DEF 14A of Lsi Industries Inc, Sep 16, 2024

DEF 14A of Lsi Industries Inc

Filed Sep 16, 2024 · FY20240001437749-24-029209

Open on EDGAR

  1. Proposal 1. Election of Directors

    Proposal 1. Election of Directors The Nominating and Corporate Governance Committee of the Board has nominated for re-election the seven current members of the Board of Directors: Robert P. Beech, Ronald D. Brown, James A. Clark, Amy L. Hanson, Chantel E. Lenard, Ernest W. Marshall, Jr. and Wilfred T. O'Gara. Please see the “Nominees for Board of Directors” section of this Proxy Statement for additional information about each nominee. All individuals elected at the 2024 Annual Meeting will hold office for a one-year term expiring at the 2024 Annual Meeting and until their successors are elected and qualified or until their earlier resignation, retirement or removal. Shareholders are entitled to one vote for each share held of record. Proxies solicited by the Board will be voted FOR the election of the seven nominees. Shareholders are not entitled to cumulate their votes in the election of members of the Board of Directors. If any of the nominees become unable to serve, proxies will be voted for any substitute nominee designated by the Board. The Board of Directors recommends a vote FOR each of the seven individuals nominated in this Proxy Statement. The seven nominees receiving the greatest number of votes will be elected.

  2. NOMINEES FOR BOARD OF DIRECTORS

    NOMINEES FOR BOARD OF DIRECTORS The following individuals have been nominated for election by the Board of Directors as recommended by the Nominating and Corporate Governance Committee. Each nominee is currently a member of the Board of Directors. The Board of Directors recommends a vote FOR each of the seven nominees. The seven nominees receiving the greatest number of votes will be elected. Robert P. Beech (age 71) has been a Director since July 2013. Mr. Beech is currently the President of PentaBeech, LLC, a privately held strategy and innovation advisory firm. Mr. Beech was formerly the Executive Chairman of Eccrine Systems, Inc., a privately held Cincinnati-based biotechnology company that he co-founded in 2013. Mr. Beech was engaged as Entrepreneur-in-Residence for life sciences at CincyTechUSA from 2013 to 2020. From 2004 through 2012 he was a senior executive at Precigen, Inc. (formerly Intrexon Corporation), when it was a privately held biotechnology company based in Maryland. Prior to 2003, he was Chief Executive Officer of Digineer, Inc., an international healthcare IT software and services company he founded in 1986 and led until 2002. The Board believes that Mr. Beech’s substantial experience leading high-technology ventures as a CEO and senior corporate executive qualify him to serve on the Board. He serves as Chair of the Company’s Nominating and Corporate Governance Committee and is a member of the Audit Committee. Ronald D. Brown (age 71) has been a Director since November 6, 2018. He served as Interim Chief Executive Officer of the Company from April 23, 2018 to November 1, 2018. Mr. Brown served as Interim President & CEO of Cincinnati Incorporated from July 2020 to December 2020. Cincinnati Incorporated is a privately owned machine tool company. He served from March 2017 to 2018 as Vice Chairman of The Armor Group, Inc. which he joined in 2013 as chief operating officer. The Armor Group, Inc. manufactures equipment and products and provides related services to a variety of industrial markets. Mr. Brown was Chairman and Chief Executive Officer of Milacron Inc. (NYSE) from 2001 to 2008 and President and Chief Operating Officer of Milacron Inc. from 1999 through 2001. Milacron is a supplier of plastic processing and metalworking fluid technologies. Mr. Brown has served as a director of A. O. Smith Corporation (NYSE) since 2001 and was appointed as Presiding Director in April 2024; and is the chairperson of its Personnel and Compensation Committee and a member of its Nominating and Governance Committee. A. O. Smith manufactures and markets comprehensive lines of water heaters and water treatment products. He also joined the James Advantage Funds Trust in 2014 as an independent trustee and serves on its Audit and Governance and Compensation Committees. The Board believes that Mr. Brown’s experience as the chief executive officer and chairman of a publicly held company provides valuable insight as to the issues and opportunities facing the Company. Further, he has international and manufacturing experience with The Armor Group and in his previous positions at Milacron. In addition, Mr. Brown has experience as a chief financial officer and a corporate attorney. The Board also believes that his legal background makes him well-suited to address legal and governance requirements of the SEC and NASDAQ. Mr. Brown serves on the Company’s Executive and Compensation Committees. James A. Clark (age 60) has been Chief Executive Officer since November 2018 and a Director since January 2019. Mr. Clark previously served as President and CEO at Alliance Tire Americas, Inc. (a KKR portfolio company) and as Managing Director at Dunes Point Capital. Mr. Clark has over 25 years of experience as a senior operating executive in global manufacturing and product services companies. Prior to joining Dunes Point Capital, he served as Vice President of Strategy and Corporate Development at Rexel Holdings USA, where he was responsible for the strategic planning and M&A activities for REXEL’s $3.5 billion of revenues in U.S. operations. Prior to joining REXEL, Mr. Clark served in several senior executive positions with United Technologies Corporation (UTC) and General Electric (GE), including President of Electronic Security Products Group and CMO- VP of Global Sales for GE Security. He holds a BA in Business from The State University of New York – Regents and participated in postgraduate study programs at Northwestern University - Kellogg School of Business and the University of Virginia - Darden School of Business. The Board believes that Mr. Clark's substantial management and operating experience, as well as his position as our Chief Executive Officer, qualify him to serve on the Board. Mr. Clark is a member of the Company’s Executive Committee. Amy L. Hanson (age 66) has been a Director of the Company since January 2019. Ms. Hanson is currently the CEO of Amy Hanson Advisory Services, a retail management strategic services consulting firm, since April 2016. Ms. Hanson also serves on the boards of Messer, Inc. (one of the of the Midwest’s largest construction companies), Strivve, Inc. (formerly Switch Inc.), a Seattle based fin-tech start up, and Credit First National Association (CFNA), a bank subsidiary of Bridgestone Americas. Previously she was an Executive Vice President and Corporate Officer for Macy’s Inc., a leading department store retailer with over 680 stores throughout the US for over 30 years. Ms. Hanson had responsibilities for leading financial, credit and customer services for Macy’s. During her career at Macy’s, she also had direct responsibilities for procurement, real estate, store planning, design and construction as well as serving as Vice Chairman for Macy’s North. The Board believes that Ms. Hanson’s insight and experience in finance, strategic planning, and leadership through times of change, acquisitions and mergers for Macy’s qualify her to serve on the Board, as well as chair the Audit Committee, and as a member of the Nominating and Corporate Governance Committee. Chantel E. Lenard (age 55) has been a Director of the Company since June 2020. Ms. Lenard presently serves as a Lecturer of Marketing in the MBA program at the University of Michigan Ross School of Business. Ms. Lenard retired from Ford Motor Company (NYSE: F) in 2017, having served as the top marketing executive for Ford in both the U.S. and Asia. From 2013 to 2017, Ms. Lenard held the position of U.S. Chief Marketing Officer, leading the organization’s pricing, promotions, media, digital marketing, product strategy, and consumer experience activities. From 2010 to 2013, Ms. Lenard was based in Shanghai, China, as Vice President of Marketing for Ford’s Asia Pacific and Africa operations, where she led the marketing activities for 11 countries across the region. In addition to her marketing roles, Ms. Lenard held a number of leadership positions in strategy, sales, finance, and purchasing during her 25-year career with Ford. Ms. Lenard presently serves as a member of the Board of Directors of TTM Technologies Inc. (NASDAQ: TTMI), and previously served as a Director for Uni-Select, Inc. (TSX: UNS). In 2023, she completed the National Association of Corporate Directors’ CERT Certification program in Cyber-Risk Oversight. The Board believes that Ms. Lenard’s substantial marketing and management experience, particularly her leadership positions in strategy, sales, finance, and purchasing, qualify her to serve on the Board as well as on the Audit Committee and Compensation Committee.

  3. NOMINEES FOR BOARD OF DIRECTORS

    Ernest W. Marshall, Jr. (age 55) was elected as a member of the Board effective August 17, 2022. Mr. Marshall, Jr. has served as the Executive Vice President and Chief Human Resources Officer at Eaton Corporation located in Cleveland, Ohio since July 2018. He was Vice President of Human Resources of GE Aviation at the General Electric Company from August 2013 to April 2018. Mr. Marshall, Jr. has served as a director of Republic Bancorp (Nasdaq: RBCAA) since 2020. The Board believes that Mr. Marshall, Jr.’s substantial experience in human resources management qualifies him to serve on the Board as well as on the Compensation Committee. Wilfred T. O'Gara (age 67) has been a Director since January 1999 and was appointed Chairman in August 2018. Mr. O’Gara is the Managing Director of Buffalo Fork Holdings, LLC, an investment company. He previously served as Chief Executive Officer of Isoclima SpA from July 2017 to August 2018. Isoclima SpA produces transparent armor and other specialized glass and polycarbonate products for military and civilian armored vehicles. Prior to joining Isoclima, Mr. O'Gara served as Vice Chairman of The O’Gara Group, a security and defense related firm, from 2016 until July 2017 and he was the President and Chief Executive Officer from 2003 to 2017. Mr. O’Gara has been identified as an “audit committee financial expert” under SEC guidelines given his understanding of accounting and financial reporting, disclosures and controls. The Board believes that Mr. O’Gara’s independence from management, experience as a successful principal executive and his designation as an audit committee financial expert make his service integral to the Board. He serves on the Company’s Executive Committee and the Nominating and Corporate Governance Committee.

  4. Responsiveness to 2023 Say-on-Pay Vote

    Responsiveness to 2023 Say-on-Pay Vote At the 2023 Annual Meeting of Shareholders, approximately 99% percent of the votes cast were in favor of the advisory vote to approve executive compensation. We believe that these vote results, together with feedback received during the Company’s ongoing shareholder engagement efforts, reflect that shareholders are pleased with the structure of the Company’s compensation programs put into place by the Compensation Committee for fiscal year 2023. The Compensation Committee considered this support when reviewing compensation for fiscal year 2024, particularly with respect to the design and structure of the Company’s executive compensation program. The Compensation Committee continued with the same structure used in 2023 that includes two equity-based components: performance share units (“PSUs”) and restricted stock units (“RSUs”). The award of PSUs was intended to create long-term performance alignment for the executive team based on achieving critical operating performance results based on three-year goals related to RONA and cumulative adjusted EBITDA over a three-year performance cycle. The fiscal 2024 PSU awards will cliff vest on the third anniversary grant date if specified three-year RONA and EBITDA objectives are achieved. With respect to fiscal year 2025 incentive compensation, the Compensation Committee continued its focus on aligning the Company’s executive compensation program with shareholder value creation and continued to use PSUs as a meaningful component of executive compensation.

  5. Compensation Committee Evaluation of Executive Compensation Philosophy and Design

    Compensation Committee Evaluation of Executive Compensation Philosophy and Design The Compensation Committee reviews competitive market data for comparable executive level positions as a point of reference in its executive compensation decisions. The Committee also reviews the Company’s financial performance, individual NEO performance, and the Company’s competitive environment. The Committee considers compensation information disclosed by a peer group of companies and industry reference companies with which the Company competes for business and executive talent. The Committee also considers information derived from published survey data that compares the elements of each NEO’s target total direct compensation to the market information for executives with similar roles. FW Cook compiles this information for the Committee and adjusts the published survey data to reflect the Company’s revenue size in relation to the survey participants to more accurately reflect the scope of responsibility for each NEO. The peer companies were selected primarily based upon the following criteria: (i) similar business operations/industry/competitors for investor capital, (ii) sales and market capitalization between approximately 1/3 and 3 to 4 times the Company’s sales and market capitalization, and (iii) competitors for executive talent. The Compensation Committee, with input from FW Cook, continued to use the same peer group that was used in the prior year, except PGT Innovations Inc. was removed because it was acquired and is no longer a reporting company. For fiscal 2024 compensation purposes, our peer group consisted of the following 12 companies.

  6. Compensation Committee Evaluation of Executive Compensation Philosophy and Design

    | FY24 Peer Group | | | | AAON Inc. | CTS Corporation | Trex Company Inc. | | Ameresco, Inc. | Daktronics, Inc. | Key Tronic Corporation. | | Broadwind Energy Inc. | Eastern Company | Napco Security Technologies, Inc. | | CECO Environmental Corp. | Gorman-Rupp Company | Powell Industries, Inc. |

  7. Practices Implemented to Serve Shareholder Long-term Interests

    Practices Implemented to Serve Shareholder Long-term Interests The following tables summarize certain executive compensation governance practices that the Committee believes will drive financial performance and serve long-term shareholder interests.

  8. Practices Implemented to Serve Shareholder Long-term Interests

    | Practices the Company Follows |

  9. Practices Implemented to Serve Shareholder Long-term Interests

    | Pay for performance | A significant portion of executive compensation is at-risk and tied to the achievement of various performance objectives that are disclosed to shareholders. | | NEO salary guidelines set annually | The Company generally considers NEO salaries as part of its annual performance review process in an effort to be responsive to industry trends. | | Balances short-term and long-term incentives | The Company’s incentive programs provide an appropriate balance of annual and longer-term incentives, with long term incentive compensation comprising a significant percentage of target total compensation. | | Uses multiple performance metrics | The Company mitigates the risk of the undue influence of a single performance metric by utilizing multiple performance metrics for the short- and long- term incentive plans. | | Caps award payouts | Cash incentive payouts under the FY24 short-term incentive plan are capped at 200% of target. | | Market-based approach for determining NEO target pay | Target compensation for NEOs is set after consideration of market data at peer group companies, industry reference companies and other market data. | | Stock ownership and retention guidelines for all NEOs | The Company also maintains stock ownership guidelines for its directors and NEOs. Until the director or NEO meets their requirement, they must retain 50% of the net after-tax shares received from awards under the Company’s equity compensation plans. | | Conducts a risk assessment | The Compensation Committee annually conducts a compensation risk assessment to determine whether the compensation program, or elements thereof, create risks that are reasonably likely to have a material adverse effect on the Company. | | Acts through an independent Compensation Committee | The Compensation Committee is comprised entirely of independent directors and has retained an independent compensation consulting firm. |

  10. Practices Implemented to Serve Shareholder Long-term Interests

    | Practices the Company Prohibits |

  11. Practices Implemented to Serve Shareholder Long-term Interests

    | No excise tax gross-up payments | The Company does not enter into any new contractual agreements that include excise tax gross-up payments. | | No re-pricing of options | The Company has never repriced or otherwise reduced the per-share exercise price of any outstanding stock options. Re-pricing of stock options is not permitted under our equity award plans without first obtaining approval from the shareholders of the Company. The Company and the Committee will not reprice underwater options without the consent of the Company’s shareholders. | | No pledging or hedging of shares | The Company’s insider trading policy restricts Board members and executive officers from entering into hedging transactions with respect to the Company’s securities and from holding the Company’s securities in margin accounts or otherwise pledging such securities as collateral for loans. No Board member or executive officer implemented any pledges or hedging transaction. | | No special perquisites to executives | The Company does not provide executives with benefit programs or perquisites that are not generally made available to all Company employees, except in limited circumstances. |

  12. Elements of Executive Compensation

    Elements of Executive Compensation As more fully described below, the Company’s executive compensation program consists of four elements: a competitive base salary benchmarked against a peer group of companies as well as industry reference companies and other relevant market data; a short-term cash incentive plan tied to the Company’s annual financial performance results and the NEO’s individual performance; a long-term incentive plan utilizing equity in various forms; and customary benefits. The Company’s executive compensation program is designed to reward executives with above-market pay for results which exceed the Company’s target performance goals and objectives. The Committee has engaged FW Cook to assist in benchmarking each NEO’s total direct compensation opportunity, including all elements of executive compensation. The assessment also factors in peer group and industry reference company data and other relevant market data. In general, the Company seeks to provide target compensation opportunities that are competitive with its peer group companies and other compensation data sources, as provided by FW Cook. There may be instances which indicate the need to pay above target level compensation and the Company is prepared to do so within reasonable limits. The Committee applies a collective, subjective evaluation of the above factors to determine the compensation level of each NEO in light of the Company’s performance and such NEO’s individual performance. The Committee does not utilize a particular objective formula as a means of establishing annual base salary levels or any other element of compensation. The following table summarizes the elements of the NEO compensation program.

  13. Elements of Executive Compensation

    | Base Salary | Cash | Provides competitive, fixed compensation to attract and retain superior executive talent. | | Short-Term Incentive Plan | Cash | Provides a direct financial incentive to achieve annual Company and individual performance objectives. | | Long-Term Incentive Plan | PSUs and RSUs | Encourages the executive team to earn, build and maintain a long-term equity ownership position through Company and individual performance so that executive interests are aligned with shareholder interests. A portion of the awards are earned only if certain performance objectives are achieved. | | Health, Retirement and Other Benefits | NEOs participate in benefit plans generally available to our employees, including the 401K plan; premiums paid on long-term disability and life insurance policies; and the Company also offers a nonqualified deferred compensation plan | Benefit plans are part of a broad-based employee benefits program; the nonqualified deferred compensation plan provides competitive benefits to our executive officers. |

  14. Short-Term Incentive Plan

    Short-Term Incentive Plan The Company’s annual short-term incentive plan (the “STIP”) provides for the payment of an annual cash incentive and motivates the NEOs to achieve and exceed the Company’s annual operating plan objectives. In August 2023, the Compensation Committee adopted the Fiscal Year 2024 Short Term Incentive Plan (the “FY24 STIP”). The performance criteria under the FY24 STIP are 100% performance based and as discussed below, are weighted eighty percent (80%) on adjusted EBITDA and twenty percent (20%) on net sales. Company performance is measured by comparing the Company’s actual adjusted EBITDA and net sales for the fiscal year ended June 30, 2024, to the target adjusted EBITDA and target net sales for the entire 2024 fiscal year as set by the Committee. The Committee views each of adjusted EBITDA and net sales as a measure that aligns with incentivizing growth in shareholder value creation. The Committee continues to believe that adjusted EBITDA remains an important performance criterion because it reflects operating performance and excludes items which can be outside of management’s direct influence or control, such as amortization of intangibles. Adjusted EBITDA also is a highly referenced and preferred performance metric with the shareholder and analyst community. Adjusted EBITDA is a non-GAAP financial measure. Please see Annex A for further discussion regarding our use of Non-GAAP measures. The Committee also continues to believe that net sales remain an important metric, because long-term, it measures the Company’s growth. EMI’s results are not included any FY24 STIP targets or results and the Compensation Committee did not adjust any targets after the Company acquired EMI. As in the recent past, the FY24 STIP places a greater emphasis on EBITDA over net sales, with EBITDA weighted 80% and net sales weighted 20% of the total incentive. The Committee has prioritized increasing the profitability of current sales and seeking adequate margins on new growth opportunities. The Company’s adjusted EBITDA performance result was approximately midway between the target and threshold achievement levels even though the Company did not attain the net sales threshold. FY24 revenues were impacted by what we believe is a delay in purchasing decisions in the grocery vertical segment as two large grocery chain customers of the Company resolve with the U.S. Federal Trade Commission their proposed combination. As noted above, EMI’s results are not included in the results of the FY24 STIP tables below:

  15. Short-Term Incentive Plan

    | FY24 STIP Performance Metrics | | | | | | | Performance Metric | Threshold Achievement | Target Achievement | Maximum Achievement | Actual Results | Achievement as a Percentage of Target | | Net Sales | $459.3 Million | $510.3 Million | $535.8 Million | $451.6 Million | 0% | | Adjusted EBITDA | $44.8 Million | $52.7 Million | $58.0 Million | $50.1 Million | 84% |

  16. FY24 STIP Potential Payout Levels

    FY24 STIP Potential Payout Levels

  17. FY24 STIP Potential Payout Levels

    | Executive | Threshold Achievement (% of base salary) | Target Achievement (% of base salary) | Maximum Achievement (% of base salary) | | James A. Clark | 40 | 80 | 160 | | James E. Galeese | 25 | 50 | 100 | | Thomas A. Caneris | 25 | 50 | 100 |

  18. FY24 STIP Actual Payouts

    FY24 STIP Actual Payouts

  19. FY24 STIP Actual Payouts

    | Executive | Actual Bonus Payment | Percent of Target Opportunity | | James A. Clark | $394,548 | 67.1% | | James E. Galeese | $141,830 | 67.1% | | Thomas A. Caneris | $131,440 | 67.1% |

  20. Long-Term Incentive Plan (LTIP)

    Long-Term Incentive Plan (LTIP) The Company’s long-term incentive plan (the “LTIP”) provides for the award of restricted stock units and performance share units under the 2019 Omnibus Award Plan, as it may be amended from time to time. The LTIP rewards executives for achieving the company’s long-term performance goals which in turn will create long-term shareholder value. The grant of equity-based compensation provides a strong longer-term alignment of NEO interests with shareholder interests. The Company has adopted stock ownership and retention guidelines for the executive team to reinforce such alignment. In connection with the LTIP equity awards granted to the NEOs, the Compensation Committee generally exercises broad discretion to achieve an appropriate balance between retention and incentive objectives. The Committee attempts to reward the NEOs with LTIP equity awards in an amount that would be significant in relation to the other annual compensation paid to the NEOs, and in the Committee’s judgment, reasonable and appropriate after considering the NEO’s total compensation in relation to that of the most senior executives of companies in similar industries identified in reports prepared for the Committee. The size of the award is not determined by application of any formula, but rather reflects the Committee’s subjective judgment with regard to encouraging and rewarding high levels of performance. The Compensation Committee is responsible for administration of the 2019 Omnibus Award Plan, with respect to executive officers, including the NEOs, Board members and all other employees. After consultation with Mr. Clark, Mr. Galeese and Mr. Caneris concerning possible grants to employees other than themselves, the Committee determines the individuals who will receive equity awards, the date of grant, the vesting and/or performance conditions of the grant, and the number of shares or units awarded. The Committee bases its individual equity awards upon Company performance, the past contributions of the particular employee and the capability of the employee to positively impact the Company’s future success and profitability. Although the Company does not have a written policy regarding the timing of or practices related to granting equity awards, neither the Company nor the Committee engages in re-pricing, spring-loading, back-dating or bullet-dodging practices. The Committee usually grants annual equity awards to the NEOs on or around the time of its August meeting. In August 2023, the Compensation Committee adopted the Fiscal 2024 Long Term Incentive Plan (the “FY24 LTIP”). The FY24 LTIP’s terms ensure that a substantial portion of each NEO’s compensation opportunity is dependent on attaining Company performance over a longer term. The FY24 LTIP is comprised of two components with greater weight (60%) on the performance-based PSUs and less weight (40%) on the RSUs. The Committee views RSUs as a talent retention tool with ratable vesting over three years. The Committee believes the three-year PSU awards appropriately focus the NEOs on long-term performance and shareholder alignment. The Committee believes that this LTIP mix makes the overall grant value heavily performance-oriented over a longer period, with three years representing an appropriate performance cycle. PSU awards are subject to a three-year performance period. The vesting of the PSU awards is subject to the achievement of a three-year cumulative adjusted EBITDA and a Return on Net Assets (“RONA”) performance objective. Specifically, PSU awards will cliff vest at the end of the third year if specific adjusted EBITDA and RONA targets are achieved. Each performance metric is weighted at 50% of the total PSU award. Adjusted EBITDA serves as a proxy for cash flow and the amount of profit that can be made from the Company’s current assets and operations. Adjusted EBITDA is a non-GAAP financial measure. Please see Annex A for further discussion regarding our use of Non-GAAP measures. RONA measures the effectiveness with which the Company uses its assets and working capital to sustain growth. The Compensation Committee believes adjusted EBITDA and RONA are common metrics important to the investment and analyst community and that improvements in adjusted EBITDA and RONA will promote growth in shareholder value.

  21. FY24 LTIP Performance Metrics – Three Year Performance Period (FY25-FY27)

    FY24 LTIP Performance Metrics – Three Year Performance Period (FY25-FY27)

  22. FY24 LTIP Performance Metrics – Three Year Performance Period (FY25-FY27)

    | Performance Metric as a Percent of Target | Weight of Performance Metric | Threshold Achievement as a Percentage of Target | Target Achievement | Maximum Achievement as a Percentage of Target | Threshold Payout | Target Payout | Maximum Payout | | RONA (measured at end of three years) | 50% | 71.2% | 100% | 103.8% | 50% | 100% | 200% | | Adjusted EBITDA (cumulative) | 50% | 85% | 100% | 110% | 50% | 100% | 200% |

  23. Vesting of FY22 Performance Share Unit Awards

    Vesting of FY22 Performance Share Unit Awards In 2020, during some of the most uncertain times of the COVID-19 pandemic, the Company announced an ambitious five-year growth plan to grow revenues by 63%, Adjusted EBITDA by 3.3x and EPS by 5.7x. LSI achieved these growth and profitability goals in only three years, or two years prior to the forecasted date. The Fiscal 2022 Long Term Incentive Plan (“FY22 LTIP”) adopted by the Compensation Committee reflected these aggressive and rigorous goals; and the Company’s achievement of these goals resulted in maximum performance under the FY22 LTIP. All PSU awards granted under the FY22 LTIP were subject to a three-year performance period and tied to the aggressive growth plan. The vesting of the PSU awards was subject to the achievement of a three-year cumulative EBITDA and a Return on Net Assets (“RONA”) performance objective. EBITDA is a non-GAAP financial measure. Please see Annex A for further discussion regarding our use of Non-GAAP measures. The Compensation Committee believes EBITDA and RONA are common metrics used by the investment and analyst community and that improvements in EBITDA and RONA will result in growth in shareholder value.

  24. FY22 LTIP Performance Metrics – Three Year Performance Period

    FY22 LTIP Performance Metrics – Three Year Performance Period

  25. FY22 LTIP Performance Metrics – Three Year Performance Period

    | Performance Metric as a Percent of Target | Weight of Performance Metric | Threshold Achievement | Target Achievement | Maximum Achievement | Threshold Payout | Target Payout | Maximum Payout | | RONA % (measured at end of three years) | 50% | 10.6% | 13.50% | 14.50% | 50% | 100% | 150% | | Adjusted EBITDA (cumulative) | 50% | $72.80 million | $97.3 million | $104.20 million | 50% | 100% | 150% |

  26. FY22 LTIP Performance Metrics – Three Year Performance Period

    Consistent with their treatment in the STIP, EMI’s results are not included any LTIP targets or results, and the Compensation Committee did not adjust any targets after the Company acquired EMI. Fiscal year 2024 results were: (i) RONA of 29.7%, which exceeded the maximum (payout at 150% of target) and (ii) Cumulative EBITDA for Fiscal years 2022 through 2024 of $136.85 million, which exceeded the maximum (payout at 150% of target). The combination of these two achievement levels resulted in a blended weighted achievement rate of 150% of target and issuance of the following share amounts pursuant to the terms and conditions of the PSUs granted in FY2022 to the NEOs.

  27. FY22 LTIP Performance Metrics – Three Year Performance Period

    | Executive | PSUs Granted in FY2022 (at Target) | Shares Vesting in FY2024 under PSUs (at Max) | | James A. Clark | 69,071 | 103,607 | | James E. Galeese | 23,952 | 35,928 | | Thomas A. Caneris | 20,642 | 30,963 |

  28. NEO Stock Holding Requirements

    Until a NEO meets his requirement, he must retain 50% of the net after-tax shares received from awards under the Company’s equity compensation plans. In addition, each NEO is prohibited from selling Company stock acquired by exercising stock options or the vesting of other equity grants until such officer is in compliance with his or her ownership requirement; provided, however NEOs may immediately sell Company stock acquired by exercising stock options or other equity grants in amounts not exceeding the retention ratio. Once a NEO has met his minimum ownership requirement, he shall be deemed to have met his share ownership requirement regardless of fluctuations in the price of the Company’s shares or changes in this base salary or cash retainer, unless the NEO sold shares in excess of the retention ratio in the proceeding twelve (12) months. In such case, the determination of the NEO’s compliance with the minimum share requirements shall begin anew.

  29. Clawbacks: Recovery of Prior Equity Awards

    Clawbacks: Recovery of Prior Equity Awards Under the LSI Industries Inc. Incentive Compensation Recoupment Policy (the “Clawback Policy”), if the Company is required to prepare an accounting restatement (a “Restatement”), the Company’s board of directors (the “Board”) shall take reasonably prompt action to recoup all erroneously awarded compensation that would not have been received had the amount been determined based on the measures in the Restatement. The Board may seek to recoup the erroneously awarded compensation by any means as the Board, in its sole discretion, determines to be appropriate. The Board may also determine whether, and to what extent, additional action is appropriate to address the circumstances surrounding any Restatement to reduce the risk of recurrence and to impose such other discipline as the Board deems fit. This Clawback Policy is in addition to (and not in lieu of) any right of repayment, forfeiture or off-set against any person that may be available under applicable law or otherwise. The Board shall have full authority to administer the Clawback Policy and to delegate any of its powers under the Clawback Policy to the Compensation Committee of the Board or any subcommittee or delegate thereof.

  30. Change in Control Agreements and Supplemental Benefits Agreements

    Change in Control Agreements and Supplemental Benefits Agreements Effective January 26, 2021, the Company entered into Change in Control Agreements and Supplemental Benefits Agreements with each of the following executive officers: James A. Clark, Chief Executive Officer; James E. Galeese, Executive Vice President and Chief Financial Officer; and Thomas A. Caneris, Executive Vice President, Human Resources and General Counsel. The Change in Control Agreements provide that if the executive’s employment terminates during a change in control period (generally defined as the twenty-four months after a change in control) other than in connection with death, disability, “cause” or “good reason,” (each as defined in such agreements), he is entitled to a severance payment equal to a multiple of his then-current base salary plus target bonus for the severance period. The multiple for Mr. Clark is two and one-half times; the multiple for each of Mr. Galeese and Mr. Caneris is two times. The agreements provide for continued participation in medical and dental plans, with full COBRA payments to be paid by the Company. The agreements also provide that in the event of a change in control and upon a subsequent qualifying termination of employment, unless the successor company agrees to assume, replace or substitute the executive’s stock options, restricted stock awards, and/or restricted stock unit awards (“RSUs”), such awards shall become vested in full and exercisable in their entirety. The agreements further provide that in the event of a change in control all performance stock units granted to the executive will convert at the target performance level into time-based RSUs vesting in equal installments over three years. The Supplemental Benefits Agreements provide that if the executive’s employment is terminated by the Company without “cause” or the executive terminates his employment for “good reason” (each as defined in such agreements), at any time outside of a change in control period (generally defined as the twenty-four months after a change in control), the executive is entitled to a severance payment equal to a multiple of the sum base salary and annual target bonus. The multiple for Mr. Clark is one and one-half times; the multiple for each of Mr. Galeese and Mr. Caneris is one times. The agreements provide that if the executive’s employment is terminated by the Company without “cause,” the executive terminates his employment for “good reason” or in the event of the executive’s retirement when the executive satisfies applicable retirement criteria, or in the event of executive’s death or disability: (A) all unvested stock options (other than stock options that may vest upon the achievement of performance conditions) shall immediately and without further action become fully vested; and (B) all unvested stock options that may vest upon the achievement of performance conditions, all unvested restricted stock unit awards, all unvested restricted stock awards and all unvested performance stock unit awards shall continue to vest pursuant to their original vesting schedules. The agreements also provide for continuation of coverage under group health plans maintained by the Company, additional cash COBRA payments for six months (in the case of Mr. Clark only) and non-competition covenants.

  31. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  32. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Fiscal Year | Salary (1) | Bonus (2) | Option Awards (3) | Stock Awards (4) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation | All Other Compensation (5) | Total | | James A. Clark | 2024 | $728,269 | | | $1,500,000 | $352,800 | $339,981 | $156,548 | $3,077,598 | | Chief Executive | 2023 | $708,000 | - | - | $1,099,998 | $840,000 | $913,964 | $169,125 | $3,731,087 | | Officer | 2022 | $614,539 | - | - | $939,363 | $741,600 | ($190,023) | $345,754 | $2,451,233 | | James E. Galeese | 2024 | $415,353 | | | $540,000 | $126,823 | $125,369 | $60,645 | $1,268,190 | | EVP, Chief Financial Officer (6) | 2023 | $394,870 | - | - | $350,003 | $288,234 | $345,753 | $63,091 | $1,441,952 | | | 2022 | $363,963 | - | - | $325,747 | $274,508 | ($76,371) | $86,018 | $973,865 | | Thomas A. Caneris | 2024 | $386,679 | | | $330,000 | $117,532 | $271,519 | $79,781 | $1,185,511 | | EVP, HR & General | 2023 | $383,368 | - | - | $299,998 | $279,839 | $789,067 | $88,514 | $1,840,785 | | Counsel | 2022 | $353,360 | - | - | $279,994 | $266,513 | ($183,778) | $234,800 | $950,889 |

  33. SUMMARY COMPENSATION TABLE

    | (1) Salary compensation represents the base salary paid during the fiscal year. |

  34. SUMMARY COMPENSATION TABLE

    | (2) Bonus compensation represents the incentive and discretionary compensation expensed during the fiscal year and paid in the following fiscal year. |

  35. SUMMARY COMPENSATION TABLE

    | (3) Stock option award compensation represents the grant date fair value which will be expensed for financial statement reporting purposes in accordance with FASB ASC Topic 71 (Compensation–Stock Compensation). There can be no assurance that the value realized from the exercise of stock options, if any, will equal the amount of ASC 718 compensation expense recorded. See discussion related to all assumptions made in the valuation of stock options in accordance with ASC 718 in Note 10 to the Company’s financial statements included in the Company’s Form 10-K for the fiscal year ended June 30, 2024. |

  36. SUMMARY COMPENSATION TABLE

    | (4) Stock awards in 2024 through 2022 to Messrs. Clark, Galeese and Caneris are comprised of RSU and PSU awards. The 2024 RSU awards are as follows: Mr. Clark of $600,000; Mr. Galeese of $216,000; and Mr. Caneris of $132,000. The 2024 PSU awards are as follows: Mr. Clark of $900,000; Mr. Galeese of $324,000; and Mr. Caneris of $198,000. The 2023 RSU awards are as follows: Mr. Clark of $439,999; Mr. Galeese of $140,001; and Mr. Caneris of $119,998. The 2023 PSU awards are as follows: Mr. Clark of $659,999; Mr. Galeese of $210,001; and Mr. Caneris of $180,000. The 2022 RSU awards are as follows: Mr. Clark of $375,744; Mr. Galeese of $130,000; and Mr. Caneris of $112,291. The 2022 PSU awards are as follows: Mr. Clark of $563,616; Mr. Galeese of $195,450; and Mr. Caneris of $168,436. For all years, RSU compensation represents the grant date fair value and PSUs at 100% of target payout. For the 2020 through 2023 years, PSUs, the minimum is 50% of target payout and the maximum is 150% of target payout. For the 2024, PSUs, the minimum is 50% of target payout and the maximum is 200% of target payout. |

  37. SUMMARY COMPENSATION TABLE

    | (5) See the “All Other Compensation” table for an explanation of the amounts shown in this column. |

  38. SUMMARY COMPENSATION TABLE

    | (6) Effective May 31, 2024, Mr. Galeese assumed the responsibilities as the Chief Accounting Officer. |

  39. ALL OTHER COMPENSATION

    | Name | Fiscal Year | Life Insurance (1) | Qualified Retirement Plan or 401K Plan Contributions (2) | Non-qualified Deferred Compensation Plan Contributions (3) | Relocation Allowance | Total | | | 2024 | $2,000 | $8,625 | $145,923 | | $156,548 | | James A. Clark | 2023 | $2,000 | $7,625 | $159,500 | - | $169,125 | | | 2022 | $2,000 | $10,919 | $333,635 | - | $345,754 | | | 2024 | $2,000 | $8,625 | $50,020 | | $60,645 | | James E. Galeese | 2023 | $2,000 | $7,625 | $53,466 | - | $63,091 | | | 2022 | $2,000 | $9,423 | $75,395 | - | $86,018 | | | 2024 | $2,000 | $0 | $77,781 | | $79,781 | | Thomas A. Caneris | 2023 | $2,000 | $0 | $86,514 | | $88,514 | | | 2022 | $2,000 | $2,170 | $181,430 | - | $234,800 |

  40. ALL OTHER COMPENSATION

    | (3) The amounts represent non-qualified deferred compensation employer matching contributions. |

  41. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS The following table sets forth certain information regarding all grants of plan-based awards made to the NEOs during fiscal 2024.

  42. GRANTS OF PLAN-BASED AWARDS

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | Executive | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Stock Option Awards: Number of Securities Underlying Options | Stock Unit Awards: Number of Securities Underlying Shares of Stock / Units (1) | Performance Stock Unit Awards: Number of Securities Underlying Awards (2) | Exercise or Base Price of Option and RSU Awards ($/share) | Grant Date Fair Value of Stock Option, RSU and PSU Awards | | James A. Clark | 8/16/23 | $294,000 | $588,000 | $1,176,000 | 35,267 | 70,533 | 141,066 | - | 47,022 | 70,533 | $12.76 | $1,500,000 | | James E. Galeese | 8/16/23 | $105,686 | $211,372 | $422,743 | 12,696 | 25,392 | 50,784 | - | 16,928 | 25,392 | $12.76 | $540,000 | | Thomas A. Caneris | 8/16/23 | $97,944 | $195,887 | $391,774 | 7,759 | 15,517 | 31,034 | - | 10,345 | 15,517 | $12.76 | $330,000 |

  43. GRANTS OF PLAN-BASED AWARDS

    | (1) RSUs vest over three years in equal annual installments. | | (2) PSUs cliff vest at the end of three years if certain adjusted EBITDA and RONA targets are met. |

  44. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides information regarding unexercised stock options and unvested stock awards held by our NEOs as of June 30, 2024.

  45. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | Option Awards | | | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Pay Out Value of Unearned Shares, Units or Other Rights That Have Not Vested | | James A. Clark | (4) 11/1/18 (2) 8/19/20 (3) 10/26/21 (7) 10/26/21 (3) 8/17/22 (7) 8/17/22 (3) 8/16/23 (7) 8/16/23 | 500,000 76,271 - - - - - - | - - - - - - - - | - - - - - - - - | $4.40 $6.80 - - - - - - | 11/1/28 8/19/30 - - - - - - | - - - 15,349 - 42,725 - 47,022 | - - - $222,100 - $618,231 - $680,408 | - - 69,071 - 95,652 - 70,533 - | - - $999,457 - $1,384,084 - $1,020,613 - | | James E. Galeese | (1) 6/12/17 (2) 8/17/17 (2) 8/16/18 (2) 8/21/19 (2) 8/19/20 (3) 10/26/21 (7) 10/26/21 (3) 8/17/22 (7) 8/17/22 (3) 8/16/23 (7) 8/16/23 | 32,874 21,701 38,386 75,606 22,586 - - - - - - | - - - - - - - - - - - | - - - - - - - - - - - | $9.15 $5.92 $4.94 $3.83 $6.80 - - - - - - | 6/12/27 8/17/27 8/16/28 8/21/29 8/19/30 - - - - - - | - - - - - - 5,323 - 13,594 - 16,928 | - - - - - - $77,024 - $196,705 - $244,948 | - - - - - 23,952 - 30,435 - 25,392 - | - - - - - $346,585 - $440,394 - $367,422 - | | Thomas A. Caneris | (5) 8/5/19 (1) 8/21/19 (2) 8/19/20 (3) 10/26/21 (7) 10/26/21 (3) 8/17/22 (7) 8/17/22 (3) 8/16/23 (7) 8/16/23 | 100,000 73,404 21,928 - - - - - - | - - - - - - - - - | - - - - - - - - - | $4.04 $3.83 $6.80 - - - - - - | 8/5/29 8/21/29 8/19/30 - - - - - - | - - - - 4,587 - 11,652 - 10,345 | - - - - $66,374 - $168,604 - $149,692 | - - - 20,642 - 26,087 - 15,517 - | - - - $298,690 - $377,479 - $224,531 - |

  46. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (1) Stock options have a ten-year term and vest ratably over a four-year period beginning with the first anniversary date of grant. |

  47. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (2) Stock options have a ten-year term and vest ratably over a three-year period beginning on the first anniversary of the date of grant. |

  48. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (3) PSUs are unearned and vesting of the PSUs is subject to the achievement of three-year performance objectives. |

  49. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (4) Inducement Grant of Performance Stock Options made as part of the executive’s initial employment with the Company. |

  50. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (5) Inducement grant of Stock Options made as part of the executive’s initial employment with the Company. |

  51. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (6) RSUs granted on August 19, 2020 vest over a three-year period as follows: (a) 50% on the first anniversary of the award; (b) 25% on the second anniversary of the award; and (3) 25% on the third anniversary of the award. Upon vesting, share certificates are issued and accrued cash dividends are paid to the executive. |

  52. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | (7) RSUs granted after August 19, 2020 vest ratably over a three-year period beginning on the first anniversary of the date of grant. Upon vesting, share certificates are issued and accrued cash dividends are paid to the executive. |

  53. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED The following table provides information for each of the NEOs on option exercises, and RSU and PSU vesting, during fiscal 2024, including the number of shares acquired upon vesting and the value realized.

  54. OPTION EXERCISES AND STOCK VESTED

    | Executive | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting | | James A. Clark | - | - | 122,421 | $1,698,643 | | James E. Galeese | 18,421 | $155,982 | 33,574 | $475,450 | | Thomas A. Caneris | - | - | 31,253 | $440,225 |

  55. NONQUALIFIED DEFERRED COMPENSATION

    NONQUALIFIED DEFERRED COMPENSATION The Company has a Nonqualified Deferred Compensation Plan that allows for both employee contributions and company contributions. This is a funded plan so that when contributions are made into the plan, they are 100% invested in Common Stock of the Company. A group of employees of the Company having an annual base salary above a certain limit are invited to defer up to 20% of their salary or bonus into this plan. The Company makes a matching contribution equal the amount contributed by the employee. A Company make-up contribution will also be made into the plan on behalf of the named executives at the same percentage as in the Company’s qualified retirement plan for any salary and bonus compensation not receiving a benefit in the qualified retirement plan due to ERISA imposed limits on covered compensation or because the executive elected to defer salary and/or bonus into the deferred compensation plan. The following table provides information relating to the activity in the Deferred Compensation Plan accounts of the NEOs during fiscal 2024 and the aggregate balance of the accounts as of June 30, 2024.

  56. NONQUALIFIED DEFERRED COMPENSATION

    | Executive | Executive Contributions in Fiscal 2024 (1) | LSI Contributions in Fiscal 2024 | Aggregate Earnings in Fiscal 2024 (2) | Aggregate Withdrawals / Distributions in Fiscal 2024 | Aggregate Balance at June 30, 2024 (3) | | James A. Clark | $145,789 | $145,789 | $339,981 | - | $2,677,996 | | James E. Galeese | $50,020 | $50,020 | $125,369 | - | $987,626 | | Thomas A. Caneris | $77,709 | $77,709 | $271,519 | - | $2,111,585 |

  57. NONQUALIFIED DEFERRED COMPENSATION

    | (1) NEO’s contributions are included as part of the NEO’s salary in all years represented in the Summary Compensation Table. |

  58. NONQUALIFIED DEFERRED COMPENSATION

    | (2) Aggregate earnings are included as part of each NEO’s change in nonqualified deferred compensation earnings in the Summary Compensation Table. Aggregate earnings represent the change in the market price the Company’s Common Shares as all account balances in the Plan are invested in Common Shares. |

  59. NONQUALIFIED DEFERRED COMPENSATION

    | (3) NEOs and other Plan participants are fully vested in their plan account balances. Participants may receive installment or lump sum distributions upon termination of employment from the Company (not before a date which is six months after termination for the NEOs). There is also a provision for hardship distributions in the event of an unforeseeable emergency that would result in a severe financial hardship to the participant. All distributions are made in Common Shares. |

  60. POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL Effective January 26, 2021, the Company entered into Change in Control Agreements and Supplemental Benefits Agreements with each of the following executive officers: James A. Clark, Chief Executive Officer; James E. Galeese, Executive Vice President and Chief Financial Officer; and Thomas A. Caneris, Executive Vice President, Human Resources and General Counsel. The Change in Control Agreements provide that if the executive’s employment terminates during a change in control period (generally defined as the twenty-four months after a change in control) other than in connection with death, disability, “cause” or “good reason,” (each as defined in such agreements), he is entitled to a severance payment equal to a multiple of his then-current base salary plus his target bonus for the severance period. The multiple for Mr. Clark is two and one-half times; the multiple for each of Mr. Galeese and Mr. Caneris is two times. The agreements provide for continued participation in medical and dental plans, with full COBRA payments to be paid by the Company. The agreements also provide that in the event of a change in control and upon a subsequent qualifying termination of employment, unless the successor company agrees to assume, replace or substitute the executive’s stock options, restricted stock awards, and/or restricted stock unit awards (“RSUs”), such awards shall become vested in full and exercisable in their entirety. The agreements further provide that in the event of a change in control all performance stock units granted to the executive will convert at the target performance level into time-based RSUs vesting in equal installments over three years. The Supplemental Benefits Agreements provide that if the executive’s employment is terminated by the Company without “cause” or the executive terminates his employment for “good reason” (each as defined in such agreements), at any time outside of a change in control period (generally defined as the twenty-four months after a change in control), the executive is entitled to a severance payment equal to a multiple of the sum of one year of base salary and his annual target bonus. The multiple for Mr. Clark is one and one-half times; the multiple for each of Mr. Galeese and Mr. Caneris is one time. The agreements provide that if the executive’s employment is terminated by the Company without “cause,” the executive terminates his employment for “good reason” or in the event of the executive’s retirement when the executive satisfies applicable retirement criteria, or in the event of executive’s death or disability: (A) all unvested stock options (other than stock options that may vest upon the achievement of performance conditions) shall immediately and without further action become fully vested; and (B) all unvested stock options that may vest upon the achievement of performance conditions, all unvested restricted stock unit awards, all unvested restricted stock awards and all unvested performance stock unit awards shall continue to vest pursuant to their original vesting schedules. The agreements also provide for continuation of coverage under group health plans maintained by the Company, additional cash COBRA payments for six months (in the case of Mr. Clark only) and non-competition covenants.

  61. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE As of June 30, 2024, the Company’s employee population consisted of approximately 1,900 individuals. The Company did not exclude any employees from our determination of the median employee. The Company determined the compensation of its median employee for this purpose by: (i) calculating the annual total compensation based on the W-2 Box 1 amount for each of its employees; (ii) wages and salaries were annualized for those employees who were not employed for the full fiscal year based on their applicable work schedules; (iii) ranking the annual total compensation of all employees (excluding the PEO) from highest to lowest. The median amount was selected from the annualized list. The Company is providing disclosure of the ratio of the annual total compensation of its principal executive officer (“PEO”) to its median employee’s annual total compensation as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K. For purposes of the disclosure required by Item 402(u), the Company is referencing the compensation of the Company’s Chief Executive Officer, James A. Clark. Mr. Clark’s annual total compensation for fiscal 2024 was $3,077,598. The median employee’s (excluding the PEO) annual total compensation for fiscal 2024 was $40,000. The median employee for fiscal 2024 was a non-exempt, full-time employee located in the United States. Therefore, the Company reasonably estimates that the fiscal 2024 of the PEO’s annual total compensation to the annual total compensation of our median employee was 76.9 to 1. Under the SEC’s rules and guidance, there are numerous ways to determine the compensation of a company’s median employee, including the employee population sampled, the elements of pay and benefits used, any assumptions made and the use of statistical sampling. In addition, no two companies have identical employee populations or compensation programs, and pay, benefits and retirement plans may differ by country even within the same company. As such, the Company’s pay ratio may not be comparable to the pay ratio reported by other companies.

  62. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the following table reports the compensation of our Principal Executive Officer (PEO), and the average compensation of our other Named Executive Officers (Other NEOs) as reported in the Summary Compensation Table for the past three fiscal years, as well as their “compensation actually paid”(“CAP”) as calculated pursuant to recently adopted SEC rules and certain performance measures required by such rules.

  63. PAY VERSUS PERFORMANCE

    | | | | | | Value of Initial Fixed $100 | | | Company | | | | | | | | | | Selected Measure | | Fiscal Year (1) (a) | Summary Compensation Table Total for PEO (2) (b) | Compensation Actually Paid to PEO (3) (c) | Average Compensation Table Total for Other NEOs (4) (d) | Average Compensation Actually Paid to Other NEOs (3) (e) | LYTS Total Stockholder Return (f) | Peer Group Total Stockholder Return (g) | GAAP Net Income ($ mil.) (6) (h) | Adj. EBITDA ($ mil.) (7) (i) | | 2024 | $3,077,598 | $4,223,123 | $1,225,195 | $1,474,215 | $243 | $200 | $25.0 | $51.4 | | 2023 | $3,731,087 | $6,402,557 | $1,431,921 | $1,585,393 | $208 | $165 | $25.8 | $51.6 | | 2022 | $2,451,233 | $2,316,647 | $803,367 | $790,710 | $100 | $119 | $15.0 | $35.1 | | 2021 | $2,150,425 | $3,299,030 | $844,832 | $1,100,678 | $127 | $151 | $5.9 | $21.1 |

  64. PAY VERSUS PERFORMANCE

    | (1) NEOs included in these columns reflect the following: |

  65. PAY VERSUS PERFORMANCE

    | Fiscal Year | PEO | Non-PEO NEOs | | 2024 | James A. Clark | James E. Galeese and Thomas A. Caneris | | 2023 | James A. Clark | James E. Galeese, Thomas A. Caneris, and Jeffrey S. Bastian | | 2022 | James A. Clark | James E. Galeese, Thomas A. Caneris, Michael C. Beck, and Jeffrey S. Bastian | | 2021 | James A. Clark | James E. Galeese, Thomas A. Caneris, Michael C. Beck, and Jeffrey S. Bastian |

  66. PAY VERSUS PERFORMANCE

    | (2) The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Clark for each corresponding year in the "Total" column of the Summary Compensation table. |

  67. PAY VERSUS PERFORMANCE

    | (3) The dollar amounts reported in this column represent the amount of “compensation actually paid” to the PEO and Other NEOs, as computed in accordance with Item 402(v) of Regulation S-K, with dividends already accounted for in the fair value of equity awards. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO or Other NEOs during the applicable year. In accordance with the requirements, the following adjustments were made to the PEO and Other NEOs’ total compensation for each year to determine the "compensation actually paid": |

  68. PAY VERSUS PERFORMANCE

    | | Fiscal Year 2024 | | Fiscal Year 2023 | | Fiscal Year 2022 | | Fiscal Year 2021 | | | | PEO ($) | Other NEOs ($) | PEO ($) | Other NEOs ($) | PEO ($) | Other NEOs ($) | PEO ($) | Other NEOs ($) | | Summary Compensation Table Total | $3,077,598 | $1,225,195 | $3,731,087 | $1,431,921 | $2,451,233 | $803,367 | $2,150,425 | $844,832 | | Less Change in Pension Value Reported in Summary Compensation Table | $339,981 | $198,444 | $913,964 | $499,678 | ($190,023) | ($121,449) | $20,660 | $35,175 | | Less Stock Award and Option Value Reported in Summary Compensation Table for the Fiscal Year(a) | $1,500,000 | $435,000 | $1,099,998 | $263,334 | $939,363 | $224,861 | $720,355 | $185,775 | | Plus (Less) Fair value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at End of Fiscal Year(b) | $1,724,532 | $500,115 | $2,034,199 | $486,977 | $945,810 | $207,974 | $1,104,237 | $272,633 | | Plus (Less) Fair value of Equity Awards Granted in Any Prior Fiscal Year that are Outstanding and Unvested at End of Fiscal Year | $1,040,792 | $314,375 | $1,569,428 | $378,507 | ($379,279) | ($95,786) | $785,383 | $187,709 | | Plus Fair Value at Vesting Date of Awards Granted and Vested During the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $10,270 | $0 | $0 | | Plus (Less) Change in Fair Value of Equity Awards granted in Prior Fiscal Years that Vested During the Fiscal Year | $220,182 | $67,974 | $1,081,804 | $51,000 | $48,223 | ($31,702) | $0 | $16,453 | | Compensation Actually Paid (CAP) | $4,223,123 | $1,474,215 | $6,402,557 | $1,585,393 | $2,316,647 | $790,710 | $3,299,030 | $1,100,678 |

  69. PAY VERSUS PERFORMANCE

    | (a) The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” columns in the Summary Compensation Table for the applicable year. |

  70. PAY VERSUS PERFORMANCE

    | (b) In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our NEOs were measured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. |

  71. PAY VERSUS PERFORMANCE

    | (4) The dollar amounts reported in this column are the average amounts of total compensation reported for Other NEOs for each corresponding year in the "Total" column of the Summary Compensation table. |

  72. PAY VERSUS PERFORMANCE

    | (5) The Company is using as its Peer Group the S&P 600 Building Products Index, which is an index used by the Company for purposes of disclosure in its Form 10-K under Item 201(e) of Regulation S-K. |

  73. PAY VERSUS PERFORMANCE

    | (6) The dollar amounts reported represent the amount of net income reflected in our consolidated audited financial statements for the applicable year. |

  74. PAY VERSUS PERFORMANCE

    | (7) EBITDA was chosen as the “Company Selected Measure”, as it represents the most important financial performance measure used to align compensation actually paid to the PEO and other NEOs in 2023 to the Company's performance: |

  75. Compensation Actually Paid versus Total Shareholder Return

    Compensation Actually Paid versus Total Shareholder Return We use a variety of quantitative and qualitative metrics to align compensation with our performance and the value we are delivering to our shareholders. The graph below reflects the relationship between the CAP for the PEO and the average Other NEOs versus the Company's TSR and the peer group TSR, assuming an initial fixed investment of $100 for the fiscal years ended June 30, 2024, 2023, 2022 and 2021.

  76. Compensation Actually Paid versus Net Income

    Compensation Actually Paid versus Net Income Although Net Income is a required metric for purposes of the Pay Versus Performance Table (PVP Table), it is not a measure we use in our short- or long-term incentive plan and is not a factor the Committee considers in determining pay for our NEOs. The graph below presents CAP and Net Income for each of the four fiscal years reported in the PVP Table.

  77. Compensation Actually Paid versus Adjusted EBITDA

    Compensation Actually Paid versus Adjusted EBITDA The graph below reflects the relationship between the PEO and Average Other NEOs CAP and the Company’s Adjusted EBITDA metric for each of the four fiscal years reported in the PVP Table.

  78. Board of Directors

    Board of Directors The Board of Directors elects or appoints the Company’s executive officers to manage the Company’s business operations and oversees the management of the Company on behalf of its shareholders. It reviews the Company's long-term strategic plans and exercises direct decision-making authority in all major corporate decisions, such as acquisitions or divestitures, the declaration of dividends, major capital expenditures and the establishment of critical corporate policies. The Executive Committee is responsible, during the intervals between meetings of the Board of Directors, for exercising all the powers of the Board of Directors in the management and control and the business of the Company to the extent permitted by law. The Board of Directors held five (5) meetings during fiscal 2024 either in person or telephonically. The independent Directors discussed matters in executive session at the end of certain Board meetings, Executive Committee meetings and other Committee meetings, in each instance without the presence of the Company's senior management executives. Each member of the Board of Directors is expected to attend the Annual Meeting. Each Board member who was a Board member at the time of the Company’s 2023 Annual Meeting attended the meeting. Each Board member attended at least 75% of the aggregate of all meetings of the Board, Board Committees of which she or he was a member and independent Director meetings. Shareholders may communicate with the Board or any individual member of the Board on matters of concern by mail addressed to the Corporate Headquarters at 10000 Alliance Road, Cincinnati, Ohio 45242 or through the Company’s website at www.lsicorp.com, in each case to the attention of the Secretary of the Company.

  79. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The compensation program for the Company’s non-employee Directors has been approved by the Nominating and Corporate Governance Committee and the Board of Directors. During Fiscal 2024, non-employee Director annual compensation, was as follows: $125,000, of which $65,000 is comprised of Common Shares and the remainder is cash. In addition, Committee Chairs receive the following amounts annually: Audit Committee Chair $17,500; Compensation Committee Chair $15,500; Nominating and Corporate Governance Committee Chair $13,500. The Chairman of the Board receives a $50,000 annual retainer. Directors who are employees of the Company do not receive any compensation for serving as a member of the Board of Directors. Effective in fiscal 2024, the compensation program for the Company’s non-employee Directors was changed by the Board of Directors to increase compensation as follows: $135,000, of which $75,000 is comprised of Common Shares and the remainder is cash. In addition, Committee Chairs receive the following amounts annually: Audit Committee Chair $20,000; Compensation Committee Chair $15,500; Nominating and Corporate Governance Committee Chair $13,500. The Chairman of the Board receives a $65,000 annual retainer. Directors who are employees of the Company do not receive any compensation for serving as a member of the Board of Directors. The following table sets forth information regarding compensation paid by the Company to its non-employee Directors during fiscal 2024.

  80. DIRECTOR COMPENSATION

    | Name (1) | Fees Earned or Paid In Cash (2) | Stock Awards (2) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value And Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | Robert P. Beech | $73,500 | $75,000 | -- | -- | -- | -- | $148,500 | | Ronald D. Brown | $75,500 | $75,000 | -- | -- | -- | -- | $150,500 | | Amy L. Hanson | $80,000 | $75,000 | -- | -- | -- | -- | $155,000 | | Chantel E. Lenard | $60,000 | $75,000 | -- | -- | -- | -- | $135,000 | | Wilfred T. O'Gara | $125,000 | $75,000 | -- | -- | -- | -- | $200,000 | | Ernest W. Marshall, Jr. | $60,000 | $75,000 | -- | -- | -- | -- | $135,000 |

  81. DIRECTOR COMPENSATION

    | (1) The table includes all non-employee directors of the Company in fiscal 2023. |

  82. DIRECTOR COMPENSATION

    | (2) Stock awards are made to each non-employee director quarterly as part of the annual retainer. The annual value of Common Shares awarded, based upon the closing price on the first business day of each calendar quarter, is equal to approximately $75,000 in fiscal 2024. |

  83. The Executive Committee

    The Executive Committee The Executive Committee was composed of Messrs. O’Gara (Chair), Brown, and Clark as of June 30, 2024 and did not meet during fiscal 2024.

  84. The Audit Committee

    The Audit Committee The Audit Committee was composed of Ms. Hanson (Chair), Mr. Beech, and Ms. Lenard as of June 30, 2024. All of the Audit Committee members are independent directors under NASDAQ independence standards, and each satisfies the NASDAQ financial literacy requirements. Ms. Hanson has been designated as an Audit Committee financial expert by the Board of Directors and meets all requirements as a financial expert as established by the Securities and Exchange Commission. The Audit Committee met four (4) times in fiscal 2024. The Audit Committee is solely responsible for the appointment, compensation, retention and oversight of the Company's independent registered public accounting firm, Grant Thornton LLP. The Audit Committee also evaluates information received from both Grant Thornton and management to determine whether the auditor is independent of management. The independent registered public accounting firm reports directly to the Audit Committee. The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the following:

  85. The Compensation Committee

    The Compensation Committee The Compensation Committee was composed of Mr. Brown (Chair), Ms. Lenard and Mr. Marshall, Jr. as of June 30, 2024 and met six (6) times during fiscal 2024. In discharging the responsibilities of the Board of Directors relating to compensation of the Company’s Chief Executive Officer and other senior executive officers, the purposes of the Compensation Committee are, among others, (i) to review and approve the compensation of the Company’s Chief Executive Officer and other senior executive officers and (ii) to oversee the Company’s compensation plan, policies and programs, including its incentive plans and benefit plans and programs. The Compensation Committee approves, adopts and administers the Company’s short-term incentive compensation plan, its long-term incentive compensation plan, 2019 Omnibus Plan and all awards granted thereunder, including amendments to the plans or such awards. The Committee also performs such duties and responsibilities under the terms required by any executive compensation plan, incentive compensation plan or equity-based plan. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as the Compensation Committee may deem appropriate in its sole discretion. The Committee has from time to time considered the advice of independent compensation advisors and consultants to assist in the evaluation of the Company’s executive compensation plan and practices. Beginning in 2017, the Committee retained FW Cook as a consultant to provide assistance to the Committee in connection with its review of compensation for the Company’s NEOs, including the Chief Executive Officer. The Committee believes that it has the necessary resources available to: (i) survey the compensation practices of the Company’s peer group and industry reference companies; and (ii) review other relevant market and industry data and developments. The Company’s executive compensation plan is designed to support the corporate objective of maximizing the long-term value of the Company for its shareholders. To achieve this objective, the Compensation Committee believes it is important to provide competitive levels of compensation to attract and retain the most qualified employees, to recognize individuals who exceed expectations and to closely link executive compensation with corporate performance and shareholder interests. The methods by which the Committee believes the Company's long-term objectives can be achieved are through an appropriate mix of base salary, an annual cash incentive compensation plan and a long-term equity-based incentive compensation plan. The Compensation Committee processes and procedures for the consideration and determination of executive compensation are discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement.