Document:

Exhibit 10.1

 

SEPARATION AND RELEASE OF CLAIMS AGREEMENT

 

This Separation and Release of Claims Agreement
( this" Agreement") is entered into by and between RF Industries, Ltd., a Nevada corporation, (the "Employer")
on behalf of itself, its subsidiaries and other corporate affiliates and each of their respective employees, officers, directors,
owners, shareholders and agents (collectively referred to herein as the "Employer Group"), and Johnny Walker (the
"Executive") (the Employer and the Executive are collectively referred to herein as the "Parties")
as of October 24, 2016 (the "Execution Date").

 

Because the Executive is required to spend
substantial time dealing with the medical issues affecting a member of the Executive’s family, the Executive and the Employer
have mutually agreed to terminate that certain Employment Agreement entered into between Employer and Executive on December 23,
2015 (the “Employment Agreement”) and the Executive’s employment thereunder. Accordingly, the parties hereto
agree that the Executive's last day of employment with the Employer shall be October 28, 2016 (the "Separation Date").
After the Separation Date, the Executive will not represent himself as being an employee, officer, attorney, agent or representative
of the Employer Group for any purpose. Except as otherwise set forth in this Agreement, the Separation Date will be the employment
termination date for the Executive for all purposes, meaning the Executive will no longer be entitled to any further compensation,
monies or other benefits from the Employer Group, including coverage under any benefits plans or programs sponsored by the Employer
Group. In addition, the Employment Agreement shall terminate on, and as of the Separation Date.

 

1.           Return of Property; Status Memorandum.
By the Separation Date, the Executive must return all Employer Group property, including devices, laptops, computers, mobile phones,
hand-held electronic devices, credit cards, electronically stored documents or files, physical files and any other Employer Group
property in the Executive's possession. In addition, by the Separation Date, the Executive shall deliver to the Employer a memorandum
that (i) lists all material matters, projects and initiatives of the Employer Group being directed or supervised by the Executive,
and (ii) contains a description of the status of such matters, projects and initiatives and any upcoming action items to be taken
by the principal executive officer of the Employer.

 

    	 	 	 

     

    

 

2.           Employer Group's Waiver and Release
and Executive Representations. The Employer Group expressly waives and releases any and all claims against the Executive that
may be waived and released by law with the exception of claims arising out of or attributable to (a) events, acts or omissions
taking place after the Parties' execution of the Agreement; (b) the Executive's breach of any terms and conditions of the Agreement;
and (c) the Executive's criminal activities or intentional misconduct occurring during the Executive's employment with the Employer
Group. The Executive represents, warrants and confirms that: (a) he has no claims, complaints or actions of any kind filed against
the Employer Group with any court of law, or local, state or federal government or agency; and (b) he has been properly paid for
all commissions, bonuses and other compensation due to him has been paid, including his final payroll check for his salary and
any accrued but unused vacation/paid time off through and including the Separation Date above. Any vested benefits under any of
the Employer Group’s employee benefit plans are excluded and shall be governed by the terms of the applicable plan documents
and award agreements. The Executive specifically represents, warrants and confirms that he has not engaged in, and is not aware
of, any unlawful conduct in relation to the business of the Employer Group.

 

3.           Separation Benefits. In consideration
for the Executive's execution, non-revocation of, and compliance with this Agreement, including the waiver and release of claims
in Section 4, the Employer Group agrees to provide the following payments and benefits:

 

(a)           The Employer shall pay the Executive
the following amounts, in each case minus all relevant taxes and other withholdings: (i) On the Effective Date, as defined in Section
4(c) below, a lump sum payment equal to $41,666 (which is equal to the amount that the Executive would have been paid under the
Employment Agreement had he continued to be employed until December 31, 2016) plus the Executive’s accrued and unused vacation
pay, and (ii) a severance payment of $29,833 on January 15, 2017. Notwithstanding the foregoing, no payment shall be made or begin
before the Effective Date of this Agreement.

 

(b)           The Executive understands, acknowledges
and agrees that the severance payment and other benefits exceed what he is otherwise entitled to receive upon separation from employment,
and that the payment and benefits are in exchange for executing this Agreement. The Executive further acknowledges no entitlement
to any additional payment or consideration not specifically referenced herein.

 

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4.           Release.

 

		(a)	General Release and Waiver of Claims

 

In exchange for the consideration provided
in this Agreement, the Executive and his heirs, executors, representatives, agents, insurers, administrators, successors and assigns
(collectively the "Releasors") irrevocably and unconditionally fully and forever waive, release and discharge
the Employer Group, including subsidiaries, affiliates, predecessors, successors and assigns, and all of their respective officers,
directors, employees, in their corporate and individual capacities (collectively, the "Releasees") from any and
all claims, demands, actions, causes of actions, obligations, judgments, rights, fees, damages, debts, obligations, liabilities
and expenses (inclusive of attorneys' fees) of any kind whatsoever (collectively, "Claims"), whether known or
unknown, from the beginning of time to the date of the Executive's execution of this Agreement, including, without limitation,
any claims any Claims under any federal, state, local or foreign law, that Releasors may have, have ever had or may in the future
have arising out of, or in any way related to the Executive's hire, benefits, employment, termination or separation from employment
with the Employer Group and any actual or alleged act, omission, transaction, practice, conduct, occurrence or other matter, including,
but not limited to (i) any and all claims under Title VII of the Civil Rights Act, as amended, the Americans with Disabilities
Act, as amended, the Family and Medical Leave Act, as amended, the Fair Labor Standards Act, the Equal Pay Act, as amended, the
Executive Retirement Income Security Act, as amended (with respect to unvested benefits), the Civil Rights Act of 1991, as amended,
Section 1981 of U.S.C. Title 42, the Sarbanes-Oxley Act of 2002, as amended, the Worker Adjustment and Retraining Notification
Act, as amended, the National Labor Relations Act, as amended, the Age Discrimination in Employment Act, as amended, the Genetic
Information Nondiscrimination Act of 2008, the California Fair Employment and Housing Act, as amended, and/or any other Federal,
state, local or foreign law (statutory, regulatory or otherwise) that may be legally waived and released; and (ii) any tort, contract
and/or quasi-contract law, including but not limited to claims of wrongful discharge, defamation, emotional distress, tortious
interference with contract, invasion of privacy, nonphysical injury, personal injury or sickness or any other harm. However, this
general release of claims excludes, and the Executive does not waive, release or discharge (i) any right to file an administrative
charge or complaint with the Equal Employment Opportunity Commission or other administrative agency; (ii) claims under state workers'
compensation or unemployment laws; or (iii) indemnification rights the Executive has against the Employer, and/or any other claims
that cannot be waived by law.

 

		(b)	Waiver of California Civil Code Section 1542

 

The Executive understands that he may later
discover Claims or facts that may be different than, or in addition to, those which the Executive now knows or believes to exist
with regards to the subject matter of this Agreement, and which, if known at the time of signing this release, may have materially
affected this Agreement or Executive's decision to enter into it. Nevertheless, the Releasors hereby waive any right or Claim that
might arise as a result of such different or additional Claims or facts. The Releasors have been made aware of, and understand,
the provisions of California Civil Code Section 1542 and hereby expressly waive any and all rights, benefits and protections of
the statute, which provides, "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."

 

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		(c)	Specific Release of ADEA Claims

 

In further consideration of the payments and
benefits provided to the Executive in this Agreement, the Releasors hereby irrevocably and unconditionally fully and forever waive,
release and discharge the Releasees from any and all Claims, whether known or unknown, from the beginning of time to the date of
the Executive's execution of this Agreement arising under the Age Discrimination in Employment Act (ADEA), as amended, and its
implementing regulations. By signing this Agreement, the Executive hereby acknowledges and confirms that: (i) the Executive has
read this Agreement in its entirety and understands all of its terms; (ii) the Executive has been advised of and has availed himself
of his right to consult with his attorney prior to executing this Agreement; (iii) the Executive knowingly, freely and voluntarily
assents to all of the terms and conditions set out in this Agreement including, without limitation, the waiver, release and covenants
contained herein; (iv) the Executive is executing this Agreement, including the waiver and release, in exchange for good and valuable
consideration in addition to anything of value to which he is otherwise entitled; (v) the Executive was given at least twenty-one
(21) days to consider the terms of this Agreement and consult with an attorney of his choice, although he may sign it sooner if
desired; (vi) the Executive understands that he has seven (7) days from the date he signs this Agreement to revoke the release
in this paragraph by delivering notice of revocation to Mark Turfler, Chief Financial Officer, at the Employer Group, by e-mail/fax/overnight
delivery before the end of such seven-day period; and (vii) the Executive understands that the release contained in this paragraph
does not apply to rights and claims that may arise after the date on which the Executive signs this Agreement.

 

This Agreement shall not become effective,
until the later of the Separation Date of the eighth (8th) day after the Executive and the Employer Group execute this Agreement.
Such date shall be the “Effective Date” of this Agreement. No payments due to the Executive hereunder shall be made
or begin before the Effective Date.

 

5.           Knowing and Voluntary Acknowledgement.
The Executive specifically agrees and acknowledges that: (i) the Executive has read this Agreement in its entirety and understands
all of its terms; (ii) the Executive has been advised of and has availed himself of his right to consult with his attorney prior
to executing this Agreement; (iii) the Executive knowingly, freely and voluntarily assents to all of its terms and conditions including,
without limitation, the waiver, release and covenants contained herein; (iv) the Executive is executing this Agreement, including
the waiver and release, in exchange for good and valuable consideration in addition to anything of value to which he is otherwise
entitled; (v) the Executive is not waiving or releasing rights or claims that may arise after his execution of this Agreement;
and (vi) the Executive understands that the waiver and release in this Agreement is being requested in connection with the cessation
of his employment with the Employer Group.

 

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6.           Post-termination Obligations and
Restrictive Covenants.

 

		(a)	Confidential Information

 

The Executive understands and acknowledges
that during the course of his employment by the Employer, he has had access to and learned about confidential, secret and proprietary
documents, materials and other information, in tangible and intangible form, of and relating to the Employer Group and its businesses
and existing and prospective customers, suppliers, other associated third parties ("Confidential Information").
The Executive further understands and acknowledges that this Confidential Information and the Employer's ability to reserve it
for the exclusive knowledge and use of the Employer Group is of great competitive importance and commercial value to the Employer,
and that improper use or disclosure of the Confidential Information by the Executive might cause the Employer to incur financial
costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties.

 

The Executive understands and agrees that
Confidential Information developed by him in the course of his employment by the Employer shall be subject to the terms and conditions
of this Agreement as if the Employer furnished the same Confidential Information to the Executive in the first instance. Confidential
Information shall not include information that is generally available to and known by the public at the time of disclosure to the
Executive, provided that such disclosure is through no direct or indirect fault of the Executive or person(s) acting on the Executive's
behalf.

 

		(b)	Disclosure and Use Restrictions

 

The Executive agrees and covenants: (i) to
treat all Confidential Information as strictly confidential; and (ii) not to directly or indirectly disclose, publish, communicate
or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or
part, to any entity or person whatsoever (including other employees of the Employer Group) not having a need to know and authority
to know and use the Confidential Information in connection with the business of the Employer Group and, in any event, not to anyone
outside of the direct employ of the Employer Group except as required in the performance of any of the Executive's remaining authorized
employment duties to the Employer. Nothing herein shall be construed to prevent disclosure of Confidential Information as may be
required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized
government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order.
The Executive shall promptly provide written notice of any such order to an authorized officer of the Employer Group.

 

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		(c)	Duration of Confidentiality Obligations

 

The Executive understands and acknowledges
that his obligations under this Agreement with regard to any particular Confidential Information shall commence immediately and
shall continue during and after his employment by the Employer until such time as such Confidential Information has become public
knowledge other than as a result of the Executive's breach of this Agreement or breach by those acting in concert with the Executive
or on the Executive's behalf.

 

		(d)	Non-Solicitation

 

The Executive agrees and covenants not to
disrupt or interfere with the business of Employer Group by directly or indirectly soliciting, recruiting, attempting to hire or
recruit, or raiding the employees of Employer Group or otherwise inducing the termination of employment of any employee of the
Employer Group for one year beginning on the Separation Date.

 

The Executive understands and acknowledges
that because of the Executive's experience with and relationship to the Employer Group, he has had access to and learned about
much or all of the Employer Group’s Confidential Information and trade secrets, including customer information. "Customer
Information" includes, but is not limited to, names, phone numbers, addresses, e-mail addresses, order history, order
preferences, chain of command, pricing information and other information identifying facts and circumstances specific to the customer
and relevant to sales.

 

The Executive agrees and covenants that
Executive will not use Customer Information or the Employer Group’s Confidential Information to directly or indirectly interrupt,
disturb or interfere with the relationships of the Employer Group with any customer, supplier, consultant, independent contractor
or other business partner, or to compete unfairly with the Employer Group.

 

7.           Non-disparagement. The Parties
agree and covenant that they shall not at any time make, publish or communicate to any person or entity or in any public forum
any defamatory or disparaging remarks, comments or statements concerning the other Party (and in the case of the Employer Group,
the Employer Group’s business, employees or officers), now or in the future.

 

8.           Remedies. In the event of a breach
or threatened breach by the Executive of any of the provisions of this Agreement, the Executive hereby consents and agrees that
the Employer shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable
relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any
actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other
security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other
available forms of relief.

 

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Should the Executive fail to abide by any
of the terms of this Agreement or post-termination obligations contained herein, the Employer may, in addition to any other remedies
it may have, reclaim any amounts paid to the Executive under the provisions of this Agreement or terminate any benefits or payments
that are later due under this Agreement, without waiving the releases provided herein.

 

9.           Successors and Assigns.

 

		(a)	Assignment by the Employer Group

 

The Employer Group may assign this Agreement
to any subsidiary or corporate affiliate, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or assets of the Employer. This Agreement shall inure to the benefit
of the Employer Group and permitted successors and assigns.

 

		(b)	No Assignment by the Executive

 

The Executive may not assign this Agreement
or any part hereof, it being understood that this Agreement is personal to Executive. Any purported assignment by the Executive
shall be null and void from the initial date of purported assignment.

 

10.         Arbitration. The parties agree
that any dispute, controversy or claim arising out of or related to the Executive's employment with the Employer/this Agreement
or any breach of this Agreement shall be submitted to and decided by binding arbitration before to a single arbitrator in San Diego,
California mutually agreeable to the parties before and shall be conducted pursuant to the provisions of Title 9 of the California
Code of Civil Procedure, excluding Chapter 5 of Title 9. In the context of a given dispute, the parties agree to submit
to the reasonable discretion of the arbitrator as to whether the parties shall have any rights to conduct written and/or oral discovery
and the scope and process for any such discovery. Reimbursement of all legal fees and costs shall be awarded to the prevailing
party or otherwise as the parties may mutually agree

 

This agreement to arbitrate is freely negotiated
between Executive and Employer and is mutually entered into between the parties. Both parties fully understand and agree that they
are giving up certain rights otherwise afforded to them by civil court actions, including but not limited to the right to a jury
trial.

 

11.         Governing Law: Jurisdiction and
Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of California without regard to conflicts-of-law
principles. Any action or proceeding by either of the Parties to enforce this Agreement shall be brought only in any state or federal
court located in San Diego, California.

 

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12.         Entire Agreement. Unless specifically
provided herein, this Agreement contains all the understandings and representations between the Executive and the Employer Group
pertaining to the termination of Executive’s employment and supersedes all prior and contemporaneous understandings, agreements,
representations and warranties, both written and oral, with respect to such subject matter. The Parties mutually agree that the
Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement.

 

13.         Modification and Waiver. No
provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed
by the Executive and the Employer. No waiver by either of the Parties of any breach by the other party hereto of any condition
or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar
provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the Parties
in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof
or the exercise of any other such right, power or privilege.

 

14.         Captions. Captions and headings
of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be
construed by reference to the caption or heading of any section or paragraph.

 

15.         Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one
and the same instrument.

 

16.         Nonadmission. Nothing in this
Agreement shall be construed as an admission of wrongdoing or liability on the part of the Executive of the Employer Group.

 

17.         Notices. All notices under this
Agreement must be given in writing by personal delivery/regular mail/receipted e-mail at the addresses indicated on the signature
page of this Agreement.

 

18.         Section 409A. This Agreement
is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A) or an exemption thereunder
and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement,
payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable
exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary
separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes
of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to
be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" under
Section 409A. Notwithstanding the foregoing, the Employer makes no representations that the payments and benefits provided under
this Agreement comply with Section 409A and in no event shall the Employer be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A.

 

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19.         Acknowledgment of Full Understanding.
THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE
ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING
THIS AGREEMENT.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the Execution Date above.

 

	 	RF INDUSTRIES, LTD.
	 	 	 
	 	By	/s/ Mark Turfler
	 	Name: 	Mark Turfler
	 	Title:   	Chief Financial Officer
	 	7610 Miramar Road, Bldg.

6000, San Diego,

California 92126

 

	JOHNNY WALKER	 
	 	 
	Signature: 	 /s/ Johnny Walker	 
	2217 Ravinia Dr.	 
	Arlington, Texas 76012	 

 

    	 	 9Exhibit

Exhibit 10.1

KIMBALL ELECTRONICS, INC.
NON-EMPLOYEE DIRECTORS 
STOCK COMPENSATION DEFERRAL PLAN

KIMBALL ELECTRONICS, INC.
 NON-EMPLOYEE DIRECTORS STOCK COMPENSATION DEFERRAL PLAN 

Kimball Electronics, Inc. hereby establishes a nonqualified deferred compensation plan for members of the Board of Directors who are not employees of the Company to be known as the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan.
The Plan is effective as of the Effective Date, and is entitled to be, and shall be administered as, an unfunded plan maintained for the purpose of providing deferred compensation for the Directors and, as such, is not an “employee benefit plan” within the meaning of the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE I.   GENERAL PROVISIONS.  
Section 1.1    Purpose.  The purpose of this Plan is to provide each Director with an opportunity to defer receipt of some or all of the shares of Common Stock payable as Fees as a means of saving for retirement or other purposes.  The obligations of the Company hereunder constitute a mere promise to make the payments provided for in this Plan.  No Director, his or her spouse or the estate of either of them shall have, by reason of this Plan, any right, title or interest of any kind in or to any property of the Company.  To the extent any Participant has a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.
Section 1.2    Definitions.  The following definitions shall be applicable throughout the Plan:
(a)    “Accounting Date” means the Business Day on which a calculation concerning a Participant’s Deferred Fee Stock Account is performed, or as otherwise defined by the Committee or the Company.
(b)    “Beneficiary” means the Participant’s estate.
(c)    “Board” or “Board of Directors” means the board of directors of the Company.
(d)    “Business Day” means a day on which the NASDAQ is open for trading activity.
(e)    “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated pursuant thereto.
(f)    “Committee” means the Compensation and Governance Committee of the Board or its designee.

(g)    “Common Stock” means the common stock, no par value per share, of the Company.  
(h)    “Company” means Kimball Electronics, Inc., an Indiana corporation, and any successor thereto.
(i)    “Corporate Human Resources” means the human resources department of the Company.
(j)    “Credit Date” means the date on which any Fees would otherwise have been paid to the Participant if such Fees were not Deferred Fees.
(k)    “Deferred Fee Stock Account” means the Company’s bookkeeping account (including subaccounts relating to each Fee Deferral Election by a Participant) for a Participant that is separately accounted for and to which Deferred Fees are credited with Stock Units attributable to the Participant’s hypothetical investment in Common Stock.
(l)    “Deferred Fees” mean the Fees elected by the Participant to be deferred pursuant to a Fee Deferral Election, and which are credited to the Participant’s Deferred Fee Stock Account.
(m)    “Designated Deferral Period” means the deferral period specified in a Fee Deferral Election, which deferral period shall specify the payment of shares of Common Stock shall be made or begin, within (or commencing within) sixty (60) days after Termination, in either a single lump sum or in three (3) substantially equal annual installments.
(n)    “Director” means any non-employee director of the Board. 
(o)    “Dividend Equivalent Amounts” means the amount of dividends or other distributions to shareholders of the Company that a Participant would have received had the Participant’s Stock Units been actual shares of Common Stock as of the date of a dividend or other distribution by the Company.
(p)    “Effective Date” means October 20, 2016, the effective date of the Plan.
(q)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(r)    “Fair Market Value” means the closing price of a share of Common Stock, as reported on the NASDAQ on the date and at the time designated by the Company.
(s)    “Fee Deferral Election” means a Participant’s delivery of a notice of election to defer payment of all or a portion of his or her Fees under the terms of the Plan.  Such Fee Deferral Elections shall be in the form prescribed by the Committee or the Company, comply with Code section 409A to the extent applicable, and be irrevocable except as otherwise provided in the Plan.
(t)    “Fees” mean the portion of a Director’s annual retainer fee payable to the Director in shares of Common Stock for service as a member of the Board.

(u)    “NASDAQ” means The NASDAQ Stock Market LLC.
(v)    “Participant” means a Director who elects to defer the payment of any Fees pursuant to a Fee Deferral Election.
(w)    “Personal Representative” means the person or persons who, upon the disability or incompetence of a Participant, have acquired on behalf of the Participant, by legal proceeding or otherwise, the right to receive the payments specified in this Plan.
(x)    “Plan” means this Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan as it now exists or may be hereafter amended.
(y)    “Plan Year” means each November 1 through October 31 fiscal year during the term of this Plan, with the first Plan Year commencing on the Effective Date.
(z)    “Secretary of the Treasury” or “Treasury” means the United States Department of Treasury.
(aa)    “Stock Units” means the hypothetical Common Stock share equivalents credited to a Participant’s Deferred Fee Stock Account pursuant to this Plan with one Stock Unit representing one share of Common Stock.
(bb)    “Termination” means retirement from the Board or termination of service as a Director for any other reason that constitutes a “separation from service” within the meaning of Code section 409A and the Treasury regulations and other guidance promulgated thereunder.
(cc)    “Unforeseeable Emergency” means a severe financial hardship of a Participant (that cannot be alleviated by compensation or reimbursement received insurance companies or otherwise as provided in Treasury Regulation Section 1.409A-3(i)(3)) because of (i) an illness or accident of the Participant, the Participant’s spouse or dependent (as defined in Code section 152(a)); (ii) a loss of the Participant’s property due to casualty; or (iii) such other similar extraordinary unforeseeable circumstances because of events beyond the control of the Participant.  Corporate Human Resources or its delegate shall determine whether a Participant has incurred an Unforeseeable Emergency.
Section 1.3    Shares; Adjustments In Event Of Changes In Capitalization.
(a)    Shares Authorized for Issuance.  There shall be reserved for issuance under the Plan one million (1,000,000) shares of Common Stock, subject to adjustment pursuant to subsection (b) below.  Such shares shall be authorized but unissued shares of Common Stock.
(b)    Adjustments in Certain Events.  In the event of any change in the outstanding Common Stock of the Company by reason of any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution to Common Stock shareholders other than ordinary cash dividends, the number or kind of shares that may be issued under the Plan shall be automatically adjusted so that the proportionate interest of the Directors 

shall be maintained as before the occurrence of such event.  Such adjustments shall be conclusive and binding for all purposes of the Plan.  
Section 1.4    Eligibility.  Each Director shall be eligible to participate in the Plan.
Section 1.5    Administration.  Full power and authority to construe, interpret and administer the Plan shall be vested in the Company and the Committee or one or more of their delegates.  Such power and authority includes, but is not limited to, establishing deferral terms and conditions and adopting modifications and amendments to procedures as may be deemed necessary or appropriate, including, without limitation, the ability to construe and interpret provisions of the Plan, make determinations regarding law and fact, reconcile any inconsistencies between provisions in the Plan or between provisions of the Plan and any other statement concerning the Plan, whether oral or written, supply any omissions to the Plan or any document associated with the Plan, and to correct any defect in the Plan or in any document associated with the Plan.  Decisions of the Company and the Committee (or their delegates) shall be final, conclusive and binding upon all parties.  Day-to-day administration of the Plan shall be the responsibility of Corporate Human Resources.  The administration of and all interpretations under the Plan shall be made consistent with all Code section 409A.
ARTICLE II.   DIRECTOR PARTICIPATION
Each Director may become a Participant by making a Fee Deferral Election to defer all or a portion of his or her Fees pursuant to Article III in lieu of currently receiving such Fees.
ARTICLE III.   DEFERRED FEE COMPENSATION
Section 3.1    Fee Deferral Elections. 
(a)    General.  Any Participant wishing to defer Fees under the Plan may elect to do so by completing and delivering a Fee Deferral Election on a form (which may be an online election form) prescribed by the Committee, the Company or Corporate Human Resources electing the Designated Deferral Period that includes the time and form of payment/distribution (lump sum or three (3) substantially equal annual installments commencing not later than sixty (60) days after Termination) of such amounts credited to the Participant’s Deferred Fee Stock Account.  An effective Fee Deferral Election to defer Fees shall be irrevocable and may not be revoked or modified except as otherwise determined by the Company or the Committee in a manner consistent with applicable law (including, without limitation, Code section 409A) or as stated herein.
(b)    Permissible Fee Deferral Election.  A Participant’s Fee Deferral Election to defer Fees may only be made before the beginning of the Plan Year in which the Fees will be earned, with one exception.  The exception applies to a Participant during his or her first year of eligibility to participate in the Plan.  In that event such a Participant may, if so offered by the Company or the Committee, elect to defer Fees for services performed after the Fee Deferral Election, provided that the Fee Deferral Election is made within thirty (30) days of the date the Participant first becomes 

eligible to participate in the Plan.  Each Fee Deferral Election to defer Fees will be treated as a separate election regarding the time and form of distribution.  A Fee Deferral Election shall be (i) in the form prescribed by the Committee or the Company, (ii) in accordance with such rules and procedures as may be established by the Committee or the Company, and (iii) deemed to have been made when the completed Fee Deferral Election is received and accepted by the Committee or the Company.
Section 3.2    Participant’s Deferred Fee Stock Account.  For each Participant who makes a Fee Deferral Election, there shall be established a Deferred Fee Stock Account to which there shall be credited any Deferred Fees as of each Credit Date.  The Deferred Fee Stock Account shall be credited on each Accounting Date with Stock Units equal to the number of shares of Common Stock (including fractions of a share) that could have been purchased with the amount of such Deferred Fees at the Fair Market Value on the Accounting Date.  As of the date of any Dividend Equivalent Amounts, the Participant’s Deferred Fee Stock Account shall be credited with additional Stock Units equal to the number of shares of Common Stock (including fractions of a share) that could have been purchased, at the Fair Market Value on such date, with the amount which would have been paid as Dividend Equivalent Amounts  on that number of shares (including fractions of a share) of Common Stock which is equal to the number of Stock Units then credited to the Participant’s Deferred Fee Stock Account.
Section 3.3    Early Payment/Distribution.
(a)    Unforeseeable Emergency.  A Participant or a Participant’s Personal Representative may submit an application for a payment/distribution from the Participant’s Deferred Fee Stock Account because of an Unforeseeable Emergency.  The amount of the payment/distribution shall not exceed the amount necessary to satisfy the needs of the Unforeseeable Emergency.  Such payment/distribution shall include an amount to pay taxes reasonably anticipated as a result of the payment/distribution.  The amount allowed as a payment/distribution under this Article III, Section 3.3(a) shall take into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensation from insurance or liquidation of the Participant’s assets (but only to the extent such liquidation would itself not cause a severe financial hardship).  The payment/distribution shall be made in a single sum and paid as soon as practicable (but not later than sixty (60) days) after the application for the payment/distribution on account of the Unforeseeable Emergency is approved.  The provisions of this Article III, Section 3.3(a) shall be interpreted and administered in accordance with applicable guidance that may be issued by the Treasury.
(b)    Prohibition on Acceleration.  Except as otherwise provided in the Plan and except as may be allowed in guidance from the Secretary of the Treasury, payments/distributions from a Participant’s Deferred Fee Stock Account may not be made earlier than the time such amounts would otherwise be paid/distributed pursuant to the terms of the Plan.  

Section 3.4    Payment/Distribution.  Deferred Fees credited to a Participant’s Deferred Fee Stock Account shall be paid/distributed in whole shares of Common Stock (with any fractional Stock Unit rounded up to a whole Stock Unit) pursuant to each Fee Deferral Election of a Participant. 
Payments of amounts deferred by Participants pursuant to valid Fee Deferral Elections and credited to Participants’ Deferred Fee Stock Accounts shall be paid (in a lump sum or installments) in accordance with such Fee Deferral Elections.  If a Participant dies prior to the payment of all amounts credited to the deceased Participant’s Deferred Fee Stock Account, the balance thereof shall be paid in whole shares of Common Stock to the Participant’s Beneficiary in a single lump sum within sixty (60) days following such Termination (provided that the Participant’s Beneficiary shall not designate (directly or indirectly) the calendar year of payment if such sixty (60) day period begins in one calendar year and ends in the next calendar year).  
ARTICLE IV.   MISCELLANEOUS PROVISIONS
Section 4.1    Inalienability; Unfunded Plan.  The interests of a Participant and his or her Beneficiary under the Plan may not in any way be voluntarily or involuntarily transferred, alienated or assigned by a Participant or a Participant’s Beneficiary, nor be subject to attachment, execution, garnishment or other such equitable or legal process.
The Plan at all times shall be unfunded; and no provision shall be made at any time with respect to segregating assets of any Participant for the payment of any amounts hereunder.  The Plan constitutes a mere promise of the Company to make payments to Participants (and, to the extent applicable, Participants’ Beneficiaries) in the future.  Participants and their Beneficiaries have rights only as unsecured general creditors of the Company.
Section 4.2    Governing Law.  The provisions of this Plan shall be interpreted and construed in accordance with the laws of the State of Indiana.
Section 4.3    Amendment and Termination.  The Committee may amend, alter or terminate this Plan at any time; provided, however, that the Committee may not, without approval by the Board:
(a)    materially increase the number of shares of Common Stock that may be issued under the Plan (except as provided in Article I, Section 1.3),
(b)    materially modify the requirements as to eligibility for participation in the Plan, or
(c)    otherwise materially increase the benefits accruing to Participants under the Plan.
Section 4.4    Compliance with Rule 16b-3.  It is the intention of the Company that the Plan comply in all respects with Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and that Participants remain non-employee Directors for purposes of administering other employee benefit plans of the Company and having such other plans be exempt from Section 16(b) of the 

Exchange Act.  Therefore, if any Plan provision is found not to be in compliance with Rule 16b-3 or if any Plan provision would disqualify Participants from remaining non-employee Directors, that provision shall be deemed amended so that the Plan does so comply and the Participants remain non-employee Directors, to the extent permitted by law and deemed advisable by the Committee, and in all events the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3.
Section 4.5    Compliance with 409A.  It is the intention of the Company and the Committee that the Plan be administered in compliance with Code section 409A and the applicable guidance issued thereunder by the Secretary of the Treasury.  Any provision that is found to be inconsistent with Code section 409A or the applicable guidance issued thereunder by the Secretary of the Treasury shall be reformed and applied by the Company in a manner consistent with applicable law, as determined by the Company.
No representation is made to any Participant with respect to the tax or securities aspects or implications of the Plan; and Participants should consult with their own tax, financial and legal advisors with respect to their participation in the Plan.  Neither the Company, nor any member of the Board, the Committee or Corporate Human Resources shall have any liability to any person in the event Code section 409A applies to any Account or payment under the Plan in a manner that results in adverse tax consequences for the Participant or his or her Beneficiary.
IN WITNESS WHEREOF, this the Plan is executed by Kimball Electronics, Inc. this 20th day of October, 2016.

    	
		
	KIMBALL ELECTRONICS, INC.

	 
	 

	By:
	/s/ Donald D. Charron

	Title:
	DONALD D. CHARRON
Chairman of the Board and CEO

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