensation Committee.&#160; There will be a straight line interpolation of actual achievement as compared to the fiscal 2017 business goals when determining the actual incentive payment percentage.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="9a3f7dbf3a7140d6911e1ba9c047dab0" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 36pt; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">E.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Incentive pay recipients must be employed at LSI on the day when incentive checks are issued for the fiscal year just recently ended.&#160; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officers</font> who terminate employment on or before the August bonus payment date are not eligible for a bonus.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">F.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Any type of lengthy leave of absence could result in a pro-rata reduction of the calculated award.&#160; Leaves of absence include time away from work for reasons of short term disability, FMLA leave, military leave, or other leave of absence.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officers</font> 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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">If a <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officer</font> 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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.).&#160; LSI will comply with all applicable assignment laws.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Except as may be otherwise determined by the Compensation Committee, the Sales and Operating Income metrics in this STIP shall exclude the positive and negative effects of extraordinary developments, such as acquisitions, as disclosed in LSI's Form 10-K.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">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.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">This STIP does not create or imply the existence of a contract of employment.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Named Executive Officer's</font> base salary rate as of January 1, 2017 shall be used to calculate the bonus amount.</div>
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