Exhibit
4.1
RF
INDUSTRIES, LTD.
2010
STOCK INCENTIVE PLAN
(a)
The
purpose of the Plan is to provide to eligible recipients an opportunity to
benefit from increases in value of the Common Stock through Stock
Awards.
(b)
The
Company, by means of the Plan, seeks to attract and retain the services of
persons eligible to receive Stock Awards, to bind the interests of eligible
recipients more closely to the Company’s own interests by offering them
opportunities to acquire Common Stock and/or cash and to afford eligible
recipients stock-based compensation opportunities that are competitive with
those afforded by similar businesses.
(c)
The
persons eligible to receive Stock Awards are the Directors, Employees and
Consultants of the Company and of its Affiliates.
(a)
“
Affiliate
” means any
“parent corporation” or “subsidiary corporation” of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b)
“
Board
” means the
Board of Directors of the Company.
(c)
“
Code
” means the
Internal Revenue Code of 1986, as amended.
(d)
“
Committee
” means a
committee of one or more members of the Board appointed by the Board in
accordance with subsection 3(c).
(e)
“
Common Stock
” means
the Common Stock, $0.01 par value per share, of the Company.
(f)
“
Company
” means RF
Industries, Ltd., a Nevada corporation.
(g)
“
Consultant
” means any
individual engaged by the Company or by an Affiliate to render consulting or
advisory services, and who is compensated for such services, or who is a member
of the Board of Directors of an Affiliate. For clarity, the term
“
Consultant
”
shall not include a Director who is not compensated by the Company other than by
way of fees and other compensation for his or her service as a
Director.
(h)
“
Corporate
Transaction
” means (i) a sale, lease or other disposition of all or
substantially all of the capital stock or assets of the Company, (ii) a
merger or consolidation of the Company in which the Company is not the surviving
entity, or (iii) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise.
(i)
“
Covered Employee
”
means the chief executive officer and the four other highest compensated
officers of the Company for whom total compensation is required to be reported
to stockholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code.
(j)
“
Director
” means a
member of the Board of Directors of the Company.
(k)
“
Disability
” means the
permanent and total disability of a person within the meaning of Section
22(e)(3) of the Code.
(l)
“
Employee
” means any
“employee” of the Company or of an Affiliate within the meaning of the
Code.
(m)
“
Exchange Act
” means
the Securities Exchange Act of 1934, as amended.
(n)
“
Fair Market Value
”
means the value of the Common Stock determined as follows:
(i)
If
the Common Stock is listed on any established stock exchange, including the
Nasdaq Stock Market, the Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange (or the exchange with the greatest volume
of trading in the Common Stock) on the day of determination, or such other
source as the Board deems reliable; or
(ii)
In
the absence of such listing of the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(o)
“
Incentive Stock
Option
” means an Option intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(p)
“
Non-Employee
Director
” means a Director who is considered a “non-employee director”
within the meaning of Rule 16b-3.
(q)
“
Nonstatutory Stock
Option
” means an Option not intended to qualify as an Incentive Stock
Option.
(r)
“
Officer
” means a
person who is an “officer” of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated
thereunder.
(s)
“
Option
” means an
Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the
Plan.
(t)
“
Option Agreement
”
means a written agreement between the Company and an Optionholder evidencing the
terms and conditions of an individual Option grant. Each Option Agreement shall
be subject to the terms and conditions of the Plan.
(u)
“
Optionholder
” means a
person to whom an Option is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Option.
(v)
“
Outside Director
”
means a Director who is considered an “outside director” within the meaning of
Section 162(m) of the Code.
(w)
“
Participant
” means a
person to whom a Stock Award is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Stock Award.
(x)
“
Plan
” means this RF
Industries, Ltd. 2010 Stock Incentive Plan as originally adopted by the Board on
March 9, 2010, and as it may be amended from time to time.
(y)
“
Rule 16b-3
” means
Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as
in effect from time to time.
(z)
“
Securities Act
” means
the Securities Act of 1933, as amended.
(aa)
“
Stock Award
” means
any right granted under the Plan, including an Option, a stock bonus,
a right to acquire
restricted stock and a stock appreciation right.
(bb)
“
Service
” means a
Participant’s service with the Company or with an Affiliate, whether as a
Director, Employee or Consultant. For purposes of the Plan, a
Participant’s Service shall not be deemed to have terminated solely because of a
change in the capacity in which the Participant renders services to the Company
or an Affiliate or a change in the entity for which the Participant renders such
Service. By way of example, a change in status from an Employee of
the Company to a Consultant or a Director, by itself, will not constitute a
termination of Service. The Board or the Chief Executive Officer of
the Company, in that party’s sole discretion, may determine whether a
Participant’s Service shall be considered interrupted in the case of the
Participant’s leave of absence approved by that party, including sick leave,
military leave or any other personal leave.
(cc)
“
Stock Award
Agreement
” means a written agreement between the Company and a holder of
a Stock Award evidencing the terms and conditions of an individual Stock Award
grant. Each Stock Award Agreement shall be subject to the terms and conditions
of the Plan.
(dd)
“
Ten Percent
Stockholder
” means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any
Affiliate.
(a)
Administration by
Board
. The Board shall administer the Plan unless and to the
extent the Board delegates administration to a Committee as provided in
subsection 3(c).
(b)
Powers of
Board
. The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:
(i)
To
determine from time to time who, among the persons eligible under the Plan,
shall be granted Stock Awards; when and how each Stock Award shall be granted;
what type or combination of types of Stock Award shall be granted; the number of
shares of Common Stock with respect to which a Stock Award shall be granted; and
the other terms and provisions of each Stock Award granted (which need not be
identical).
(ii)
To
reprice any outstanding Stock Awards under the Plan, cancel and re-grant any
outstanding Stock Awards under the Plan and effect any other action that is
treated as a repricing for financial accounting purposes.
(iii)
To construe and interpret the Plan and all Stock Awards, and
to establish, amend and revoke rules and regulations for the Plan’s
administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(iv)
To
amend the Plan or a Stock Award as provided in Section 12.
(v)
To
terminate or suspend the Plan as provided in Section 13.
(vi)
Generally,
to exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company.
(c)
Delegation to
Committee
.
(i)
General
. The Board
may delegate administration of the Plan to a Committee of one or more Directors,
and the term “
Committee
” shall
apply to any Director or Directors to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, all of the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and restore to the Board the
administration of the Plan.
(ii)
Committee
Composition
. In the discretion of the Board, the Committee may
consist solely of two or more Outside Directors or two or more Non-Employee
Directors. Within the scope of such authority, the Board or the
Committee may (1) delegate to a committee of one or more Directors who are not
Outside Directors the authority to grant Stock Awards to eligible persons who
are either (a) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock Award
or (b) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code or (2) delegate to a committee of one or more
Directors who are not Non-Employee Directors the authority to grant Stock Awards
to eligible persons who are not then subject to Section 16 of the Exchange
Act.
(d)
Effect of Board’s
Decision
. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all
persons.
4.
|
SHARES
SUBJECT TO THE PLAN.
|
(a)
Share
Reserve
. Subject to the provisions of subsection 11(a)
relating to adjustments upon changes in Common Stock, the shares of Common Stock
that may be issued pursuant to Stock Awards shall not exceed in the aggregate
500,000 shares of Common Stock. Subject to subsection 4(b), the
number of shares available for issuance under the Plan shall be reduced by
(i) one share for each share of Common Stock issued pursuant to a Stock
Award granted under Section 6 or Section 7 and (ii) one share for
each Common Stock equivalent subject to a stock appreciation right granted under
subsection 7(c).
(b)
Reversion of Shares to the Share
Reserve
.
(i)
Shares Available For Subsequent
Issuance
. If any (i) Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised or
paid in full or (ii) shares of Common Stock issued to a Participant pursuant to
a Stock Award are forfeited to or repurchased by the Company, including any
repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting of such shares, then the shares of Common
Stock not issued under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance under the
Plan.
(ii)
Shares Not Available For Subsequent
Issuance
. If any shares subject to a Stock Award are not
delivered to a Participant because the Stock Award is exercised through a
reduction of shares subject to the Stock Award (
i.e
., a “
net exercise
”), the
number of shares that are not delivered to the Participant shall no longer be
available for issuance under the Plan. If any shares subject to a
Stock Award are not delivered to a Participant because such shares are withheld
in satisfaction of the withholding of taxes incurred in connection with the
exercise of an Option or a SAR, or the issuance of shares under a stock bonus
award or restricted stock award, the number of shares that are not delivered to
the Participant shall no longer be available for subsequent issuance under the
Plan.
(c)
Source of
Shares
. The shares of Common Stock subject to the Plan may be
unissued shares or treasury shares.
(a)
Eligibility for Specific Stock
Awards
. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants.
(b)
Ten Percent
Stockholders
. A Ten Percent Stockholder shall not be granted
an Incentive Stock Option unless the exercise price of such Option is at least
110% of the Fair Market Value of the Common Stock at the date of grant and the
Option is not exercisable after the expiration of five years from the date of
grant.
(c)
Section 162(m)
Limitation
. Subject to the provisions of Section 11 relating
to adjustments upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted Options covering more than 100,000 shares of Common Stock
during any twelve-month period.
(d)
Consultants
. A
Consultant shall not be eligible for the grant of a Stock Award if, at the time
of grant, a Form S-8 Registration Statement under the Securities Act (“
Form S-8
”) is not
available to register either the offer or the sale of the Company’s securities
to such Consultant because of the nature of the services that the Consultant is
providing to the Company, or because the Consultant is not a natural person, or
as otherwise provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be registered in another
manner under the Securities Act (
e.g
., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.
(a)
General
. Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be designated as Incentive Stock
Options or Nonstatutory Stock Options at the time of grant, and, if certificates
are issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. The provisions of
separate Options need not be identical, but each Option shall include (through
inclusion or incorporation by reference in the Option or otherwise) the
substance of each of the following provisions:
(i)
Term
. Subject to
the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Option
shall be exercisable after the expiration of ten years from the date it was
granted.
(ii)
Exercise Price of an Incentive Stock
Option
. Subject to the provisions of subsection 5(b) regarding
Ten Percent Stockholders, the exercise price of each Incentive Stock Option
shall be not less than the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted.
(iii)
Exercise Price of a Nonstatutory
Stock Option
. The exercise price of each Nonstatutory Stock
Option shall be not less than the Fair Market Value of the Common Stock subject
to the Option on the date the Option is granted.
(iv)
Consideration
. The
purchase price of Common Stock acquired pursuant to an Option shall be paid, to
the extent permitted by applicable statutes and regulations, either (i) in
cash at the time the Option is exercised or (ii) at the discretion of the Board
(1) by delivery to the Company of other Common Stock; (2) according to a
deferred payment or other similar arrangement with the Optionholder; (3) by a
“net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Common Stock issued upon exercise by the largest whole number of
shares with a Fair Market Value that does not exceed the aggregate exercise
price;
provided,
however
, that the Company shall accept cash or other payment from the
Participant to the extent of any remaining balance of the aggregate exercise
price not satisfied by such holding back of whole shares;
provided, further, however
,
that shares of Common Stock will no longer be outstanding under an Option to the
extent that (i) shares are used to pay the exercise price pursuant to the “net
exercise,” (ii) shares are delivered to the Participant as a result of such
exercise, and (iii) shares are withheld to satisfy tax withholding obligations;
(4) by means of so-called cashless exercises as permitted under applicable
rules and regulations of the Securities and Exchange Commission and the Federal
Reserve Board; or (5) in any other form of legal consideration that may be
acceptable to the Board. Payment of the Common Stock’s par value, if
any, shall not be made by deferred payment. In the case of any
deferred payment arrangement, interest shall be compounded at least annually and
shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.
(v)
Transferability of an Incentive Stock
Option
. An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
(vi)
Transferability of a Nonstatutory
Stock Option
. A Nonstatutory Stock Option shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory
Stock Option does not provide for transferability, then the Nonstatutory Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.
(vii)
Vesting
Generally
. The total number of shares of Common Stock subject
to an Option may, but need not, vest and become exercisable in periodic
installments that may, but need not, be equal. The Option may be subject to such
other terms and conditions on the time or times when it may be exercised (which
may be based on performance, stock price or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(a)(vii) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.
(viii)
Termination of
Service
. In the event an Optionholder’s Service terminates
(other than upon the Optionholder’s death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination) but only within such period
of time ending on the earlier of (i) the date three months following the
termination of the Optionholder’s Service (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein or in the Option Agreement (as applicable), the Option shall
terminate.
(ix)
Extension of Termination
Date
. An Optionholder’s Option Agreement may provide that, if
the exercise of the Option following the termination of the Optionholder’s
Service (other than upon the Optionholder’s death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the
Option shall terminate on the earlier of (i) the expiration of the term of the
Option set forth in the Option Agreement or (ii) the expiration of a period of
three months after the termination of the Optionholder’s Service during which
the exercise of the Option would not be in violation of such registration
requirements.
(x)
Disability of
Optionholder
. In the event that an Optionholder’s Service
terminates as a result of the Optionholder’s Disability, the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination), but only within such period
of time ending on the earlier of (i) the date twelve months following such
termination (or such longer or shorter period specified in the Option Agreement)
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein, the Option shall
terminate.
(xi)
Death of
Optionholder
. In the event (i) an Optionholder’s Service
terminates as a result of the Optionholder’s death or (ii) the Optionholder dies
within the period (if any) specified in the Option Agreement after the
termination of the Optionholder’s Service for a reason other than death, then
the Option may be exercised (to the extent the Optionholder was entitled to
exercise such Option as of the date of death) by the Optionholder’s estate, by a
person who acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the Option upon the Optionholder’s death
pursuant to subsection 6(a)(v) or 6(a)(vi), but only within the period ending on
the earlier of (1) the date twelve months following the date of death (or such
longer or shorter period specified in the Option Agreement) or (2) the
expiration of the term of such Option as set forth in the Option Agreement. If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate.
7.
|
PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.
|
(a)
Stock Bonus
Awards
. Each stock bonus agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. The
terms and conditions of stock bonus agreements may change from time to time, and
the terms and conditions of separate stock bonus agreements need not be
identical, but each stock bonus agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:
(i)
Consideration
. A
stock bonus may be awarded in consideration for past services actually rendered
to or for the benefit of the Company or an Affiliate.
(ii)
Vesting
Generally
. Shares of Common Stock awarded under the stock
bonus agreement may, but need not, be subject to a share repurchase option in
favor of the Company in accordance with a vesting schedule to be determined by
the Board. Notwithstanding the foregoing, unless the stock bonus
agreement otherwise provides, all shares subject to the agreement shall become
fully vested upon the occurrence of a Corporate Transaction.
(iii)
Termination of
Service
. In the event a Participant’s Service terminates, the
Company may reacquire any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination under the terms
of the stock bonus agreement. The Company will not exercise its repurchase
option until at least six months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following receipt of the stock bonus unless otherwise specifically
provided in the stock bonus agreement.
(iv)
Transferability
. Rights
to acquire shares of Common Stock under the stock bonus agreement shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the stock bonus agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the stock bonus agreement
remains subject to the terms of the stock bonus agreement.
(b)
Restricted Stock
Awards
. Each restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of the restricted stock purchase
agreements may change from time to time, and the terms and conditions of
separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through inclusion or
incorporation by reference in the agreement or otherwise) the substance of each
of the following provisions:
(i)
Purchase Price
. The
purchase price under each restricted stock purchase agreement shall be such
amount as the Board shall determine and designate in such restricted stock
purchase agreement. The purchase price shall not be less than the par
value, if any, of the Common Stock on the date such award is made or at the time
the purchase is consummated.
(ii)
Consideration
. The
purchase price of Common Stock acquired pursuant to the restricted stock
purchase agreement shall be paid either: (i) in cash at the time of purchase;
(ii) at the discretion of the Board, according to a deferred payment or other
similar arrangement with the Participant; or (iii) in any other form of legal
consideration that may be acceptable to the Board in its discretion;
provided, however
, that
payment of the Common Stock’s par value, if any, shall not be made by deferred
payment.
(iii)
Vesting
Generally
. Shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to forfeiture
to the Company or other restrictions that will lapse in accordance with a
vesting schedule to be determined by the Board.
(iv)
Termination of Participant’s
Service
. In
the event a Participant’s Service terminates, any or all of the shares of Common
Stock held by the Participant that have not vested as of the date of termination
under the terms of the restricted stock purchase agreement shall be forfeited to
the Company in accordance with the restricted stock purchase
agreement.
(v)
Transferability
. Rights
to acquire shares of Common Stock under the restricted stock purchase agreement
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the
restricted stock purchase agreement remains subject to the terms of the
restricted stock purchase agreement.
(c)
Stock Appreciation
Rights
. Each stock appreciation right agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock appreciation right
agreements may be changed from time to time, and the terms and conditions of
separate stock appreciation right agreements need not be identical;
provided, however,
that each
stock appreciation right agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i)
Strike Price and Calculation of
Appreciation
. Each stock appreciation right will be
denominated in shares of Common Stock equivalents. The appreciation
distribution payable on the exercise of a stock appreciation right will not be
greater than an amount equal to the excess of (i) the aggregate Fair Market
Value on the date of the exercise of the stock appreciation right of a number of
shares of Common Stock equal to the number of shares of Common Stock equivalents
in which the Participant is vested under such stock appreciation right and with
respect to which the Participant is exercising the stock appreciation right on
such date over (ii) an amount (the “
strike price
”) that
will be determined by the Board at the time of grant of the stock appreciation
right;
provided,
however
, that the strike price of a stock appreciation right granted to a
Director or Employee shall be not less than the Fair Market Value of the Common
Stock equivalents subject to the stock appreciation right on the date the stock
appreciation right is granted.
(ii)
Vesting
. At the
time of the grant of a stock appreciation right, the Board may impose such
restrictions or conditions to vesting of such stock appreciation right as it, in
its sole discretion, deems appropriate.
(iii)
Exercise
. To
exercise any outstanding stock appreciation right, the Participant must provide
written notice to exercise to the Company in compliance with the provisions of
the stock appreciation right agreement evidencing such stock appreciation
right.
(iv)
Payment
. The
appreciation distribution in respect to a stock appreciation right may be paid
in shares of Common Stock, in cash, in any combination of shares of Common Stock
and cash, or in any other form of consideration, as determined by the Board and
contained in the stock appreciation right agreement evidencing such stock
appreciation right.
(v)
Termination of
Service
. In the event that a Participant’s Service terminates,
the Participant may exercise his or her stock appreciation right (to the extent
that the Participant was entitled to exercise such stock appreciation right as
of the date of termination) but only within such period of time ending on the
earlier of (i) the date three months following the termination of the
Participant’s Service (or such longer or shorter period specified in the stock
appreciation right agreement), or (ii) the expiration of the term of the
stock appreciation right as set forth in the stock appreciation right
agreement. If, after termination, the Participant does not exercise
his or her stock appreciation right within the time specified herein or in the
stock appreciation right agreement (as applicable), the stock appreciation right
shall terminate.
8.
|
COVENANTS
OF THE COMPANY.
|
(a)
Availability of
Shares.
During the terms of the Stock Awards, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Stock Awards.
(b)
Securities Law
Compliance.
The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards;
provided, however
, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.
9.
|
USE
OF PROCEEDS FROM STOCK.
|
Proceeds
from the sale of Common Stock pursuant to Stock Awards shall constitute general
funds of the Company.
(a)
Acceleration of Exercisability and
Vesting.
The Board shall have the power to accelerate the time
at which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest in accordance with the Plan, notwithstanding
the provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
(b)
Stockholder
Rights.
No Participant shall be deemed to have dividend rights
or other rights as a stockholder with respect to any shares of Common Stock
subject to an Option or stock appreciation right unless and until such
Participant has properly exercised the Option or stock appreciation
right. A Participant will have all of the rights of a stockholder as
to any stock bonuses and shares of Common Stock acquired under a restricted
stock purchase agreement as of the date of such Stock Awards, whether or not
then vested, except as otherwise provided in the Stock Award Agreement, and
unless and until the stock bonus or restricted stock is forfeited to the Company
in accordance with applicable vesting requirements, if any.
(c)
No Employment or other Service
Rights.
Nothing in the Plan or any instrument executed or
Stock Award granted pursuant hereto shall confer upon any Participant any right
to continue to serve the Company or an Affiliate in the capacity in effect at
the time the Stock Award was granted or shall affect the right of the Company or
an Affiliate to terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant pursuant to
the terms of such Consultant’s agreement with the Company or an Affiliate or
(iii) the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may
be.
(d)
Incentive Stock Option Dollar
Limitation.
To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and its Affiliates)
exceeds $100,000, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.
(e)
Investment
Assurances.
The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common
Stock.
(f)
Withholding
Obligations.
To the extent provided by the terms of a Stock
Award Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under a Stock Award by any of the following means (in addition to the Company’s
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award,
provided, however
, that no
shares of Common Stock are withheld with a Fair Market Value exceeding the
minimum amount of tax required to be withheld by law (or such lesser amount as
may be necessary to avoid variable award accounting); or (iii) delivering to the
Company owned and unencumbered shares of Common Stock of the
Company.
11.
|
ADJUSTMENTS
UPON CHANGES IN STOCK.
|
(a)
Capitalization
Adjustments.
If any change is made in the Common Stock subject
to the Plan, or subject to any Stock Award, without the receipt of consideration
by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class and maximum number of shares subject to the Plan pursuant to subsection
4(a) and the maximum number of shares subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted
in the class and number of shares and price per share of Common Stock subject to
such outstanding Stock Awards. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. For clarity,
the conversion of any convertible securities of the Company shall not be treated
as a transaction “without receipt of consideration” by the Company.
(b)
Dissolution or
Liquidation.
In the event of a dissolution or liquidation of
the Company, all outstanding Stock Awards shall terminate immediately prior to
such event, and shares of bonus stock and
restricted stock subject
to the Company’s repurchase option or to forfeiture under subsections
7(a)(iii) and 7(b)(iii)
may be repurchased by the Company or forfeited notwithstanding the fact that the
holder of such stock is still in Service.
(c)
Corporate
Transaction.
In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume any Stock Awards
outstanding under the Plan or may substitute similar stock awards (including an
award to acquire the same consideration paid to the stockholders in the
transaction described in this subsection 11(c)) for those outstanding under the
Plan. Unless the Stock Award Agreement otherwise provides, in the
event any surviving corporation or acquiring corporation does not assume such
Stock Awards or substitute similar stock awards for those outstanding under the
Plan, then the Stock Awards shall terminate if not exercised at or prior to such
event.
12.
|
AMENDMENT
OF THE PLAN AND STOCK AWARDS.
|
(a)
Amendment of
Plan.
The Board at any time, and from time to time, may amend
the Plan. However, except as provided in Section 11 relating to adjustments upon
changes in Common Stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to
satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any
securities exchange listing requirements.
(b)
Stockholder
Approval.
The Board may, in its sole discretion, submit any
other amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c)
Contemplated
Amendments.
It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
eligible Employees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder relating
to Incentive Stock Options or to bring the Plan or Incentive Stock Options
granted under it into compliance therewith.
(d)
No Impairment of
Rights.
Rights under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless the
Participant consents thereto in writing.
(e)
Amendment of Stock
Awards.
The Board at any time, and from time to time, may
amend the terms of any one or more Stock Awards;
provided, however
, that the
rights under any Stock Award shall not be impaired by any such amendment unless
the Participant consents thereto in writing.
13.
|
TERMINATION
OR SUSPENSION OF THE PLAN.
|
(a)
Plan Term.
Unless
sooner terminated by the Board pursuant to Section 3, the Plan shall
automatically terminate on the day before the tenth anniversary of the date the
Plan is adopted by the Board. No Stock Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.
(b)
No Impairment of
Rights.
Suspension or termination of the Plan shall not impair
rights and obligations under any Stock Award granted while the Plan is in effect
except with the written consent of the Participant.
14.
|
EFFECTIVE
DATE OF PLAN.
|
The Plan
shall become effective upon approval of the stockholders of the Company,
provided that such approval is received before the expiration of one year from
the date the Plan is approved by the Board of Directors, and provided further
that the Board of Directors may grant Options (but not award bonus stock,
restricted stock, or stock appreciation rights) pursuant to the Plan prior to
stockholder approval if the exercise of such Options by its terms is contingent
upon stockholder approval of the Plan as provided above.
The law
of the State of Nevada shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to the choice of law
rules.
Exhibit
4.2
RF
INDUSTRIES, LTD.
INCENTIVE
STOCK OPTION AGREEMENT
THIS
INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”), is made as of the __ day of
-___________, 200_ by and between RF Industries, Ltd., a Nevada corporation (the
“Company”), and ________ _________ (“Optionee”).
RECITAL
The
action of the Board of Directors of the Company (the “Board”) has authorized the
granting to Optionee as an employee of the Company of an incentive stock option,
pursuant to the Company’s 2010 Stock Incentive Plan (the “Plan”), to purchase
the number of shares of common stock of the Company specified in Section 1
hereof, at the price specified therein, such option to be for the term and
upon the terms and conditions hereinafter stated.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and of the undertakings of the
parties hereto contained herein, it is hereby agreed:
1.
Number of Shares; Option
Price
. Pursuant to said action of the Board, the Company
hereby grants to Optionee the option (“Option”) to purchase, upon and subject to
the terms and conditions of the Plan, __________ shares of common stock of the
Company (“Shares”) at the price of $______ per Share (which price shall be no
less than the fair market value of a Share on the date of grant of this
Option).
2.
Term
. This
Option shall expire on the day before the ______ anniversary of the date of
grant of the Option (the “Expiration Date”), unless such Option shall have been
terminated prior to that date in accordance with the provisions of this
Agreement.
3.
Shares Subject to
Exercise
. This Option shall be exercisable in installments as
to ___________ of the number of Shares on the first ______ anniversaries of the
date hereof, as to ___________ of the number of Shares on the second ______
anniversaries of the date hereof, and as to ___________ of the number of Shares
on the third ______ anniversaries of the date hereof
provided
,
however
, that an
installment shall not become exercisable if the Optionee is not employed as an
employee of the Company, or any of its subsidiaries, as of such anniversary
date. Once exercisable, the Option shall thereafter remain
exercisable as to such Shares for the term specified in Section 2 hereof, unless
Optionee’s employment is terminated pursuant to Section 6 hereof or the Option
is terminated pursuant to a Corporate Transaction (as defined in Section 15
hereof).
4.
Method and Time of
Exercise
. The Option may be exercised by written notice
delivered to the Company at its principal executive office stating (i) that
Optionee has no plan to violate Section 16 in the future, (ii) that Optionee
agrees to notify the Company within ten (10) days of a violation of Section 16
hereof, and (iii) the number of shares with respect to which the Option is being
exercised, together with:
(A) a
check or money order made payable to the Company in the amount of the exercise
price and any withholding tax, as provided under Section 5 hereof;
or
(B) if
expressly authorized in writing by the Board, in its sole discretion, at the
time of the Option exercise, the tender to the Company of shares of the
Company’s common stock owned by Optionee having a fair market value not less
than the exercise price; or
(C) if
expressly authorized in writing by the Board, subject to the Sarbanes-Oxley Act
of 2002, in its sole discretion, at the time of the Option exercise, the
Optionee’s full recourse promissory note in a form approved by the Company;
or
(D) if
any other method such as cashless exercise is expressly authorized in writing by
the Board, in its sole discretion, at the time of the Option exercise, the
tender of such consideration having a fair market value not less than the
exercise price.
Only
whole shares may be purchased.
5.
Tax
Withholding
. In general, no tax withholding is required with
respect to this Option or its exercise. If, however, for any reason
all or part of this Option is considered to be a non-qualified stock option,
rather than an incentive stock option, then, as a condition to exercise of such
portion of this Option, the Company may require Optionee to pay over to the
Company all applicable federal, state and local taxes which the Company is
required to withhold with respect to the exercise of this Option in that
connection. At the discretion of the Board and upon the request of
Optionee, the minimum statutory withholding tax requirements may be satisfied by
the withholding of Shares otherwise issuable to Optionee upon the exercise of
this Option.
6.
Exercise on Termination of
Employment
. If for any reason Optionee ceases to be employed
by the Company or any of its subsidiaries (such event being called a
“Termination”), this Option (to the extent then exercisable) may be exercised in
whole or in part at any time, except with respect to a Termination For Cause,
only within 90 days of the date of such Termination, but in no event after the
earlier of the Expiration Date or a Corporate Transaction which terminates the
Option pursuant to Section 15 hereof. For purposes of this Agreement,
“employment” means service as an employee. For purposes of this
Agreement, Optionee’s employment shall not be deemed to terminate by reason of a
transfer to or from the Company or its subsidiary or among such entities, or
sick leave, military leave or other leave of absence approved by the Board, if
the period of any such leave does not exceed ninety (90) days or, if longer, if
Optionee’s right to reemployment by the Company or any Affiliate is guaranteed
either contractually or by statute. For purposes of this Agreement,
“Termination For Cause” shall mean Optionee’s loss of employment by the Company
or any of its subsidiaries due to Optionee’s (a) willful breach or habitual
neglect or continued incapacity to perform Optionee’s required duties, (b)
commission of acts of dishonesty, fraud, misrepresentation or other acts of
moral turpitude as would prevent the effective performance of Optionee’s duties
or (c) termination for cause under any employment agreement between the Company
and Optionee (as defined therein). In the event Optionee’s employment
by the Company or any of its subsidiaries is Terminated For Cause, then the
Option shall cease to be exercisable as of the date of such
Termination.
7.
Non-Transferability
. This
Option may not be assigned or transferred except by will or by the laws of
descent and distribution, and may be exercised only by Optionee during the
Optionee’s lifetime and after the Optionee’s death, by the Optionee’s personal
representative or by the person entitled thereto under the Optionee’s will or
the laws of intestate succession.
8.
Optionee Not a
Stockholder
. Optionee shall have no rights as a stockholder
with respect to the Shares covered by this Option until the date of issuance of
a stock certificate or stock certificates to the Optionee upon exercise of this
Option. No adjustment will be made for dividends or other rights for
which the record date is prior to the date such stock certificate or
certificates are issued.
9.
No Right to
Employment
. Nothing in the Option granted hereby shall
interfere with or limit in any way the right of the Company or of any of its
subsidiaries to terminate Optionee’s employment, consulting or advising at any
time, nor confer upon Optionee any right to continue in the employ of, consult
with, or advise the Company or any of its Subsidiaries.
10.
Modification and
Waiver
. This Option may not be modified except by a writing
signed by both parties, except that either party may waive any right hereunder
by an instrument unilaterally signed.
11.
Restrictions on Sale of
Shares
. Optionee represents and agrees that upon the
Optionee’s exercise of this Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the Shares issued to the Optionee, the Optionee will acquire the
Shares issuable upon exercise of this Option for the purpose of investment and
not with a view to their resale or further distribution, and that upon such
exercise thereof the Optionee will furnish to the Company a written statement to
such effect, satisfactory to the Company in form and
substance. Optionee agrees that any certificates issued upon exercise
of this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state and federal securities
law. Any person or persons entitled to exercise this Option under the
provisions of Sections 6 and 7 hereof shall, upon each exercise of this Option
under circumstances in which Optionee would be required to furnish such a
written statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
12.
Nevada Law
Governs
. This Agreement shall be interpreted under the
internal laws of the State of Nevada and any action hereunder shall be brought
in the state or federal courts of Nevada.
13.
Notices
. All
notices to the Company shall be addressed to the Corporate Secretary at the
principal executive office of the Company at 7610 Miramar Road,
Building 6000, San Diego, California 92126, and all notices to Optionee shall be
addressed to Optionee at the address of Optionee on file with the Company, or to
such other address as either may designate to the other in writing. A
notice shall be deemed to be duly given if and when enclosed in a properly
addressed sealed envelope deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid,
written notices under this Agreement may be given by personal delivery to
Optionee or to the Corporate Secretary (as the case may be).
14.
Sale or Other
Disposition
. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form of transfer) of any
Shares acquired by exercise of this Option, the Optionee shall first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
15.
Corporate
Transactions
. In the event of a Corporate
Transaction (as such term is defined in the Plan), the Board shall
notify Optionee at least thirty (30) days prior thereto or as soon as may be
practicable. To the extent not previously exercised, this Option
shall terminate immediately prior to the consummation of such Corporate
Transaction unless the Board determines otherwise in its sole discretion;
provided
,
however
, that the
Board, in its sole discretion, may (i) permit exercise of this Option prior to
its termination, even if this Option would not otherwise have been exercisable,
and (ii) provide that this Option shall be assumed or an equivalent option
substituted by an applicable successor corporation or any subsidiary of the
successor corporation.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
RF
INDUSTRIES, LTD.
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
|
OPTIONEE:
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
Social
Security
Number
|