RF INDUSTRIES, LTD.

                             2000 STOCK OPTION PLAN

                              AS ADOPTED EFFECTIVE

                                   MAY 5, 2000


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                               TABLE OF CONTENTS


                                                                            Page
                                                                           -----

ARTICLE 1.  INTRODUCTION...................................................... 1

ARTICLE 2.  ADMINISTRATION.................................................... 1
          2.1  Committee  Composition......................................... 1
          2.2  Powers of the Committee........................................ 1
          2.3  Committee for Non-Officer Grants .............................. 2

ARTICLE 3.  SHARES AVAILABLE FOR GRANTS........................................2
          3.1  Basic Limitation............................................... 2
          3.2  Annual Increase in Shares ..................................... 3
          3.3  Additional Shares ............................................. 3

ARTICLE 4.  ELIGIBILITY........................................................3
          4.1  Incentive Stock Options........................................ 3
          4.2  Other Grants................................................... 3

ARTICLE 5.  OPTIONS............................................................3
          5.1  Stock Option Agreement..........................................3
          5.2  Number of Shares ...............................................3
          5.3  Exercise Price..................................................4
          5.4  Exercisability and Term.........................................4
          5.5  Manner of Exercise..............................................4
          5.6  Effect of Change in Control.....................................4
          5.7  Modification or Assumption of Options...........................4
          5.8  Buyout Provisions...............................................5

ARTICLE 6.  PAYMENT FOR OPTION SHARES..........................................5
          6.1  General Rule....................................................5
          6.2  Surrender of Stock..............................................5
          6.3  Exercise/Sale...................................................5
          6.4  Exercise/Pledge.................................................5
          6.5  Promissory Note.................................................6
          6.6  Other Forms of Payment..........................................6

ARTICLE 7.  PROTECTION AGAINST DILUTION........................................6
          7.1  Adjustments.....................................................6
          7.2  Dissolution or Liquidation......................................6
          7.3  Reorganizations.................................................6

ARTICLE 8.  AWARDS UNDER OTHER PLANS...........................................7

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ARTICLE 9.  LIMITATION ON RIGHTS...............................................7
          9.1  Retention Rights................................................7
          9.2  Stockholers' Rights.............................................7
          9.3  Conditions Upon Issuance of Common Shares.......................7

ARTICLE 10. WITHHOLDING TAXES..................................................8
         10.1  General.........................................................8
         10.2  Share Withholding...............................................8

ARTICLE 11. FUTURE OF THE PLAN.................................................8
         11.1  Term of the Plan................................................8
         11.2  Amendment or Termination........................................8
         11.3  Stockholder Approval............................................8
         11.4  Effect of Amendment or Termination..............................8

ARTICLE 12. LIMITATION ON PARACHUTE PAYMENTS...................................8
         12.1  Scope of Limitation.............................................8
         12.2  Basic Rule......................................................9
         12.3  Reduction of Payments...........................................9
         12.4  Overpayments and Underpayments..................................9
         12.5  Related Corporations...........................................10

ARTICLE 13. INDEMNIFICATION.................................................. 10

ARTICLE 14. PROVISION OF INFORMATION..........................................10

ARTICLE 15. DEFINITIONS.......................................................10

ARTICLE 16. EXECUTION.........................................................13





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                              RF INDUSTRIES, LTD.

                             2000 STOCK OPTION PLAN

ARTICLE 1.  INTRODUCTION.

     The Plan was adopted by the Board effective May 5, 2000. The purpose of the
Plan is to promote the  long_term  success of the  Company  and the  creation of
stockholder   value  by  (a)  encouraging   Employees,   Outside  Directors  and
Consultants to focus on critical  long_range  objectives,  (b)  encouraging  the
attraction and retention of Employees,  Outside  Directors and Consultants  with
exceptional  qualifications  and (c) linking  Employees,  Outside  Directors and
Consultants directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this  purpose by  providing  for Awards in the form of
Options  (which may constitute  incentive  stock options or  nonstatutory  stock
options). Terms defined herein shall have the meanings set forth in "Article 2 -
Definitions."

     The Plan shall be governed by, and construed in accordance with, the
laws of the State of Nevada (except their choice_of_law provisions).

ARTICLE 2.  ADMINISTRATION.

     2.1Committee Composition . The Plan shall be administered by the Committee.
The Committee shall consist exclusively of two or more directors of the Company,
who shall be  appointed  by the  Board.  In  addition,  the  composition  of the
Committee  shall  satisfy  such  requirements  as the  Securities  and  Exchange
Commission  may  establish  for  administrators  acting under plans  intended to
qualify for  exemption  under Rule 16b_3 (or its  successor)  under the Exchange
Act.

     2.2 Powers of the Committee . Subject to the  provisions  of the Plan, and,
subject to the specific  duties  delegated by the Board to such  Committee,  the
Committee shall have the authority, in its discretion:

          (a)  to  determine  the Fair  Market  Value of the Common  Shares,  in
               accordance with Section 15 of the Plan;

          (b)  to select the  Consultants  and  Employees  to whom Awards may be
               granted hereunder;

          (c)  to determine whether and to what extent Awards or any combination
               thereof are granted hereunder;

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          (d)  to  determine  the number of Common  Shares to be covered by each
               Award granted hereunder;

          (e)  to approve forms of agreement for use under the Plan;

          (f)  to determine the terms and conditions,  not inconsistent with the
               terms of the Plan, of any Award granted hereunder. Such terms and
               conditions  include,  but are not limited to, the exercise price,
               the time or times  when  Awards  may be  exercised  (which may be
               based on  performance  criteria),  any vesting,  acceleration  or
               waiver  of  forfeiture  restrictions,   and  any  restriction  or
               limitation  regarding  any Awards or the Common  Shares  relating
               thereto, based in each case on such factors as the Committee,  in
               its sole discretion, shall determine;

          (g)  to construe and interpret the terms of the Plan;

          (h)  to prescribe, amend and rescind rules and regulations relating to
               the Plan;

          (i)  to determine whether and under what circumstances an Award may be
               settled in cash instead of Common Shares or Common Shares instead
               of cash;

          (j)  to reduce the exercise price of any Award;

          (k)  to modify or amend each Award (subject to the Plan);

          (l)  to  authorize  any person to execute on behalf of the Company any
               instrument  required  to effect the grant of an Award  previously
               granted by the Board;

          (m)  to determine the terms and restrictions applicable to Awards; and

          (n)  to make all other  determinations  deemed  necessary or advisable
               for administering the Plan.

     2.3 Committee for  Non_Officer  Grants  . The  Board  may  also  appoint  a
secondary  committee  of the  Board,  which  shall  be  composed  of one or more
directors of the Company who need not satisfy the  requirements  of Section 2.1.
Such  secondary  committee may administer the Plan with respect to Employees and
Consultants  who are not  considered  officers or directors of the Company under
section  16 of the  Exchange  Act,  may  grant  Awards  under  the  Plan to such
Employees and  Consultants and may determine all features and conditions of such
Awards. Within the limitations of this Section 2.3, any reference in the Plan to
the Committee shall include such secondary committee.

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ARTICLE 3.  SHARES AVAILABLE FOR GRANTS.

     3.1 Basic  Limitation.  Common  Shares  issued  pursuant to the Plan may be
authorized  but unissued  shares or treasury  shares.  The  aggregate  number of
Options  awarded  under  the Plan  shall not  exceed  (a)  300,000  plus (b) the
additional  Common Shares  described in Sections 3.2 and 3.3. The  limitation of
this Section 3.1 shall be subject to adjustment pursuant to Article 7.

     3.2 Annual Increase in Shares. As of January 1of each year, commencing with
the year 2001,  the  aggregate  number of Options that may be awarded  under the
Plan shall  automatically  increase by a number equal to the lesser of (a) 4% of
the total number of Common Shares then outstanding or (b) 10,000 Shares.

     3.3 Additional Shares. If Common Shares issued upon the exercise of Options
are forfeited,  then such Common Shares shall again become  available for Awards
under the Plan.  If Options are  forfeited  or  terminate  for any other  reason
before being exercised,  then the corresponding Common Shares shall again become
available  for  Awards  under  the  Plan.  The  foregoing  notwithstanding,  the
aggregate  number of Common  Shares  that may be issued  under the Plan upon the
exercise of ISOs shall not be increased when Common Shares are forfeited.

ARTICLE 4.  ELIGIBILITY.

     4.1 Incentive Stock Options. Only Employees who are common_law employees of
the Company,  a Parent or a Subsidiary  shall be eligible for the grant of ISOs.
In  addition,  an Employee who owns more than 10% of the total  combined  voting
power of all classes of  outstanding  stock of the Company or any of its Parents
or  Subsidiaries  shall  not be  eligible  for the  grant of an ISO  unless  the
requirements set forth in section 422(c)(6) of the Code are satisfied.

     4.2 Other Grants . Only Employees,  Outside Directors and Consultants shall
be eligible for the grant of NSOs under the Plan.

ARTICLE 5.  OPTIONS.

     5.1 Stock  Option  Agreement . Each grant of an Option under the Plan shall
be evidenced by a Stock Option  Agreement  between the Optionee and the Company.
Such  Option  shall be  subject to all  applicable  terms of the Plan and may be
subject to any other terms that are not  inconsistent  with the Plan.  The Stock
Option  Agreement  shall  specify  whether  the Option is an ISO or an NSO.  The
provisions  of the various Stock Option  Agreements  entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other  compensation.  A Stock Option Agreement may provide that a
new  Option  will  be  granted  automatically  to the  Optionee  when  he or she
exercises a prior  Option and pays the Exercise  Price in the form  described in
Section 6.2.


3

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     5.2 Number of Shares . Each Stock Option Agreement shall specify the number
of Common Shares  subject to the Option and shall provide for the  adjustment of
such  number in  accordance  with  Article 7. The  limitations  set forth in the
preceding sentence shall be subject to adjustment in accordance with Article 7.

     5.3 Exercise Price . Each Stock Option Agreement shall specify the Exercise
Price;  provided that the Exercise  Price under an ISO shall in no event be less
than 100% of the Fair  Market  Value of a Common  Share on the date of grant and
the  Exercise  Price under an NSO shall in no event be less than 85% of the Fair
Market Value of a Common Share on the date of grant.

     5.4 Exercisability and Term . Each Stock Option Agreement shall specify the
date  or  event  when  all  or  any  installment  of  the  Option  is to  become
exercisable,  which may include vesting requirements and/or performance criteria
with respect to the Company  and/or the  Optionee.  The Stock  Option  Agreement
shall also  specify  the term of the  Option;  provided  that the term of an ISO
shall in no event  exceed  10 years  from  the  date of  grant.  A Stock  Option
Agreement  may  provide  for  accelerated  exercisability  in the  event  of the
Optionee's  death,  disability or retirement or other events and may provide for
expiration  prior to the end of its term in the event of the  termination of the
Optionee's service.

     5.5  Manner of  Exercise  . An Option  shall be deemed  exercised  when the
Company  receives:  (i) notice of exercise (in accordance  with the Stock Option
Agreement)  from the person  entitled  to  exercise  the  Option,  and (ii) full
payment  for the Common  Shares with  respect to which the Option is  exercised.
Full payment may consist of any consideration  and method of payment  authorized
by the  Committee  and  permitted by the Stock Option  Agreement.  Common Shares
issued upon  exercise of an Option  shall be issued in the name of the  Optionee
or, if  requested  by the  Optionee,  in the name of the Optionee and his or her
spouse.  Until the Common  Shares are issued (as  evidenced  by the  appropriate
entry on the books of the Company or of a duly authorized  transfer agent of the
Company),  no  right to vote or  receive  dividends  or any  other  rights  as a
stockholder shall exist with respect to the Common Shares subject to the Option,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be  issued)  such  Common  Shares  promptly  after the Option is  exercised.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the Common Shares are issued, except as provided in Article
7 of the Plan.

     Exercising  an Option in any  manner  shall  decrease  the number of Common
Shares  thereafter  available,  both for purposes of the Plan and for sale under
the Option, by the number of Common Shares as to which the Option is exercised.

     5.6 Effect of Change in Control . The Committee may determine,  at the time
of granting an Option or thereafter,  that such Option shall become  exercisable
as to all or part of the Common Shares  subject to such Option in the event that
a Change in Control occurs with respect to the Company, subject to the following
limitation:

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          (a)  In the case of an ISO, the acceleration of  exercisability  shall
               not occur without the Optionee's written consent.

     5.7  Modification  or Assumption of Options . Within the limitations of the
Plan,  the Committee  may modify,  extend or assume  outstanding  options or may
accept the  cancellation of outstanding  options (whether granted by the Company
or by another  issuer) in return for the grant of new  options for the same or a
different  number of shares and at the same or a different  exercise price.  The
foregoing  notwithstanding,  no  modification  of an Option  shall,  without the
consent  of the  Optionee,  alter or impair  his or her  rights  or  obligations
determined pursuant to the Option Agreement representing such Option.

     5.8 Buyout  Provisions . The Committee may at any time (a) offer to buy out
for a payment in cash or cash  equivalents an Option  previously  granted or (b)
authorize  an Optionee  to elect to cash out an Option  previously  granted,  in
either  case at such  time and  based  upon such  terms  and  conditions  as the
Committee shall establish.

ARTICLE 6.  PAYMENT FOR OPTION SHARES.

     6.1 General Rule . The entire  Exercise  Price of Common Shares issued upon
exercise  of Options  shall be payable in cash or cash  equivalents  at the time
when such Common Shares are purchased, except as follows:

          (a)  In the case of an ISO granted  under the Plan,  payment  shall be
               made only pursuant to the express  provisions  of the  applicable
               Stock Option  Agreement.  The Stock Option  Agreement may specify
               that payment may be made in any form(s) described in this Article
               6.

          (b)  In the  case of an NSO,  the  Committee  may at any  time  accept
               payment in any form(s) described in this Article 6.

     6.2 Surrender of Stock . To the extent that this Section 6.2 is applicable,
all or any part of the Exercise Price may be paid by surrendering,  or attesting
to the ownership of, Common Shares that are already owned by the Optionee.  Such
Common  Shares  shall be valued at their Fair Market  Value on the date when the
new  Common  Shares  are  purchased  under  the  Plan.  The  Optionee  shall not
surrender,  or attest to the  ownership  of,  Common  Shares in  payment  of the
Exercise Price if such action would cause the Company to recognize  compensation
expense (or  additional  compensation  expense)  with  respect to the Option for
financial reporting purposes.

     6.3 Exercise/Sale . To the extent that this Section 6.3 is applicable,  all
or any part of the  Exercise  Price  and any  withholding  taxes  may be paid by
delivering (on a form  prescribed by the Company) an irrevocable  direction to a
securities  broker  approved  by the  Company  to sell all or part of the Common
Shares  being  purchased  under the Plan and to deliver all or part of the sales
proceeds to the Company.

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     6.4  Exercise/Pledge  . To the extent that this Section 6.4 is  applicable,
all or any part of the Exercise Price and any  withholding  taxes may be paid by
delivering  (on a form  prescribed by the Company) an  irrevocable  direction to
pledge  all or part of the Common  Shares  being  purchased  under the Plan to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

     6.5  Promissory  Note . To the extent that this Section 6.5 is  applicable,
all or any part of the Exercise Price and any  withholding  taxes may be paid by
delivering  (on a form  prescribed  by the Company) a  full_recourse  promissory
note. However, to the extent required by state corporation law, the par value of
the Common Shares being purchased under the Plan, if newly issued, shall be paid
in cash or cash equivalents.

     6.6  Other  Forms of  Payment . To the  extent  that  this  Section  6.6 is
applicable,  all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable  laws,  regulations
and rules.

ARTICLE 7.  PROTECTION AGAINST DILUTION.

     7.1 Adjustments . In the event of a subdivision of the  outstanding  Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend  payable  in a form other than  Common  Shares in an amount  that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by  reclassification  or otherwise) into a lesser
number of Common Shares, a recapitalization, a spin_off or a similar occurrence,
the Committee shall make such adjustments as it, in its sole  discretion,  deems
appropriate in one or more of:

     (a)  The number of Options available for future Awards under Article 3;

     (b)  The limitations set forth in Section 5.2;

     (c)  The number of Common Shares covered by each outstanding Option; or

     (d)  The Exercise Price under each outstanding Option.

Except as  provided  in this  Article 7, a  Participant  shall have no rights by
reason  of any  issue  by the  Company  of  stock  of any  class  or  securities
convertible  into stock of any class, any subdivision or consolidation of shares
of stock of any class,  the payment of any stock  dividend or any other increase
or decrease in the number of shares of stock of any class.

     7.2 Dissolution or Liquidation . To the extent not previously  exercised or
settled,  Options  shall  terminate  immediately  prior  to the  dissolution  or
liquidation of the Company.

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     7.3  Reorganizations . In the event that the Company is a party to a merger
or other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization. Such agreement shall provide for:

     (a)  The  continuation  of the  outstanding  Awards by the Company,  if the
          Company is a surviving corporation;

     (b)  The assumption of the outstanding Awards by the surviving  corporation
          or its parent or subsidiary;

     (c)  The  substitution  by  the  surviving  corporation  or its  parent  or
          subsidiary of its own awards for the outstanding Awards;

     (d)  Full  exercisability  or vesting  and  accelerated  expiration  of the
          outstanding Awards; or

     (e)  Settlement of the full value of the outstanding Awards in cash or cash
          equivalents followed by cancellation of such Awards.

ARTICLE 8.  AWARDS UNDER OTHER PLANS.

     The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Common  Shares  issued  under this Plan.  Such  Common
Shares shall,  when issued,  reduce the number of Common Shares  available under
Article 3.

ARTICLE 9.  LIMITATION ON RIGHTS.

     9.1  Retention  Rights . Neither the Plan nor any Award  granted  under the
Plan  shall be deemed  to give any  individual  a right to  remain an  Employee,
Outside  Director or Consultant.  The Company and its Parents,  Subsidiaries and
Affiliates  reserve the right to terminate the service of any Employee,  Outside
Director or Consultant at any time, with or without cause, subject to applicable
laws,  the  Company's  certificate  of  incorporation  and by_laws and a written
employment agreement (if any).

     9.2  Stockholders'  Rights . A Participant  shall have no dividend  rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock  certificate for such
Common  Shares is  issued  or, if  applicable,  the time when he or she  becomes
entitled to receive such Common Shares by filing any required notice of exercise
and paying any required  Exercise  Price.  No adjustment  shall be made for cash
dividends  or other  rights  for which the  record  date is prior to such  time,
except as expressly provided in the Plan.


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     9.3 Conditions  Upon Issuance of Common Shares . Common Shares shall not be
issued  pursuant to the  exercise of an Award  unless the exercise of such Award
and the  issuance  and  delivery of such  Common  Shares  shall  comply with all
relevant provisions of law, including,  without limitation,  the Securities Act,
as amended,  the Exchange Act, the  securities  laws of applicable  states,  the
rules  and  regulations  promulgated   thereunder,   applicable  laws,  and  the
requirements  of any stock  exchange or  quotation  system upon which the Common
Shares  may then be  listed  or  quoted,  and shall be  further  subject  to the
approval of counsel for the Company with respect to such compliance.

ARTICLE 10.  WITHHOLDING TAXES.

     10.1 General . To the extent required by applicable  federal,  state, local
or foreign law, a Participant  or his or her successor  shall make  arrangements
satisfactory  to  the  Company  for  the  satisfaction  of any  withholding  tax
obligations  that arise in  connection  with the Plan.  The Company shall not be
required  to issue any  Common  Shares or make any cash  payment  under the Plan
until such obligations are satisfied.

     10.2 Share  Withholding . The Committee may permit a Participant to satisfy
all or part of his or her  withholding  or income tax  obligations by having the
Company  withhold all or a portion of any Common Shares that otherwise  would be
issued to him or her or by  surrendering  all or a portion of any Common  Shares
that he or she previously acquired.  Such Common Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.

ARTICLE 11.  FUTURE OF THE PLAN.

     11.1  Term of the  Plan . The  Plan,  as set  forth  herein,  shall  become
effective on May 5, 2000. The Plan shall remain in effect until it is terminated
under  Section  11.2,  except that no ISOs shall be granted on or after the 10th
anniversary  of the later of (a) the date when the Board adopted the Plan or (b)
the date when the Board adopted the most recent increase in the number of Common
Shares   available   under  Article  3  which  was  approved  by  the  Company's
stockholders.

     11.2  Amendment or  Termination  . The Board may at any time amend,  alter,
suspend or terminate the Plan for any reason.

     11.3 Stockholder  Approval . The Company shall obtain stockholder  approval
of any Plan  amendment  to the  extent  requested  by  applicable  law,  rule or
regulation,  including the  requirements of any exchange or quotation  system on
which the Common  Shares are listed or quoted.  Such  stockholder  approval,  if
required  shall be obtained in such a manner and to such a degree as is required
by the applicable laws, rules or regulations.

     11.4  Effect  of  Amendment  or  Termination  . No  amendment,  alteration,
suspension or  termination  of the Plan shall impair the rights of any Optionee,
unless  mutually  agreed  otherwise  between the Optionee  and the Board,  which
agreement  must be in writing and signed by the Optionee and the Company  unless
such amendment,  alteration,  suspension or termination is required to enable an

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Option  designated  as an Incentive  Stock  Option to qualify as a  Nonqualified
Stock Option or is necessary to comply with any  applicable  laws or  government
regulations.

ARTICLE 12.  LIMITATION ON PARACHUTE PAYMENTS.

     12.1 Scope of  Limitation  . This Article 12 shall apply to an Award unless
the  Committee,  at the time of  making  an Award  under the Plan or at any time
thereafter,  specifies  in writing  that such Award shall not be subject to this
Article  12. If this  Article  12 applies to an Award,  it shall  supersede  any
contrary provision of the Plan or of any Award granted under the Plan.

     12.2 Basic Rule . In the event that the independent  auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company under the Plan to or for the benefit of a Participant  (a "Payment")
would be nondeductible by the Company for federal income tax purposes because of
the provisions  concerning  "excess  parachute  payments" in Section 280G of the
Code, then the aggregate present value of all Payments shall be reduced (but not
below zero) to the Reduced Amount.  For purposes of this Article 12 the "Reduced
Amount" shall be the amount,  expressed as a present value,  which maximizes the
aggregate  present  value of the  Payments  without  causing  any  Payment to be
nondeductible by the Company because of Section 280G of the Code.

     12.3  Reduction  of Payments . If the Auditors  determine  that any Payment
would be  nondeductible by the Company because of Section 280G of the Code, then
the Company shall promptly give the Participant notice to that effect and a copy
of the  detailed  calculation  thereof  and  of  the  Reduced  Amount,  and  the
Participant may then elect, in his or her sole discretion, which and how much of
the Payments  shall be eliminated or reduced (as long as after such election the
aggregate  present  value of the Payments  equals the Reduced  Amount) and shall
advise the Company in writing of his or her  election  within 10 days of receipt
of notice.  If no such  election is made by the  Participant  within such 10_day
period,  then the Company may elect which and how much of the Payments  shall be
eliminated  or reduced (as long as after such  election  the  aggregate  present
value  of  the  Payments  equals  the  Reduced  Amount)  and  shall  notify  the
Participant  promptly of such election.  For purposes of this Article 12 present
value shall be determined in accordance with Section 280G(d)(4) of the Code. All
determinations  made by the Auditors under this Article 12 shall be binding upon
the  Company  and the  Participant  and shall be made within 60 days of the date
when a Payment  becomes  payable or  transferable.  As promptly  as  practicable
following such determination and the elections hereunder,  the Company shall pay
or transfer to or for the benefit of the  Participant  such  amounts as are then
due to him or her under the Plan and shall  promptly  pay or  transfer to or for
the benefit of the  Participant  in the future such amounts as become due to him
or her under the Plan.

     12.4  Overpayments  and  Underpayments  . As a result of uncertainty in the
application of Section 280G of the Code at the time of an initial  determination
by the Auditors  hereunder,  it is possible that Payments will have been made by
the Company that should not have been made (an "Overpayment") or that additional
Payments  that will not have been made by the  Company  could have been made (an
"Underpayment"),  consistent  in each case with the  calculation  of the Reduced

<PAGE>


Amount hereunder. In the event that the Auditors,  based upon the assertion of a
deficiency  by  the  Internal   Revenue  Service  against  the  Company  or  the
Participant  that  the  Auditors  believe  has a high  probability  of  success,
determine that an Overpayment has been made, such  Overpayment  shall be treated
for all purposes as a loan to the Participant which he or she shall repay to the
Company,  together  with  interest at the  applicable  federal rate  provided in
Section  7872(f)(2)  of the Code;  provided,  however,  that no amount  shall be
payable by the Participant to the Company if and to the extent that such payment
would not reduce the amount  subject to taxation under Section 4999 of the Code.
In the event that the Auditors determine that an Underpayment has occurred, such
Underpayment  shall promptly be paid or transferred by the Company to or for the
benefit of the  Participant,  together with interest at the  applicable  federal
rate provided in Section 7872(f)(2) of the Code.

     12.5  Related  Corporations  . For  purposes  of this  Article 12, the term
"Company" shall include affiliated  corporations to the extent determined by the
Auditors in accordance with Section 280G(d)(5) of the Code.

ARTICLE 13.  INDEMNIFICATION.

     In addition  to such other  rights of  indemnification  as they may have as
members of the Board or officers or  employees  of the Company and any Parent or
Subsidiary,  members of the  Committee  and any  officers  or  employees  of the
Company and any Parent or Subsidiary  to whom  authority to act for the Board is
delegated shall be indemnified by the Company  against all reasonable  expenses,
including  attorneys' fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding,  or in connection with any appeal
therein,  to which  they or any of them may be a party by reason  of any  action
taken or  failure  to act under or in  connection  with the  Plan,  or any right
granted  hereunder,  and against all amounts paid by them in settlement  thereof
(provided such settlement is approved by independent  legal counsel  selected by
the Company) or paid by them in  satisfaction  of a judgment in any such action,
suit or  proceeding,  except  in  relation  to  matters  as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence,  bad faith or intentional misconduct in duties;  provided,  however,
that  within  sixty  (60) days after the  institution  of such  action,  suit or
proceeding,  such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

ARTICLE 14.  PROVISION OF INFORMATION.

     At least annually, copies of the Company's annual report or Form 10-KSB
for the  just-completed  fiscal year shall be made available to each Participant
and purchaser of Common Shares upon exercise of an Award.  The Company shall not
be  required  to provide  such  information  to key  employees  whose  duties in
connection with the Company assure them access to equivalent information.

<PAGE.


ARTICLE 15.  DEFINITIONS.

     15.1 "Affiliate"  means any entity other than a Subsidiary,  if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.

     15.2 "Award" means any award of an Option under the Plan.

     15.3 "Board" means the Company's  Board of Directors,  as constituted  from
time to time.

     15.4 "Change in Control" shall mean:

          (a)  The consummation of a merger or consolidation of the Company with
               or into another entity or any other corporate reorganization,  if
               more than 50% of the combined  voting power of the  continuing or
               surviving entity's securities outstanding  immediately after such
               merger, consolidation or other reorganization is owned by persons
               who were not  stockholders  of the Company  immediately  prior to
               such merger, consolidation or other reorganization;

          (b)  The sale,  transfer or other  disposition of all or substantially
               all of the Company's assets;

          (c)  A change in the  composition  of the Board,  as a result of which
               fewer  than 50% of the  incumbent  directors  are  directors  who
               either  (i) had  been  directors  of the  Company  on the date 24
               months  prior to the date of the  event  that  may  constitute  a
               Change  in  Control  (the  "original  directors")  or  (ii)  were
               elected,  or  nominated  for  election,  to the  Board  with  the
               affirmative  votes of at least a majority of the aggregate of the
               original  directors  who were  still in office at the time of the
               election  or  nomination  and the  directors  whose  election  or
               nomination was previously so approved; or

          (d)  Any   transaction  as  a  result  of  which  any  person  is  the
               "beneficial  owner" (as defined in Rule 13d_3 under the  Exchange
               Act),  directly  or  indirectly,  of  securities  of the  Company
               representing  at least 20% of the total voting power  represented
               by the Company's then outstanding voting securities. For purposes
               of this  Paragraph  (d),  the term  "person"  shall have the same
               meaning as when used in sections  13(d) and 14(d) of the Exchange
               Act but shall  exclude (i) a trustee or other  fiduciary  holding
               securities  under an employee benefit plan of the Company or of a
               Parent or  Subsidiary  and (ii) a corporation  owned  directly or
               indirectly by the  stockholders  of the Company in  substantially
               the same  proportions  as their  ownership of the common stock of
               the Company.

<PAGE>

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's  incorporation  or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.

     15.5 "Code" means the Internal Revenue Code of 1986, as amended.

     15.6 "Committee" means a committee of the Board, as described in Article 2.

     15.7 "Common Share" means one share of the common stock of the Company.

     15.8 "Company" means RF Industries, Ltd., a Nevada corporation.

     15.9  "Consultant"  means a consultant  or adviser who  provides  bona fide
services  to  the  Company,  a  Parent,  a  Subsidiary  or  an  Affiliate  as an
independent  contractor.  Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.1.

     15.10  "Employee" means a common_law  employee of the Company,  a Parent, a
Subsidiary or an Affiliate.

     15.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     15.12  "Exercise  Price" means the amount for which one Common Share may be
purchased  upon  exercise of an Option,  as  specified in the  applicable  Stock
Option Agreement.

     15.13 "Fair Market  Value" means with respect to each Common Share the last
reported  sale  price  of the  Company's  Common  Shares  sold on the  principal
national  securities  exchanges  on  which  the  Common  Shares  are at the time
admitted  to  trading  or  listed,  or, if there  have been no sales of any such
exchange  on such day,  the  average of the  highest bid and lowest ask price on
such day as reported by the Nasdaq system,  or any similar  organization  if the
Nasdaq is no longer reporting such information, either (i) on the date which the
notice of  exercise  is deemed to have  been sent to the  Company  (the  "Notice
Date") or (ii) over a period of five (5) trading days preceding the Notice Date,
whichever  of (i) or (ii) is greater.  If on the date for which the current fair
market  value is to be  determined,  the  Common  Shares  are not  listed on any
securities  exchange  or quoted  on the  Nasdaq  system or the  over-the-counter
market,  the current  fair market  value of Common  Shares  shall be the highest
price per share which the Company  could then obtain from a willing buyer (not a
current  employee  or  director)  for Common  Shares sold by the  Company,  from
authorized but unissued shares,  as determined in good faith by the Board of the
Company,  unless prior to such date the Company has become  subject to a binding
agreement for a merger, acquisition or other consolidation pursuant to which the
Company is not the surviving  party, in which case the current fair market value
of the  Common  Shares  shall be deemed to be the  value to be  received  by the
holders of the Company's  Common  Shares for each share thereof  pursuant to the
Company's acquisition. Such determination shall be conclusive and binding on all
persons.

<PAGE>

     15.14 "ISO" means an incentive stock option  described in Section 422(b) of
the Code.

     15.15 "NSO" means a stock  option not  described  in Sections 422 or 423 of
the Code.

     15.16 "Option" means an ISO or NSO granted under the Plan and entitling the
holder to purchase Common Shares.

     15.17 "Optionee" means an individual or estate who holds an Option.

     15.18  "Outside  Director"  shall  mean a member of the Board who is not an
Employee.  Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 4.1.

     15.19  "Parent"  means  any  corporation  (other  than the  Company)  in an
unbroken  chain  of  corporations  ending  with  the  Company,  if  each  of the
corporations  other than the Company  owns stock  possessing  50% or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

     15.20 "Participant" means an individual or estate who holds an Award.

     15.21  "Plan" means this RF  Industries,  Ltd.  2000 Stock Option Plan,  as
amended from time to time.

     15.22  "Subsidiary"  means any  corporation  (other than the Company) in an
unbroken  chain  of  corporations  beginning  with the  Company,  if each of the
corporations  other than the last  corporation  in the unbroken chain owns stock
possessing  50% or more of the total  combined  voting  power of all  classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a  Subsidiary  on a date after the  adoption  of the Plan shall be
considered a Subsidiary commencing as of such date.

ARTICLE 16.  EXECUTION.

     To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to execute this document in the name of the Company.

         RF Industries, Ltd.



         By:  /s/  Terrie Gross
            -----------------------------------------
               Terrie Gross, Chief Financial Officer