Form of 2019 Omnibus Award Plan Restricted Stock Unit Award Agreement

Exhibit 10.4

FY21 Grant Under The

LSI INDUSTRIES INC. 2019 OMNIBUS AWARD PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

LSI INDUSTRIES INC. (the “Company”), pursuant to the 2019 Omnibus Award Plan, as amended from time to time (the “Plan”), hereby irrevocably grants you (the “Participant”), on _________, 2020 (the “Grant Date”) a forfeitable Restricted Stock Unit Award (the “Restricted Unit Award”) representing the right to receive shares of Company common stock, no par value per share (“Common Stock”), subject to the restrictions, terms and conditions herein.

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) has determined that it would be in the best interests of the Company and its shareholders to grant the award provided for herein to the Participant, on the terms and conditions described in this Restricted Stock Unit Award Agreement (the “Agreement”).

NOW, THEREFORE, for and in consideration of the promises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, for themselves, and their permitted successors and assigns, hereby agree as follows:

1.           Terms and Conditions.

a.     Grant; Vesting.  Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Participant as of the Grant Date, a total of __________ restricted stock units (“Restricted Units”) which shall be credited in a book entry account established for the Participant until payment in accordance with Section 1(d). Subject to the other terms and conditions contained in this Agreement and the Plan, the restrictions on the Restricted Units shall lapse over the three years after the Grant Date (the “Restricted Period”) as follows: (i) with respect to Fifty Percent (50%) of the Restricted Units, on the first anniversary of the Grant Date (the “First Vesting Date”); (ii) with respect to Twenty-Five Percent (25%) of the Restricted Units, on the second anniversary of the Grant Date (the “Second Vesting Date”); and (iii) with respect to Twenty-Five Percent (25%) of the Restricted Units, on the third anniversary of the Grant Date (the “Third Vesting Date”, and collectively with the First Vesting Date and the Second Vesting Date, the “Vesting Dates”). Restricted Units that have not yet vested pursuant to Section 1(a) shall be forfeited automatically without further action or notice if the Participant ceases to be employed by the Company other than as provided below. All of the Restricted Units shall vest in full prior to the Vesting Dates upon the occurrence of any of the following: (A) the Participant dies while in the employ of the Company; or (B) the Participant has a Disability that results in a separation from employment with Company. If an offer letter or employment agreement to which Participant is a party with the Company provides for vesting in other circumstances, such as Company terminating Participant’s employment without Cause or Participant terminating employment for Good Reason, the terms and conditions relating to vesting in such offer letter or employment agreement shall apply.

b.     Retirement. If the Participant retires from the Company at any time following the first anniversary of this Agreement and at such time satisfies the Normal Retirement Criteria (defined below), the Restricted Unit Award herein granted shall continue to vest as set forth in clauses (ii) and (iii) of Section 1(a).  The Normal Retirement Criteria will be satisfied if the Participant separates from employment with the Company and the Participant (x) retires (and satisfies the Company’s criteria for retirement at such time) from the Company, (y) is at least 55 years of age at the time of such retirement, and (z) has at least ten credited years of service with the Company or its subsidiaries at the time of such retirement. If at the time of retirement the Participant satisfies the Normal Retirement Criteria and subsequently dies or becomes Disabled before the Participant’s Restricted Units herein granted become vested in their entirety the Restricted Units herein granted shall become vested as set forth the penultimate sentence of Section 1(a).

c.     Change in Control. Notwithstanding anything to the contrary in Section 1, in the event of a Change in Control, unless the successor company, or a parent of the successor company in the Change in Control agrees to assume, replace, or substitute unvested portion of the Restricted Unit Award granted hereunder (as of the consummation of such Change in Control) with restricted units on substantially identical terms, as determined by the Committee, if the Participant’s employment with the Company or its Affiliates (or any successor thereto) is terminated within [twenty four (24) for Clark, Galeese and Caneris and twelve (12) months for other NEOs] months following a Change in Control either (x) by the Company or its Affiliates (or any successor thereto) without Cause or (y) by the Participant with Good Reason, the Restricted Units granted hereunder shall vest in full as of the date of such termination. As used herein, “Good Reason” shall mean the occurrence of any of the following: (i) a material diminution in the Participant’s authority, duties or responsibilities or change in title or change in reporting relationship; (ii) a material diminution in the Participant’s annual base salary as in effect on the date of this Agreement or as the same may be increased from time to time; (iii) a material diminution in the budget over which the Participant retains authority; (iv) the Company fails to pay or provide any amount or benefit that the Company is obligated to pay or provide under this Agreement or any other employment, compensation, benefit or reimbursement plan, agreement or arrangement of the Company to which the Participant is a party or in which the Participant participates; (v) the relocation of the Participant’s principal place of employment to a location which increases the Participant’s one−way commuting distance by more than 50 miles, or the Company’s requiring the Participant to travel on business other than to an extent substantially consistent with the Participant’s business travel obligations prior to the Change in Control; (vi) a significant adverse change occurs, whether of a quantitative or qualitative nature, in the indemnification protection provided to the Participant for acts and omissions arising out of his service on behalf of the Company or any other entity at the request of the Company; or (vii) the Company fails to obtain the assumption of this Agreement pursuant to this Section. If the Participant does not terminate his employment within 60 days after the first occurrence of the circumstances giving rise to Good Reason, then the Participant will be deemed to have waived such right to terminate for Good Reason with respect to such circumstances.

d.     Payment; Share Ownership; Dividend Equivalents. The Company shall settle as soon as administratively possible after the applicable Vesting Date, any vested portion of the Restricted Unit Award by the payment to the Participant of one share of Common Stock (a “Share”) for each vested Restricted Unit, subject to any applicable tax withholding requirements. If the Participant is deemed a Specified Employee at the time of the Vesting Date, then such payment will be delayed until the earlier of the date that is six months following the Vesting Date and the Participant’s death. At no time prior to such Vesting Date shall the Participant be deemed for any purpose to be the owner of shares of Common Stock in connection with a Restricted Unit Award and the Participant shall have no right prior to applicable Vesting Dates to vote Shares in respect of the Restricted Unit Award.  However, the Participant shall possess dividend equivalent payment rights with respect to the Restricted Units granted pursuant to this Agreement as of the Grant Date.  Any dividend equivalent payment on the Restricted Units shall be based on the number of Restricted Units credited to the Participant as of the dividend record date and such credited dividend equivalent payment amount shall be paid in accordance with quarterly dividend declarations by the Board of Directors on the Common Stock. The Participant will not have any rights of a shareholder of the Company with respect to the Restricted Units until the delivery of the underlying Shares.  The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor.  No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

e.     Forfeiture.  Except as otherwise determined by the Committee in its sole discretion or as set forth in Section 1, unvested portion of Restricted Unit Awards shall be forfeited without consideration to the Participant upon the Participant’s termination of employment with the Company or its Affiliates for any reason. 

a.     Restrictive Covenant Agreement.  This Restricted Unit Award is conditioned upon the Participant’s agreement to this Agreement and compliance with the Restrictive Covenant and Confidentiality Agreement executed by the Participant in favor of the Company (“Restrictive Covenant Agreement”). If such Participant does not agree (whether electronically or otherwise) to this Agreement and the Restrictive Covenant Agreement within ninety (90) days from the date of the Restricted Unit Award, the Restricted Unit Award shall be terminable by the Company.

b.     Clawback/Forfeiture.  Notwithstanding anything to the contrary contained herein, the Restricted Unit Award may be forfeited without consideration if the Participant, as determined by the Committee in its sole discretion (i) engages in an activity that is in conflict with or adverse to the interests of the Company or any Affiliate, including but not limited to fraud or conduct contributing to any financial restatements or irregularities, or (ii) without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement between the Participant and the Company or any Affiliate, including without limitation, the Restrictive Covenant Agreement.  If the Participant engages in any activity referred to in the preceding sentence, the Participant shall, at the sole discretion of the Committee, forfeit the amount of Shares paid in respect of the Restricted Unit Award, including, without limitation, any and all Shares and dividend equivalents, and repay such to the Company.

3.     Incorporation by Reference.  The provisions of the Plan are hereby incorporated herein by reference.  Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of this Agreement shall control. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Restricted Unit Award. The number and kind of Shares deliverable pursuant to the Restricted Unit Award are subject to adjustment as provided in Section 12 of the Plan.

[Signature Pages To Follow]

By accepting this Agreement through the online acceptance tool on ________________ website, the Participant agrees to all of the terms and conditions in this Agreement and the Plan and consents to the electronic delivery of any documents that the Company elects to deliver in connection with this Agreement.