|
Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
|
President/Chief
Executive Officer and Chief Financial Officer Compensation
On December 3, 2018,
the Board of the Directors (the “
Board
”) of RF Industries, Ltd. (the “
Company
”) increased
the annual base salary of (i) Robert Dawson, the Company’s President and Chief Executive Officer, from $275,000 to $300,000,
and (ii) Mark Turfler, the Company’s Chief Financial Officer and Corporate Secretary, from $170,000 to $187,000, effective
as of January 2, 2019.
Fiscal Year 2018
Executive Incentive Compensation Bonuses
On December 13, 2017,
the Board adopted corporate goals for the determination of cash bonuses to be paid to certain officers for the 2018 fiscal year.
At its meeting on December 3, 2018, the Board determined that Mr. Dawson and Mr. Turfler met, and exceeded, all of the goals in
the incentive bonus plan. Accordingly, the Board granted the full bonus payment and, under its discretionary right, increased by
Mr. Dawson’s annual bonus by $17,125 and increased Mr. Turfler’s annual bonus by $10,000. Accordingly, for the fiscal
year ended October 31, 2018, Robert Dawson’s annual incentive compensation increased from $182,875 to $200,000, and Mark
Turfler’s annual incentive compensation from $113,050 to $123,050.
Adoption of Fiscal
Year 2019 Executive Incentive Compensation Plan
On December 3, 2018,
the Board also adopted corporate goals for the determination of cash and equity bonuses to be paid to the Company’s two named
officers and to certain officers for the 2019 fiscal year. Under the plan adopted by the Board, cash and/or equity bonuses, if
any, will be paid to qualified participating officers of the Company and its subsidiaries based upon (i) the achievement of specified
corporate goals and (ii) a review of the subjective personal performance and contribution of each of the officers. The subjective
performance of each officer will be evaluated and determined, in its sole discretion, by the Compensation Committee of the Board
after consultation with the Company’s Chief Executive Officer. The corporate goals will apply to all participating officers.
The maximum target
bonus payable to participating officers if 100% of the goals are achieved will range from 15% of the recipient’s annual salary
to 50% of the recipient’s 2019 base salary for the senior executive officers, including Mr. Dawson and Mr. Turfler. Cash
bonuses and equity compensation (in the form of either stock options or restricted stock) will be based on the Company’s
earnings per share (before payment of bonuses) (“
EPS
”) for the fiscal year ending October 31, 2019. The maximum
bonus payable to each participating officer is subject to reduction based upon the subjective performance of such participating
officer (performance criteria include the development and execution of strategic plans, the operations of that officer’s
business unit, the exercise of leadership by the officer, the support and development of management and other employees, and the
contribution of such officer to the improvement in the Company’s overall business activities and profitability). The Board
and Compensation Committee reserve the right to modify these goals, criteria and target percentage at any time, and to grant bonuses
to the participants even if the performance goals are not met. In addition, the Board and Compensation Committee may modify the
bonus plan targets to reflect significant change in Company’s business, including changes due to acquisitions or dispositions
of businesses or product lines. The 2019 bonuses will be paid within 75 days after the end to the fiscal year to participating
officers who are employed with the Company on the date of payment.
The Company’s Chief Executive Officer
will participate in the 2019 bonus plan. Under his employment agreement, the Chief Executive Officer currently is entitled to a
cash bonus of up to 50% of his annual base salary. Under the 2019 bonus plan, the maximum cash bonus payable to all participating
officers, including the Chief Executive Officer, has been increased to 75% of their 2019 base salaries if the Company achieves
150% of its performance targets. Accordingly, the Chief Executive Officer could receive a larger year-end bonus under the 2019
Company bonus plan than under his employment agreement if he and the Company substantially exceed the Company’s target goals.