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EXHIBIT 2
LSI INDUSTRIES INC.
1995 DIRECTORS' STOCK OPTION PLAN
The purpose of the 1995 Directors' Stock Option Plan is to advance the
interests of LSI Industries Inc. and its shareholders by affording non-employee
members of the Company's Board of Directors an opportunity to increase their
proprietary interest in the Company by the grant of options to them under the
terms set forth herein. The Company believes that this Plan will give an
incentive to these members of the Board to increase revenues and profits and
otherwise serve to align their interest with shareholders.
1. EFFECTIVE DATE OF THE PLAN. This Plan shall become effective
May 2, 1995, having been adopted by the Board of Directors on such date,
subject to approval by the affirmative vote of the holders of the majority of
the shares of Common Stock of the Company voting on the issue at the next
Annual Shareholders' Meeting. All options granted prior to such approval are
conditioned upon such approval being received. If shareholder approval is not
received within twelve months of the Effective Date, options granted pursuant
to this Plan shall be null and void.
2. SHARES SUBJECT TO THE PLAN. The shares to be issued upon the
exercise of the options granted under the Plan shall be shares of Common Stock,
no par value, of the Company. Either treasury or authorized and unissued
shares of Common Stock, or both, as the Board of Directors shall from time to
time determine, may be so issued. Shares of Common Stock which are the subject
of any lapsed, expired or terminated options may be made available for
reoffering under the Plan.
Subject to the provisions of Section 4 hereof, the aggregate number of
shares of Common Stock for which options may be granted under the Plan shall be
50,000.
1. ADMINISTRATION. The Plan shall be administered by a committee
appointed in accordance with Article III, Section 6 of the Amended Code of
Regulations and consisting of three or more directors which directors may also
be eligible to participate in the Plan.
Subject to the express provisions of the Plan, the Committee shall
have the authority to establish the terms and conditions of such option
agreements, consistent with this Plan. Such agreements need not be uniform.
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4. ADJUSTMENTS TO COMMON STOCK AND OPTION PRICE.
4.1 In the event of changes in the outstanding Common
Stock of the Company as a result of stock dividends, split-ups,
recapitalizations, combinations or exchanges, the number and class of
shares of Common Stock authorized to be the subject of options under
this Plan and the number and class of shares of Common Stock and
Option Price for each option which is outstanding under this Plan
shall be correspondingly adjusted by the Committee.
4.2 The Committee shall make appropriate adjustments in
the Option Price to reflect any spin-off of assets, extraordinary
dividends or other distributions to shareholders.
4.3 In the event of the dissolution or liquidation of the
Company or any merger, consolidation, combination or other transaction
in which the Company is not the surviving corporation or in which the
outstanding shares of Common Stock of the Company are converted into
cash, other securities or other property, each outstanding option
issued hereunder shall terminate as of a date fixed by the Committee
provided that not less than 20 days' written notice of the date of
expiration shall be given to each holder of an option.
5. ELIGIBLE DIRECTORS; GRANT OF OPTIONS. An Eligible Director
shall be each director of the Company, now serving as a director or elected
hereafter, who is not also an employee of the Company.
Each Eligible Director shall be granted an option to purchase 1,000
shares of Common Stock on the first business day after each Annual
Shareholders' Meeting. Such grant shall continue until the number of shares
provided for in this Plan in Section 2 are exhausted.
In recognition of their service to the Company to date, the following
directors shall also be granted options for the shares set forth opposite their
names on adoption of this Plan on May 2, 1995:
Michael J. Burke 10,000 shares
Allen L. Davis 10,000 shares
John N. Taylor 3,000 shares
6. PRICE. The purchase price of the shares of Common Stock which
may be acquired pursuant to the exercise of any option granted pursuant to the
Plan shall be the last closing sale price reported immediately prior to the
date of grant ("Option Price").
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7. PERIOD OF OPTION. The term of each option shall be ten years
from the date of grant.
8. EXERCISE OF OPTIONS. An option may be exercised by an
Eligible Director as to all or part of the shares covered thereby by giving
written notice to the Company at its principal office, directed to the
attention of its Secretary, accompanied by payment of the Option Price in full
for shares being purchased. The payment of the Option Price shall be either in
cash or, subject to any conditions set forth in the option agreement, by
delivery of shares of Common Stock of the Company having a fair market value
equal to the purchase price on the date of exercise of the option, or by any
combination of cash and such shares. Payment may also be made by instruction
from the Optionee to withhold from the shares of Common Stock issuable upon
exercise of the option that number of shares of Common Stock which have a fair
market value, measured by the last closing sale price reported immediately
prior to the date of exercise, equal to the option price for the option or
portion thereof being exercised.
Unless there is in effect at the time of exercise a registration
statement under the Securities Act of 1933 permitting the resale to the public
of shares acquired under the Plan, the holder of the option shall, except to
the extent determined by the Committee that such is not required, (i) represent
and warrant in writing to the Company that the shares acquired are being
acquired for investment and not with a view to the distribution thereof, (ii)
acknowledge that the shares acquired may not be sold unless registered for sale
under said Act or pursuant to an exemption from such registration, and (iii)
agree that the certificates evidencing such shares shall bear a legend to the
effect of clauses (i) and (ii).
9. NONTRANSFERABILITY OF OPTIONS. No option granted under the
Plan shall be transferable otherwise than by will or by the laws of descent and
distribution, and an option may be exercised during the lifetime of the holder
only by him.
10. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee shall
cease to be an Eligible Director on account of disability or death, an option
theretofore granted to such Eligible Director may be exercised by the optionee
or, in the case of death, by the legal representative of the estate of the
deceased option holder or by the person or persons to whom such Eligible
Director's rights under the option shall pass by will or the laws of descent
and distribution, at any time within one year from the date the optionee ceased
to be an Eligible Director but only during the option period. "Disability"
shall have the meaning ascribed to it in Section 105(d)(4) of the Internal
Revenue Code of 1986, as amended.
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11. RIGHTS AS A STOCKHOLDER. The holder of an option shall not
have of the rights of a stockholder of the Company with respect to the shares
subject to an option until a certificate or certificates for such shares shall
have been issued upon the exercise of the option.
12. AMENDMENT AND TERMINATION.
12.1 This Plan shall terminate ten years after its
effective date and thereafter no options shall be granted hereunder.
All options outstanding at the time of termination of the Plan shall
continue in full force and effect in accordance with and subject to
the terms and conditions of the Plan. The Board of Directors of the
Company at any time prior to that date may terminate the Plan or make
such amendments to it as the Board of Directors shall deem advisable;
provided, however, that except as provided in Section 4, the Board of
Directors may not, without shareholder approval, increase the maximum
number of shares as to which options may be granted under the Plan,
change the class of persons eligible to receive options under the Plan
or change the number of options to be granted to each eligible person
under the Plan. No termination or amendment of the Plan may, without
the consent of the holder of an option then existing, terminate his
option or materially and adversely affect his rights under such
option.
12.2 This Plan may not be amended more than once every six
months other than to conform with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules
thereunder.
13. AUTOMATIC TERMINATION OF OPTION. Notwithstanding anything
contained herein to the contrary, if at any time a holder of an option granted
under this Plan becomes an employee, officer or director of or a consultant to
an entity which the Committee determines is a competitor of the Company, such
option shall automatically terminate as of the date such conflicting
relationship was established.