<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
LSI INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] 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: ...........................................................
================================================================================
<PAGE> 2
[LSI INDUSTRIES, INC. LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 12, 1998
Dear Shareholder:
We cordially invite you to attend our Annual Shareholders' Meeting to
be held at the Company's headquarters located at 10000 Alliance Road,
Cincinnati, Ohio on Thursday, November 12, 1998 at 10:00 a.m. Eastern Standard
Time.
The purposes of this Annual Meeting are to consider and act upon the
following proposals:
1) To elect two Class B directors to hold office until the Annual
Meeting of Shareholders in 2000 and until their respective
successors are duly elected and qualified; and
2) To ratify the appointment of Arthur Andersen LLP as the
Company's independent public accountants for fiscal year 1999;
and
3) To transact such other business as may properly be brought
before the meeting or any other adjournment thereof.
Shareholders of record at the close of business on Thursday, September
17, 1998 are entitled to notice and to vote at the meeting. This notice is given
pursuant to an order of the Board of Directors.
Following the meeting, we will review the Company's progress over the
last year and our plans for the future, and will have an open house at the
Cincinnati Operations. Our directors and executive officers will be available to
discuss the Company's business with you.
Yours truly,
/s/ Robert J. Ready
Robert J. Ready
Chairman of the Board and President
Dated: September 24, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, SIGN AND PROMPTLY
RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. PROXIES MAY BE REVOKED BY
WRITTEN NOTICE OF REVOCATION, THE SUBMISSION OF A LATER PROXY OR BY ATTENDING
THE MEETING AND VOTING IN PERSON.
<PAGE> 3
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 12, 1998
INTRODUCTION
The Board of Directors of LSI Industries Inc. is requesting your Proxy
for the Annual Meeting of Shareholders on November 12, 1998, and at any
adjournment thereof, pursuant to the foregoing Notice. This Proxy Statement and
the accompanying proxy were first mailed on September 28, 1998, to shareholders
of record on September 17, 1998.
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 B directors by the Board
of Directors, and "FOR" Proposal 2 (Ratification of Appointment of Independent
Public Accountants).
As of September 17, 1998, the record date for determining shareholders
entitled to notice of and to vote at the Annual Meeting, LSI Industries had
9,680,002 Common Shares outstanding. Each share is entitled to one vote. Only
shareholders of record at the close of business on September 17, 1998, 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.
<PAGE> 4
PRINCIPAL SHAREHOLDERS
- ----------------------
As of September 4, 1998, the following are the only shareholders known
by the Company to own beneficially 5% or more of its outstanding Common Shares:
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership Of Class
- ------------------------ -------------------- --------
<S> <C> <C>
Robert J. Ready 556,660 (a) 5.69%
State of Wisconsin Investment Board 625,000 6.39%
Thomson Horstmann & Bryant, Inc. 679,000 6.94%
</TABLE>
(a) Includes exercisable options for 6,750 shares, 8,171 shares held in the
Company's non-qualified Deferred Compensation Plan, and 130,488 shares
held in trust for Mr. Ready's children.
The business address of Mr. Ready is: 10000 Alliance Road, Cincinnati, Ohio
45242. Mr. Ready disclaims beneficial ownership of shares held by or in trust
for his children. The business address of the State of Wisconsin Investment
Board is P.O. Box 7842, Madison, WI 53707, and the business address of Thomson
Horstmann & Bryant, Inc. is Park 80 West, Plaza Two, Saddle Brook, NJ 07663.
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 B 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 1999 Annual Meeting of Shareholders must submit their proposals to the
Company at its offices on or before August 13, 1999.
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 1999 Annual Shareholders' Meeting, it must be received
prior to August 13, 1999.
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
2
<PAGE> 5
Meeting of Shareholders while the terms of the Class B directors expire at the
1998 Annual Meeting of Shareholders. One Class B director's position is
currently open.
The Board is nominating for reelection its present Class B directors,
namely, Allen L. Davis, and James P. Sferra. Proxies solicited by the Board will
be voted for the election of these two nominees.
All Class B 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 1999. 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 1999.
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.
3
<PAGE> 6
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
The directors and executive officers of LSI Industries are:
<TABLE>
<CAPTION>
Common Shares
Beneficially Owned
------------------
Name and Age Position Amount Percentage
------------ -------- ------ ----------
<S> <C> <C> <C>
Robert J. Ready (a) Chairman, President, and 556,660 (d) 5.69%
58 Chief Executive Officer
James P. Sferra (a) Executive Vice President- 223,653 (e) 2.29%
59 Manufacturing; Secretary
and Director
John N. Taylor, Jr. (b)(c) Director 212,410 (e) 2.17%
63
Ronald S. Stowell Vice President, Chief Financial 33,497 (e) *
48 Officer and Treasurer
Michael J. Burke (b)(c) Director and Assistant 30,000 (e) *
55 Secretary
Allen L. Davis (b)(c) Director 29,812 (e) *
56
All Directors and Executive Officers --------- ------
as a Group (Six Persons) 1,086,032 11.10%
========= ======
</TABLE>
- ------------------------------
Information as of September 4, 1998
(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 2,500
shares, Mr. Taylor of 7,500 shares, Mr. Stowell of 15,225 shares, Mr.
Burke of 18,000 shares, and Mr. Davis of 18,000 shares; and indirect
beneficial ownership for Mr. Sferra of 26,931 shares, and Mr. Taylor of
112,900 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-
4
<PAGE> 7
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 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. (formerly Provident Bancorp, Inc.)
and The Provident Bank, Cincinnati, Ohio from 1986 and 1984, respectively, to
1998.
BOARD ACTIONS AND COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF
1934
The Board of Directors met seven times during fiscal 1998.
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 did not meet during fiscal 1998.
The Audit Committee, composed of Messrs. Davis (Chairman), Burke, 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
1998.
The Compensation Committee, composed of Messrs. Burke (Chairman),
Davis, 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
1998.
The Company does not have a Nominating Committee.
During fiscal year 1997, directors who are not employees of the Company
received $11,000 per year for serving as a Director plus $1,000 for each meeting
attended. Committee
5
<PAGE> 8
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 1,000 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.
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 representation from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during fiscal 1998 all
filing requirements were met.
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, 1998 during each of the
last three fiscal years for services rendered to the Company and its
subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------
Other Annual Securities All Other
Name and Compensation Underlying Compensation
Principal Position Year Salary Bonus (1) Options (2) (3)
- ------------------ ---- ------ ----- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Ready 1998 $410,000 $205,000 $31,300 -- $80,116
Chairman, President 1997 395,000 -- 33,144 -- 96,706
and Chief Executive 1996 375,000 125,250 19,604 22,500 97,743
Officer
James P. Sferra 1998 312,200 156,100 17,200 5,000 41,643
Executive Vice President- 1997 300,000 -- 15,397 -- 49,889
Manufacturing; Secretary 1996 275,000 99,069 16,485 15,000 58,626
Ronald S. Stowell 1998 165,000 79,895 18,900 10,000 21,138
Vice President, Chief 1997 142,000 -- 15,805 -- 29,105
Financial Officer, and 1996 130,000 53,420 14,981 15,000 29,446
Treasurer
</TABLE>
- ----------------------
(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.
The Company maintains a nonqualified Deferred Compensation Plan that is
designed to motivate certain executives and to further align the interests of
these executives with those of Company Shareholders. The Plan permits executives
to defer any portion of their salary
6
<PAGE> 9
and bonus, beginning in fiscal year 1997, with a portion of that deferral being
matched by the Company. If the executive's salary deferral is voluntarily
invested in LSI Common Shares, and if a certain minimum return on average
shareholders' equity is achieved, then the Company will match (in LSI Common
Shares) a portion of the executive's deferral. Additionally, beginning in fiscal
year 1996, the Company also makes contributions into the Deferred Compensation
Plan for certain executives to make up the retirement contribution that would
have been credited to their accounts in the qualified LSI Industries Inc.
Retirement Plan if it were not for ERISA-imposed limits on covered compensation.
Such Deferred Compensation Plan contribution aggregating $143,000, $91,000, and
$47,000 for the named executives is included in the Summary Compensation Table
for fiscal years 1996, 1997, and 1998, respectively.
STOCK OPTIONS
- -------------
The following tables contain information concerning (a) the grant of
stock options to the Named Executives and (b) the exercise and appreciation of
stock options held by Named Executives.
<TABLE>
<CAPTION>
Fiscal 1998 Option Grants
-------------------------
Potential Realizable Value
Number of at Assumed Annual Rates
Securities % of of Share Price
Underlying Total Options Exercise Appreciation for Option Term (1)
Options Granted to Employees Price Expiration --------------------------------
Name Granted in Fiscal 1998 ($/Share) Date 5% 10%
- ---- ------- -------------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Robert J. Ready -- -- -- -- -- --
James P. Sferra 5,000 3.3% $ 15.13 9/4/07 $ 47,576 $120,567
Ronald S. Stowell 10,000 6.6% $ 15.13 9/4/07 $ 95,152 $241,133
</TABLE>
(1) Potential realizable value is net of option exercise price, but before
taxes associated with exercise. These amounts represent compounded
rates of appreciation and exercise of the options immediately prior to
expiration of their term. Actual gains, if any, are dependent on the
future performance of the Common Shares, overall stock market
conditions, and the optionee's continued employment through the vesting
period. The amounts in this table may not necessarily be achieved.
<TABLE>
<CAPTION>
Fiscal 1998 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
- ---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert J. Ready 67,118 $690,869 -- / 13,500 -- / $ 96,795
James P. Sferra 11,340 139,709 16,238 / 9,000 $208,773 / $ 64,530
Ronald S. Stowell 3,938 72,617 10,725 / 19,000 $104,870 / $113,240
</TABLE>
(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.
7
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for fiscal year 1998.
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 additional key managers and executives to keep pace 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
executives with the highest qualifications, by recognizing exceptional
individual performance, and by tying executive pay to 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 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 1998 were
made to those employees based upon the achievement of specific goals set forth
in the strategic Plan adopted for the 1998 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 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.
8
<PAGE> 11
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 1998 the Committee
took into account the employee's current responsibilities and performance when
granting stock options as an incentive for motivating future performance. 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
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, 1998,
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, 1993 in the Company's Common Shares and in each of the indexes
presented; it also assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
LSI Nasdaq Dow Jones
Industries Market Index Electrical
June 30 Inc. (U.S.) Equipment Index
------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
1993 100 100 100
1994 220 101 98
1995 434 135 123
1996 595 173 149
1997 474 210 185
1998 713 278 205
</TABLE>
9
<PAGE> 12
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 1998.
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.
By order of the Board of Directors
/s/ James P. Sferra
James P. Sferra
Secretary
Dated: September 24, 1998
10
<PAGE> 13
LSI INDUSTRIES INC.
PROXY
FOR
ANNUAL
MEETING
The undersigned hereby appoints ROBERT J. READY, MICHAEL J. BURKE, AND
JOHN N. TAYLOR, JR., or any one of them, proxies of the undersigned, each with
the power of substitution, to vote all 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 12, 1998 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 B Directors The Two Nominees Below.
FOR [ ] WITHHOLD AUTHORITY [ ]
ALLEN L. DAVIS AND JAMES P. SFERRA
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 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS A
CONTRARY CHOICE IS SPECIFIED.
, 1998
- ------------------------ ----------------------------------------
----------------------------------------
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
