RF INDUSTRIES, LTD.
7610 Miramar Road
San Diego, CA 92126-4202
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF SHAREHOLDERS
WILL BE HELD ON MAY 10, 2002
An Annual Meeting of Shareholders of RF Industries, Ltd., a Nevada
corporation (the "Company"), will be held at the Mira Mesa Hotel at 9888 Mira
Mesa Blvd., Function Room A, San Diego, CA 92131 on Friday, May 10, 2002, at
1:30 p.m., Pacific Standard Time, for the following purposes:
1. To elect six directors of the Company who shall serve until the 2003 Annual
Meeting of Shareholders (and until the election and qualification of their
successors).
2. To ratify the selection of J.H. Cohn LLP as the Company's independent
public accountants for the fiscal year ending October 31, 2002.
3. To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournment thereof.
The Board of Directors has fixed the close of business on March 22, 2002 as
the record date for determination of shareholders entitled to notice of and to
vote at the Annual Meeting of Shareholders or any adjournment thereof. A
complete list of such shareholders will be available at the executive offices of
the Company for ten (10) days before the meeting.
All shareholders are cordially invited to attend the Annual Meeting of
Shareholders in person. Regardless of whether you plan to attend the meeting,
please sign and date the enclosed Proxy and return it promptly in the
accompanying envelope, postage for which has been provided if mailed in the
United States. The prompt return of Proxies will ensure a quorum and save the
Company the expense of further solicitation. Any shareholder returning the
enclosed Proxy may revoke it prior to its exercise by voting in person at the
meeting or by filing with the Secretary of the Company a written revocation or a
duly executed Proxy bearing a later date.
By Order of the Board of Directors
Terrie A. Gross,
Corporate Secretary
Chief Financial Officer
San Diego, California
March 31, 2002
RF INDUSTRIES, LTD.
7610 Miramar Road
San Diego, CA 92126-4202
PROXY STATEMENT
General
The enclosed Proxy 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 Shareholders ("Annual Meeting") to be held on Friday, May 10, 2002,
at 1:30 p.m., local time, or at any adjournment or postponement thereof. The
Annual Meeting will be held at the Mira Mesa Hotel at 9888 Mira Mesa Blvd.,
Function Room A, San Diego, CA 92131. The Company intends to mail this Proxy
Statement and the accompanying Proxy and Annual Report to all shareholders
entitled to vote at the Annual Meeting on or about March 31, 2002.
Voting
Only shareholders of record at the close of business on March 22, 2002,
will be entitled to notice of and to vote at the Annual Meeting. On December 31,
2001, there were 3,441,054 shares of Common 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.
On each or any other matter properly presented and submitted to a vote at
the Annual Meeting, each share will have one vote and an affirmative vote of a
majority of the shares represented at the Annual Meeting and entitled to vote
(where the holders of a majority of the shares entitled to vote are present in
person or by Proxy) will be necessary to approve the matter. Abstentions will be
counted towards the tabulation of votes cast on proposals presented to the
shareholders and will have the same effect as negative votes. Broker non-votes
are counted towards a quorum but are not counted for any purpose in determining
whether a matter has been approved.
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 statement has the power to
revoke it any time before its exercise. It may be revoked by filing with the
Secretary of the Company's principal executive office, 7610 Miramar Road, San
Diego, CA 92126-4202, an instrument of revocation or a duly executed Proxy
bearing a later date, or it may be revoked by attending the Annual Meeting and
voting in person.
Solicitation
The Company will bear the entire cost of solicitation of Proxies, including
the preparation, assembly, printing, and mailing of this Proxy Statement, the
Proxy, and any additional material furnished to shareholders. 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 Proxies by mail may be supplemented by
telephone, telegram, 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 other than by mail.
PROPOSAL 1:
NOMINATION AND ELECTION OF DIRECTORS
Each director to be elected will hold office until the next Annual Meeting
and until his or her successor is elected and has qualified, or until his or her
death, resignation, or removal. Six directors are to be elected at the Annual
Meeting. All six nominees are currently members of the Board of Directors. Mr.
Ehret, Mr. Hill, Mr. Hooper and Mr. Jacobs were elected by the shareholders at
the Company's 2001 annual meeting of shareholders, while Mr. Fink and Mr. Kester
were appointed by the current directors in 2001.
The six candidates receiving the highest number of affirmative votes cast
at the Annual Meeting shall be elected as directors of the Company. Each person
nominated for election has agreed to serve if elected. If any of such nominees
shall become unavailable or refuse to serve as a director (an event that is not
anticipated), the Proxy holders will vote for substitute nominees at their
discretion. Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the four nominees named below.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE
Nominees
Set forth below is information regarding the nominees, including
information furnished by them as to their principal occupations for the last
five years, and their ages as of October 31, 2001.
Name Age Director Since
---- --- --------------
John R. Ehret 64 1991
Marvin Fink 65 2001
Howard F. Hill 62 1979
Henry E. Hooper 49 1998
Robert Jacobs 50 1997
Linde Kester 56 2001
John R. Ehret is President, Chief Financial Officer, and co-owner of TPL
Electronics of Los Angeles, California. He holds a B.S. degree in Industrial
Management from the University of Baltimore. He has been in the electronics
industry for over 34 years.
Marvin Fink , formerly President of Teledyne's Electronics Group, was at
Teledyne for 39 years. He holds a B.E.E. degree from the City College of New
York, a 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 a member of the
California Bar.
Howard F. Hill, a founder of the Company in 1979, has credits in
Manufacturing Engineering, Quality Engineering and Industrial Management. He
took over the presidency of the Company in July of 1993. He has held various
positions in the electronics industry over the past 30 years.
Henry E. Hooper is General Partner of the D3 Family Fund, LP, a partnership
that invests in small capitalization value stocks. Prviously, Hooper worked in
the distribution industry, and served in various leadership capacities for
TESSCO Technologies, a distributor of wireless communications products and
services. He holds a bachelors degree and an MBA from Yale University. Mr.
Hooper has been in the telecommunications industry for over 15 years.
Robert Jacobs is RF Industries' Account Executive at Neil Berkman
Associates and coordinates the Company's investor relations. He holds an MBA
from the University of Southern California and has been in the investor
relations industry for over 18 years.
Linde Kester is the Proprietor of Oregon's Chateau Lorane Winery. He was
formerly Chairman and CEO of Xentek, an electronics power conversion
manufacturer which he co-founded in 1972. Kester was also a co-founder of Hidden
Valley National Bank in Escondido, CA. He holds an A.A. in Electron-Mechanical
Design from Fullerton College and has over two decades of experience in the
electronics industry.
Management
Howard F. Hill is the President and Chief Executive Officer of the Company.
See "Nominees," above.
Terrie Gross joined the Company in January 1992 as Accounting Manager. She
was elected to Corporate Secretary in February 1995, and elected to Chief
Financial Officer in May 1997.
Board Committees and Meetings
During the fiscal year ended October 31, 2001, the Board of Directors held
five meetings. All members of the Board of Directors hold office until the next
Annual Meeting of Shareholders or the election and qualification of their
successors. The Board of Directors has an Audit Committee. Executive officers
serve at the discretion of the Board of Directors.
During the fiscal year ended October 31, 2001, each Board of Directors
member attended at least 75% of the aggregate of the meetings of the Board of
Directors on which he served.
Audit Committee
The Audit Committee will meet at least quarterly with the Company's
management and independent accountants to, among other things, review the
results of the annual audit and quarterly reviews and discuss the financial
statements, recommend to the Board the independent accountants to be retained,
and receive and consider the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial controls. The Audit Committee is also authorized to review related
party transactions for potential conflicts of interest. The Audit Committee,
which as of the end of fiscal 2001 was composed of Mr. Jacobs and Mr. Hooper,
met one time during fiscal 2001.
Executive Compensation
Summary of Cash and Other Compensation. The following table sets forth
compensation for services rendered in all capacities to the Company for each
person who served as the Company's Chief Executive Officer during the fiscal
year ended October 31, 2001 (the "Named Executive Officer). No other executive
officer of the Company received salary and bonus, which exceeded $100,000 in the
aggregate during the fiscal year ended October 31, 2001.
Annual Compensation Long-Term Compensation Awards
---------------------------- --------------------------------------
Securities
Underlying
Name and Principal Position Year Salary Bonus Options/SARs (#)
--------------------------- ---- ------ ----- ----------------
($) ($)
--- ---
Howard F. Hill, President 2001 125,000 25,000 4,000
Chief Executive Officer, Director
2000 125,000 25,000 4,000
1999 125,000 25,000 4,000
As permitted by rules established by the SEC, no such amounts were paid
with respect to certain perquisites, which were either the lesser of 10% of
bonus plus salary or $50,000 for the last three fiscal years.
Option Grants. The following table contains information concerning the
stock option grants to the Company's Named Executive Officer for the fiscal year
ended October 31, 2001.(1)
Option Grants in Last Fiscal Year
-------------------------------------
% of Total Options
Granted to
Securities Underlying Employees in Base Price Expiration
Name Options Granted (#) Fiscal Year ($/Share) Date
------ --------------------- ------------------- ---------- -----------
Howard F. Hill, President
Incentive Stock Option 2,000 2.5% $2.66 October 2011
Non-Qualified Option 2,000 5% $2.26 October 2011
(1) Options generally have a maximum term of ten years.
Option Exercises and Holdings. The following table sets forth information
concerning option exercises and option holdings under existing stock option
plans and Mr. Hill's employee agreement for the year ended October 31, 2001,
with respect to the Company's Chief Executive Officer.
Aggregated Options/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
-------------------------------------------------------
Value of
Unexercised
Value Realized Number of Unexercised In-the-Money
Shares Acquired Market Price at Options/SARs at Fiscal /SARs at Fiscal
--------------- --------------- ---------------------- ---------------
Exercise Less Year-End (#) Year-End ($)
------------- ------------ ------------
Name Exercise # Exercise Price ($) Exercisable Unexercisable Exercisable (2)
---- ---------- ------------------ ----------- ------------- -----------
Howard F. Hill, 0 0 458,000 0 $1,100,320
President
(2) Represents the closing price per share of the underlying shares on the last
day of the fiscal year less the option exercise price multiplied by the
number of shares. The closing value per share was $2.66 on the last trading
day of the fiscal year as reported on the Nasdaq SmallCap Market.
During the fiscal year ended October 31, 2001, the Company did not adjust
or amend the exercise price of stock options awarded to the Named Executive
Officers.
Employment Agreement
The Company has no employment or severance agreements, other than with the
President, for payments of more than $100,000. On June 1, 1994, the Company
entered into a six-year, renewable employment contract with the President
calling for annual compensation of $85,000, increased to $125,000 in 1999, plus
a bonus to be determined by the Board. The employment contract was renewed
effective January 1998 and the current term expires in 2005. In the event Mr.
Hill is terminated for a material breach of the employment contract, he shall be
paid one years' initial base salary. In addition, the employment contract
granted the President options to acquire 500,000 shares of common stock at $.10
per share. Such options vested ratably over the first six-year term of the
initial agreement. Upon termination, Mr. Hill must exercise his options within
one year of written notice. The shares underlying his options may be sold to the
Company at an agreed upon price, and the Company has a right of first refusal to
purchase such shares.
Compensation of Directors
The Company has no standard arrangements pursuant to which directors of the
Company are compensated for their services as directors. The directors are
eligible for reimbursement of expenses incurred in connection with attendance at
Board meetings and Board committee meetings. During the fiscal year ended
October 31, 2001, options to purchase 2,000 shares of common stock were granted
to each of the following directors: Messrs. Ehret, Hill, Hooper and Jacobs. Mr.
Kester and Mr. Fink were each granted initial stock options of 15,000 shares
each and 2,000 prorated for the time served on the board. All options granted
were $2.26 per share.
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 January 31, 2002 by: ( i ) each director and
nominee for director; (ii) the executive officer named in the Summary
Compensation Table in Executive Compensation; (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.
Name and Address of Number of Shares (1) &( 2) Percentage (2)
Beneficial Owner Beneficially Owned Beneficially Owned
------------------ ------------------ ------------------
Hytek International, Ltd. 752,167 21.9%
690 West 28th Street
Hialeah, FL 33010
Howard H. Hill 508,000(3) 13.03%
7610 Miramar Road, Building 6000
San Diego, CA 92126-4202
John R. Ehret 12,000(4) *
7610 Miramar Road, Building 6000
San Diego, CA 92126-4202
Robert Jacobs 4,000(5) *
7610 Miramar Road, Building 6000
San Diego, CA 92126-4202
Henry E. Hooper 15,555(6) *
7610 Miramar Road, Building 6000
San Diego, CA 92126-4202
Marvin Fink 0
7610 Miramar Rd., Bldg. 6000
San Diego, CA 92126-4202
Linde Kester 41,902 1.2%
7610 Miramar Rd., Bldg. 6000
San Diego, CA 92126-4202
All Directors and Officers as 681,497 16.9%
a Group (7 Persons)
(1) This table is based on information supplied by officers, directors and
principal stockholders, excluding Hytek International, Inc. Except as
indicated in the footnotes to this table and pursuant to applicable
community property laws to the Company's knowledge, the persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock. The inclusion in this table of such shares does not
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of, or receives the economic benefit of such shares.
Applicable percentages are based on 3,441,054 shares outstanding on January
31, 2002.
(2) Shares of Common Stock, which were not outstanding but which could be
acquired upon exercise of an option within 60 days from the date of this
filing, are considered outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned. However, such shares
are not considered to be outstanding for any other purpose.
(3) Includes 458,000 shares, which Mr. Hill has the right to acquire upon
exercise of options exercisable within 60 days.
(4) Includes 12,000 shares, which Mr. Ehret has the right to acquire upon
exercise of options exercisable within 60 days.
(5) Includes 4,000 shares, which Mr. Jacobs has the right to acquire upon
exercise of options exercisable within 60 days.
(6) Includes 15,555 shares, which Mr. Hooper has the right to acquire upon
exercise of options exercisable within 60 days.
* Represents less than 1% of the outstanding shares.
There is no arrangement known to the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
Compliance With Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 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 on its review of the copies of reporting forms received by the
Company, the Company believes that during its most recent fiscal year ended
October 31, 2001, that its officers and directors complied with the filing
requirements under Section 16(a), except as follows: Mr. Fink and Mr. Kester
failed to timely file a notice on Form 3 upon their appointment to the Board of
Directors.
PROPOSAL 2:
SELECTION OF AUDITORS
Subject to stockholder approval at the Annual Meeting, the Board has
selected J.H. Cohn LLP to continue as the Company's independent auditors for the
fiscal year ending October 31, 2002. A representative of J.H. Cohn LLP is
expected to be present at the Annual Meeting. The representative will have an
opportunity to make a statement and will be available to respond to appropriate
questions from stockholders.
Stockholder ratification of the selection of J.H. Cohn LLP as the Company's
independent accountants is not required by the Company's Bylaws or otherwise.
However, the Board is submitting the selection of J.H. Cohn LLP to the
stockholders for ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Board will reconsider whether or
not to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different independent accounting firm
at any time during the year if the Board determines that such a change would be
in the best interests of the Company and its stockholders.
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 J.H. Cohn
LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
REPORT OF THE AUDIT COMMITTEE (1)
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,
2001.
The Audit Committee has reviewed and discussed the Company's audited
financial statements with the management. The Audit Committee has discussed with
J.H. Cohn LLP, the Company's independent accountants, the matters required to be
discussed by Statement of Auditing Standards No. 61, COMMUNICATION WITH AUDIT
COMMITTEES which includes, among other items, matters related to the conduct of
the audit of the Company's financial statements. The Audit Committee has also
received written disclosures and the letter from J.H. Cohn LLP required by
Independence Standards Board Standard No. 1, which relates to the accountant's
independence from the Company and its related entities, and has discussed with
J. H. Cohn LLP their independence from the Company.
The Audit Committee acts pursuant to the Audit Committee Charter, which was
approved by the board in 2001. Fees for J.H. Cohn LLP for the last fiscal year
were: Audit - $31,400 and all other fees of $43,300, which includes due
diligence on potential acquisition candidates, reviewing Form 10-Qs, SEC audit
and other matters.
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 Annual Report on Form 10-KSB for
the fiscal year ended October 31, 2001.
AUDIT COMMITTEE
Robert Jacobs
Henry Hooper
Linde Kester
(1) The material in this report is not deemed "soliciting material," is not
deemed filed with the SEC, and is not to be incorporated by reference in
any filing of the Company under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, whether made before or
after the date hereof and irrespective of any general incorporation
language in any such filing.
Stock Performance Graph (1)
The following graph compares the monthly return for the Company, the NASDAQ
US Stock Index and the NASDAQ Electronic Components Stock Index.
(GRAPHIC OMITTED)
o The monthly return on investment for each of the periods for the Company is
based on the closing price on the last trading day of each month. The
Indices are based on their respective values on the final trading day of
each month.
Certain Transactions
On April 1, 1997, the Company loaned to Howard Hill, its President and
Chief Executive Officer, $70,000 pursuant to a Promissory Note which provides
for interest at the rate of 6% per annum and which has no specific due date for
principal or interest payments.
Mr. Jacobs, a director of the Company, is an employee of Neil Berkman
Associates, the Company's public relations firm. For the fiscal years ended
October 31, 2001 and October 31, 2000, the Company paid to Neil Berkman
Associates $31,785 and $27,220, respectively, for services rendered.
STOCKHOLDERS' PROPOSALS
Stockholders who intend to submit proposals at the 2002 Annual Meeting must
submit such proposals to the Company no later than December 1, 2002 in order for
them to be included in the Proxy Statement and the form of Proxy to be
distributed by the Board of Directors in connection with that meeting.
Stockholders proposals should be submitted to RF Industries, Ltd., 7610 Miramar
Road, San Diego, CA 92126-4202.
ANNUAL REPORTS
The Company's 2001 Annual Report on Form 10-KSB which includes audited
financial statements for the Company's fiscal year ended October 31, 2001, is
being mailed with the Proxy Statement to stockholders of record on or about
March 31, 2002.
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 of 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.
Terrie A. Gross,
Corporate Secretary
Chief Financial Officer
San Diego, California
March 31, 2002
PROXY
RF INDUSTRIES, LTD.
a Nevada Corporation
ANNUAL MEETING OF SHAREHOLDERS
May 10, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Howard F. Hill and John Ehret, or either of
them, as proxies, each with the power to appoint his or her substitutes, and
hereby authorizes them to represent and vote, as designated below, all of the
shares of Common Stock of RF Industries, Ltd., held of record by the undersigned
on March 22, 2002 at the Annual Meeting of Shareholders to be held at the Mira
Mesa Hotel at 9888 Mira Mesa Blvd., Function Room A, San Diego, CA 92126 on
Friday, May 10, 2002, at 1:30 p.m. Pacific Daylight Time, or any adjournments or
postponement thereof with all powers which the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
1. For the election as directors of the nominees listed below, except to the
extent that authority is specifically withheld.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
below (except as marked vote for all nominees
to the contrary below) listed below
Nominees: Howard F. Hill, John R. Ehret, Henry E. Hooper, Robert Jacobs,
Marvin Fink and Linde Kester.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
2. PROPOSAL TO RATIFY APPOINTMENT OF J.H. COHN LLP, AS INDEPENDENT AUDITOR.
[ ] For [ ] Against [ ] Abstain
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted for Proposals 1 and 2. I understand that I may revoke this Proxy only
by written instructions to that effect, signed and dated by me, which must be
actually received by the Company prior to the commencement of the Annual
Meeting.
DATED:
-----------------------------
-----------------------------
Signature
-----------------------------
Signature if Held Jointly
-----------------------------
Number of Shares
Please sign exactly as your name appears on your stock certificate. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
the shares are owned by a corporation, sign in the full corporate name by the
President or other authorized officer. If the shares are owned by a Partnership,
sign in the name of the Partnership name by an authorized person. Please mark,
sign, date and return the Proxy promptly using the enclosed envelope.
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