<SEC-DOCUMENT>0000892251-16-000282.txt : 20160822
<SEC-HEADER>0000892251-16-000282.hdr.sgml : 20160822
<ACCEPTANCE-DATETIME>20160822150218
ACCESSION NUMBER:		0000892251-16-000282
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20160817
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:		20160822
DATE AS OF CHANGE:		20160822

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:		161845096

	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>
<DOCUMENT>
<TYPE>8-K
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<FILENAME>form8k082216.htm
<DESCRIPTION>FORM 8-K FOR AUGUST 22, 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 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; August 17, 2016</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><u>LSI INDUSTRIES INC.</u></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: normal; FONT-STYLE: normal; 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">01-13375</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">(Commission File Number)</div>

<div>&#160;</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="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: normal; FONT-STYLE: normal">Registrant's telephone number, including area code</font><u><font style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 360pt">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">(513) 793-3200</font></u></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: center"><u>(Former name or former address, if changed since last report.)</u></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">&#9744;</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; TEXT-ALIGN: left">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</div>
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 &#160;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><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="TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">(e)</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">On August 17, 2016, the Compensation Committee (the "Committee") of the Board of Directors of LSI established annual salaries and determined cash bonuses for the Company's executive officers as follows:</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Name</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Fiscal 2016</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Cash Bonus</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Fiscal 2017 Base Salary</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">(effective <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">9/1/16)</font></div>
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<td style="VERTICAL-ALIGN: top; WIDTH: 50%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Dennis W. Wells</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$516,395</div>
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<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$560,000</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">President and Chief Executive Officer</div>
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<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Ronald S. Stowell</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$97,850</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$400,608</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Vice President, Chief Financial Officer &amp;</div>
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<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Treasurer</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<td style="VERTICAL-ALIGN: top; WIDTH: 50%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Shawn M. Toney</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$82,476</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$337,665</div>
</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">President, and President of</div>
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<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">LSI Lighting Segment</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 50%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<td style="VERTICAL-ALIGN: top; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Jeff A. Croskey</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$47,004</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$288,660</div>
</td>
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<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">President, LSI Graphics Segment</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">and President, Grady McCauley Inc.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 50%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 24%">&#160;</td>
</tr>

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<td style="VERTICAL-ALIGN: top; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Andrew J. Foerster</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$71,506</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 2%">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; WIDTH: 24%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">$295,622</div>
</td>
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<td style="VERTICAL-ALIGN: top; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Executive Vice President and</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Bonus payments to Messers. Stowell, Toney, McCauley and Foerster were paid pursuant to LSI's Fiscal Year 2016 Named Executive Officer Incentive Compensation Plan (the "2016 Incentive Plan"). The 2016 Incentive Plan provides for cash bonus awards to the Company's named executive officers that are driven by the achievement of defined key performance indicators which reflect the Registrant's operating results.&#160;&#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. Ten percent of the bonus potential for a named executive officer is discretionary and to be determined by subjective measures. As the 2016 Incentive Plan does not apply Mr. Wells, the Committee determined Mr. Wells' incentive compensation in its discretion and pursuant to his employment agreement.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">The Committee also revised the LSI Industries Inc. Short Term Incentive Plan for Named Executive Officers - - FY2017 to also cover the FY2017 incentive for the Company's Chief Executive Officer.&#160; This revised plan is included as Exhibit 10.1 to this Form 8-K.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">LSI Industries Inc. Short Term Incentive Plan for Named Executive Officers - - FY2017 (Revised August 17, 2016)</div>
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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.</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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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Ronald S. Stowell</div>
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<TYPE>EX-10.1
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<DESCRIPTION>LSI INDUSTRIES INC. SHORT TERM INCENTIVE PLAN FOR NAMED EXECUTIVE OFFICERS - - FY2017 (REVISED AUGUST 17, 2016)
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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">SHORT TERM INCENTIVE PLAN (STIP)</div>

<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">FOR NAMED EXECUTIVE OFFICERS</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: (Revised) August 17, 2016</div>

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

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: center">(Revised) August 17, 2016</div>

<div>The Short Term Incentive Plan (STIP) for Named Executive Officers for Fiscal 2017 is designed to incentivize Named Executive Officers 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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<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>Bonus Potential </u></font>determines the percentage payout to named executive officers based on the attainment of the FY 2017 Business Plan goals and as approved by the Compensation Committee in the table below.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-VARIANT: normal; FONT-WEIGHT: normal; FONT-STYLE: normal; TEXT-ALIGN: left"><u>Achievement</u></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">All Other NEOs</div>
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<div style="TEXT-ALIGN: center"><u>Chief Executive Officer and All Other Named Executive Officers</u></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Metrics%</u></div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>FY 2016</u></div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>FY 2017</u></div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; WIDTH: 34.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Sales</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">30%</div>
</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM-COLOR: ; WIDTH: 32.76%">
<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; WIDTH: 34.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Operating Inc.</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">70%</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 32.76%">
<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; WIDTH: 34.48%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">100%</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 32.76%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">100%</div>
</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>
</div>

<div><br>
</div>

<div><br>
</div>

<div style="TEXT-ALIGN: center"><br>
</div>

<div><br>
</div>

<div><br>
</div>

<div><br>
</div>

<div><br>
</div>

<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%; BACKGROUND-COLOR: #000000" noshade="noshade">
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<div><br>
</div>

<div><br>
</div>

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

<table id="z2530f10e03034329a87b85dbedf09d8a" 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; TEXT-ALIGN: left; MARGIN-LEFT: 36pt">The following rules govern this STIP:</div>

<div><br>
</div>

<div>
<table id="z5cf5b2ed0b2e4b9bbae4fcb52eebbf7f" 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 the Chief Executive Officer and Named Executive Officers (together referred to as "Named Executive Officers") as identified by the Compensation Committee.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="z1a37aadba55a4be5b6014c6c569441f4" 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="z74deb44f8fde4bc09422e8b190f16af5" 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 Named Executive Officer's bonus for special objectives or subjective circumstances.</div>
</td>
</tr>
</table>
</div>

<div><br>
</div>

<div>
<table id="ze2308356527747abb2530399c53368ca" 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="z476a41f2c4fa4aaebe1d43829da78f2b" 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; Named Executive Officers who terminate employment on or before the August bonus payment date are not eligible for a bonus.</div>
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<div>
<table id="z44a3660e7e764dd294c3bd1281dccb4c" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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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>
<table id="z91842373da164243ac62e9af3dfcbec3" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">G.</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 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>
<table id="zf62cb9cea4fb4294a11bdeaabf53cfec" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">H.</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 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>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">I.</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>
<table id="z1df874a67fce42fc86115360d976d52d" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">J.</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>
<table id="z0f268b013f1146bcb75c261215baa915" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">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>
<table id="z9f9a9f5e7c164e2dafe4ef0c27655937" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt">L.</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; MARGIN-LEFT: 18pt">M.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The Named Executive Officer's base salary rate as of January 1, 2017 shall be used to calculate the bonus amount.</div>
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