-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DTXiJSksLXLci5evsuT7MBTYlhfm4rmWzmiB85IPwWIR4WMTO6ys6Ei5jgHCbECZ Bk0b8D4qk5i//8AGmP0CjQ== 0000950152-99-007765.txt : 19990924 0000950152-99-007765.hdr.sgml : 19990924 ACCESSION NUMBER: 0000950152-99-007765 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991111 FILED AS OF DATE: 19990923 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: DEF 14A SEC ACT: SEC FILE NUMBER: 333-72407 FILM NUMBER: 99715582 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 DEF 14A 1 LSI INDUSTRIES, INC. DEFINITIVE PROXY 1 SCHEDULE 14A SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12 LSI Industries Inc. ------------------------------------------------ (Name of Registrant as Specified in its Charter) LSI Industries Inc. ------------------------------------------------ (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i) (1), or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: --------------------------------------------------------------- 2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:(1) --------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------ (1)Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: --------------------------------------------------------------- 2) Form, Schedule or Registration Statement No.: --------------------------------------------------------------- 3) Filing Party: --------------------------------------------------------------- 4) Date Filed: --------------------------------------------------------------- 2 [LSI INDUSTRIES LOGO] NOTICE OF ANNUAL MEETING AND PROXY STATEMENT September 24, 1999 Dear Shareholder: We invite you to attend our annual meeting of shareholders on Thursday, November 11, 1999, at the Company's headquarters located at 10000 Alliance Road, Cincinnati, Ohio. At the meeting, you will hear a report on our operations and have a chance to meet your directors and executives. This booklet includes the formal notice of the meeting and the proxy statement. The proxy statement tells you more about the agenda and procedures for the meeting. It also describes how the Board operated and gives a personal information about our director candidates. Even if you only own a few shares, we want your shares to be represented at the meeting. I urge you to complete, sign, date and promptly return your proxy card in the enclosed envelope. Sincerely yours, /s/ Robert J. Ready Robert J. Ready Chairman of the Board, Chief Executive Officer, and President 3 [LSI INDUSTRIES LOGO] NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF LSI INDUSTRIES INC. TIME: 10:00 a.m., Eastern Standard Time DATE: Thursday, November 11, 1999 PLACE: LSI Industries Corporate Headquarters 10000 Alliance Road Cincinnati, Ohio 45242 PURPOSE: - - Elect Directors - - Ratify the appointment of Arthur Andersen LLP as the Company's independent public accountants for fiscal year 2000 - - Conduct other business if properly raised Only shareholders of record on September 16, 1999 may vote at the meeting. The approximate mailing date of the Proxy Statement and accompanying Proxy Card is September 27, 1999. YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. /s/ Robert J. Ready Robert J. Ready Chairman of the Board, Chief Executive Officer, and President September 24, 1999 4
LSI Industries Inc. Proxy Statement Table of Contents ----------------- Begins on Page INTRODUCTION.................................................................. 1 VOTING AT ANNUAL MEETING...................................................... 1 General Information..................................................... 1 Principal Shareholders.................................................. 2 Voting by Proxy......................................................... 2 Shareholder Proposals................................................... 2 Proposal 1. Election of Directors............................. 3 Proposal 2. Ratification of Appointment of Independent Public Accountants.................... 3 Other Matters.................................................. 4 MANAGEMENT.................................................................... 4 Directors and Executive Officers........................................ 4 Board Actions........................................................... 6 Compliance with Section 16 of the Securities Exchange Act of 1934....... 6 Executive Compensation.................................................. 7 Stock Options........................................................... 7 REPORT OF THE COMPENSATION COMMITTEE.......................................... 8 Base Compensation....................................................... 8 Incentive Compensation.................................................. 8 Stock Option Grants..................................................... 9 CORPORATE PERFORMANCE GRAPH................................................... 9 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION................... 10 OTHER MATTERS................................................................. 10 QUESTIONS ................................................................... 11
5 LSI INDUSTRIES INC. 10000 ALLIANCE ROAD CINCINNATI, OHIO 45242 TELEPHONE (513) 793-3200 ------------------------------------------ P R O X Y S T A T E M E N T ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 11, 1999 INTRODUCTION The Board of Directors of LSI Industries Inc. is requesting your Proxy for the Annual Meeting of Shareholders on November 11, 1999, and at any adjournment thereof, pursuant to the foregoing Notice. This Proxy Statement and the accompanying proxy were first mailed on September 27, 1999, to shareholders of record on September 16, 1999. VOTING AT ANNUAL MEETING GENERAL INFORMATION Shareholders may vote in person or by proxy at the Annual Meeting. Proxies given may be revoked at any time by filing with the Company either a written revocation or a duly executed proxy bearing a later date, or by appearing at the Annual Meeting and voting in person. All shares will be voted as specified on each properly executed proxy. If no choice is specified, the shares will be voted as recommended by the Board of Directors, namely "FOR" Proposal 1 to elect the two persons nominated as Class A directors by the Board of Directors, and "FOR" Proposal 2 (Ratification of Appointment of Independent Public Accountants). As of September 16, 1999, the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting, LSI Industries had 10,173,056 Common Shares outstanding. Each share is entitled to one vote. Only shareholders of record at the close of business on September 16, 1999, will be entitled to vote at the Annual Meeting. Abstentions and shares otherwise not voted for any reason, including broker non-votes, will have no effect on the outcome of any vote taken at the Annual Meeting. -1- 6 PRINCIPAL SHAREHOLDERS As of September 10, 1999, the following are the only shareholders known by the Company to own beneficially 5% or more of its outstanding Common Shares:
Amount and Nature of Percent Name of Beneficial Owner Beneficial Ownership Of Class - ------------------------ -------------------- -------- DePrince, Race & Zollo, Inc. 608,800 5.90% 201 South Orange Ave. Suite 850 Orlando, FL 32801 Robert J. Ready 567,149 (a) 5.50% 10000 Alliance Road Cincinnati, Ohio 45242 State of Wisconsin Investment Board 564,000 5.47% 121 East Wilson Street Madison, WI 53702 T. Rowe Price Associates, Inc. 550,000 5.33% 100 East Pratt Street Baltimore, MD 21202 Fleet Investment Advisors, Inc. 537,678 5.21% 75 State Street Boston, MA 02109 (a) Includes exercisable options for 13,500 shares, 11,910 shares held in the Company's non-qualified Deferred Compensation Plan, and 130,488 shares held in trust for Mr. Ready's children. Mr. Ready disclaims beneficial ownership of shares held by or in trust for his children.
VOTING BY PROXY All properly signed proxies will, unless a different choice is indicated, be voted "FOR" the election of the two nominees for Class A directors proposed by the Board of Directors, and ratification of the appointment of independent public accountants. If any other matters come before the meeting or any adjournment, each proxy will be voted in the discretion of the individuals named as proxies on the card. SHAREHOLDER PROPOSALS Shareholders who desire to have proposals included in the Notice for the 2000 Annual Meeting of Shareholders must submit their proposals to the Company at its offices on or before May 30, 2000. -2- 7 The form of Proxy for the Annual Meeting of Shareholders grants authority to the persons designated therein as proxies to vote in their discretion on any matters that come before the meeting, or any adjournment thereof, except those set forth in the Company's Proxy Statement and except for matters as to which adequate notice is received. In order for a notice to be deemed adequate for the 2000 Annual Shareholders' Meeting, it must be received prior to August 11, 2000. PROPOSAL 1. ELECTION OF DIRECTORS The Company's Code of Regulations provides that the Board of Directors be composed of two classes of directors, Class A and Class B, with each class elected for a two-year term. One class is elected annually. The terms of the Class A directors expire at the 1999 Annual Meeting of Shareholders while the terms of the Class B directors expire at the 2000 Annual Meeting of Shareholders. The Board is nominating for reelection two present Class A directors, namely, Michael J. Burke and Robert J. Ready. Proxies solicited by the Board will be voted for the election of these two nominees. John N. Taylor, Jr., a Class A director, has indicated that he will retire from the Board of Directors effective November 11, 1999. This Director's position will remain vacant until such time as the Board of Directors locates and recruits a suitable replacement board member. No candidate is being nominated by the Board for this imminent vacancy at the present time. All Class A directors elected at the Annual Meeting will be elected to hold office for two years and until their successors are elected and qualified. In voting to elect directors, shareholders are entitled to one vote for each share held of record. Shareholders are not entitled to cumulate their votes in the election of directors. Should any of the nominees become unable to serve, proxies will be voted for any substitute nominee designated by the Board. Nominees receiving the highest number of votes cast for the positions to be filled will be elected. RECOMMENDATION OF THE BOARD OF DIRECTORS The Board of Directors recommends a vote in FAVOR of each of the directors nominated in this Proxy Statement. Nominees receiving the highest number of votes will be elected. PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors appointed Arthur Andersen LLP as the Company's independent public accountants for fiscal 2000. Arthur Andersen LLP has been the independent public accounting firm for the Company since March 1996. Although not required by law, the Board is seeking shareholder ratification of its selection. If ratification is not obtained, the Board intends to continue the employment of Arthur Andersen LLP at least through fiscal 2000. -3- 8 Representatives of Arthur Andersen LLP are expected to be present at the Shareholders' Meeting and will be given an opportunity to comment, if they so desire, and to respond to appropriate questions that may be asked by shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS The Board of Directors recommends a vote in FAVOR of Proposal 2. The affirmative vote of a majority of Common Shares voting at the Annual Meeting is required for ratification of this proposal. OTHER MATTERS Any other matters considered at the Annual Meeting, including adjournment, will require the affirmative vote of a majority of Common Shares voting. MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The directors and executive officers of LSI Industries are:
Common Shares Beneficially Owned Name and Age Position Amount Percentage ------------ -------- ------ ---------- Robert J. Ready (a) Chairman, President, and 567,149 (d) 5.50% 59 Chief Executive Officer James P. Sferra (a) Executive Vice President- 212,782 (e) 2.06% 60 Manufacturing; Secretary and Director John N. Taylor, Jr. (b)(c) Director 174,835 (e) 1.69% 64 Ronald S. Stowell Vice President, Chief Financial 43,668 (e) * 49 Officer and Treasurer Michael J. Burke (b)(c) Director and Assistant 31,500 (e) * 56 Secretary Allen L. Davis (b)(c) Director 31,312 (e) * 57 Wilfred T. O'Gara (b)(c) Director 1,500 (e) * 42 All Directors and Executive Officers _________ ______ as a Group (Seven Persons) 1,062,746 10.30% ========= ======
-4- 9 - ------------------------------ Information as of September 10, 1999 (a) Executive Committee Member (b) Compensation Committee Member (c) Audit Committee Member (d) See "Principal Shareholders" (e) Includes options exercisable within 60 days for Mr. Sferra of 9,500 shares, Mr. Taylor of 9,000 shares, Mr. Stowell of 17,500 shares, Mr. Burke of 19,500 shares, Mr. Davis of 19,500 shares, and Mr. O'Gara 1,500 shares; and indirect beneficial ownership for Mr. Sferra of 6,732 shares, and Mr. Taylor of 98,825 shares. * Less than 1% Robert J. Ready is the founder of the Company and has been its President and a Director since 1976. Mr. Ready was appointed Chairman of the Board of Directors in February 1985. Mr. Ready is also a Director of Meridian Diagnostics, Inc. (a Nasdaq listed company) and of Superior Label Systems, Inc. James P. Sferra shared in the formation of the Company. Mr. Sferra has served as Corporate Vice President of Manufacturing from November 1989 to November 1992, and as Executive Vice President-Manufacturing since then. Prior to that, he served as Vice President-Manufacturing of LSI Lighting Systems, a division of the Company. Mr. Sferra has served as a Director since 1976, and was appointed Secretary in 1996. John N. Taylor, Jr. was elected a Director of the Company in November 1992. Mr. Taylor has indicated his intention to retire from the Board in November 1999 and has tendered his resignation. Mr. Taylor is Chairman of Kurz-Kasch, Inc., a specialty manufacturer of plastic-based components, and electromagnetic products headquartered in Dayton, Ohio. Prior to that, Mr. Taylor founded and was Chairman and Chief Executive Officer of Component Technology Corp., a Nasdaq listed company in Erie, Pennsylvania, until its sale in 1989. Mr. Taylor is a Director of Robbins & Myers Inc. (a Nasdaq listed company), Dayton, Ohio. Ronald S. Stowell has served as Chief Financial Officer since joining the Company in December 1992, and was appointed Treasurer in November 1993 and Vice President in November 1997. From 1985 to November 1992, Mr. Stowell served as Corporate Controller of Essef Corporation (a Nasdaq listed company), Chardon, Ohio, a manufacturer of high performance composite and engineered plastics products. Michael J. Burke was elected a Director and Assistant Secretary of the Company in February 1985. Mr. Burke is a Managing Partner of the Cincinnati law firm of Keating, Muething & Klekamp, P.L.L., counsel to the Company, and has been associated with that firm since 1968. Allen L. Davis was elected a Director of the Company in February 1985. Mr. Davis, now retired, was the President and Chief Executive Officer, and a Director of Provident Financial Group, Inc. and The Provident Bank (a Nasdaq listed company), Cincinnati, Ohio from 1986 and 1984, respectively, to 1998. Wilfred T. O'Gara was appointed a Director of the Company in January 1999 to fill the vacancy which was created by the death of an LSI Industries director in 1997. Mr. O'Gara has been President, Chief Operating Officer and a Director of The Kroll-O'Gara Company (a -5- 10 Nasdaq listed company), Cincinnati, Ohio since December 1997. Prior to the December 1997 merger of Kroll Holdings, Inc. and The O'Gara Company, Mr. O'Gara was the CEO of The O'Gara Company and has served in various executive officer and director positions in its subsidiaries and predecessors since 1983. BOARD ACTIONS The Board of Directors met seven times during fiscal 1999. The Executive Committee, composed of Messrs. Ready (Chairman), and Sferra, 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 Executive Committee met two times during fiscal 1999. The Audit Committee, composed of Messrs. Davis (Chairman), Burke, O'Gara, and Taylor, is responsible for reviewing the Company's internal accounting operations. It also recommends the appointment of the Company's independent public accountants and reviews the relationships between the Company and the independent public accountants. The Audit Committee met two times during fiscal 1999. The Compensation Committee, composed of Messrs. Burke (Chairman), Davis, O'Gara, and Taylor, is responsible for establishing compensation levels for management and for administering the Company's stock option plans and Deferred Compensation Plan. The Compensation Committee met three times during fiscal 1999. The Company does not have a Nominating Committee. During fiscal year 1999, directors who are not employees of the Company received $13,000 per year for serving as a Director plus $1,200 for each meeting attended. Committee members received $750 per year for serving as Chairman of a committee plus $600 for each committee meeting attended. Directors who are employees of the Company do not receive any compensation for serving as a Director. All directors attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and Committees of which they were members. Non-employee directors received an annual grant of an option to purchase 1,500 Common Shares at the market price at the time of grant. The option is exercisable at the time of grant and has a ten year life. COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers, directors and persons who own more than ten percent of the Company's Common Shares to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon its review of copies of such forms received by it, or upon written representations from certain reporting persons that no Forms 5 were required for those persons, the Company believes that during fiscal 1999 all filing requirements were met. -6- 11 EXECUTIVE COMPENSATION The following table sets forth information regarding annual, long-term, and other compensation paid by the Company to its Chief Executive Officer and each of the other two executive officers at June 30, 1999 during each of the last three fiscal years for services rendered to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE Annual Compensation ------------------------------------- Other Annual Securities All Other Name and Compensation Underlying Compensation Principal Position Year Salary Bonus (1) Options (2) (3) - ------------------ ---- ------ ----- ------------ ----------- ------------ Robert J. Ready 1999 $424,500 $212,250 $27,892 -- $112,670 Chairman, President 1998 410,000 205,000 31,300 -- 80,116 and Chief Executive 1997 395,000 -- 33,144 -- 96,706 Officer James P. Sferra 1999 323,200 161,600 17,200 -- 61,955 Executive Vice President- 1998 312,200 156,100 17,200 5,000 41,643 Manufacturing; Secretary 1997 300,000 -- 15,397 -- 49,889 Ronald S. Stowell 1999 181,500 105,750 19,300 -- 48,529 Vice President, Chief 1998 165,000 79,895 18,900 10,000 21,138 Financial Officer, and 1997 142,000 -- 15,805 -- 29,105 Treasurer - ---------------------- (1) Other Annual Compensation consists of automobile allowances for all executive officers as well as professional fee allowances for Mr. Ready, and Mr. Sferra. (2) Represents Common Shares underlying options awarded under the Company's stock option plans. (3) All Other Compensation includes Retirement Plan and Deferred Compensation Plan contributions, premiums paid on long-term disability and life insurance policies, and payment of accrued vacation.
STOCK OPTIONS No stock options were granted in fiscal year 1999 to the executive officers shown in the Summary Compensation Table. The following table contains information concerning the exercise and appreciation of stock options held by the Named Executives.
Fiscal 1999 Option Exercises and Year-End Option Values ------------------------------------------------------- Number of Securities Underlying Value of Shares Unexercised Options Unexercised In-the-Money Acquired on Value at Fiscal Year-End Options at Fiscal Year-End(1) Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable - ---- -------- -------- ------------------------- ----------------------------- Robert J. Ready -- -- 6,750 / 6,750 $ 76,241 / $ 76,241 James P. Sferra 20,738 204,747 2,500 / 7,000 $ 22,488 / $ 73,315 Ronald S. Stowell 4,725 47,675 10,500 / 14,500 $ 118,598 / $ 140,778
-7- 12 (1) In-the-Money Options are options for which the market value of the underlying Common Shares exceeds the exercise price. Calculation is based upon the market value of the underlying Common Shares at fiscal year-end, minus the exercise price. REPORT OF THE COMPENSATION COMMITTEE The Compensation Committee of the Board of Directors has furnished the following report on executive compensation for fiscal year 1999. The LSI Industries Inc. Compensation Committee annually establishes salaries, bonuses and stock option awards for executive officers and key management personnel. The Committee reviews the performance of the Company's executive officers on an individual basis and also reviews each executive's performance in connection with the Company's overall performance. The Committee desires to establish executive compensation that enhances the Company's overall fundamental objective of providing long-term value for its shareholders and employees. In addition, major emphasis is being placed on retaining current management and incentivizing key managers to align their interests to make them consistent with the Company's growth. The Committee believes that the interests of management and shareholders can be more closely aligned by providing executives with competitive levels of compensation that will enable LSI Industries to attract and retain key executives by rewarding exceptional individual performance, and by tying executive pay to personal goals as well as overall corporate performance. The Committee uses base salaries, incentive and deferred compensation arrangements, and stock options designed to tie a portion of the executive's compensation to the stock market performance of the Company's Common Shares when establishing executive and managerial compensation programs. BASE COMPENSATION The Committee reviewed the base salaries of the Company's executive officers and each executive's level of responsibility and potential, as well as salary levels offered by competitors and the overall competition in the existing marketplace. Each executive's particular division of the Company was reviewed, and its contribution to the overall results of the Company assessed. The Committee used this information to determine the executive's base compensation level and to set the performance goals for the upcoming year. The Committee applied a collective, subjective evaluation of the above factors to determine the annual base compensation level of its executive officers in light of the Company's performance and, in certain cases, its various divisions. The Committee did not utilize a particular objective formula as a means of establishing annual base compensation levels. Mr. Ready's salary was established on the same basis. INCENTIVE COMPENSATION Incentive compensation awards for performance during fiscal 1999 were made to those employees based upon the achievement of specific goals set forth in the strategic Plan adopted for the 1999 fiscal year. The Plan states that 20% of certain employees' bonuses are based upon overall corporate results, with the remaining 80% based upon divisional results. Bonuses -8- 13 for Corporate officers are based entirely on overall corporate results. Some discretionary bonuses were paid to various executive officers and key managers based on the Committee's analysis of the performance of these individuals and their contribution to the success of the Company or the particular division for which they were primarily responsible. STOCK OPTION GRANTS The shareholders of LSI Industries established a Stock Option Plan to provide a method of attracting, retaining and providing appropriate incentives to key employees. The Committee is responsible for the administration of this Plan, both with respect to executive officers and all other employees. To that end, the Committee determines which employees receive options, the time of grant and the number of shares subject to the option. In fiscal 1999 the Committee took into account the employee's current responsibilities and performance when granting stock options as an incentive for motivating future performance as well as the number of shares already owned and the options previously granted. All option prices are set at 100% of market value on the date of grant. The Committee based its individual option awards upon the contributions of the particular employee and its view of the importance of the employee to the Company's future progress and development. Compensation Committee Michael J. Burke, Chairman Allen L. Davis Wilfred T. O'Gara John N. Taylor, Jr. CORPORATE PERFORMANCE GRAPH The following graph compares the cumulative total shareholder return on the Company's Common Shares during the five fiscal years ended June 30, 1999, with a cumulative total return on the Nasdaq Stock Market Index (U.S. companies) and the Dow Jones Electrical Equipment Index. The comparison assumes $100 was invested June 30, 1994 in the Company's Common Shares and in each of the indexes presented; it also assumes reinvestment of dividends. -9- 14
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN LSI Nasdaq Dow Jones Industries Market Index Electrical June 30 Inc. (U.S.) Equipment Index ------- ---------- ------------ --------------- 1994 100 100 100 1995 197 133 125 1996 270 171 151 1997 215 208 189 1998 324 274 208 1999 397 393 292
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Michael J. Burke, who is Chairman of the Compensation Committee, is a co-managing partner of Keating, Muething & Klekamp, P.L.L., Cincinnati, Ohio, a law firm that provided legal services to the Company in fiscal year 1999. OTHER MATTERS LSI Industries is not aware of any other matters to be presented at the Annual Meeting other than those specified in the Notice. QUESTIONS If you have any questions or need more information about the annual shareholders' meeting, write to or contact: LSI Industries Inc. Ronald S. Stowell, Vice President, Chief Financial Officer & Treasurer 10000 Alliance Road Cincinnati, Ohio 45242 (513) 793-3200 For more information about your stock ownership, call the Provident Bank at (513) 763-8113. -10- 15 We also invite you to visit the LSI Industries site on the Internet at www.lsi-industries.com. Internet site materials are for your general information only and are not part of this proxy solicitation. By order of the Board of Directors /s/ James P. Sferra James P. Sferra Secretary Dated: September 24, 1999 -11- 16 LSI INDUSTRIES INC. PROXY The undersigned hereby appoints ALLEN L. DAVIS, WILFRED T. O'GARA, FOR AND JAMES P. SFERRA, or any one of them, proxies of the ANNUAL undersigned, each with the power of substitution, to vote all MEETING Common Shares which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of LSI Industries Inc. to be held on November 11, 1999 at 10:00 A.M. Eastern time at the Company's headquarters located at 10000 Alliance Road, Cincinnati, Ohio and any adjournment of such meeting on the matters specified below and in their discretion with respect to such other business as may properly come before the meeting or any adjournment thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS: 1. AUTHORITY TO ELECT AS CLASS A DIRECTORS THE TWO NOMINEES BELOW. FOR ___ WITHHOLD AUTHORITY ___ MICHAEL J. BURKE AND ROBERT J. READY WRITE THE NAME OF ANY NOMINEE(S) FOR WHOM AUTHORITY TO VOTE IS WITHHELD ________________________________________ 2. RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 2000. FOR ___ AGAINST ___ ABSTAIN ___ THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS A CONTRARY CHOICE IS SPECIFIED. _______________________, 1999 _______________________________________________ _______________________________________________ IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON INDICATING, WHERE PROPER, OFFICIAL POSITION OR REPRESENTATIVE CAPACITY. IN THE CASE OF JOINT HOLDERS, ALL SHOULD SIGN. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS -----END PRIVACY-ENHANCED MESSAGE-----