OPTION AGREEMENT
EXHIBIT
4.1
This
Option Agreement is entered into as of this 6th
day of
December 2004 by and between RF Industries, Ltd., a Nevada corporation (the
“Company”), and Xxxxxx Xxxxx ("Employee") with reference to the
following:
WHEREAS,
concurrently with the execution of this Option Agreement, Employee is becoming
an employee of the Company; and
WHEREAS,
the Company desires to grant to Employee an option to purchase some of shares
of
the Company upon the terms and conditions set forth in this Option
Agreement.
NOW,
THEREFORE, the Company and Employee hereby agree as follows:
1. Grant
of Option.
In
consideration for the Employee’s acceptance of the Company’s offer for
employment to become the General Manager of the Bioconnect operations of the
Company, the Company hereby grants to Employee an option (the "Option") to
purchase up to 100,000 (the “Shares”) of the Company's common stock. The Option
shall also extend to and encompass any and all shares of common stock or other
securities which may be paid or issued by the Company with respect to the
Shares, whether by reason of a stock split, stock dividend, merger,
reorganization or similar transaction. The Option shall vest and may be
exercised according to the Vesting Schedule (the “Vesting Schedule”) set forth
in Section 3, below.
2. Exercise
Price; Term; Manner of Exercise.
The
Option, which shall vest and may be exercised according to the Vesting Schedule
provided for in Section 3, entitles Employee to purchase vested Shares from
the
Company at any time after the first anniversary of this Option Agreement (the
"First Exercise Date"). The exercise price of the Shares that vest on December
6th
of each
year shall be determined and automatically set on December 6th
of that
year at the price of the last sale on the trading market on December
6th
of that
year, or in the event December 6th
falls on
a Saturday or Sunday, the last sales price on the Friday immediately preceding
December 6th. The Option shall cease vesting on the termination of Employee’s
employment with the Company and shall expire and terminate 90 days following
such termination. The Option must be exercised within 90 days after the
termination of Employee’s employment with the Company. Employee may exercise the
vested portion of the Option at any time during the term of the Option after
the
First Exercise Date by providing the Company with a written notice stating
that
the Option has been exercised and by delivering to the Company a check in the
amount of the purchase price for each share purchased upon the exercise of
the
Option. The per share exercise price shall be subject to adjustment for stock
splits, stock dividends, mergers, recapitalizations or other similar events).
For example, if there is a two-for-one stock split of the Company's Common
Stock
prior to the exercise of the Option, the exercise price per share of previously
vested Option shares shall be adjusted to half that amount, and the number
of
shares subject to the Option will double.
3. Vesting
Schedule.
Provided that the Option has not been terminated prior to such date, the Option
shall vest and may be exercised on the following schedule: One-tenth (1/10)
of
all of the Options (initially, 10,000 Shares) shall vest and may be exercised
on
or after the first anniversary of this Option Agreement; thereafter, for each
of
the next 9 years, an additional one-tenth (1/10) of all of the Options
(initially, 10,000 Shares) shall vest and may be exercised on or after each
anniversary of this Option Agreement. After the First Exercise Date, the Option
vesting period will be prorated for days worked after December 6th.
Options
that have become vested and are exercisable shall, after the date of vesting,
remain subject to exercise during the term of the Option. All 100,000 Shares
of
the Option will have vested and may be exercised on or after the tenth
anniversary of this Option Agreement.
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4. Covenants
of the Company.
The
Company covenants and agrees with Employee that the Company shall not take
or
suffer any action that would jeopardize Employee's rights under this Option
Agreement and that the Company shall, at all times during the term of this
Option Agreement, keep a number of the Company Shares equal to the shares
subject to the Option free and clear of any liens, claims, encumbrances or
interests of any kind.
5. Successors
and Assigns.
This
Option Agreement shall inure to the benefit of the successors and assigns of
Employee and shall be binding on the successors and assigns of the Company.
6. Governing
Law; Disputes.
This
Option Agreement shall be governed by and construed in accordance with the
internal laws of the State of Nevada, without regard to conflicts of law
principles, according to its fair meaning and not in favor of or against either
the Company or Employee.
7. Legend
on Shares of Common Stock.
Employee hereby acknowledges and agrees that the shares to be received by
Employee upon the exercise of the Option have not been registered under the
Securities Act of 1933, and that the stock certificates representing such shares
shall bear such restrictive legends as the Company or the Company's counsel
deem
necessary or advisable under applicable law. Accordingly, Employee hereby agrees
and acknowledges that the shares purchased upon the exercise of the Option
may
not be sold until a registration statement under the Securities Act of 1933
shall have become effective for such shares or until an exemption from
registration is available under the Securities Act of 1933.
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IN
WITNESS WHEREOF, Employee and the Company have executed this Option Agreement
on
the date and year first above written.
| The Company: | By: |
|
Xxxxxx
Xxxx, President
|
|
| Employee: | By: |
|
Xxxxxx
Xxxxx
|
|
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