UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(A)14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Filed by the Registrantx

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¨Preliminary Proxy Statement

¨Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

xDefinitive Proxy Statement

¨Definitive Additional Materials

¨Soliciting Materials Under Rule 14a-12

 

 RF INDUSTRIES, LTD. 
 

(Name of Registrant as Specified in its Charter)

 

 
 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

 

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RF INDUSTRIES, LTD.
7610 Miramar Road
San Diego, California 92126

 

NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF STOCKHOLDERS
WILL BE HELD ON SEPTEMBER 8, 20169, 2019

 

An Annual Meeting of Stockholders of RF Industries, Ltd., a Nevada corporation (the “Company”), will be held at the offices of TroyGould PC, 1801 Century Park East, 16th Floor, Los Angeles,CohnReznick, LLP, 11452 El Camino Real, Suite 100, San Diego, California, 9006792130 on Thursday,Monday, September 8, 2016,9, 2019, at 10:1:00 a.m.p.m., for the following purposes:

 

1.To elect one membertwo members of the Company’s Board of Directors to serve until the 20192022 Annual Meeting of Stockholders.

 

2.To conduct an advisory vote on the frequency of future advisory votes on the compensation of our named executive officers.

3.To conduct an advisory vote on the compensation of the Company’s named executive officers as disclosed in this proxy statement.

 

3.4.To ratify the selection of CohnReznick LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2016.2019.

 

4.5.To transact such other business as may properly come before the Annual Meeting of Stockholders or any adjournment thereof.

 

The Board of Directors has fixed the close of business on July 15, 201612, 2019 as the record date for determination of stockholders entitled to notice of and to vote at the Annual Meeting of Stockholders or any adjournment thereof.

 

We are pleased to take advantage of Securities and Exchange Commission rules that allow companies to furnish their proxy materials over the Internet. We are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy materials and our 20152018 Annual Report on Form 10-K. The Notice contains instructions on how to access those documents and to cast your vote via the Internet. The Notice also contains instructions on how to request a paper copy of our proxy materials and our 20152018 Annual Report on Form 10-K. All stockholders who do not receive a Notice will receive a paper copy of the proxy materials and the Annual Report by mail. This process allows us to provide our stockholders with the information they need on a more timely basis, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials.

 

Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. I urge you, therefore, to return a signed proxy card or vote by telephone or over the Internet so that you can be sure your votes are properly counted, even if you plan to attend the meeting. Information about voting procedures can be found in the proxy statement.

 

I hope you will join us.

 

By Order of the Board of Directors,

By Order of the Board of Directors,

President and Chief Executive Officer

Johnny Walker

President and CEO

 

San Diego, California

July 25, 201629, 2019

 

 

 

 

RF INDUSTRIES, LTD.
7610 Miramar Road
San Diego, California 92126

______________________________

PROXY STATEMENT

PROXY STATEMENT

 

General

 

The enclosed Proxyproxy is solicited on behalf of the Board of Directors of RF Industries, Ltd., a Nevada corporation (the “Company”), for use at the Annual Meeting of Stockholders (“Annual Meeting”) to be held on Thursday,Monday, September 8, 2016,9, 2019, at 10:1:00 a.m.p.m. local time, or at any adjournment or postponement thereof. The Annual Meeting will be held at the offices of TroyGould PC, 1801 Century Park East, 16th Floor, Los Angeles,CohnReznick LLP, 11452 El Camino Real, Suite 100, San Diego, California, 90067.92130.

 

The Notice of Internet Availability is first being mailed to our stockholders on or about July 25, 2016.29, 2019.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON SEPTEMBER 8, 20169, 2019

 

The Company’s Notice of Annual Meeting, this proxy statement, the proxy card, and our Annual Report for the fiscal year ended October 31, 20152018 are available on the Internet at https://materials.proxyvote.com/749552 and on our website atwww.rfindustries.com under “Investor Information.”

 

Voting

 

Only stockholders of record at the close of business on July 15, 2016,12, 2019, will be entitled to notice of and to vote at the Annual Meeting. On July 15, 2016,12, 2019, there were 8,835,4839,360,351 shares of Common Stockcommon stock outstanding. The Company is incorporated in Nevada, and is not required by Nevada corporation law or its Articles of Incorporation to permit cumulative voting in the election of directors.

 

How can I attend the Annual Meeting?

 

You may attend the Annual Meeting if you are listed as a stockholder of record as of July 15, 201612, 2019 and bring proof of your identity. If you hold your shares in street name through a broker or other nominee, you will need to provide proof that you are the beneficial owner of the shares by bringing either a copy of a brokerage statement showing your share ownership as of July 15, 2016,12, 2019, or a legal proxy if you wish to vote your shares in person at the Annual Meeting.

 

How can I vote my shares in person at the Annual Meeting?

 

Shares held directly in your name as the stockholder of record may be voted in person at the Annual Meeting. If you choose to do so, please bring proof of your identity to the Annual Meeting. If your shares are held in a stock brokerage account or by a bank or other nominee, you have the right to direct your broker or nominee on how to vote these shares and are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you receive a proxy from your broker or nominee. Your broker or nominee has provided voting instructions for you to use. If you wish to attend the Annual Meeting and vote in person shares held in your brokerage account name, please contact your broker or nominee so that you can receive a legal proxy to present at the Annual Meeting. Even if you plan to attend the Annual Meeting, we urge you to vote in one of the ways described below so that your vote will be counted if you later decide not to attend the Annual Meeting or are unable to attend. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you change your proxy instructions as described above.


How can I vote my shares without attending the Annual Meeting?

 

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct your vote without attending the Annual Meeting. You may vote by granting a proxy or, for shares held in street name, by submitting voting instructions to your broker or nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to the summary instructions below, the instructions included on the Notice of Internet Availability of the proxy materials, and if you request printed proxy materials, the instructions included on your proxy card or, for shares held in street name, the voting instruction card provided by your broker or nominee.

 


·By Internet — If you have Internet access, you may submit your proxy from any location in the world by following the Internet voting instructions on the proxy card or voting instruction card sent to you.

 

·By Telephone — You may submit your proxy by following the telephone voting instructions on the proxy card or voting instruction card sent to you.

 

·By Mail — You may do this by marking, dating and signing yourthe enclosed proxy card or, for shares held in street name, the voting instruction card provided to you by your broker or nominee, and mailing it in the enclosed, self-addressed, postage prepaid envelope. No postage is required if mailed in the United States.Please note that you will be mailed a printed proxy card or printed voting instruction card only if you request that such printed materials be sent to you by following the instructions in the Notice of Internet Availability for requesting paper copies of the proxy materials.

 

What vote is required for the proposals?

 

With regard to the election of directors, the nomineetwo nominees receiving the greatest number of votes cast will be elected provided a quorum is present. On each matter properly presented and submitted to a vote at the Annual Meeting, each share will have one vote for shares represented at the Annual Meeting (in person or by proxy) and entitled to vote. Shares represented by proxies that reflect abstentions or broker non-votes (that is, shares held by a broker or nominee which are represented at the meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions will be counted towards the tabulation of votes cast on matters properly presented to the stockholders (except the election of directors) and will have the same effect as negative votes.votes (except with respect to the advisory “say on frequency” vote on executive compensation described in the last sentence of this paragraph). Broker non-votes will not be counted as votes cast and, therefore, will have no effect on the outcome of the matters presented at the Annual Meeting. If the enclosed proxy is properly executed and returned to, and received by, the Company prior to voting at the Annual Meeting, the shares represented thereby will be voted in accordance with the instructions marked thereon. If no instructions are indicated on a properly executed proxy, the shares represented by that proxy will be voted as recommended by our Board of Directors. Assuming that a quorum is present, the affirmative vote of a majority of the shares of common stock present or represented by proxy at the Annual Meeting and entitled to vote will be required to (i) approve, on an advisory basis, our executivethe compensation forof our named executive officers and (ii) ratify the appointment of theour independent registered public accounting firm. The advisory vote on the frequency of future advisory votes on the compensation of the Company’s named executive officers is being submitted to enable stockholders to express a preference as to whether future advisory votes on executive compensation should be held every year, every two years or every three years and therefore does not require “approval” by the Company’s stockholders.

 

As a result of changes made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to the regulation of brokers under certain self-regulatory organizations such as the New York Stock Exchange (“NYSE”(the “NYSE”) and NASDAQ Stock Market LLC (“Nasdaq"Nasdaq”), brokers are not permitted to vote on the election of directors or on the two advisory proposalproposals on executive compensation without instructions from the beneficial owner. Therefore, if your shares are held in the name of your broker, bank or other nominee, your vote is especially important this year.important.

 

Revocability of Proxies

 

When the enclosed Proxy is properly executed and returned, the shares it represents will be voted at the Annual Meeting in accordance with any directions noted thereon, and if no directions are indicated, the shares it represents will be voted in favor of the proposals set forth in the notice attached hereto. Any person giving a Proxy in the form accompanying this Proxy Statement has the power to revoke it any time before its exercise. To revoke a proxy previously submitted by telephone or through the Internet, you may simply vote again at a later date, using the same procedures, in which case your later submitted vote will be recorded and your earlier vote revoked. A Proxyproxy may also be revoked by filing with the Secretary of the Company’s principal executive office, 7610 Miramar Road, San Diego, California 92126-4202, an instrument of revocation or a duly executed Proxyproxy bearing a later date, or it may be revoked by attending the Annual Meeting and voting in person.Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote in person at the Annual Meeting, you must obtain from the record holder a proxy issued in your name.


If I am a beneficial owner of shares, can my brokerage firm vote my shares?

 

If you are a beneficial owner and do not vote via the Internet, telephone, or by returning a signed voting instruction card to your broker, your shares may be voted only with respect to so-called routine matters where your broker has discretionary voting authority over your shares. Brokers will have such discretionary authority to vote on Proposal 34 regarding the ratification of the selection of our independent registered public accounting firm for 2016,2019, but not on any of the other proposals.

 


We encourage you to provide instructions to your brokerage firm by returning your voting instruction card. This ensures that your shares will be voted at the Annual Meeting with respect to all of the proposals described in this proxy statement.

 

Solicitation

 

The Company will bear the entire cost of solicitation of Proxies,proxies, including the preparation, assembly, printing, and mailing of this Proxy Statement, the Proxy,proxy, and any additional material furnished to stockholders. Copies of solicitation material will be furnished to brokerage houses, fiduciaries, and custodians holding shares in their names that are beneficially owned by others to forward to such beneficial owners. In addition, the Company may reimburse such persons for their cost of forwarding the solicitation material to such beneficial owners. The solicitation of Proxiesproxies by mail may be supplemented by telephone, facsimile or email, and/or personal solicitation by directors, officers, or employees of the Company. No additional compensation will be paid for any such services. Except as described above, the Company does not intend to solicit Proxies.proxies.

 

How can I find out the results of the voting at the Annual Meeting?

 

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published by the Company on Form 8-K within four business days following the Annual Meeting.

 

PROPOSAL 1:
NOMINATION AND ELECTION OF DIRECTORS

 

The Company’s Amended and Restated Bylaws (the "Bylaws"“Bylaws”) provide for the classification of our Board of Directors into three classes of directors, with each class as nearly equal in number as possible, with staggered terms of office. Nevada law permits the bylaws to provide for a classified board of directors. At each annual meeting of stockholders, the successors to the class of directors whose terms expire at that meeting will be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election and until their successors have been duly elected and qualified.

 

Until the date of the Annual Meeting, theThe Company’s Board of Directors continues to becurrently is composed of the following five members: Marvin H. Fink, Howard F. Hill, William L. Reynolds, Darren ClarkJoseph Benoit, Gerald T. Garland, Sheryl Cefali and Joseph Benoit. However, becauseRobert Dawson. On June 7, 2019, the Board has been divided into three classes of directors, only the term of William L. Reynolds and Darren Clark will expire at the Annual Meeting. Mr. Clark is not a nominee for election at the Annual Meeting, andDirectors increased the number of directors constitutingon the entire Board of Directors to seven members and appointed Sheryl Cefali to serve as a director, effective June 7, 2019. Ms. Cefali has been reduced to four members, effectiveappointed as a Class III director, and will serve until the annual meeting of stockholders at which the Class III directors are elected (the Class III directors will be elected at the Annual Meeting. Accordingly, only one director isMeeting) and until her successor has been duly elected and qualified. Two directors are to be elected at the Annual Meeting. The nomineetwo nominees to be elected at the Annual Meeting is William L. Reynolds.are Mr. Dawson and Ms. Cefali. The director to bedirectors elected at the Annual Meeting will hold office until histheir term expires and until his successor istheir successors are elected and has qualified, or until histheir death, resignation, or removal.

 

William L. Reynolds, one of the Class III directors, on June 7, 2019 informed the Board that he will retire from the Board of Directors immediately before this year’s annual meeting of stockholders. Accordingly, he informed the Board that he does not intend to stand for re-election this year. Mr. Reynolds informed the Board that his retirement is not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

The candidatetwo nominees receiving the highest number of affirmative votes cast at the Annual Meeting shall be elected as directors of the Company. William L. Reynolds hasMr. Dawson and Ms. Cefali have agreed to serve if elected. If for any reason William L. ReynoldsMr. Dawson or Ms. Cefali is not a candidate when the election occurs, we intend to vote proxies for the election of a substitute nominee or, in lieu thereof, our Board of Directors may reduce the number of directors in accordance with our Bylaws. Unless otherwise instructed, the Proxyproxy holders will vote the Proxiesproxies received by them in a manner that will result infavor of the election of William L. Reynolds.Mr. Dawson and Ms. Cefali.

 

A majority of the Directors are "independent directors"“independent directors” as defined by the listing standards of The Nasdaq Stock Market, and the Board of Directors has determined that such independent directors have no relationship with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a director.


 


Set forth below is information regarding the nomineenominees and the other current Board members, including information furnished by them as to their principal occupations and their ages.ages:

 

Name Age Director Since Age Director Since
Marvin H. Fink 80  2001 83 2001
Howard F. Hill 75 1979 78 1979
William L. Reynolds 81 2005 84 2005
Darren Clark 49 2011
Gerald T. Garland 68 2017
Joseph Benoit 62 2013 65 2013
Sheryl Cefali 57 2019
Robert Dawson 45 2018

 

Class III - NomineeNominees for Election for a Three-Year Term Expiring at the 2019 Annual Meeting2022

 

William L. ReynoldsRobert Dawson has been the Company’s current President and Chief Executive Officer since July 17, 2017. Effective July 21, 2018, Mr. Dawson was appointed to the Company’s Board to also serve as a director. Prior to joining RF Industries on July 17, 2017, Mr. Dawson was President and CEO of Vision Technology Services, an information technology consulting and project management company that was acquired by BG Staffing. He spent 2007-2013 at TESSCO Technologies, a publicly traded distributor of wireless products and services. At TESSCO Mr. Dawson held multiple executive roles in sales, marketing, product management and strategy culminating with being Vice President of Sales, responsible for TESSCO’s sales organization and leading a team delivering more than $700 million in sales. He joined TESSCO through the 2007 acquisition of NetForce Solutions, a technology training and consulting firm that he co-founded in 2000 and led as the Chief Executive Officer through seven years of growth before being acquired by TESSCO. Mr. Dawson received his Bachelor's degree in Business Administration from Hillsdale College.

Sheryl Cefali was appointed to the Board of Directors on June 7, 2019. Ms. Cefali is a retired financial executive. Mr. Reynolds most recently wasManaging Director in the VPtransactions opinions practice at Duff & Phelps and head of Financethe firm's Los Angeles office. Ms. Cefali has over 25 years of experience rendering fairness and Administration for Teledyne Controls from 1994 until his retirementsolvency opinions and determining valuations of companies and securities. She is a member of the Fairness and Solvency Opinion Senior Review Committee at Duff & Phelps. Prior to joining Duff & Phelps in 1997. Prior thereto, for 22 years he was the Vice- President of Finance andAdministration of Teledyne Microelectronics. Mr. Reynolds also1990, she was a program finance administratorVice President with Houlihan Lokey. Ms. Cefali received her M.B.A. from the University of Teledyne Systems Company for five years. He hasSouthern California and her B.A. from the University of California at Santa Barbara. Ms. Cefali holds the FINRA Series 7 and 63 licenses. Ms. Cefali also serves as an officer and a B.B.A. degreedirector on the board of the Women’s Leadership Council. In January 2019, the Los Angeles Business Journal named Ms. Cefali as one of the Top Women in Accounting from Woodbury College.Banking.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” ELECTION OF THE FOREGOING NOMINATED DIRECTORS.

 

Continuing Directors

 

The following is a description of the incumbent Class I, and Class II and III directors whose terms of office will continue after the Annual Meeting:

 

Class I - DirectorDirectors Continuing in Office Until the 20172020 Annual Meeting

 

Marvin H. Fink is a retired executive. Mr. Fink most recently served as the Chief Executive Officer, President and Chairman of the Board of Recom Managed Systems, Inc. from October 2002 to March 2005. Prior thereto, Mr. Fink was President of Teledyne’s Electronics Group. Mr. Fink was employed at Teledyne for 39 years. He holds a B.E.E. degree from the City College of New York, an M.S.E.E. degree from the University of Southern California and a J.D. degree from the University of San Fernando Valley. He is an inactive member of the California Bar.

 

Gerald T. Garland was most recently Senior Vice President of Solutions Development and Product Management for TESSCO Technologies, a publicly-traded value-added distributor and solutions provider for the wireless industry. Mr. Garland also served as Senior Vice President of the Commercial Division at TESSCO, where he was responsible for sales, business and product development and product management at the Company’s core wireless communications business. He was previously Director of Business Development at American Express Tax and Business Services from 2002 to 2003, where he was involved in an expanded asset recovery capability for Fortune 1000 corporations. From 2000 to 2001, he was Chief Financial Officer at Mentor Technologies, a developer of on-line, Cisco certification training products. Mr. Garland was Chief Financial Officer and Treasurer at TESSCO Technologies from 1993 to 1999 during the Company’s successful Initial Public Offering and oversaw TESSCO’s annual sales expansion from $50 million to over $190 million. Prior to joining TESSCO, Mr. Garland held leadership positions at Bank of America and Stanley Black & Decker. Mr. Garland received his MBA, with a concentration in Finance, from Loyola University and his Bachelor of Science in Business Management and Accounting from Towson University. He is currently the Managing Director at Inscite Consulting, on the Board of Directors and Chief Adviser to the World Trade Center Institute and on the Executive Advisory Board of Patriot Capital. He is also on the Executive Committee of Communications Electronics, Inc. and the Board of SOZO Children.


Class II - Directors Continuing in Office Until the 20182021 Annual Meeting

 

Howard F. Hill, a founder of the Company in 1979, served as thisthe Company’s Chief Executive Officer until January 22, 2015. Effective January 22, 2015, Mr. Hill stepped down as the Chief Executive Officer and agreed to serve as thisthe Company’s Chief Operating Officer. Effective April 6, 2015, Mr. Hill announced that he was taking an indefinite medical leave of absence and resigned as the Company’s Chief Operating Officer.On April 7, 2016, Mr. Hill retired as an employee of the Company. Mr. Hill did, however, agree to continueCompany, but continued to serve on the Company’s Board of Directors. On October 31, 2016, Mr. Hill assumed the position as the unpaid, interim President and Chief Executive Officer of the Company until July 17, 2017, the date that his successor, Robert Dawson, assumed the duties of President and Chief Executive Officer. In addition, from January 18, 2013 until June 7, 2013, Mr. Hill also served as the Company’s interim Chief Financial Officer. Mr. Hill has credits in Manufacturing Engineering, Quality Engineering and Industrial Management. He was the President of the Company from July 1993 until July 2011. He has held various positions in the electronics industry over the past 60 years.

 

Joseph Benoit was appointed to the Board of Directors on April 8, 2013. Mr. Benoit retired from Union Bank in June 2012 after serving in various management and leadership roles for over 20 years. Managing over 100 Union Bank branch offices in Southern California and being the head of Business Banking were among his responsibilities. As an Executive Vice President, he also served as Union Bank’s integration manager for FDIC assisted acquisitions. Mr. Benoit has a B.S. in Business Administration from San Diego State University and an MBA from National University. He is also a graduate of Pacific Coast Banking School and serves as a director on various non-profit boards.

 

Class III - Directors Continuing in Office Until the 2019 Annual Meeting

William L. Reynolds is a retired financial executive. Mr. Reynolds most recently was the Vice President of Finance and Administration for Teledyne Controls from 1994 until his retirement in 1997. Prior thereto, for 22 years he was the Vice- President of Finance and Administration of Teledyne Microelectronics. Mr. Reynolds also was a program finance administrator of Teledyne Systems Company for five years. He has a B.B.A. degree in Accounting from Woodbury College. William L. Reynolds on June 7, 2019 informed the Board that he will retire from the Board of Directors immediately before this year’s annual meeting of stockholders. Accordingly, he informed the Board that he does not intend to stand for re-election this year. Mr. Reynolds informed the Board that his retirement is not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

In determining whether the nomination of each current director was appropriate and that each current director is qualified to serve on the Board of Directors, the Board considered the following:

 

Marvin H. Fink: Mr. Fink has significant experience in a variety of areas important to overseeing the management and operations of this Company, including experience as an executive officer, an engineer and a lawyer. Mr. Fink has been the principal executive officer of a public company as well as the President of Teledyne’s Electronics Group. He has degrees in engineering and law and was involved in the electronics industry for over 40 years.

 

Howard F. Hill: Mr. Hill is a founder of the Company and has over 60 years of experience in the electronics industry.

 


Joseph Benoit: Mr. Benoit has significant financial management and banking experience, having served in various executive positions at Union Bank.

 

William L. Reynolds: Mr. Reynolds has significant accounting and financial management expertise, having served as VP of Finance and Administration for Teledyne Controls, as the Vice-President of Finance and Administration of Teledyne Microelectronics, and as a program finance administrator of Teledyne Systems Company. He also has a degree in accounting, which enables him to serve as the “audit committee financial expert” of the Audit Committee.

 

Darren Clark:Gerald T. Garland: Mr. ClarkGarland has significant leadership experience in product management, sales management, solutions development, global sourcing and financial management. Mr. Garland served as a Chief Financial Officer and Senior Vice President for a leading distributor and solutions provider to the wireless industry for over 18 years. Mr. Garland has also held senior leadership positions with Bank of America, Stanley Black & Decker, American Express and TESSCO Technologies.


Sheryl Cefali:Ms. Cefali has over 30 years of experience rendering fairness and solvency opinions and determining valuations of companies and securities. Ms. Cefali is currently a Managing Director at Duff & Phelps, is the founder and has been a principal executive officer of Cables Unlimited, Inc. and as a result, is familiar with the operationshead of that key subsidiaryfirm’s Los Angeles office, and is a member of the Company. He isthat firm’s Fairness and Solvency Opinion Senior Review Committee. Prior to joining Duff & Phelps in 1990, she was a Vice President with Houlihan Lokey.

Robert Dawson: Mr. Dawson has significant leadership experience in sales, marketing, product management and strategy for a leading publicly traded distributor of wireless products and services. Mr. Dawson also served as President and CEO of an expert in the designinformation technology consulting and manufactureproject management company and was a co-founder of complex cable assemblies, harnessesa successful telecom and fiber optic cable assemblies. The fiber optic industry is an important areawireless technology training and consulting firm that he co-founded and led for seven years of growth for the Company.until it was acquired.

 

Terms of Service

 

Each director to be elected at the Annual Meeting will hold office until his respectiveor her three-year term expires and until his or her successor is elected and has qualified, or until his or her death, resignation, or removal.

 

Board Leadership Structure

 

Currently, the positions of Chairman of the Board of Directors and Chief Executive Officer of the Company are held by separate individuals, with Mr. Fink serving as Chairman of the Board and Johnny WalkerRobert Dawson serving as Chief Executive Officer.Officer and as a director on the Board. Mr. Fink, an independent director, has served as the Chairman of the Board since 2007, and the Company has continuously had a separate Chairman of the Board and Chief Executive Officer for more than a decade. The Chairman of the Board is appointed by our Board of Directors on an annual basis.Directors.

 

The Board of Directors currently believes that this structure is best for the Company, as it allows Mr. WalkerDawson to focus on the Company’s strategy, business and operations while enabling Mr. Fink to manage our Board of Directors and serveserving as a liaison between the Board and the Company’s senior management, led by Mr. Walker. Additionally, themanagement. The Board currently believes the separation of offices is beneficial, because a separate Chairman can provide the Chief Executive Officer with guidance and feedback on his performance and the Chairman provides a more effective channel for the Board to express its views on management. This structure can also enable Mr. Fink and the other members of the Board to be better informed and to communicate more effectively on issues, including with respect to risk oversight matters.

 

The Board does not believe that a formal policy separating the positions of Chairman of the Board and Chief Executive Officer is necessary. The Board continually evaluates our leadership structure and could in the future decide to combine the Chairman and Chief Executive Officer positions if it believes that doing so would serve the best interests of the Company and our stockholders.

 

Management

 

Johnny Walker,Robert Dawson, has served as our President and Chief Executive Officer was hired assince July 17, 2017. See, “Proposal No. 1: Nominees for Election for a Three-Year Term Expiring at the President of the Company on October 6, 2014 and was appointed as Chief Executive Officer on January 22, 2015. Mr. Walker has extensive experience in the communications and wireless industries. Most recently, from 1999 to 2014, he served as the Chief Executive Officer and Chief Financial Officer of Hutton Communications, a major distributor of commercial wireless communications and related equipment. Hutton Communications has been one of the Company’s distributors for over 20 years. From 1993 to 1998, Mr. Walker was the Chief Financial Officer and Chief Operating Officer at River Oaks Furniture. From 1990 to 1993, he was the CEO of Profit Partners International, a court appointed receiver for the rehabilitation and liquidation of troubled Savings and Loans institutions in the State of Texas. From 1984 to 1990, Mr. Walker was the Chief Financial Officer and Chief Operating Officer of Tony Lama. From 1979 to 1983, Mr. Walker was a partner-in-charge of the Haskins & Sells (now Deloitte & Touche) offices in St. Louis, Missouri. Previously, Mr. Walker was a Partner of Haskins & Sells in Dallas, Texas from 1970 to 1979.  Mr. Walker is a CPA and studied Accounting and Finance at Texas Tech University. He received a Bachelor of Business Administration Degree in Accounting from Texas A&M Commerce and a Masters of Science in Accounting degree from Texas Tech University.2022,” above.

 

Mark Turfler, age 67, Senior Vice President and Chief Financial Officer, was appointed as the Company’s Acting Chief Financial Officer and Corporate Secretary on June 7, 2013. Effective as of January 10, 2014, Mr. Turfler was promoted to Chief Financial Officer. Mr. Turfler joined the Company in January 2013 as our Controller. Prior to joining the Company, Mr. Turfler worked in senior accounting/finance positions at Ligand Pharmaceuticals, Inc. from 2006 to 2009, at Cylene Pharmaceuticals, Inc. from 2010 to 2011, and as an independent financial/accounting consultant from 2012 until he joined the Company in January 2013. Mr. Turfler has more than 35 years of accounting and finance experience including several years with publicly traded companies in a variety of senior financial executive positions with wireless telecommunications, international manufacturing, medical device and software companies. Mr. Turfler began his career with PricewaterhouseCoopers after graduating from Syracuse University with a B.S. in accounting. Mr. Turfler is a Certified Public Accountant and a member of the American Institute of CPAs, California Society of CPAs, Corporate Directors Forum and Financial Executives International.


Board of Director Meetings

 

During the fiscal year ended October 31, 2015,2018, the Board of Directors held twelve meetings. During the fiscal year ended October 31, 2015,met eight times, and each member of the Board of Directors attended at least 75% of the meetings of the Board of Directors and of the Board committees on which he served.

 

Board Committees

 

During fiscal 2015,2018, the Board of Directors maintained three committees, the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.

 

The Audit Committee meets periodically with the Company’s management and independent registered public accounting firm to, among other things, review the results of the annual audit and quarterly reviews and discuss the financial statements. The Audit Committee also hires the independent registered public accounting firm, and receives and considers the accountant’s comments as to controls, adequacy of staff and management performance and procedures. The Audit Committee is also authorized to review related party transactions for potential conflicts of interest and to conduct internal investigations into whistleblower complaints. TheDuring fiscal 2018, the Audit Committee currently iswas composed of Mr. ReynoldsGarland (Chairman), Mr. FinkBenoit and Mr. Benoit.Reynolds. Each of these individuals was a non-employee director and was independent as defined under the NASDAQ Stock Market’s listing standards. Each of the members of the Audit Committee has significant knowledge of financial matters, and Mr. Reynolds currently serves as theis an “audit committee financial expert” of the Audit Committee.expert.” The Audit Committee met fourfive times during fiscal 2015. The Audit Committee operates under a formal charter that governs its duties and conduct, which charter is posted on the Company’s website.2018.

 

The Compensation Committee currently consists of Messrs. Fink, Reynolds, and Benoit (Chairman) each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Compensation Committee is responsible for considering and authorizing remunerationrecommending to the Board the compensation arrangements for senior management. The Compensation Committee held eightthree formal meetingmeetings during fiscal 2015,2018, which waswere attended by all committee members.

 

The Nominating and Corporate Governance Committee is responsible for developing and recommending corporate governance guidelines to the Board, identifying qualified individuals to become directors, recommending selected nominees to serve on the Board, and overseeing the evaluation of the Board and its committees. The Nominating and Corporate Governance Committee currently consists of Messrs. Fink (Chairman), Benoit, and Reynolds, each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Nominating and Corporate Governance Committee held one formal meetingtwo meetings during fiscal 2015,2018, which were attended by all committee members.

The Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee each operate pursuant to a written charter, which charters are available on our website at www.rfindustries.com.

 

Nominating Directors

 

The Nominating and Corporate Governance Committee has not adopted a formal policy with regard to the consideration of diversity when evaluating candidates for election to the Board. However, the Nominating and Corporate Governance Committee believes that membership should reflect diversity in its broadest sense, but should not be chosen nor excluded based on race, color, gender, national origin or sexual orientation. In this context, the Nominating and Corporate Governance Committee does consider a candidate’s experience, education, industry knowledge, history with the Company, if any, and differences of viewpoint when evaluating his or her qualifications for election to the Board.

 

The Nominating and Corporate Governance Committee believes that the Board of Directors should consist of individuals who possess the integrity, education, work ethic, experience and ability to work with others necessary to oversee our business effectively and to represent the interests of all of the Company’s stockholders. The Nominating and Corporate Governance Committee also believes that it is desirable for directors to own an equity interest in the Company in order to better align their interests with those of the stockholders. The standards that the Nominating and Corporate Governance Committee considers in selecting candidates (although candidates need not possess all of the following characteristics, and not all factors are weighted equally) include, among other factors determined to be relevant by the Board, each director'sdirector’s or nominee's:nominee’s:

 


·business experience;

 

·industry experience;

 

·financial background;

 

·breadth of knowledge about issues affecting the Company; and

 

·time available for meetings and consultation regarding Company matters and other particular skills and experience possessed by the individual.

The Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee each operate pursuant to a written charter, which charters are available on our website at www.rfindustries.com.

Stockholder Recommendations of Director Candidates The Board of Directors will consider Board nominees recommended by stockholders. In order for a stockholder to nominate a candidate for director, timely notice of the nomination must be given in writing to the Corporate Secretary of the Company. To be timely, the notice must be received at the principal executive offices of the Company as set forth under “Stockholder Proposals” below. Notice of a nomination must include the following information: your name, address and number of shares you own; the name, age, business address, residence address and principal occupation of the nominee; and the number of shares beneficially owned by the nominee. It must also include the information that would be required to be disclosed in the solicitation of proxies for election of directors under the federal securities laws, as well as whether the individual can understand basic financial statements and the candidate’s other board memberships (if any). You must submit the nominee’s consent to be elected and to serve.serve, if elected. The Board of Directors may require any nominee to furnish any other information that may be needed to determine the eligibility and qualifications of the nominee.

 

Any recommendations in proper form received from stockholders will be evaluated in the same manner that potential nominees recommended by our Board members or management are evaluated.

 

Stockholder CommunicationCommunications with Board Members Stockholders who wish to communicate with our Board members may contact us at our principal executive office at 7610 Miramar Road, Suite 6000, San Diego, California 92126-4202. Written communications specifically marked as a communication for our Board of Directors, or a particular director, except those that are clearly marketing or soliciting materials, will be forwarded unopened to the Chairman of our Board, or to the particular director to whom they are addressed, or presented to the full Board or the particular director at the next regularly scheduled Board meeting.

 

Code of Business Conduct and Ethics

 

The Company has adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of the Company's Directors,Company’s directors, officers and employees, including its principal executive officer and principal financial officer. The Code is posted on the Company’s website at www.rfindustries.com. The Company intends to disclose any amendments to the Code by posting such amendments on its website. In addition, any waivers of the Code for Directorsdirectors or executive officers of the Company will be disclosed in a report on Form 8-K.

 

COMPENSATION OF EXECUTIVES AND DIRECTORS

 

Summary Compensation Discussion and Analysis

 

Because the Company is a "smaller reporting company," as defined by the rules of the Securities and Exchange Commission, the Company is not required to provide a compensation discussion and analysis in this Proxy Statement. Nevertheless, this Summary Compensation Discussion and Analysis is provided in order to address the aspects of the Company’s compensation programs and explain the Company’s compensation philosophy, policies, and practices with respect to the Named Executive Officers that are listed in the "Executive Compensation" section below. During fiscal 2015, these individuals were: Johnny Walker, who served as President and Chief Executive Officer during fiscal 2015, Darren Clark, who served as President of Cables Unlimited, Inc. during fiscal 2015, and Mark Turfler, the Company’s Chief Financial Officer in fiscal 2015. Until January 22, 2015, Mr. Hill was this Company’s Chief Executive Officer. Mr. Hill served as this Company’s Chief Operating Officer until he announced that he was taking a medical leave of absence effective April 6, 2015. Mr. Hill retired as an employee of the Company on April 7, 2016.


The Company’s compensation program currently is designed to recruit and retain as executive officers individuals with the highest capacity to develop, grow and manage our business, and to align their compensation with the Company’s short-term and long-term goals. To do this, the compensation program for executive officers is made up of the following main components: (i) base salary, designed to compensate our executive officers for work performed during the fiscal year; (ii) year-end cash incentive programs, designed to reward the executive officers for achieving yearly performance goals and for their individual performances during the fiscal year; and (iii) equity-based awards, meant to align the executive officers’ interests with the interests of the Company’s stockholders.

 

The Board has appointed a Compensation Committee, which consists of Messrs. Fink, Reynolds and Benoit, to assist the Board in discharging its responsibilities relating to compensation matters, including matters relating to compensation programs for directors and executive officers. The Board of Directors believes that each member of the Compensation Committee is an "independent"“independent” director as defined by the listing standards of The Nasdaq Stock Market. The Compensation Committee has overall responsibility for evaluating and recommending compensation plans, policies and programs, and compensation and benefits of the Named Executive Officers.

 

The Compensation Committee attempts to structure the total compensation for the Company’s Named Executive Officers to provide a guaranteed amount of cash compensation in the form of competitive base salaries, while also providing a meaningful amount of annual cash compensation in the form of annual bonuses that is at risk and dependent on ourboth the Company’s performance and on the individual performancesperformance of the executives, in the form of annual bonuses.executives. The Company also seeks to provide a portion of total compensation in the form of equity-based awards under the Company’s stock option plan in order to align the long-term interests of executives with those of the Company’s stockholders and for retention purposes. Historically, the Company has made larger grants of stock options to the Named Executive Officers and other key officers and employees at the time that the officers/key employees first join the Company, which options vest over a longer period of time (often up to nine years). These option grants are supplemented by smaller, annual options grants that are similar to the option grants made to other officers and key employees.


 

Base salaries for our executive officers are determined by an assessment of the Company’s overall financial and operating performance, each executive officer's experience, duties, responsibilities, performance evaluation and changes in his or her responsibilities. The Company seeks to establish annual base salaries that the Compensation Committee believes are fair and competitive with salaries for executive officers in similar positions and with similar responsibilities in the Company’s marketplace. To date, the Company has not engaged an independent compensation consultant to assist in establishing the compensation payable to the Company’s executive officers. The annual base salaries are supplementedCompany’s Named Executive Officers for the fiscal year ended October 31, 2018 were Robert D. Dawson, who was hired to serve as the President and Chief Executive Officer of the Company in July 2017 and Mark Turfler, who has served as the Company’s Chief Financial Officer since January 2014.

·Mr. Dawson was hired in July 2017 at an annual base salary of $250,000. On the first anniversary of his employment start date, the Company increased his annual base salary to $275,000. Mr. Dawson’s annual base salary was further increased to $300,000 on January 3, 2019 to reflect the Company’s performance in fiscal 2018, and to $400,000 on July 17, 2019 in connection with entering into a new employment agreement with Mr. Dawson.

·Mr. Turfler’s annual base salary for fiscal 2017 was $170,000. Effective January 3, 2019, the Company increased Mr. Turfler’s base salary to $187,000.

In order to induce Mr. Dawson to accept the position as the Company’s new Chief Executive Officer and President and to relocate from the East Coast to San Diego, California, in 2017 the Company granted Mr. Dawson a stock option to purchase 100,000 shares of the Company’s common stock. The option has an exercise price of $1.90, which was the trading price on the Nasdaq Stock Market on Mr. Dawson’s start date, and vests as to 10,000 shares per year, with year-end10,000 shares having vested on his start date, and 10,000 shares vesting on each anniversary thereafter while he is employed by the Company.

In December 2017, the Board of Directors adopted corporate goals for the determination of cash bonuses thatto be paid to certain officers for the fiscal year ending October 31, 2018. Under the 2018 plan, cash 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 corporate goals apply to all participating officers. The target bonus payable to participating officers starts at 15% of the officer’s annual salary, but will not exceed 67% of such recipient’s 2018 base salary. Cash bonuses are based on both quantitative metrics (including non-GAAP financial measuresvarious earnings per share targets (before payment of bonuses) for the fiscal year ending October 31, 2018. The cash bonus payable to each participating officer is subject to reduction based upon the subjective performance of such as EBITDA) and subjectiveparticipating officer (subjective performance criteria (such asinclude, for example, the development and execution of specified strategic plans, to divest the Companyoperations of non-performing divisions or to acquire other companies or lines ofthat 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)activities and profitability). Each Named Executive Officer has different subjective/quantitativeThe Board and Compensation Committee reserve the right to modify these goals, criteria and target percentages 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 thatto reflect significant change in Company’s business, including changes due to acquisitions or dispositions of businesses or product lines. Plan bonuses are tailored to that officer’s duties and position.

Forbe paid within 75 days after the end to the fiscal year ended October 31, 2015,to participating officers who are employed with the Company on the date of payment.

Mr. Dawson was eligible to participate in the 2018 bonus plan. Under his employment agreement, he was entitled to a cash bonus of up to 50% of his annual base salaries of our Named Executive Officers were as follows: Mr. Walkers’ base salary was $250,000, Mr. Clark’s base salary was $150,000 and Mr. Turfler’s base salary was $170,000. Mr. Hill’s annual base salary duringsalary. However, under the period in fiscal 2015 that he served as2018 bonus plan, the Company’smaximum cash bonus payable to all participating officers, including the Chief Executive Officer, was $240,000.increased to 67% of the 2018 base salary. Accordingly, Mr. Dawson could receive a larger year-end bonus under the 2018 Company bonus plan than under his employment agreement if he and the Company substantially exceed the Company’s goals. The 2016 annual base salariesCompensation Committee determined that the company and each of the named executive officers exceeded the 2018 bonus plan goals and, accordingly, the Company awarded cash bonuses of $150,000 and $123,505 to Mr. Walker, Mr. ClarkDawson and Mr. Turfler, remained unchanged from the prior year.respectively.


  

Mr. Walker joinedIn December 2018, the Board of Directors adopted corporate goals for the determination of cash bonuses to be paid to certain officers for the current fiscal year ending October 31, 2019. Under the 2019 plan, cash 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 corporate goals apply to all participating officers. The target bonus payable to participating officers starts at 25% of the officer’s annual salary, but will not exceed 75% of such recipient’s 2019 base salary. Cash bonuses are based on various earnings per share targets (before payment of bonuses) for the fiscal year ending October 31, 2019. The cash bonus payable to each participating officer is subject to reduction based upon the subjective performance of such participating officer (subjective performance criteria include, for example, 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 October 2014 as its new President. Since then, Mr. Walker has been promotedthe Company’s overall business activities and profitability). The Board and Compensation Committee reserve the right to modify these goals, criteria and target percentages 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. Plan bonuses are to be paid within 75 days after the Company’s Chief Executive Officer, a position he currently still holds. Mr. Walker’s base salary of $250,000 perend to the fiscal year was established based on estimated salaries of executiveto participating officers at comparable companies and the pay scale of the Company’s other executive officers. Consistentwho are employed with the Company’s philosophy of granting executive equity compensation to incentivize executives to increase stockholder value and to promote loyalty, in October 2014 the Company granted Mr. Walker a ten-year option to purchase up to 100,000 shares of the Company’s common stock. The exercise price of the option was equal to the exercise price on the date of grant, and the option vests as follows: the right to purchase 10,000 shares vested on the date of grant, and the remaining 90,000 shares vest in equal 10,000 share installments over the next nine years.payment.

 

In January 2015, Mr. Turfler entered into a new, one-yearDawson is eligible to participate in the 2019 bonus plan. Under his employment agreement, under whichhe is currently entitled to a cash bonus of up to 50% of his annual base salary for fiscal 2015salary. However, under the 2019 bonus plan, the maximum cash bonus payable to all participating officers, including the Chief Executive Officer, was increased from $141,564 to $170,000 per year. In addition,75% of the 2019 base salary. Accordingly, Mr. Turfler received an option to purchase 100,000 shares, which option has an exercise price equal toDawson could receive a larger year-end bonus under the exercise price on the date of grant. As with Mr. Walker’s option, Mr. Turfler’s option vests as follows: the right to purchase 10,000 shares vested on the date of grant,2019 Company bonus plan than under his employment agreement if he and the remaining 90,000 shares vest in equal 10,000 share installments overCompany substantially exceed the next nine years.Company’s goals.

 


The employment agreement of each of the four Named Executive Officers provided for an annual bonus based on the Company’s goals for the October 31, 2015 fiscal year. These bonuses were intended to incentivize and reward the four Named Executive Officers for their contribution to our financial and operational success. Under the bonus plan, for the fiscal year ended October 31, 2015, Mr. Walker, Mr. Hill and Mr. Clark were entitled to receive a year-end bonus targeted at 50% of their annual base salary, of which 80% was tied to quantitative criteria that the Compensation Committee established, and 20% was based on the subjective evaluation by the Compensation Committee of the executive officer’s performance. Mr. Turfler was eligible to receive a year-end bonus equal to 40% of his base salary, or which 70% was be based on quantitative goals, and 30% was based on the subjective evaluation by the Compensation Committee. The quantitative criteria established for the past fiscal year were based on achieving certain a pre-determined EBITDA goals for the entire Company or, in the case of Mr. Clark, for the Cables Unlimited subsidiary. The Compensation Committee established a baseline EBITDA amount that the Company (or Cables Unlimited) had to meet before the Named Executive Officers subject to the bonus plan could receive any portion of their quantitative bonus. Under the bonus plan, if the actual EBITDA exceeded the baseline EBITDA, then the Named Executive Officers could ratably earn a year-end bonus (up to 80% of the total potential bonus, or 70% in the case of Mr. Turfler) based on the amount of EBITDA above the baseline EBITDA. In addition, the Compensation Committee had established subjective, qualitative targets for the Named Executive Officers. If the Compensation Committee determined, in its discretion, that a Named Executive Officer met some or all of his qualitative targets, that Named Executive Officer would receive a discretionary year-end bonus in an amount up to 20% (or 30% for Mr. Turfler) of his total potential year-end bonus.

For the fiscal year ended October 31, 2015, the Company determined that none of the Named Executive Officers achieved the quantitative goals established under the officers’ annual bonus plans. Accordingly, the Company did not pay any incentive bonuses tied to the quantitative goals. The Company did, however, determine that the Named Executive Officers achieved some, but not all, of their individual subjective annual goals, and that the Named Executive Officers were entitled to receive a portion of their potential qualitative year-end bonuses. The amount paid to each Named Executive Officer for fiscal 2015 under each officers’ bonus plan was the following: Mr. Walker ($25,000), Mr. Hill($12,000), Mr. Turfler ($17,500), and Mr. Clark ($12,500).

Executive Compensation

 

Summary of Cash and Other Compensation. The following table sets forth compensation for services rendered in all capacities to the Company (i) for each person who served as the Company’s Chief Executive Officer at any time during the past fiscal year, (ii) for each executive officer, (otherother than persons who served asour Chief Executive Officer)Officer, who was employed with the Company on October 31, 20152018 and who earned over $100,000 during the fiscal year ended October 31, 2015,2018, and (iii) for any executive officer who earned over $100,000 during the October 31, 20152018 fiscal year but was no longer employed with the Company on October 31, 20152018 (the foregoing executives are herein collectively referred to as the “Named Executive Officers”). No other executive officer of the Company received total salary and bonus, which exceededin excess of $100,000 in the aggregate, during the fiscal year ended October 31, 2015:

Name and Principal Position Year  Salary
($)
  Bonus
($)
  Stock
Awards
($)
  Option
Awards
($)(6)
  All Other
Compensation
($)
  Total
($)
 
Howard F. Hill                            
Chief Executive  2015   114,000   12,000   -   -   22,230(1)  152,250 
Officer, Chief Operating Officer and  2014   240,000   227,100   -   -   51,514(1)  297,637 
Director (2)                            
                             
Johnny Walker  2015   250,000   25,000   -   -   19,231   294,231 
President and Chief Executive  2014   14,000   -   -   145,687   1,603   161,290 
Officer (3)                            
                             
Darren Clark  

2015

   

150,000

   12,500   -   

4,020

   

11,538

   

178,058

 
President of Cables Unlimited, Inc.  2014   150,000   -   -   3,061   11,538   164,599 
                             
Mark Turfler
Chief Financial Officer(4)
  

2015

2014

   

166,000

142,000

   

17,500

8,000

   

-

-

   

19,094

215,038

   

27,297

13,525

(5)  

229,891

378,563

 

_______________________


(1) Mr. Hill’s other compensation consisted of $11,538 and $27,692 of accrued vacation in fiscal 2015 and 2014, respectively, and $10,692 and $23,822 for vehicle and apartment rental costs in fiscal 2015 and 2014, respectively. Because Mr. Hill does not live in San Diego, the Company has maintained an apartment in San Diego for Mr. Hill and some of the other managers since 1994. The compensation attributable to the use of a Company vehicle represents the value of his personal use of a Company vehicle.2018.

 

(2) Effective January 22, 2015, Mr. Hill stepped down as Chief Executive Officer. Mr. Hill thereafter served as the Company’s Chief Operating Officer until April 7, 2016. On April 7, 2016, Mr. Hill retired as an employee of the Company.

Name and Principal Position Year  Salary ($)  Bonus ($)  Stock Awards
($)
  Option
Awards ($)(2)
  Non-Equity
Incentive Plan
Compensation
 ($)
  Nonqualified
Deferred
Compensation
Earnings ($)
  All Other
Compensation
($)
  Total ($) 
Robert Dawson  2018   259,423   -   -   -   200,000

(3)

  -   36,448(4)  495,871 
President and Chief Executive Officer  2017   67,000(1)  -   -   58,777   -   -   52,397(4)  178,174 
Mark Turfler  2018   170,000   -   -   -   123,050(5)  -   20,197(7)  313,247 
SVP, Chief Financial Officer  2017   170,000   -   -   -   15,300(6)  -   -   185,300 

(1)Mr. Dawson joined the Company as President as of July 17, 2017 at an annual salary of $250,000.Effective July 17, 2018, Mr. Dawson’s annual salary was increased to $275,000.Mr. Dawson’s annual base salary was further increased to $300,000 on January 3, 2019 to reflect the Company’s performance in fiscal 2018, and to $400,000 on July 17, 2019 in connection with entering into a new employment agreement with Mr. Dawson.

(2)The amounts in this column represent the aggregate fair value of the option awards recognized by the Company as an expense for financial reporting purposes. The fair value of these awards and the amounts expensed were determined in accordance with Financial Accounting Standards Board ASC Topic 718. The assumptions we use in calculating these amounts are discussed in Note 9, “Stock options,” to the Consolidated Financial Statements.

(3)For the fiscal year ended October 31, 2018, the Company adopted corporate goals for the determination of cash bonuses to be paid to Robert Dawson, the Company’s Chief Executive Officer.  The target bonus payable to Mr. Dawson was 50% of his 2018 base salary ($250,000) up to 133% based on the achievement by the Company of certain EPS targets and the Company’s subjective determination of his performance for the fiscal year ended October 31, 2018. The Company did achieve its maximum earnings per share targets, and the Board of Directors awarded Mr. Dawson a cash bonus of $200,000.

(4)As part of his employment agreement, the Company agreed to reimburse Mr. Dawson up to $75,000 for relocation expenses, of which Mr. Dawson was paid $52,397 in the fiscal year ended October 31, 2017 and $22,603 of which was paid in the fiscal year ended October 31, 2018. Mr. Dawson’s other compensation for the fiscal 2018 year also includes $13,845 of accrued vacation.

(5)For the fiscal year ended October 31, 2018, the Company adopted corporate goals for the determination of cash bonuses to be paid to Mark Turfler, the Company’s Chief Financial Officer.  The target bonus payable to Mr. Turfler was 50% of his 2018 base salary ($170,000) up to 133% based on the achievement by the Company of certain earnings per share targets and the Company’s subjective determination of his performance for the fiscal year ended October 31, 2018.  The Company did achieve its maximum earnings per share targets, and the Board of Directors awarded Mr. Turfler a cash bonus of $123,050.

(6)For the fiscal year ended October 31, 2017, the Company adopted corporate goals for the determination of cash bonuses to be paid to Mark Turfler, the Company’s Chief Financial Officer.  The target bonus payable to Mr. Turfler was 40% of his 2017 base salary ($170,000).  The cash bonus was based upon (i) the Company’s subjective determination of his performance (30% of the bonus) and (ii) the achievement by the Company of certain EBITDA targets for the fiscal year ended October 31, 2017 (70% of the bonus).  The Company did not achieve its EBITDA targets, and Mr. Turfler did not receive this portion of the bonus.  However, the Company determined that Mr. Turfler met certain of his subjective performance goals and, therefore, was awarded a cash bonus of $15,300.

(7)Mr. Turfler’s other compensation for the fiscal 2018 year consisted of $20,197 of accrued vacation.

 

(3) Mr. Walker joined the Company as President as of October 6, 2014 at an annual salary of $250,000. Accordingly, Mr. Walker’s salary for 2014 represents his salary during the period he was employed in fiscal 2014. Mr. Walker was promoted as the new Chief Executive Officer on January 22, 2015.

(4) Mr. Turfler was hired January 18, 2013 and appointed Acting Chief Financial Officer and Corporate Secretary effective June 7, 2013. On January 10, 2014, he was appointed Chief Financial Officer of the Company.

(5) Mr. Turfler’s other compensation consisted of $13,077 of accrued vacation in fiscal 2015, and $14,220 for vehicle costs.

(6) The amounts in this column represent the aggregate fair value of the option awards recognized by the Company as an expense for financial reporting purposes. The fair value of these awards and the amounts expensed were determined in accordance with Financial Accounting Standards Board Statement ASC Topic 718. The assumptions we use in calculating these amounts are discussed in Note 8, “Stock options,” to the Consolidated Financial Statements.

Fiscal 20152018 Option Grants

 

In fiscal 2015, the CompanyNo options were granted the following stock options to the Named Executive Officers underduring the2010 Stock Incentive Plan: year ended October 31, 2018.

Name Grant Date 

All Other

Option Awards: Number of Securities Underlying
Options(1) 

  

Exercise Price of

Option Awards

($/Share)

  

Grant Date

Fair Value of Stock and

Option Awards

($)(2)

 
Howard Hill November 19,            
Chief Executive Officer2014  4,000  $4.41  $4,019 
               
Howard Hill April 6,            
Chief Operating Officer 2015  8,733  $4.07  $35,543 
               
Darren Clark November 19,            
President ,Cables Unlimited, Inc. 2014  4,000  $4.41  $4,019 
               
Mark Turfler November 19,            
Chief Financial Officer 2014  19,000  $4.41  $19,094 

(1)Represents shares of our common stock underlying options awarded, each of which vest over time.
(2)Represents the fair value of each equity award on the date of grant, as computed in accordance withFASB ASC 718.

 

Holdings of Previously Awarded Equity

 

Equity awards held as of October 31, 20152018 by each of our Named Executive Officers were issued under our 2000 Stock Option Plan and 2010 Stock Incentive Plan, except for options to purchase 168,457 shares that were granted to Mr. Hill in 1994 under his employment agreement.Plan. The following table sets forth outstanding equity awards held by our Named Executive Officers as of October 31, 2015:2018:

 


Outstanding Equity Awards As Of October 31, 20152018

 

Name Number of Securities Underlying Unexercised Options
 (#) Exercisable
  Number of Securities Underlying Unexercised Options
 (#) Unexercisable
  Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
  Option Exercise Price
($)
  Option Expiration Date
Howard Hill  168,457           0.05  (1)
Howard Hill  2,667           3.16  10/31/16
Howard Hill  1,333       2,667(2)  5.88  4/11/19
Howard Hill  1,333       2,667(3)  4.41  11/19/19
Howard Hill  8,733           4.07  4/05/20
Johnny Walker  20,000       80,000(4)  4.53  10/06/24
Darren Clark  4,100           3.69  12/22/16
Darren Clark
Darren Clark
  

666

1,333

       

1,334

2,667

(5)
(6)
  

5.88

4.41

  4/11/19
11/19/19
Mark Turfler
Mark Turfler
  

10,000

6,333

       

80,000

12,667

(7)
(8)
  

5.88

4.41

  4/11/24
11/19/19
Name Number of
Securities
Underlying
Unexercised Options
 (#) Exercisable
  Number of
Securities
Underlying Unexercised
Options
(#) Unexercisable
  Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
Mark Turfler  50,000     50,000(1)  5.88  04/11/24
Mark Turfler  19,000     -   4.41  11/19/19
Robert Dawson  20,000     80,000(2)  1.90   07/17/27

____________________

(1)This option expires one year after Mr. Hill’s employment with the Company terminates.
(2)Vests annually in three installments following grant on April 11, 2014.
(3)Vests annually in three installments following grant on November 19, 2014.
(4)Vests as to 10,000 shares annually following grant on October 6, 2014.
(5)Vests as to 666 shares annually following grant on April 11, 2014.
(6)Vests as to 1,333 shares annually following grant on November 19, 2014.
(7)Vests as to 10,000 shares annually following grant on April 11, 2014.
(8)(2)Vests as to 6,33310,000 shares annually following grant on November 19,October 6, 2014.
Vests as to 10,000 shares annually following grant on July 17, 2017.

During the fiscal year ended October 31, 2015,2018, the Company did not adjust or amend the exercise price of stock options awarded to any of the Named Executive Officers.

 

Employment AgreementsAgreements; Incentive Plan; Change of Control Arrangements

 

Employment Agreements.

On June 16, 2017, the Company entered into an employment letter agreement with Robert D. Dawson, under which Mr. Dawson has served as the Company’s President and Chief Executive Officer. The 2017 employment agreement expired, and on July 17, 2019 the Company entered into a new, two-year employment agreement with Mr. Dawson.

Under Mr. Dawson’s 2017 agreement, the Company agreed to pay Mr. Dawson an annual base salary of $250,000. Mr. Dawson’s salary was increased to $275,000 upon his one year anniversary, and then to $300,000 on January 2, 2019. Under the 2017 employment agreement, Mr. Dawson was eligible to participate in the Company’s executive officersannual bonus plan, pursuant to which he had the opportunity to earn a year-end bonus equal to fifty percent (50%) of his annual base salary, although the actual bonus paid could be higher or lower based on the over- or under-achievement of Company and individual objectives as determined by the Company’s Board of Directors or its Compensation Committee. Mr. Dawson earned a $200,000 cash bonus for the fiscal year ending October 2016 are Johnny Walker,2018.

In addition, on July 17, 2017, Mr. Dawson received stock options to purchase 100,000 shares of the Company’s Chief Executive Officer, and Markcommon stock. The award has an exercise price of $1.90 vests as to 10,000 shares per year on each anniversary of July 17, 2017 (with 10,000 shares having vested on July 17, 2017) while he is employed by the Company. Mr. Dawson was paid $75,000 for his relocation expenses to San Diego.

On July 17, 2019 the Company entered into a new employment agreement with Mr. Dawson. The new agreement is substantially the same as the 2017 agreement except that Mr. Dawson’s base salary was increased to $400,000. The new agreement provides that, upon a Change of Control Transaction (as defined in the new agreement), all of Mr. Dawson’s time based stock options 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), Mr. Dawson will be entitled to receive a change of control cash payment in an amount equal to 12 months of his salary.

Mr. Turfler, the Company’s Chief Financial Officer. The followingOfficer, is a summary of thecurrently employed on an at-will basis pursuant to an unwritten employment agreements of Messrs. Walker and Turfler that are effective during fiscal 2016.

On December 24, 2015, the Company entered into new employment agreements with Johnny Walker (as the Company’s President/Chief Executive Officer), and Mark Turfler (as the Company’s Chief Financial Officer). The basic provisions of the foregoing two employment agreements are the same and are as follows: The term of each of the employment agreements continues through December 31, 2016 (the “Term”), subject to earlier termination, as provided in the employment agreements. Under the employment agreements,agreement.  Mr. Walker is entitled to receive anTurfler’s current annual base salary of $250,000is $187,000, and Mr. Turflerhe is entitled to an annual base salary of $170,000. Each of the executive officers is also entitled to participate in anythe Company’s pension, retirement, disability, insurance, medical service, orand other employee benefit planplans that isare generally available to all employees of the Company. In addition,

2019 Incentive Plan.

Both Mr. Walker hasDawson and Mr. Turfler are eligible to participate in the Company’s cash and equity incentive bonus plan adopted by the Board of Directors for the 2019 fiscal year (the “2019 Incentive Plan”). Under the 2019 Incentive Plan, cash equity bonuses, if any, will be paid to qualified participating officers of the Company and its subsidiaries, including Messrs. Dawson and Turfler, 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 under the 2019 Incentive Plan to participating officers if all 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. However, the maximum cash bonus payable to all participating officers, including the Chief Executive Officer, may be increased to 75% of the 2019 base salaries of the officers if the Company achieves 150% of its performance targets. 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 overall 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 earn an annual bonusmodify 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 incentive plan targets to reflect significant change in Company’s business, including changes due to acquisitions or dispositions of upbusinesses or product lines. The 2019 bonuses will be paid within 75 days after the end to fifty percent (50%)the fiscal year to participating officers who are employed with the Company on the date of his base salary, subject to meeting certain quantitative and qualitative targets, and Mr. Turfler has the right to earn an annual bonuspayment.


Change of up to forty percent (40%) of his base salary, subject to meeting certain qualitative targets.Control Arrangements.

 

In the event that a Corporate Transaction occurs before the end of the 2019 fiscal year, the Company shall be required to pay each participant in the 2019 Incentive Plan his/her estimated pro rata portion of the annual bonus that has been accrued/earned through the date of Corporate Transaction. Prior to the closing of a ChangeCorporate Transaction, the Compensation Committee of Controlthe Board of Directors shall review the performance targets set forth in the 2019 Incentive Plan and shall, in good faith based on the information available to the Compensation Committee, estimate which of the performance goals would have been met by the end of the fiscal year had the Corporate Transaction not occurred. The Compensation Committee shall thereafter pay the participants their pro rata portion (based on the number of calendar days elapsed from the beginning of the fiscal year to the date of the Corporate Transaction) of such estimated annual bonus. The foregoing estimated bonus will be paid in cash at or promptly after the closing of the Corporate Transaction.

Under the 2019 Incentive Plan, a “Corporate Transaction” shall mean (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.

The outstanding stock options currently owned by the Company’s principal officers (including Messrs. Dawson and Turfler) and division managers provide that, immediately prior to a change of control (as defined in their employment agreements)the 2010 Stock Option Plan), Mr. Walker and Mr. Turfler are entitled to receive cash payment in an amount equal to twelve (12) months’ salary (based on the executive officer’s base salary at the time of such termination), plus payment for all accrued and unused vacation time. On October 6, 2014, Mr. Walker was granted a nine-yearunvested stock option to purchase up to 100,000 shares of the Company’s common stock. Upon a Change of Control, all of the unvested shares under that 100,000-share stock optionoptions will upon the Change of Control, become fully vested.vested and exercisable.

 


The Company has no other change of control payment agreements in effect other than the provision in Mr. Dawson’s employment agreement described above.

Compensation of Directors

 

Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. For their services during the year ended October 31, 2015,2018, non-employee directors (i.e. directors who are not employed by the Company as officers or employees) received $30,000 annually,$50,000, which amount iswas paid one-half in cash, and one-half through the grant of stock options to purchase shares of the Company’s common stock. Effective November 1, 2018, the Chairman of each committee of the Board of Directors will receive an annual cash retainer of $15,000, which retainer is payable quarterly.

 

DIRECTOR COMPENSATION FOR FISCAL YEAR 20152018

 

Name Fees
Earned or
Paid in
Cash
  Stock
Awards
  Option
Awards(1)(2)
  All Other
Compensation
  Total  Fees
Earned or
Paid in
Cash
  Stock
Awards
  Option
Awards(1)(2)
  All Other
Compensation
  Total 
Joseph Benoit $15,000   -  $15,000  $-  $30,000  $25,000   -  $25,000  $-  $50,000 
Darren Clark $-   -  $-  $-  $- 
Marvin H. Fink $15,000   -  $15,000  $-  $30,000  $25,000   -  $25,000  $-  $50,000 
Howard F. Hill $-   -  $-  $-  $-  $25,000   -  $25,000  $-  $50,000 
William Reynolds $15,000   -  $15,000  $-  $30,000  $25,000   -  $25,000  $-  $50,000 
Gerald Garland $25,000   -  $25,000  $-  $50,000 
Sheryl Cefali (3) $-   -  $-  $-  $- 

 

(1)This column represents the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. These amounts do not correspond to the actual value that will be recognized by the named directors from these awards.
(2)On December 16, 2015, weNovember x, 2017, the Company granted five-year non-qualified options to purchase 17,064xx,339 shares of the Company’s common stock to each of Mr. Marvin Fink (Chairman), Mr. William Reynolds, and Joseph Benoit (Independent Directors)and Howard Hill for their services as directors for the fiscal year ended October 31, 2016.2018. The options have an exercise price of $4.42$x.50 per share.
(3)Ms. Sheryl Cefali was appointed to the Board on June 7, 2019 and, accordingly, received no compensation for fiscal 2019.

Certain Transactions

On April 1, 1997, the Company loaned to Howard Hill, its President at that time and Chief Executive Officer, $70,000 pursuant to a Promissory Note which provided for interest at the rate of 6% per annum and which has no specific due date for principal repayment. As of October 31, 2015, the principal balance still outstanding on the loan was $66,980. Mr. Hill used to pay interest on the loan annually. The note is collateralized by personal property owned by Mr. Hill. In connection with his retirement, Mr. Hill repaid the loan in full on April 7, 2016.

On June 15, 2011, the Company purchased Cables Unlimited, Inc., a New York corporation, from Darren Clark, the sole shareholder of Cables Unlimited, Inc. In connection with the purchase of Cables Unlimited, the Company entered into a five-year lease for the New York facilities from which Cables Unlimited conducts its operations. Cables Unlimited’s monthly rent expense under the lease is $13,000 per month, plus payment of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance for Cables Unlimited’s business operations and equipment. During the fiscal year ended October 31, 2015, the Company paid the landlord a total of $156,000 under the lease. The owner and landlord of the facility is a company controlled by Darren Clark, the former owner of Cables Unlimited and a 2015 Named Executive Officer and director of the Company.

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of July 15, 201612, 2019 for (i) each director; (ii) the Company’s Named Executive Officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than 5% of the Common Stock.outstanding shares of our common stock. As of July 15, 2016,12, 2019, there were 8,835,4839,360,351 shares of Common Stockcommon stock issued and outstanding.

 


Name and Address of Beneficial Owner Number of Shares Beneficially Owned(1)   Percentage Beneficially
Owned
 
Howard H. Hill
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
  258,902(2)  2.9%
         
 Marvin H. Fink
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
  53,267(3)  0.6%
         
 William L. Reynolds
7610 Miramar Rd., Ste. 6000
San Diego, CA 92126-4202
  76,779(4)  0.9%
         
 Joseph Benoit
7610 Miramar Rd., Ste. 6000
San Diego, CA 92126-4202
  39,941(5)  0.5%
         
 Darren Clark
3 Old Dock Road, Yaphank,
New York, 11980
  306,766(6)  3.5%
         
 Johnny Walker
7610 Miramar Rd., Ste. 6000
San Diego, CA 92126-4202
  26,067(7)  0.3%
         
Mark Turfler
7610 Miramar Road, Ste. 6000
San Diego, CA 92126-4202
  36,333(8)  0.4%
         
All Directors and Officers as a Group (7 Persons)  721,591(9)  8.8%
         
Hytek International, Ltd
P.O. Box 10927 APO
George Town
Cayman Islands
  901,860   10.2%
         
 Renaissance Technologies LLC 
800 Third Avenue 
New York, New York 10022(10)
  683,600   7.7%
Name and Address of Beneficial Owner Number of Shares
Beneficially Owned(1) 
  Percentage
Beneficially
Owned
 
Directors and Named Executive Officers          
Howard F. Hill  308,768(2)  3.3%
Marvin H. Fink  137,732(3)  1.5%
William L. Reynolds  114,009(4)  1.2%
Joseph Benoit  102,648(5)  1.1%
Gerald T. Garland  71,069(6)  0.8%
Sheryl Cefali  4,623(7)  0.0%
Mark Turfler  81,495(8)  0.9%
Robert Dawson  45,000(9)  0.5%
All Directors and Officers as a Group (8 Persons)  865,344(10)  8.8%
Greater than 5% stockholders        
Hytek International, Ltd
9642 Penshurst Trace
Charlotte, North Carolina 28210 (11)
  848,010    9.1%
Renaissance Technologies LLC
800 Third Avenue
New York, New York 10022 (12)
  720,602    7.7%
AIGH Investment Partners, L.P.
6060 Berkeley Avenue 
Baltimore, MD 21209 (13)
  562,000    6.0%

 

(1)Shares of Common Stock, which were not outstanding but whichcommon stock that could be acquired by a beneficial owner upon exercise of an option within 60 days from the date of this filing,July 12, 2019 are considered outstanding for the purpose of computing the percentage of outstanding shares beneficially owned. However,owned by such sharesowner, but are not considered to be outstanding for any other purpose.

 

 (2)Includes 34,68184,547 shares that Mr. Hill has the right to acquire upon exercise of options exercisable within 60 days.options.

 

 (3)Includes 50,26760,393 shares that Mr. Fink has the right to acquire upon exercise of options exercisable within 60 days.options.

 

 (4)Includes 43,97960,393 shares that Mr. Reynolds has the right to acquire upon exercise of options exercisable within 60 days.options.

 (5)Includes 39,941102,648 shares that Mr. Benoit has the right to acquire upon exercise of options exercisable within 60 days.options.

 


(6)Includes 6,76643,329 shares whichthat Mr. ClarkGarland has the right to acquire upon exercise of options exercisable within 60 days.options.
   
(7)Includes 20,0001,541 shares which Mr. Walkerthat Ms. Cefali has the right to acquire upon exercise of options exercisable within 60 days.options. Ms. Cefali was appointed to the Board as of June 7, 2019. Includes 92,132 shares that Mr. Benoit has the right to acquire upon exercise of options.
   

(8)Includes 36,333Represents 79,000 shares whichthat Mr. Turfler has the right to acquire upon exercise of options exercisable within 60 days.options.
   
(9)Represents 30,000 shares that Mr. Dawson has the right to acquire upon exercise of options.
 (9)

(10)Includes 231,967461,851 shares whichthat the directors and officers have the right to acquire upon exercise of options exercisable within 60 days.options.
   
(11)Based on the list of record holders maintained by the Company’s transfer agent and representation from company representatives.
 (10) 
(12)Based on a Schedule 13G/A jointly filed with the SEC by Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation on February 11, 2016.13, 2019.
(13)Based on a Schedule 13G/A jointly filed with the SEC by AIGH Investment Partners, L.P., AIGH Investment Partners, L.L.C., and Mr. Orin Hirschman on February 15, 2019

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table provides information as of October 31, 20152018 with respect to the shares of Company common stock that may be issued under the Company’s existing equity compensation plans.plans:

 

 A  B  C  A  B  C 
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options  Weighted Average Exercise Price of Outstanding Options ($)  Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) Number of Securities
to be Issued Upon
Exercise of
Outstanding Options
  

Weighted Average

Exercise Price of
Outstanding
Options ($)

  Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation 
Plans (Excluding
Securities Reflected in
Column A)
 
Equity Compensation Plans Approved by Stockholders (1)  921,643  $4.71   845,203   814,200  $3.41   1,524,588 
                        
Equity Compensation Plans Not Approved by Stockholders (2)  318,457  $0.54   0   130,000  $1.07   - 
                        
Total  1,240,100  $3.64   845,203   944,200  $3.09   1,524,588 

 

(1)Consists of options granted under the R.F. Industries, Ltd. (i) 2010 Stock Incentive Plan and (ii) 2000 Stock Option. The 2000 Stock Option Plan has expired, and no additional options can be granted under this plan. Accordingly, all 845,203 shares remaining available for issuance represent shares under the 2010 Stock Incentive Plan.

 

(2)Consists of options granted to five officers and/orone key employeesemployee of the Company under employment agreements entered into by the Company with each of these officers and employees.Company.

 

Compliance withDelinquent Section 16(a) of the Exchange ActReports

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review of information furnished to the Company,Section 16(a) reports filed electronically with the SEC by the Company’s executive officers and directors and persons owning more than 10% of the Company’s common stock and upon any written representations received from the Company’s executive officers and directors, to the Company’s knowledge, during the fiscal year ended October 31, 2015,2018, all Forms 4Section 16(a) reports were timely filed, except that Howard Hill was late in filing four Form 4s, and Johnny Walker late in filing three Forms 4. Each of the foregoing late filings was filed within one to ten calendar days after the due dates.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ELECTION OF THE FOREGOING NOMINATED DIRECTOR.filed.

 

PROPOSAL NO. 2:
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES

ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

Under Section 951 of the Dodd-Frank Act, as set forth in Section 14A of the Exchange Act, the Company is required at least once every six years to provide its stockholders with an opportunity to vote, on an advisory, non-binding basis, as to whether future advisory votes on the compensation of the Company’s Named Executive Officers as disclosed in its annual meeting proxy statement should be held every year, every two years or every three years. The last such “say on frequency” vote by the stockholders occurred at the 2013 annual meeting of stockholders. Therefore, a say on frequency vote will be held at the 2019 Annual Meeting.

The Board of Directors believes that an advisory “say on pay” vote on executive compensation should be held every year so that stockholders may regularly express their views on our executive compensation program. Proposal No. 2 gives the Company’s stockholders the opportunity to express their views about the frequency of say on pay votes.

This vote will not be binding on the Board of Directors and may not be construed as overruling any decision by the Board of Directors or as creating or implying any change to the fiduciary duties of the Board. The Compensation Committee and the Board may, however, take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.

Stockholders can choose one of four choices for this Proposal No. 2 on the proxy card: one year, two years, three years or abstain. The option of one year, two years or three years that receives the most votes will be considered the say on frequency vote that has been recommended by the stockholders. Stockholders are not being asked to approve or disapprove the Board’s recommendation.

THE BOARDOF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE TO HAVE FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY YEAR.

PROPOSAL NO. 3:
ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE OFFICERS

 

Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, of 2010 (the “Dodd-Frank Act”), as set forth in Section 14A(a)14A of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”),also enables the Company’s stockholders to vote to approve, on an advisory, non-binding basis, the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with SEC rules. At the 2014 Annual Meeting2013 annual meeting of stockholders, our stockholders approved an advisory measure that the stockholders’ advisory vote on executive compensation be held on an annual basis. The Board of Directors has determined to follow the stockholders’ recommendations and to include an annual stockholders advisory vote on the compensation of the Company’s executive officers.


As described above in the “Compensation of Executives and Directors” section of this proxy statement, the executive officer compensation programs are designed to support this Company’s business goals and to promote short- and long-term profitable growth. We urge stockholders to read the "Summary“Summary Compensation Discussion and Analysis"Analysis” section of the proxy statement, which describes our executive compensation policies, and to review the other related compensation tables and narratives, which provide detailed information on the compensation of our Named Executive Officers. The Compensation Committee believes that the policies and procedures set forth in the Compensation of Executives and Directors section are effective in fulfilling the Company’s objectives and that the compensation of our named executive officers reported in this proxy statement has supported and contributed to our recent and long-term success.


Proposal No. 2,3, commonly known as a “say on pay” vote, gives stockholders the opportunity to endorse or not endorse the compensation of our executivesNamed Executive Officers as disclosed in this Proxy Statement. This proposal will be presented at the Annual Meeting as a resolution in substantially the following form:

 

RESOLVED, that the stockholders approve the compensation of the Company’s Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the compensation tables and related narrative disclosure in the Company’s proxy statement for the 20162019 Annual Meeting.

 

This vote will not be binding on the Board of Directors and may not be construed as overruling aany decision by the Board or as creating or implying any change to the fiduciary duties of the Board of Directors. The vote will not affect any compensation previously paid or awarded to any executive.executive officer. The Compensation Committee and the Board may, however, take into account the outcome of the vote when considering future executive compensation arrangements.

 

Unless the Board modifies its policy on the frequency of holding "say“say on pay"pay” advisory votes based in part on the results of the advisory vote described above in Proposal No. 2, the next "say“say on pay"pay” advisory vote will occur in 2017.2020.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"“FOR” THIS RESOLUTION.

 

PROPOSAL NO. 3:4:
SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 

The Audit Committee of the Board has selected CohnReznick LLP to continue as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2016.2019.

 

Stockholder ratification of the selection of CohnReznick LLP as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or otherwise. However, the Board is submitting the selection of CohnReznick LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Board will request the Audit Committee to reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee of the Board determines that such a change would be in the best interests of the Company and its stockholders. A representative of CohnReznick LLP is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from stockholders. [Is this correct?]

 

The affirmative vote of the holders of a majority of the shares represented and voting at the meeting will be required to ratify the selection of CohnReznick LLP.

 

Audit Fees

 

The following is a summary of the fees billed to the Company by CohnReznick LLP, the Company’s independent registered public accounting firm, for professional services for rendered for the fiscal years ended October 31, 20152018 and 2014:2017:

 

Fee Category Fiscal 2018 Fees  Fiscal 2017 Fees 
Audit Fees $248,000  $202,000 
Audit-Related  -0-   -0- 
Fees All Other Fees  -0-   10,000 
Total Fees $248,000  $212,000 

Fee Category Fiscal 2015 Fees  Fiscal 2014 Fees 
Audit Fees $290,000  $184,000 
Audit-Related Fees  -0-   -0- 
All Other Fees  10,000   89,000 
Total Fees $300,000  $273,000 

Audit Fees.Consists of fees billed and estimated for professional services rendered for the audit of the Company’s annual financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by CohnReznick LLP in connection with statutory and regulatory filings or engagements.

 

Audit-Related Fees.  Consists of fees billed and estimates for assurance and related services that are reasonably related to the performance of the audit and review of the Company’s financial statements and are not reported under “Audit Fees.” These services include professional services requested by the Company in connection with its preparation for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, accounting consultations in connection with acquisitions and consultations concerning financial accounting and reporting standards. The Company did not incur audit-related fees during fiscal 20152018 and 2014.2017.

 

All Other Fees.The Company usedengaged CohnReznick LLP in 2017 to perform an audit of the Company’s 401K plan.

 

The Audit Committee has determined that the provision of services, in addition to audit services, rendered by CohnReznick LLP and the fees billed therefore in fiscal 20152018 and 20142017 were compatible with maintaining CohnReznick LLP’s independence.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF COHNREZNICK LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

 

REPORT OF THE AUDIT COMMITTEE

 

Notwithstanding anything to the contrary set forth in any of the Company’s previous or future filings under the Securities Act or the Securities Exchange Act that might incorporate by reference previous or future filings, including this Proxy Statement, in whole or in part, the following report shall not be incorporated by reference into any of such filings.

 

The responsibilities of the Audit Committee include providing oversight to the financial reporting process of the Company through periodic meetings with the Company’s independent registered public accounting firm and management to review accounting, auditing, internal controls, and financial reporting matters. The Company’s management is responsible for the preparation and integrity of the financial reporting information and related systems of internal controls. The Audit Committee, in carrying out its role, relies on senior management, including senior financial management, and its independent registered public accounting firm.

 

The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended October 31, 2015.2018.

 

The Audit Committee has reviewed and discussed the Company’s audited financial statements with management. The Audit Committee has discussed with CohnReznick LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by Statement of Auditing StandardsStandard No. 61 (Communication1301, “Communications with Audit Committees) which includes, among other items, matters related toCommittees,” issued by the conduct of the audit of the Company’s financial statements.Public Company Accounting Oversight Board (the “PCAOB”).. The Audit Committee has also received written the disclosures and the letter from CohnReznick LLP required by Independence Standards Board Standard No. 1, which relates toapplicable requirements of the PCAOB regarding the auditor’s communications with the Audit Committee concerning independence from the Company and its related entities, and has discussed with CohnReznick LLP their independence from the Company.

 

Based on the review and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015.2018.

 

The Audit Committee has retained CohnReznick LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2016.2019.

 


It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with accounting principles generally accepted in the United States. That is the responsibility of management and the Company’s independent registered public accounting firm. In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States and (ii) the report of the Company’s independent registered public accounting firm with respect to such financial statements.


 

 

AUDIT COMMITTEE

Gerald Garland
William L. Reynolds

Marvin H. Fink

Joseph Benoit

 

STOCKHOLDER PROPOSALS

 

StockholdersA stockholder who intendintends to submit proposalsa proposal at the 2017 Annual Meeting2020 annual meeting of stockholders must submit such proposalsproposal to the Company no later than March 24, 2017April 1, 2020 in order for themthe proposal to be included in the Proxy Statementproxy statement and the form of Proxyproxy to be distributed by the Board of Directors in connection with that meeting. Stockholders proposalsSuch a stockholder proposal should be submitted to Corporate Secretary, RF Industries, Ltd., 7610 Miramar Road, San Diego, CA 92126-4202. Only proper proposals under SEC Rule 14a-8 which are timely received will be included in the 2010 proxy statement. A stockholder who intends to present a proposal at the 2020 annual meeting but not to include the proposal in the Company’s proxy statement, or who intends to nominate a person for election as a director at the 2020 annual meeting, must comply with the requirements set forth in 2017.the Company’s Amended and Restated Bylaws including, without limitation, delivering the proposal or nomination to the Company no later than April 1, 2020.

 

FORM 10-K

 

The Company will furnish without charge to each person whose proxy is being solicited, upon request of any such person, a copy of the Annual Report of the Company on Form 10-K for the fiscal year ended October 31, 2015,2018, as filed with the Securities and Exchange Commission,SEC, including financial statements and schedules thereto. Such report was filed with the Securities and Exchange CommissionSEC on January 29, 2016.December 20, 2018. Requests for copies of such report should be directed to the President, RF Industries, Ltd., 7610 Miramar Road, San Diego, CA 92126-4202. The Form 10-K may also be accessed electronically by means of the SEC’s home page on the Internet at http://www.sec.gov.

 

ANNUAL REPORT

 

The Company’s 20152018 Annual Report, which consists of an abridged version of the Form 10-K and which includes audited financial statements for the Company’s fiscal year ended October 31, 2015,2018, is being distributed along with this Proxy Statement. For your additional convenience, the Company is posting a copy of this Proxy Statement, the proxy card, and the Annual Report for the fiscal year ended October 31, 20152018 on the Company’s website at www.rfindustries.com, under “Investor Information”, and at https://materials.proxyvote.com/749552.

 

OTHER MATTERS

 

The Board of Directors knows of no other matters which will be brought before the Annual Meeting. However, if any other matter properly comes before the Annual Meeting or any adjournment thereof, it is intended that the persons named in the enclosed form of Proxy will vote on such matters in accordance with their best judgment.

  

 

Johnny Walker

 
President and CEO

Chief Executive Officer

 

San Diego, California

July 25, 201629, 2019


 

 

RF INDUSTRIES, LTD. 7610 MIRAMAR ROAD, SUITE 6000 SAN DIEGO, CA 92126-4202 ATTENTION: MARK TURFLER VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E83048-P27470 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY RF INDUSTRIES, LTD. The Board of Directors recommends you vote FOR the following Class III directors to serve until the 2022 Annual Meeting of Stockholders. For Withhold 1. Election of Directors 1a. Robert Dawson 1b. Sheryl Cefali The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 Year 2 Years 3 Years Abstain 2. Approval, on an advisory basis, of the frequency of the advisory votes on the compensation of our named executive officers. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 3. Approval, on an advisory basis, of the compensation of our named executive officers as disclosed in the proxy statement The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 4. Ratification of the selection of CohnReznick LLP as the independent registered public accounting firm for the fiscal year ending October 31, 2019. NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. RF INDUSTRIES, LTD. Annual Meeting of Stockholders September 9, 2019 1:00 PM (PDT) This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Robert Dawson and Mark Turfler, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of RF INDUSTRIES, LTD. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 1:00 PM (PDT) on September 9, 2019, at CohnReznick LLP, 11452 El Camino Real, Suite 100, San Diego, California 92130, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side E83049-P27470