LYTS

LSI Industries Inc. Form 8-K Summary

Business Context and Reporting Period

This Current Report on Form 8-K, dated August 20, 2025, details the adoption of new executive compensation plans by LSI Industries Inc. The filing covers the Fiscal Year 2026 Long Term Incentive Plan (LTIP) and Short Term Incentive Plan (STIP), effective as of the close of business on August 20, 2025.

Key Financial Metrics

The filing does not report revenue, profit, cash flow, margins, debt, or liquidity figures. It focuses exclusively on the structure and targets of executive compensation plans. Key financial metrics referenced as performance targets include:

• LTIP Metrics: Three-year cumulative Adjusted EBITDA and Return on Net Assets (RONA) for the period ending June 30, 2028.
• STIP Metrics: Adjusted EBITDA and Net Sales for the fiscal year ending June 30, 2026.

Material Changes and Plan Details

The Compensation Committee adopted two new incentive plans to align executive compensation with company performance:

Fiscal Year 2026 Long Term Incentive Plan (LTIP)

• Performance Cycle: July 1, 2025, to June 30, 2028.
• Awards: Restricted Stock Units (RSUs) and Performance Stock Units (PSUs).
• Criteria: 50% weighted on cumulative Adjusted EBITDA and 50% on RONA.
• Payout Structure:
  • Below 85% (EBITDA) or 68.4% (RONA) of target: 0% payout.
  • At 100% of target: 100% payout.
  • Above 110% (EBITDA) or 106% (RONA) of target: 200% payout.
• Executive Grants (Target Value):
  • James Clark (CEO): $1,500,000 (31,088 RSUs, 46,632 PSUs).
  • James Galeese (EVP & CFO): $540,000 (11,192 RSUs, 16,788 PSUs).
  • Thomas Caneris (EVP HR & GC): $440,000 (9,119 RSUs, 13,679 PSUs).

Fiscal Year 2026 Short Term Incentive Plan (STIP)

• Performance Cycle: July 1, 2025, to June 30, 2026.
• Awards: Annual cash bonuses.
• Criteria: 80% weighted on Adjusted EBITDA and 20% on Net Sales.
• Payout Structure:
  • Below 85% (EBITDA) or 90% (Net Sales) of target: 0% payout.
  • At 100% of target: 100% payout.
  • Above 110% (EBITDA) or 105% (Net Sales) of target: 200% payout.
• Bonus Targets (% of Base Salary):
  • James A. Clark (CEO): 80%.
  • James E. Galeese (EVP & CFO): 50%.
  • Thomas A. Caneris (EVP HR & GC): 50%.

Guidance, Risks, and Contingencies

The filing outlines specific contingencies regarding employment status and corporate events:

• Vesting Requirements: Participants must remain continuously employed full-time until the payout date. Exceptions exist for death, disability, retirement, and change in control.
• Change in Control (CIC):
  • RSUs: Vest in full if terminated without Cause or for Good Reason within 24 months of a CIC, unless assumed by the successor.
  • PSUs: Convert to time-based RSUs at the target performance level, vesting over three years, regardless of actual performance achievement.
• Restrictive Covenants: Payment of any incentive award is contingent upon the participant executing a written restrictive covenant agreement.

Investor Verification Checklist

• Verify the specific dollar targets for Adjusted EBITDA and RONA for the 2028 fiscal year, as these are set by the Committee but not disclosed in this filing.
• Confirm the specific dollar targets for Adjusted EBITDA and Net Sales for the 2026 fiscal year.
• Review the subsequent periodic report for the full text of the RSU Award Agreement, PSU Award Agreement, and LTIP documents referenced as exhibits.
• Monitor future filings for actual performance results against the 85%, 100%, and 110% (or 106% for RONA) thresholds to determine potential payout levels.