Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 16, 2021, RF Industries, Ltd. (the "Company") entered into a new
employment agreement (the "New Agreement") with Robert D. Dawson, the Company's
current President and Chief Executive Officer. The New Agreement became
effective on July 17, 2021 and replaced Mr. Dawson's prior employment agreement
that expired on July 17, 2021. The initial term of the New Agreement ends on
January 31, 2023, after which the New Agreement shall automatically renew for
additional one (1) year periods, unless either Mr. Dawson or the Company
provides the other party with written notice of non-renewal at least ninety (90)
days prior to the date of automatic renewal.
Under the New Agreement, the Corporation agreed to pay Mr. Dawson an annual base
salary of $425,000. Mr. Dawson will also be eligible to participate in the
Company's annual bonus plan, pursuant to which he will have the opportunity to
earn a year-end bonus equal to fifty percent (50%) of his annual base salary
(the "Annual Bonus"). The actual bonus paid may be higher or lower than 50%
based on the over- or under-achievement of Company and Mr. Dawson's individual
objectives as determined by the Company's Board of Directors or its Compensation
Committee. Under the New Agreement, if Mr. Dawson's employment is terminated by
the Company for any reason other than for "cause," the Company is obligated to
pay Mr. Dawson (x) an amount equal to one year's base salary as in effect at
such time, and (y) the estimated pro rata portion of his target bonus that was
earned through the date of termination. In addition, the vesting period of all
of Mr. Dawson's unvested stock options and all unvested time-based restricted
stock grants will automatically be fully accelerated as of the termination date.
The foregoing provisions will not apply if Mr. Dawson voluntarily terminates his
employment with the Company or is terminated for cause.
Mr. Dawson received a fully vested, ten-year immediately exercisable stock
option to purchase 50,000 shares of the Company's common stock. The exercise
price of this option is $8.69, the closing price on July 16, 2021. The New
Agreement also provided that the vesting schedule of the remaining portion of
Mr. Dawson's 2017 grant of an option to purchase 100,000 shares was revised. As
of the date of the New Agreement, 50,000 shares of the 2017 option grant were
still unvested. Under the revised vesting schedule, provided that Mr. Dawson is
still employed by the Company, 25,000 shares of those unvested options will vest
on the July 17, 2022, and the remaining 25,000 shares will vest on July 17,
2023.
Upon a Change of Control Transaction (as defined in the New Agreement), all of
Mr. Dawson's time-based stock options and shares of restricted stock shall
immediately vest, whether or not his employment is terminated. If, at the time
of a Change of Control Transaction, Mr. Dawson's employment is terminated by the
Company for any reason other than cause (as defined in the New Agreement), Mr.
Dawson will be entitled to receive a change of control cash payment in an amount
equal to 12 months of his base salary.
There are no arrangements or understandings between Mr. Dawson and any other
persons pursuant to which he was chosen as an officer of the Company. There are
no family relationships between Mr. Dawson and any of the Company's directors,
executive officers, or persons nominated or chosen by the Company to become a
director or executive officer. Mr. Dawson is not a party to any current or
proposed transaction with the Company for which disclosure is required under
Item 404(a) of Regulation S-K.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
10.1 Employment Agreement, dated July 16, 2021, by and between RF
Industries, Ltd. and Robert D. Dawson
104 Cover Page Interactive Date File (embedded within the Inline
XBRL document).
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