Employment Letter Agreement, dated July 17, 2019, by and between RF Industries, Ltd. and Robert D. Dawson
10949 Spicewood Court
San Diego, CA 92130
July 17, 2019
Offer and Position
We are very pleased to extend an offer of employment to you for the position of President and Chief Executive Officer of RF Industries, Ltd., a Nevada corporation (the "Company").
In your capacity as President and Chief Executive Officer, you will perform duties and responsibilities that are commensurate with your position as the President and Chief Executive Officer of a publicly traded company and such other duties as may be assigned to you from time to time. You will report directly to the Board of Directors of the Company (the "Board"). You agree that you will also serve as a member of the Board for no additional compensation. You agree to devote your full business time, attention and best efforts to the performance of your duties and to the furtherance of the Company's interests. Notwithstanding the foregoing, nothing in this letter shall preclude you from devoting reasonable periods of time to charitable and community activities, managing personal investment assets and serving on boards of other companies (public or private) not in competition with the Company, provided that none of these activities interferes with the performance of your duties hereunder or creates a conflict of interest.
Your principal place of employment shall be at our corporate office/headquarters in San Diego, California, subject to business travel as needed to properly fulfill your employment duties and responsibilities.
In consideration of your services, you will be paid a base salary of $400,000 per year, subject to review annually for increase, but not decrease, payable in accordance with the standard payroll practices of the Company and subject to all withholdings and deductions as required by law.
During your employment, you will be eligible to participate in the Company's annual bonus plan pursuant to which you will have the opportunity to earn a year-end bonus equal to fifty percent (50%) of your annual base salary (the “Annual Bonus”). The actual bonus paid may be higher or lower than the Annual Bonus for over-or under-achievement of Company and individual objectives as determined by the Board of Directors or the Compensation Committee of the Board. The Annual Bonus performance goals will be established at the beginning of each fiscal year by the Board of Directors or its Compensation Committee. Any Annual Bonus with respect to a particular fiscal year will be paid within 2 1/2 months following the end of the year.
For each full fiscal year of employment, you will be eligible to receive an annual equity award determined by the Board in its discretion.
Benefits and Perquisites
You will be eligible to participate in the employee benefit plans and programs generally available to the Company's senior executives, subject to the terms and conditions of such plans and programs. You will be entitled to paid vacation in accordance with the Company's policies in effect from time to time. The Company reserves the right to amend, modify or terminate any of its benefit plans or programs at any time and for any reason. The plans currently in effect consist of the following:
--Health Insurance (the HMO plan for the employee is covered 100% by the Company, and dependents at 25%)
--Long Term Disability Insurance
--Life Insurance - $100,000
--AD&D - Accidental Death & Dismemberment equal to Life Benefit
--Maximum sick leave per year is six days
--Eight paid holidays per year
Vacation policy is as follows:
|Hire thru 5 years||80 hours / yr|
|6 thru 10 years||120 hours / yr|
|11 thru 14||160 hours / yr|
|15 thru 20 yrs||200 hours / yr|
|20+||240 hours / yr|
All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.
Term of Employment
The term of this letter agreement will be for two years until July 17, 2021. In the event that your employment with the Company is terminated without Cause, you will receive a severance payment equal to twelve months of your base salary, payable in full within thirty (30) days after termination, provided that you execute a full general release in favor of the Company. For purposes hereof, “Cause” shall mean (i) a material breach by you of this agreement or your material failure to perform your duties, which breach or failure is not cured within ten (10) days following receipt of written notice thereof from the Company’s Board of Directors; (ii) your death or your disability resulting in your inability to perform your duties assigned hereunder for a period of 90 days; (iii) theft of Company assets, dishonesty, or falsification of any Company documents or records; or (iv) your conviction (including any plea of guilty or nolo contendere) of any criminal act that in the Board’s judgment may materially damage the business or reputation of the Company.
Change in Control Payment
Immediately upon a Change of Control Transaction, all of your time based stock options shall immediately vest, whether or not your employment is terminated. If, either within 30 days before, or 180 days after a Change of Control Transaction your employment is terminated by the Company for any reason other than Cause, you will be entitled to receive a change of control cash payment in an amount equal to 12 month’s salary (based on your base salary at the time of such termination) and your Annual Bonus based on the year-to-date bonus accrual. A “Change of Control Transaction” means (x) the acquisition by any one person or entity of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities; (y) a sale, assignment, lease, conveyance or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of related transactions, or (z) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
This offer letter is intended to comply with Section 409A of the Internal Revenue Code ("Section 409A") or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this offer letter, payments provided under this offer letter may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this offer letter that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this offer letter shall be treated as a separate payment. Any payments to be made under this offer letter upon a termination of employment shall only be made upon a "separation from service" under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this offer letter comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.
Notwithstanding any other provision of this offer letter, if any payment or benefit provided to you in connection with termination of employment is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and you are determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of your termination date (the "Specified Employee Payment Date") or, if earlier, on the date of your death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which your separation from service occurs shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
This offer letter shall be governed by the laws of California, without regard to conflict of law principles.
By accepting this offer, you represent that you are able to carry out the work that this job involves without breaching any legal restrictions on your activities, such as non-competition, non-solicitation or other work-related restrictions imposed by a former employer. You also represent that you will inform the Company about any such restrictions and provide the Company with as much information about them as possible, including any agreements between you and your former employer describing such restrictions on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind, electronic or otherwise, with you from your former employer to the Company without written authorization from your former employer, nor will you use or disclose any such confidential information during the course and scope of your employment with the Company. If you have any questions about the ownership of particular documents or other information, you should discuss such questions with your former employer before removing or copying the documents or information.
|Signed||/s/ Marvin Fink|
|Marvin Fink, Chairman of the Board|
Acceptance of Offer
I have read and understood and I accept all the terms of this agreement as set forth in the foregoing letter. I have not relied on any agreements or representations, express or implied, that are not set forth expressly in the foregoing letter, and this letter supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to the subject matter of this letter.
|Signed||/s/ Robert Dawson|
|Date July 17, 2019|