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| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
(1) | Title of each class of securities to which transaction applies: | ||
(2) | Aggregate number of securities to which transaction applies: | ||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | ||
| $_____ per share as determined under Rule 0-11 under the Exchange Act. | |||
(4) | Proposed maximum aggregate value of transaction: | ||
(5) | Total fee paid: | ||
| Fee paid previously with preliminary materials. | ||
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| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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(2) | Form, Schedule or Registration Statement No.: | |
(3) | Filing Party: | |
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Forward Industries, Inc.477 Rosemary Avenue
700 Veterans Memorial Highway, Suite 219West Palm Beach, Florida 33401(561) 465-0030
100
Hauppauge, New York 11788
_________________________
To The Shareholders of Forward Industries, Inc.:
We are pleased to invite you to attend the 20182023 Annual Meeting of the shareholdersShareholders of Forward Industries, Inc., (the “Annual Meeting”) which will be held at 10:00 a.m. on February 13, 201814, 2023, at the offices of CohnReznick, 1301 Avenue of the Americas, Seventh Floor, in New York, New York, for the following purposes:
1. To elect members to our Board of Directors;
2. To ratify and approve the amendment to increase the number of shares available under the 2011 Long Term Incentive Plan by 1,000,000 shares;
3. To ratify the appointment of our independent registered public accounting firm for fiscal year 2018; and
4. For the transaction of such other matters as may properly come beforeYork. At the Annual Meeting.Meeting, our shareholders will be asked:
Forward’s
| 1. | To elect four members to our Board of Directors. |
| 2. | To ratify the appointment of our independent registered public accounting firm for fiscal year 2023. |
| 3. | To approve, on an advisory basis, the compensation paid to the Company’s named executive officers. |
| 4. | For the transaction of such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Shareholders of Directors has fixedrecord as of the close of business on December 22, 2017 as the record date for a determination of shareholders19, 2022 are entitled to notice of, and to vote at thisthe annual meeting and any postponement or adjournment thereof. Please see pages 1-2 for additional information regarding accessing the Annual Meeting and how to vote your shares. You do not need to attend the meeting to vote your shares.
Your vote is important. Please vote your proxy promptly to ensure your shares are properly represented, even if you plan to join the annual meeting. You can vote by Internet, by telephone, or any adjournment thereof.by using the enclosed proxy card.
We appreciate your continued confidence in our Company and look forward to your joining us on February 14, 2023.
By the Order of the Board of Directors
/s/ Terence Wise
Terence Wise
Chief Executive Officer
Dated: December 19, 2022
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on February 13, 2018:14, 2023: This Proxy Statement and Form 10-K are available at: https://www.proxyvote.com
If You Plan to Attend
Please note that space limitations make it necessary to limit attendance to shareholders. Registration and seating will begin at 9:00 a.m. Shares can be voted at the meeting only if the holder is present in person or by valid proxy.
For admission to the meeting, each shareholder may be asked to present valid picture identification, such as a driver’s license or passport, and proof of stock ownership as of the record date, such as the enclosed proxy card or a brokerage statement reflecting stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the meeting.
If you do not plan on attending the meeting, please vote your shares via the Internet, by phone or by signing and dating the enclosed proxy and return it in the business envelope provided. Your vote is very important.
REVIEW THE PROXY STATEMENT AND VOTE IN FOUR WAYS:
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VIA THE INTERNET IN ADVANCE Visit www.proxyvote.com. |
| BY MAIL Sign, date, and return the enclosed proxy card or voting instruction form. | |||
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BY TELEPHONE Call the telephone number on your proxy card or voting instruction form. | ||||||
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Attend the annual meeting virtually. See page 1 for additional details on how to attend. |
Dated: December 28, 2017
Whether or not you expect to attend in person, we urge you to vote your shares at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares via the Internet, by phone or by signing, dating, and returning the enclosed proxy card will save us the expenses and extra work of additional solicitation. An addressed envelope for which no postage is required if mailed in the United States is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important, so please act today!
Forward Industries, Inc.
700 Veterans Memorial Highway, Suite 100
Hauppauge, New York 11788
(631) 547-3041
Forward Industries, Inc.477 Rosemary AvenueSuite 219West Palm Beach, Florida 33401(561) 465-0030
20182023 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
Why am I receiving these materials?
These proxy materials are being sent to the holders of shares of the voting stock of Forward Industries, Inc., which we refer to as “Forward” or the “Company,” in connection with the solicitation of proxies by our Board of Directors, which we refer to as the “Board,” for use at the 20182023 Annual Meeting of Shareholders to be held at 10:00 a.m. on February 13, 201814, 2023 at 1301 Avenue of the Americas, Seventh Floor, in New York. The proxy materials relating to the Annual Meeting are first being mailed to shareholders entitled to vote at the meeting on or about December 28, 2017.20, 2022. A copy of our Form 10-K for the year ended September 30, 20172022 is being mailed concurrently with this Proxy Statement.
Who is Entitled to Vote?
Our Board has fixed the close of business on December 22, 201719, 2022 as the record date for a determination of shareholders entitled to notice of, and to vote at, this Annual Meeting or any adjournment thereof. On the record date, there were 8,970,83010,061,185 shares of common stock outstanding. Each share of Forward common stock represents one vote that may be voted on each matter that may come before the Annual Meeting. As of the record date, Forward has no outstanding preferred stock.
What is the difference between holding shares as a record holder and as a beneficial owner?
If your shares are registered in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are the “record holder” of those shares. If you are a record holder, these proxy materials have been provided directly to you by Forward.
If your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, these proxy materials have been forwarded to you by that organization. As the beneficial owner, you have the right to instruct thisthat organization on how to vote your shares.
Who May Attend the Meeting?
Record holders and beneficial owners may attend the Annual Meeting. If youryou are the beneficial owner of shares are held in street name, you will needshould refer to bring a copy of athe voting instructions provided by your brokerage statementfirm, bank, or other documentation reflecting your stock ownership asholder of record. Beneficial owners may also attend and vote online during the record date. Please see below for instructions on howannual meeting. We encourage you to vote atyour proxy by Internet, by phone or by mail prior to the meeting, even if you plan to attend the Annual Meeting if your shares are held in street name.
How Do I Vote?Meeting.
Record Holder
1.Vote by Internet. The website address for Internet voting is on your proxy card.2.Vote by phone. Call 1 (800) 690-6903 and follow the instructions on your proxy card.3.Vote by mail. Mark, date, sign and mail promptly the enclosed proxy card (a postage-paid envelope is provided for mailing in the United States).4.Vote in person. Attend and vote at the Annual Meeting.
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How Do I Vote?
Record Holder
| 1. | Vote by Internet. The website address for Internet voting is on your proxy card. |
| 2. | Vote by phone. Call 1 (800) 690-6903 and follow the instructions. |
| 3. | Vote by mail. Mark, date, sign and promptly mail the enclosed proxy card (a postage-paid envelope is provided for mailing in the United States). |
| 4. | Vote in person. Attend and Vote at the Annual Meeting. |
If you vote by Internet or phone, please DO NOT mail your proxy card.
Beneficial Owner (Holding Shares in Street Name)
1.Vote by Internet. The website address for Internet voting is on your vote instruction form.2.Vote by mail. Mark, date, sign and mail promptly the enclosed vote instruction form (a postage-paid envelope is provided for mailing in the United States).3.Vote in person. Obtain a valid legal proxy from the organization that holds your shares and attend and vote at the Annual Meeting.
| 1. | Vote by Internet. The website address for Internet voting is on your voting instruction form. |
| 2. | Vote by phone. Call 1 (800) 690-6903 and follow the instructions. |
| 3. | Vote by mail. Mark, date, sign and promptly mail the enclosed voting instruction form (a postage-paid envelope is provided for mailing in the United States). |
| 4. | Vote in person. Obtain a valid proxy from the organization that holds your shares and attend and vote at the Annual Meeting. |
What Constitutes a Quorum?
To carry on the business of the Annual Meeting, we must have a quorum. A quorum is present when a majority of the shares entitled to vote, as of the record date, are present in person or represented by proxy. Shares owned by Forward are not considered outstanding or considered to be present at the Annual Meeting. Broker non-votes (because there are routine matters presented at the Annual Meeting) and abstentions are counted as present for the purpose of determining the existence of a quorum.
What happens if Forward is unable to obtain a Quorum?
If a quorum is not present to transact business at the Annual Meeting or if we do not receive sufficient votes in favor of the proposals by the date of the Annual Meeting, the persons named as proxies may propose one or more adjournments of the Annual Meeting to permit solicitation of proxies.
What is a broker non-vote?
If your shares are held in street name, you must instruct the organization who holds your shares how to vote your shares. If you
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What happens if I do not providegive specific voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker non-vote.” Broker non-votes do not count as a vote “FOR” or “AGAINST” any of the proposals.instructions?
Record Holder. If you are thea shareholder of record and you indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board, or you sign, date and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares will be voted in accordance with the manner recommended by our Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented forBoard’s recommendations.
Beneficial Owners. If you are a vote at the meeting. If yourbeneficial owner of shares are held in street name and you do not provide specific voting instructions to the organization that holds your shares with specific voting instructions, the organization that holds your shares may generally vote at its discretion on routine matters but notcannot vote on non-routine matters. If you signthe organization that holds your vote instruction form but doshares does not providereceive instructions from you on how your broker should vote, your broker willto vote your shares on a non-routine matter, the organization will not have the authority to vote your shares on that proposal. This is generally referred to as recommended by our Boarda “broker non-vote.” In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any non-routine matter. Seematter being voted on at the note below and the following question and answer.meeting.
Important Rule Affecting Beneficial Owners Holding Shares In Street Name
Brokers may no longer use discretionary authority to vote shares on the election of directors. Please submit your votevoting instruction form so your vote is counted.
Which Proposals are Considered “Routine” or “Non-Routine”?
Proposal 2 is considered routine, and Proposals 1 and 23 are considered non-routine. A broker or other nominee cannot vote without instructions on non-routine matters, and, Proposal 3 is routine.therefore, there may be broker non-votes on Proposals 1 and 3.
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How are abstentions treated?
Abstentions have the same effect as a vote “Against” for Proposals 2 and 3. Abstentions have no effect on the outcome of any matter being voted on.
Proposal 1.
How Many Votes are Needed for Each Proposal to Pass is Broker Discretionary Voting Allowed and what is the effect of an abstention?a Broker Non-Vote and Abstention?
Proposals | Vote Required |
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| Effect of Abstentions (1) |
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| Plurality, which means that the | No. However, broker non-votes have no effect on this proposal. | No effect | |
| Ratification of Independent Registered Public Accounting Firm | Majority of the sharespresent in person orrepresented by proxy at the meeting and entitled to vote | Yes. |
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| Majority of the sharespresent in person orrepresented by proxy at the meeting and entitled to vote |
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| (1) | “Withhold” for Proposal 1. If you “withhold” authority to vote with respect to one or more director nominees, your vote will have no effect on the election of such nominees. |
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What Are the Voting Procedures?
In voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all nominees, or withhold your votes as to specific nominees. With regard to the remaining proposals, you may vote in favor of each proposal or against each proposal, or in favor of some proposals and against others, or you may abstain from voting on any of these proposals. You should specify your respective choices on the accompanying proxy card or your votevoting instruction form.
Is My Proxy Revocable?
Record Holder. You may revoke your proxy and reclaim your right to vote up to and including the day of the Annual Meeting by giving written notice to the Corporate Secretary of Forward, by delivering a proxy card dated after the date of the proxy or by voting in person atduring the Annual Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed to: Forward Industries, Inc., 477 S. Rosemary Avenue,700 Veterans Memorial Highway, Suite 219, West Palm Beach, Florida 33401,100, Hauppauge, New York 11788, Attention: Corporate Secretary.
Beneficial Owners. If you are the beneficial owner of shares held in street name, you must follow the instructions provided by your broker, bank, or other holder of record for changing or revoking your proxy. Beneficial owners, other than plan participants as outlined below, may also attend and vote online during the annual meeting, which will replace any previous votes.
Who is Paying for the Expenses Involved in Preparing and Mailing this Proxy Statement?
All of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid by Forward. In addition to the solicitation by mail, proxies may be solicited by our officers and regular employees by telephone or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of record by such persons of record, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in so doing. We may hire an independent proxy solicitation firm.
What Happens if Additional Matters are Presented at the Annual Meeting?
Other than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you submit a signed proxy card, the persons named as proxy holders, Messrs. Terence Wise and Michael Matte,Anthony Camarda, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any reason any of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.
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What is “householding” and how does it affect me?
Record holders who have the same address and last name will receive only one copy of their proxy materials, unless we are notified that one or more of these record holders wishes to continue receiving individual copies. This procedure will reduce our printing costs and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards.
If you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of these proxy materials, or if you hold Forward stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please contact our Corporate Secretary at: Forward Industries, Inc., 477 Rosemary Avenue,700 Veterans Memorial Highway, Suite 219, West Palm Beach, Florida 33401, (561) 565-0030.100, Hauppauge, New York 11788 or (631) 547-3041.
If you participate in householding and wish to receive a separate copy of these proxy materials, or if you do not wish to continue to participate in householding and prefer to receive separate copies of these documents in the future, please contact our Corporate Secretary as indicated above. Beneficial owners can request information about householding from their brokers, banks or other holders of record.
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Do I Have Dissenters’ (Appraisal) Rights?
Appraisal rights are not available to Forward shareholders with any of the proposals brought before the Annual Meeting.
Can a Shareholder Present a Proposal To Be Considered At the 2018Next Annual Meeting?
If you wish to submit a proposal to be considered at the 20192024 Annual Meeting (“20192024 Meeting”), the following is required:
For a shareholder proposal to be considered for inclusion in Forward’s Proxy Statementand proxy card for the 2019 Meeting pursuant to Rule 14a-8 under the SecuritiesExchange Act of 1934, which we refer to as the “Exchange Act,” our Corporate Secretarymust receive the written proposal no later than August 29, 2018, which is 120calendar days prior to the anniversary date Forward’s Proxy Statement was mailed toshareholders in connection with this Annual Meeting. Such proposals also must complywith SEC regulations under Rule 14a-8 regarding the inclusion of shareholder proposalsin company sponsored materials.Our Bylaws include advance notice provisions that require shareholders desiring torecommend or nominate individuals to the Board or who wish to present a proposal at the2019 Meeting must do so in accordance with the terms of the advance notice provisions. For a shareholder proposal or a nomination that is not intended to be included inForward’s Proxy Statement and proxy card under Rule 14a-8, our Corporate Secretarymust receive the written proposal no later than 120 calendar days nor more than 150calendar days prior to the first anniversary of this years Annual Meeting; Provided,however, that in the event that the 2019 Meeting is changed more than 30 days before orafter such anniversary date, the proposal must be received no earlier than the close ofbusiness on the 120th day prior to the 2019 Meeting and not later than the 90th date priorto the 2019 Meeting or the 10th day following the day on which public announcement ofthe date of such meeting is first made by the Company. If a shareholder fails to meetthese deadlines and fails to satisfy the requirements of Rule 14a-8 under the ExchangeAct, we may exercise discretionary voting authority under proxies we solicit to vote onany such proposal as we determine appropriate. Your notice must contain the specificinformation set forth in our Bylaws.Additionally, you must be a record holder at the time you deliver your notice to theCorporate Secretary and are entitled to vote at the 2019 Meeting.
| · | For a shareholder proposal to be considered for inclusion in Forward’s Proxy Statement and proxy card for the 2024 Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, which we refer to as the “Exchange Act,” our Corporate Secretary must receive the written proposal no later than August 21, 2023, which is 120 calendar days prior to the one year anniversary date Forward’s Proxy Statement was mailed to shareholders in connection with this Annual Meeting. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of shareholder proposals in company sponsored materials. |
| · | Our Bylaws include advance notice provisions that require shareholders desiring to recommend or nominate individuals to the Board or who wish to present a proposal at the 2024 Meeting must do so in accordance with the terms of the advance notice provisions. For a shareholder proposal or a nomination that is not intended to be included in Forward’s Proxy Statement and proxy card under Rule 14a-8, our Corporate Secretary must receive the written proposal no later than 120 calendar days nor more than 150 calendar days prior to the first anniversary of this year’s Annual Meeting; Provided, however, that in the event that the 2024 Meeting is changed more than 30 days before or after such anniversary date, the proposal must be received no earlier than the close of business on the 120th day prior to the 2024 Meeting and not later than the 90th date prior to the Meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. If a shareholder fails to meet these deadlines and fails to satisfy the requirements of Rule 14a-8 under the Exchange Act, we may exercise discretionary voting authority under proxies we solicit to vote on any such proposal as we determine appropriate. Your notice must contain the specific information set forth in our Bylaws. |
| · | Additionally, you must be a record holder at the time you deliver your notice to the Corporate Secretary and are entitled to vote at the 2024 Meeting and meet the ownership requirements contained in Section 208 of our Bylaws. |
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A nomination or other proposal will be disregarded if it does not comply with the above procedures. All proposals and nominations should be sent to Forward Industries, Inc., 477 S. Rosemary Avenue,700 Veterans Memorial Highway, Suite 219, West Palm Beach, Florida 33401,100, Hauppauge, New York 11788, Attention: Corporate Secretary.
We reserve the right to amend our Bylaws and any change will apply to the 20192024 Meeting unless otherwise specified in the amendment.
Interest of Officers and Directors in Matters to Be Acted Upon
Except in the election to our board of nominees set forth herein, none of the officers or directors have any interest in any of the matters to be acted upon at the Annual Meeting.
YOUR VOTE IS IMPORTANT
Please vote your proxy promptly so your shares can be represented, even if you plan to attend the Annual Meeting. You can vote by Internet, by telephone, or by using the enclosed proxy card.
Our proxy tabulator, Broadridge Financial Solutions, must receive any proxy that will not be voted at the Annual Meeting by 11:59 p.m. New York time on February 13, 2023.
The Board unanimously recommends that shareholders vote “For” the election to the Board of each of the nominees in Proposal 1, and “For” Proposals 2 and 3.
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PROPOSAL 1. ELECTION OF DIRECTORS
We currently have four
Forward’s shareholders elect the Board members annually, and all of our Board, all of whose terms will expirecurrent directors were elected by our shareholders to serve for a term expiring at this Annual Meeting.
The Board proposes and recommends the election of the following nominees as directors:
James Frost
Howard Morgan
Sangita Shah
Sharon Hrynkow
Terence Wise
James Ziglar
All of the nominees listed above is currently a director of Forward, have been nominated for election this year and have agreed to serve if elected. The four persons who receive the most votes cast will be elected and will serve as directors until the next Annual Meeting. If a nominee becomes unavailable for election before this Annual Meeting, the Board can name a substitute nominee and proxies will be voted for such substitute nominee unless an instruction to the contrary is written on the proxy card. Furthermore, we may appoint an additional person to our Board before the Annual Meeting. The principal occupation and certain other information about the nominees and our executive officers are set forth on the following pages.
The Board recommends a vote “For” the election of the nominated slate of directors.
DIRECTORS AND EXECUTIVE OFFICERS
The following table represents our Board as of the record date (all of which are Board nominees).
| Name | Age | Appointed |
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| Sharon Hrynkow | 62 | February 2022 |
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Director Nominee Biographies
Nominee Biographies
Howard Morgan. Mr. Morgan has been the Managing Director of The Justwise Group Limited (“Justwise”), a company that specializes in the procurement of consumer durable products from Asia and is an established supplier to a list of major U.K. multi-channel retailers, since 1997. Since 2013, Mr. Morgan has served as the Chief Executive Officer and a board member of EuroFresh Ltd., a wholesale distributor of fresh produce in the United Kingdom and Europe. Mr. Morgan was selected as a director as a result of his significant business management and operational skills as well as his knowledge of foreign sourcing and developing products for large multiple organizations.
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James Frost. Mr. Frost has been the Principal of Frost Chaddock Developers, LLC, a real estate investment firm, since 1995. Mr. Frost was selected as director for his relationships and contacts that may help Forward generate business and he is independent.
Sangita Shah. Ms. Shah currently serves as director and owner of Odyssean Enterprises Limited, a private advisory and investment company, in addition to serving as non-executive chairman of Bilby PLC and as a directornon-executive chairman of Swindon Town Football Club.RA International PLC. Ms. Shah is also a board advisor to Global Reach Technology, a Fast Track WiFi SME, and a non-executive director for Zypha Technologies Inc.company. Ms. Shah previously worked in seed/mezzanine financing and strategic investments within the environmental and technology sectors following a number of senior roles held at KPMG and Ernst & Young. Ms. Shah was selected as a director for her board and accounting experience, and she also serves as our Lead Director.
Sharon Hrynkow. Dr. Sharon Hrynkow, a neuroscientist by training, is Founder and Managing Partner of Global Health Consulting, LLC, an advisory group assisting clients on federal funding opportunities and strategies to grow biomedical companies. Until recently, she served as Chief Scientific Officer and Senior VP for Medical Affairs at Cyclo Therapeutics (Nasdaq: CYTH) where she launched and led its drug development programs (2015 to 2022). Prior appointments include a range of senior executive positions in global health and global science at the National Institutes of Health and Department of State (1992 – 2012) and as inaugural president of the Global Virus Network, a non-profit group working to combat the spread of viral disease (2012 – 2015). Dr. Hrynkow currently serves on two company boards, Forward Industries (Nasdaq: FORD) and CTIS, Inc., a privately held health informatics company. Dr. Hrynkow is an elected member of the Council on Foreign Relations and an elected Fellow of the American Association for the Advancement of Science. She advises a range of non-profit organizations on science and health matters, and she served as a presidential appointee on the President’s Council of Advisors on Science and Technology. Dr. Hrynkow was selected as a director for her organizational leadership and management experience as well as her global scientific networking experience.
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Terence Wise. Mr. Wise serves as principal and Chairman of The Justwise Group Limited (“Justwise”) which he founded in 1977. Mr. Wise also serves as a principal and owner of Forward Industries Asia-Pacific Corporation (f/k/a Seaton Global Corporation) (“Forward China”), a buying and supplier agent in the Asia-Pacific region and has significant shareholdings in two furniture manufacturing plants in China. See the section titled “Related Person Transactions” below. Mr. Wise was selected as a director for his extensive experience in the Asian markets.
James Ziglar. Mr. Ziglar has over 50 years of experience in law, finance, management, and public policy. Since 2009, Mr. Ziglar has served as Senior Counsel to the law firm of Van Ness Feldman LLP, advising clients on a broad range of business and public policy issues. From 2005 until 2008, Mr. Ziglar was the President and Chief Executive Officer of Cross Match Technologies, Inc., a leading provider of biometric technologies. Mr. Ziglar has 18 years of experience in investment banking and before joining Cross Match Technologies in 2005, Mr. Ziglar was a Managing Director and Chief Business Strategist at UBS Financial Services, Inc. in New York. Mr. Ziglar serves on the Board of Integrated Biometrics, Inc., and has had extensive experience in the U.S. government, having served as a Law Clerk to Supreme Court Justice Harry Blackmun, as Assistant Secretary of the Interior, as Commissioner of the Immigration and Naturalization Service, and as Sergeant at Arms of the U.S. Senate. Mr. Ziglar was chosen as a director for his experience and expertise in management, business, legal, and policy and regulatory related issues.
Executive Officers of Forward Industries, Inc.
| Age | Position | Appointed |
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Terence Wise |
| Chief Executive Officer | July 2015 |
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| Chief Financial Officer | June |
See above for Mr. Terence Wise’s biography.
Michael Matte. Anthony Camarda. Mr. MatteCamarda has served as Chief Financial Officer of Forward since June 2015.2020. Prior to his appointment, Mr. Camarda served as Executive Accounting Support at Drive DeVilbiss Healthcare, a home healthcare company, where he provided accounting and business strategy services. From MayOctober 2013 until March 2014,August 2019, Mr. MatteCamarda served in various leadership positions at The Nature’s Bounty Co., a manufacturer and seller of health and wellness products, including Vice President of Financial Planning and Analysis, where he assisted with supply chain operations strategy. Mr. Camarda is a Certified Public Accountant (New York).
Executive Officers of Subsidiaries
| Name | Age | Current Position | Appointed |
| Paul Severino | 62 | President of IPS | 2022 |
| Tom KraMer | 56 | Chief Executive Officer of Kablooe, Inc. | 2020 |
| Robert Wild | 52 | Chief Operating Officer of IPS | 2022 |
Paul Severino. Mr. Severino served as the Chief Financial Officer and Chief AccountingOperating Officer of Aspen Group,Intelligent Product Solutions, Inc., an online distance-learning education service (“IPS”) since co-founding it in the United States.2007 until January 1, 2022 when he was appointed President of IPS.
Tom KraMer. Mr. Matte alsoKraMer has served as anthe Chief Executive Officer of Kablooe, Inc. since the Company’s acquisition of the assets of Kablooe Design, Inc. in 2020. Prior to that, Mr. KraMer served as the Chief Executive Officer of Kablooe Design, Inc. since its formation in 1993.
Robert Wild. Mr. Wild has served as the Chief Operating Officer of IPS since January 1, 2022. Prior to that Mr. Wild served as the Senior Vice President of Finance and Chief Financial Officer of MeetMe, Inc., a social discovery website, from October 2007 to March 2013.IPS.
There are no family relationships between any of the executive officers and directors. Our Bylaws require that each director is elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his or her successor is elected and qualified.elected. See the section titled “Related Person Transactions”.
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Board Responsibilities
Board Responsibilities
The Board oversees, counsels, and directs management in the long-term interest of Forward and its shareholders. The Board’s responsibilities include establishing broad corporate policies and reviewing the overall performance of Forward. The Board is not, however, involved in the operating details on a day-to-day basis.
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Board Committees and Charters
The Board delegates various responsibilities and authority to different Board committees (“Board Committees”). The Board and its Committeesthe Board’s committees (“Committees”) meet throughout the year and act by written consent from time-to-time as appropriate. The Board delegates various responsibilities and authority to different Board Committees. Committees regularly report on their activities and actions to the Board.
The Board currently has and appoints the members of:of the Audit and Risk Committee (the “Audit Committee”), the Compensation Committee and the Nominating and Corporate Governance Committee. Each of thethese Committees has a written charter which may be accessed through Forward’s website at: http:https://www.forwardindustries.com/corporate-governance.html.investors/governance/.
The following table identifies the independent and non-independent Board nominees and committeeCommittee members:
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| Nominating and |
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| Corporate |
Name | Independent | Audit | Compensation | Governance |
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James Frost | Yes | ✓ | ✓ | ✓ |
Howard Morgan | Yes | ✓ |
| Chair |
Sangita Shah | Yes | Chair | ✓ |
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Terence Wise | No |
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Number of Meetings |
| 4 | 2 | 3 |
| Name | Independent | Audit and Risk | Compensation | Nominating and Governance | ||||||
| Sangita Shah | × | Chair | × | × | ||||||
| Sharon Hrynkow | × | × | Chair | × | ||||||
| Terence Wise | ||||||||||
| James Ziglar | × | × | × | Chair | ||||||
| Number of Meetings Held | 4 | 2 | 2 |
There were fivefour Board meetings held in fiscal 2017.2022. All of the directors attended over 75% of the applicable Board and Committee meetings held in fiscal 2017.2022. The Company does not have a policy regarding Board members attending annual meetings.
Director Independence
Our Board has determined that James Frost, Howard Morgan and Sangita Shah, Sharon Hrynkow, and James Ziglar are independent in accordance with standards under the Nasdaq Listing Rules. Our Board determined that as a result of being employed as an executive officer and the transactions described on page 11, Mr. Wise was not independent under the Nasdaq Listing Rules.
Our Board has also determined that James Frost, Howard Morgan and Sangita Shah, Sharon Hrynkow and James Ziglar are independent under the Nasdaq Listing Rules independence standards for Audit Committee members and Compensation Committee members.
| 8 |
Committees of the Board of Directors
Audit Committee
Audit Committee
The Audit Committee reviews our financial reporting process on behalf of the Board and administers our engagement of the independent registered public accounting firm. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of its examinations, the evaluations of our internal controls, and the overall quality of our financial reporting. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls.
Audit Committee Financial Expert
Our Board has determined that Ms. Shah is qualified as an Audit Committee Financial Expert, as that term is defined by the rules of the SECSecurities and Exchange Commission (the “SEC”) and in compliance with the Sarbanes-Oxley Act of 2002.
7
Compensation Committee
The function of the Compensation Committee is to determinemake recommendations to the Board concerning Board and committee compensation. The Compensation Committee is also responsible for oversight of our overall compensation plans and benefit programs, as well as the approval of all employment, severance and change of control agreements and plans applicable to our executive officers. The Compensation Committee has the power to set performance targetsis also responsible for determining periodic bonuses payable tothe compensation of and compensation structure for all of the Company’s executive officers and may review and make recommendations with respect to shareholder proposals related to compensation matters. Additionally, theofficers. The Compensation Committee is responsible for administering the Company’s equity incentive plans. reviews and approves equity-based compensation grants to our officers, directors, employees and consultants.
Nominating and Corporate Governance Committee
The responsibilities of the Nominating and Governance Committee include the identification of individuals qualified to become Board members, establishing the procedures for the nomination process and the selection of nominees to stand for election as directors, the oversight of the selection and composition of committees of the Board, establish procedures for the nomination process including procedures, oversight of possible conflicts of interests involving the Board and its members, developdeveloping policies and procedures for related party transactions, developdeveloping corporate governance principles, and the oversight of the evaluations of the Board and management.management specifically with respect to Corporate Governance. The Nominating and Governance Committee has not established a policy with regard to the consideration of any candidates recommended by shareholders. If we receive any shareholder recommended nominations, the Nominating and Governance Committee will carefully review the recommendation(s) and consider such recommendation(s) in good faith.
Board Diversity
While we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type and length of business experience of our board members, as well as a particular nominee’s contribution to that mix. Although there are many other factors, the boardBoard seeks individuals with experience in the sourcing industry and Asian markets, sales and marketing, legal and accounting skills and board experience. The Board and the Nominating and Governance Committee also seek individuals with diversity of race, ethnicity and gender. Please refer to our Board Diversity Matrix which may be accessed on our website at https://forwardindustries.com/investors/governance.
| 9 |
Board Leadership Structure
Our Board has determined that its current structure, with combined Chairman and Chief Executive Officer roles and an independent Lead Director (Sangita Shah), is in the best interests of Forward and its shareholders at this time. A number of factors support the leadership structure chosen by the Board, including, among others:
The Chief Executive Officer is intimately involved in the day-to-day operations ofForward and is best positioned to elevate the most critical business issues forconsideration by the Board.
8
The Board believes that having the Chief Executive Officer serve in both capacitiesallows him to more effectively execute Forward’s strategic initiatives and business plansand confront its challenges. A combined Chairman and Chief Executive Officer structure provides us with decisiveand effective leadership with clearer accountability to our shareholders. The combined role is both counterbalanced and enhanced by the effective oversight andindependence of our Board and the independent leadership provided by our Lead Director. The Board believes that the appointment of a strong independent Lead Director and theuse of regular executive sessions of the non-management directors, along with the Boardsstrong committee system and substantial majority of independent directors being independent except for the Chief Executive Officer, allow it to maintain effective oversight of management.
| · | The Chief Executive Officer is intimately involved in the day-to-day operations of Forward and is best positioned to elevate the most critical business issues for consideration by the Board. |
| · | The Board believes that having the Chief Executive Officer serve in both capacities allows him to more effectively execute Forward’s strategic initiatives and business plans and confront its challenges. A combined Chairman and Chief Executive Officer structure provides us with decisive and effective leadership with clearer accountability to our shareholders. The combined role is both counterbalanced and enhanced by the effective oversight and independence of our Board and the independent leadership provided by our Lead Director. The Board believes that the appointment of a strong independent Lead Director and the use of regular executive sessions of the non-management directors, along with the Boards strong committee system, allow it to maintain effective oversight of management. |
Role of Board in Risk Oversight
Our risk management function is overseen by our Board. Our management keeps itsthe Board apprised of material risks and provides its directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us, and how management addresses those risks. Terence Wise, as our Chief Executive Officer and Chairman of the Board, and Michael Matte,Anthony Camarda, our Chief Financial Officer, work closely together with the Board, the Audit Committee and our Lead Director once material risks are identified(who is also a member and Chair of the Audit Committee), on how to best address suchidentified risks. If the identified risk poses an actual or potential conflict with management, our independent directors may conduct the assessment. Presently, the primary risks affecting us are: (i) our ability to grow our business, (ii) increaseincreasing our customer base, (iii) failure to achieve success in the retail space, and (iii) diversify our sales outside(iv) increased inventory. The Board continues to oversee issues related to the COVID-19 pandemic and continued health and safety considerations, including potential vaccine mandates, and climate change and related disclosures.
Code of the medical industry.
Business Conduct and Ethics
Our Board has adopted a Code of Business Conduct and Ethics (“Code of Ethics”), that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. Although not required, the Code of Ethics also applies to our Board. The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair, accurate, timely and understandable disclosure, and compliance with laws, rules and regulations, including insider trading, corporate opportunities and whistle-blowing or the prompt reporting of illegal or unethical behavior. A copy of our Code of Ethics may be accessed at http:https://forwardindustries.com/corporate-governance.htmlinvestors/governance.
Anti-Hedging Policies
Under the Company’s Insider Trading Policy, all officers, directors and employees are prohibited from engaging in hedging, pledging or shoring transactions.
| 10 |
Communication with our Board of Directors
Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at Forward Industries, Inc., 477 S. Rosemary Avenue,700 Veterans Memorial Highway, Suite 219, West Palm Beach, Florida 33401,100, Hauppauge, New York 11788, Attention: Corporate Secretary, or by facsimile (561) 465-0074.(631) 676-7748. Shareholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.
Related Person Transactions
Buying Agency and Supply Agreement
On March 12, 2012, the Company entered into a Buying Agency and Supply Agreement (the “First Sourcing Agreement”) with Forward China. On March 13, 2014, the Company entered into Amendment No. 1 to the First Sourcing Agreement with Forward China, dated as of March 11, 2014. The First Sourcing Agreement, as amended, provided that Forward China would act as the Company’s exclusive buying agent and supplier of products in the Asia Pacific region. The Company will purchase products at Forward China’s cost and pay Forward China a monthly fee for services it provides under the First Sourcing Agreement.
9
On September 9, 2015, the Company entered into a Buying Agency and Supply Agreement (the “Second Sourcing Agreement”) with Forward Industries on substantially the same terms as First Sourcing Agreement, which was due to expire on September 11, 2015. The Second Sourcing Agreement provides that Forward China will act as the Company’s exclusive buying agent of carry and protective solutions in the APAC Region. Forward China also arranges for sourcing, manufacture and exportation of such products. The Company purchases products at cost and pays a service fee to the Forward China. The service fee is calculated at $100,000 monthly plus 4% of “Adjusted Gross Profit.” “Adjusted Gross Profit” is defined as the selling price less the cost from Forward China. Terence Wise, the Company’s Chairman, Chief Executive Officer and largest shareholder, is a principal of Forward China. In addition, Jenny P. Yu, a Managing Director of Forward China, owns more than 5% of the Company’s common stock. The Company recognized approximately $1,435,000 (inclusive of the extension fee below) and $1,466,000 during the fiscal years ended September 30, 2017 and 2016, respectively, in service fees paid to Forward China. As a result of the continued decrease in the Company’s net revenues, Forward China agreed to forgo its rights to the 4% portion of the service fee under the Supply Agreement beginning with the third fiscal quarter through the end of fiscal year 2017. On September 19, 2017, the Supply Agreement was amended whereby the Company agreed to pay Forward China $70,000 in order to extend the Supply Agreement for an additional six months to March 8, 2019. In addition, the 4% of Adjusted Gross Profit was reinstated for the fourth quarter of fiscal 2017.
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership of our common stock and other equity securities with the SEC. These individuals are required by the regulations of the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of the forms furnished to us, and written representations from reporting persons, that no Forms 5 were required to report delinquent filings, we believe that all filing requirements applicable to our officers, directors and 10% beneficial owners were complied with during the fiscal year 2017.
Voting Securities and Principal Holders Thereofended September 30, 2022.
Related Person Transactions
The following table sets forthCompany has a Buying Agency and Supply Agreement (the “Supply Agreement”) with Forward China. Terence Wise, the numberCompany’s Chairman, Chief Executive Officer and largest shareholder, is the owner of sharesForward China. In addition, Jenny P. Yu, a Managing Director of our common stock beneficially owned as of the record date by (i) those persons known by us to be owners ofForward China, owns more than 5% of ourthe Company’s common stock, (ii) each director, (iii) our Named Executive Officers,stock. The Supply Agreement provides that Forward China will act as the Company’s exclusive buying agent and (iv) allsupplier of our executive officers and directors of as a group. Unless otherwise specifiedproducts in the notesAsia Pacific region. The Company purchases products at Forward China’s cost and pays Forward China a monthly fee for services it provides under the Supply Agreement. The monthly service fee is calculated at $100,000 plus 4% of “Adjusted Gross Profit.”, which is defined as the selling price less the cost from Forward China. The Company recorded service fees to Forward China of approximately $1,398,000 and $1,404,000 during fiscal 2022 and 2021, respectively. The supply agreement expires October 22, 2023.
In October 2020, the Company began selling smart-enabled furniture, which is sourced by Forward China and sold in the U.S. under the Koble brand name. The Koble brand is owned by Justwise, a company owned by Mr. Wise. The Company recognized revenues from the sale of Koble products of $1,741,000 and $1,493,000 in fiscal 2022 and fiscal 2021, respectively.
The Company has an arrangement with Happ LLC (“Happ”), whose principal owner is the daughter of Ms. Yu, whereby the Company purchases products directly from Forward China and ships the product directly to Happ. In consideration for these services, the Company is paid a 3.0% fee on the total cost of the product. Revenue recognized from Happ was approximately $780,000 and $418,000 in fiscal 2022 and fiscal 2021, respectively.
The sister of Paul Severino, the Chief Operating Officer of IPS, is employed by IPS as its Chief Marketing Officer and received total compensation of approximately $125,000 and $150,000 in fiscal 2022 and fiscal 2021, respectively.
To fund the acquisition of IPS, the Company issued a $1.6 million promissory note to Forward China in consideration for a one-year loan. The note was originally due January 18, 2019 but has been subsequently extended several times and is now due on December 31, 2024. The note bears an interest rate of 8% and charges monthly interest. The Company made approximately $122,000 and $128,000 in interest payments associated with the note in fiscal 2022 and fiscal 2021, respectively. In fiscal 2022, the Company has made $200,000 of principal payments on this table, the address for each person is: c/o Forward Industries, Inc., 477 Rosemary Avenue, Suite 219, West Palm Beach, Florida 33401.note.
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| Amount and |
| |
| Name and Address | Nature of Beneficial | Percent of | |
Title of Class | of Beneficial Owner | Ownership (1) | Class (1) | |
Directors and Named Executive Officers: | ||||
Common Stock | Terence Wise (2) | 1,618,541 | 18.0 | % |
| ||||
Common Stock | Michael Matte (3) | 80,000 | * |
|
| ||||
Common Stock | James Frost (4) | 444,426 | 4.9 | % |
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Common Stock | Howard Morgan (5) | 130,000 | 1.4 | % |
| ||||
Common Stock | Sangita Shah (6) | 105,000 | 1.2 | % |
| ||||
Common Stock | All directors and executive officers as a |
|
|
|
| group ( 5 persons) | 2,377,967 | 26.4 | % |
| ||||
5% Shareholders: |
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|
|
Common Stock | Terence Wise (2) | 1,618,541 | 18.0 | % |
| ||||
Common Stock | Jenny Yu (7) | 905,859 | 10.1 | % |
——————— |
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* Less than 1%. |
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| 11 |
10
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Compensation of Directors Table 2022
The Company pays annual cash compensation of $65,000 to its non-employee directors. Effective January 1, 2018, our non-employee directors will be paid a cash compensation of $35,000 and 50,000 shares of common stock for their annual Board service. In fiscal 2017,2022, non-employee members of our Board of Directorsdirectors were compensated for as follows:
| Name (a) | Fees Earned or Paid in Cash ($)(b)(1) | Stock Awards ($)(c) | Option Awards ($)(d)(2) | Non-Equity Incentive Plan Compensation ($)(e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(f) | All Other Compensation ($)(g) | Total ($)(j) |
| Sangita Shah | 80,000 | – | 80,000 | – | – | – | 160,000 |
| Sharon Hrynkow | 37,500 | – | 25,000 | – | – | – | 62,500 |
| James Ziglar | 60,000 | – | 80,000 | – | – | – | 140,000 |
| Howard Morgan (2) | 30,000 | – | 60,000 | – | – | – | 90,000 |
_______________________
| (1) | In September 2021, the Board approved the compensation for its non-employee directors for fiscal year 2022. The non-employee directors were paid $60,000 per annum (with a $20,000 supplement for the Lead Director) in cash. Additionally, Ms. Shah and Mr. Ziglar were issued a total of $80,000 of five-year stock options ($20,000 per quarter) with the number of options calculated based on the Black-Scholes option pricing model. The issuances were made in four increments at the beginning of each quarter (first issuance October 1, 2021). One-half of each issuance were fully vested and the other half vests one year from the issuance dates, subject to continued service. Ms. Hrynkow received a partial payment because of being appointed in February 2022. Mr. Morgan did not stand for re-appointment at the February 2022 annual shareholders meeting. |
| (2) | Amounts reported represent the aggregate grant date fair value of awards granted without regard to forfeitures, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by the directors. |
Name |
| Fees Earned Paid in Cash ($)(b) |
| Stock Awards ($)(c)(1) |
| Total ($)(j) | |||
Terence Wise |
|
| - |
|
| - |
|
| - |
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Howard Morgan |
|
| 65,000 |
|
| 37,450 |
|
| 102,450 |
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Sangita Shah |
|
| 65,000 |
|
| 37,450 |
|
| 102,450 |
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N. Scott Fine (2) |
|
| 65,000 |
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| 37,450 |
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| 102,450 |
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Sharon Hrynkow (2) |
|
| 65,000 |
|
| 37,450 |
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| 102,450 |
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| 12 |
11
———————
The following information is related to the compensation earned in fiscal 2022 and 2021 by all Chief Executive Officers (principal executive officers) serving during the last fiscal year and the other most highly compensated executive officers serving at the end of the last fiscal year whose compensation exceeded $100,000. We refer to these individuals as our “Named Executive Officers.”
Name and Principal Position (a) | Year (b) | Salary ($)(c)(1) | Bonus ($)(d)(2) | Stock Awards ($)(e) | Option Awards ($)(f)(3) | All Other Compensation ($)(i)(4) | Total ($)(j) | |
| Terence Wise | 2022 | 318,750 | 0 | 0 | 0 | 12,000 | 330,750 | |
| Chief Executive Officer | 2021 | 225,000 | 0 | 0 | 0 | 9,000 | 234,000 | |
| Anthony Camarda | 2022 | 247,500 | 0 | 0 | 0 | 37,307 | 284,807 | |
| Chief Financial Officer | 2021 | 213,750 | 0 | 0 | 0 | 19,660 | 233,410 | |
| Robert Wild | 2022 | 253,500 | 50,446 | 0 | 20,000 | 18,546 | 296,901 | |
| Executive Officer of IPS | ||||||||
| Paul Severino | 2022 | 257,000 | 53,057 | 0 | 0 | 26,890 | 288,726 | |
| Executive Officer of IPS | 2021 | 248,350 | 26,250 | 0 | 0 | 26,816 | 301,416 | |
| Tom Kramer | 2022 | 250,000 | 0 | 0 | 0 | 25,558 | 275,558 | |
| Executive Officer of Kablooe |
_________________________
| (1) | See the disclosure below regarding reduced and foregone base salaries during the third quarter of fiscal 2021. |
| (2) | Represents cash bonuses. | |
| (3) | Represents stock options issued to Mr. Wild in fiscal 2022. Amounts reported represent the aggregate grant date fair value of awards granted without regards to forfeitures, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by | |
| (4) | All other compensation for: | |
|
(c) Mr. Severino represents (i) $18,000 of reimbursements for auto and phone allowances, (ii) the Company's contribution to his 401(k) plan of $8,395, and (iii) other non-material benefits. (d) Mr. Kramer represents (i) $9,960 of reimbursements for benefits and (ii) the Company's contribution to his 401(k) plan of $15,598. |
Executive Compensation
| In 2021, in order to reduce costs, each of the Named Executive Officers agreed to either forgo their salaries or a reduced salary for a three-month period beginning April 1, 2021, as described below: |
The following information is related to the compensation paid, distributed or accrued by us for fiscal 2017 and 2016 to all Chief Executive Officers (principal executive officers) serving during the last fiscal year and the two other most highly compensated executive officers serving at the end of the last fiscal year whose compensation exceeded $100,000. We refer to these individuals as our “Named Executive Officers.” During fiscal 2017 and 2016, Messrs. Wise and Matte were the Company’s only executive officers.
| · | Terence Wise - $78,000 of base salary was forgone. |
| · | Anthony Camarda – Reduced base salary to $180,000 for three months (total reduction $11,250). |
| · | Paul Severino - Reduced base salary to $230,400 for three months (total reduction $6,400). |
Summary Compensation Table
| 13 |
Name and |
| Year |
| Salary |
| All |
|
| Total |
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Terence Wise |
| 2017 |
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| 300,000 |
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| - |
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| 300,000 |
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Chief Executive Officer |
| 2016 |
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| 300,000 |
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| 300,000 |
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Michael Matte |
| 2017 |
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| 150,000 |
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| 16,290 |
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| 166,290 |
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Chief Financial Officer |
| 2016 |
|
| 156,250 |
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| 16,359 |
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| 172,609 |
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(1)Represents insurance reimbursements.
Named Executive Officer Employment Compensation Arrangements/Agreements
Michael Matte,
Terence Wise. Effective May 16, 2018, the Company and Terence Wise entered into a three-year Employment Agreement. Pursuant to his Employment Agreement, Mr. Wise received an annual base salary of $300,000. This Employment Agreement has expired. Mr. Wise is currently employed under an oral agreement. In November 2021, Mr. Wise’s base salary was increased to $325,000 per year, effective January 1, 2022. Mr. Wise is also paid $1,000 per month to cover various expenses in the performance of his duties as the Chairman and Chief Executive Officer of the Company.
Anthony Camarda. Effective June 26, 2020, the Company and Anthony Camarda, the Company’s Chief Financial Officer, is the only Named Executive Officer with anentered into a three-year Employment Agreement. Under thePursuant to his Employment Agreement, Mr. MatteCamarda was to be paid $225,000 per year and was issued 50,000 shares of common stock and 50,000 stock options. On November 1, 2015, Mr. Matte agreed to reduce hisan annual base salary to $150,000 per year. From July 1, 2015 through July 1, 2017, Terence Wise had an Employment Agreement under which he was paid $300,000 per year. Mr. Wise continues to be paid $300,000 per year under an oral agreement.
Bonus
Mr. Matte will beof $225,000 and is eligible to receiveearn a bonus based on the terms of the bonus plancertain fiscal targets and performance metrics thatset by the Compensation Committee of the Board adopts, in its sole discretion, from yearconsultation with the Chief Executive Officer. No such targets or performance metrics have been set by the Compensation Committee. In November 2021, Mr. Camarda’s base salary was increased to $255,000 per year, which may range inwas effective January 1, 2022. In 2022, Mr. Camarda’s annual base salary was increased to $285,000 per year, which will be effective January 1, 2023. In lieu of taking certain benefits, Mr. Camarda is paid $1,500 per month.
Robert Wild. In connection with the acquisition of IPS, effective January 18, 2018, the Company entered into an amount equalat-will employment agreement with Robert Wild. Pursuant to his Employment Agreement, Mr. Wild was paid an annual base salary of $235,000. Mr. Wild’s base salary has been increased to $260,000 per year. Mr. Wild receives an additional $10,000 per year for auto and cell phone allowance.
Paul Severino. In connection with the acquisition of IPS, effective January 18, 2018, the Company entered into a three-year employment agreements with Paul Severino. Under the employment Agreement, Mr. Severino received an annual base salary of $256,000 and $1,500 per month for auto and cell phone allowance. In May 2021, the Company entered into a one-year employment agreement (which extends on each one-year anniversary thereafter unless requisite notice is provided by either party), with Mr. Severino whereby he will be paid an annual base salary of $251,000 and will be eligible to receive cash bonuses and equity compensation based on performance milestones established by the Company’s Compensation Committee. No such performance metrics have been set by the Compensation Committee. In 2022, Mr. Severino’s annual base salary was increased to $275,000, which was effective July 1, 2022.
Tom KraMer. In connection with the acquisition of Kablooe, effective August 17, 2020, the Company entered into a five-year employment agreement with Tom KraMer. Under the employment agreement, Mr. KraMer receives an annual base salary of $250,000 per year and is eligible to receive cash or between 0 and 50% of Mr. Matte’s annual salary and may be awarded in a combination of cash, restricted stock, restricted stock units and/or other equity. As of the record date,equity bonuses based on fiscal year performance targets established by the Compensation Committee had not adoptedof the termsCompany’s Board of a bonus plan or set any performance metrics.
12
Termination Provisions
In the eventDirectors in its discretion. Under certain circumstances, Mr. Matte terminates his employment for Good Reason, or in the event Mr. Matte’s employment is terminated without Cause, Mr. Matte shallKraMer would be entitled to receive any earned and unpaid salary accrued through the date of termination, one year’ssix months base salary compensation for any unused vacation days and any unpaidother benefits accrued through the termination date. Good Reasonif his employment agreement is generally defined as the material diminution of Mr. Matte’s duties, a decrease in salary, a relocation of Mr. Matte’s principal place of business more than 30 miles from West Palm Beach, Florida or any failure by the Company to perform any material obligation under the Employment Agreement. Cause is generally defined as willful misconduct, material breachterminated.
Bonus
Each of the Employment Agreement,Named Executive Officers is entitled to receive discretionary bonuses at the Company’s Insider Trading Policy or other material policy and/ordiscretion of the commission of a felony or a crime of moral turpitude.Compensation Committee.
Upon the expiration of Mr. Matte’s Employment Agreement, Mr. Matte shall
Termination Provisions
Messrs. Camarda, Wild and Severino would be entitled to receive six months base salary and other benefits if their respective employment agreement is terminated.
Retirement Plans
The Company has a 401(k) plan and provides an employer matching contribution, for all of its employees, including Named Executive Officers. The Company does not offer any earned and unpaid salary accrued throughnonqualified pension plans, supplemental executive retirement plans, or other plans that provide for the datepayment of termination, compensation for any unused vacation days and any unpaid benefits accrued through the expiration date.retirement benefits.
| 14 |
Outstanding Awards at Fiscal Year End
Listed below is information with respect to unexercised options, stock that has not vested, and equity incentive plan awards for each Named Executive Officer outstanding as of September 30, 2017:2022:
Outstanding Equity Awards At 2017 Fiscal Year-End 2022
Name
|
| Number of |
| Number of (#) Unexercisable (c) |
| Equity |
| Option |
| Option |
| Number of (g) |
| Market ($)(h) |
| Equity (i) |
| Equity (j) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||
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| (b) | (c) | (d) | ($)(e) | (f) | (g) | ($)(h) | (i) | (j) | |||||||||
Terence Wise |
| 10,000 |
| - |
| - |
| 1.23 |
| 10/15/22 |
| - |
| - |
| - |
| - | 10,000 | – | 1.23 | 10/15/22 | – | |||||||||||||
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| 180,395 | 1.40 | 9/14/25 | |||||||||||||||
Michael Matte |
| 30,000 |
| 20,000 (1) |
| - |
| 0.64 |
| 6/25/25 |
| 20,000 (1) |
| 24,600 |
| - |
| - | ||||||||||||||||||
| Anthony Camarda | – | |||||||||||||||||||||||||||||||||||
| Robert Wild | 4,682 | 8,935 | – | 1.56 | 1/1/27 | – | ||||||||||||||||||||||||||||||
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| 4,817 | 8,968 | – | 1.47 | 7/1/27 | – | ||||||||||||
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| Paul Severino | – | |||||||||||||||||||||||||||||||||||
| Tom Kramer | – | |||||||||||||||||||||||||||||||||||
(1) Vest on June 22, 2018.
Risk Assessment Regarding Compensation Policies and Practices as they Relate to Risk Management
Our compensation program for employees does not create incentives for excessive risk taking by our employees or involve risks that are reasonably likely to have a material adverse effect on us. Our compensation has the following risk-limiting characteristics:
Our base pay programs consist· Our base pay programs consisting of competitive salary rates provide a reliable level of income on a regular basis, which decreases incentive on the part of our executives to take unnecessary or imprudent risks; · Awards are not tied to formulas that could focus executives on specific short-term outcomes; · Equity awards, when issued, may be recovered by us should a restatement of earnings occur upon which incentive compensation awards were based, or in the event of wrongdoing by the recipient; and · Equity awards, generally, have multi-year vesting which aligns the long-term interests of our executives with those of our shareholders and, again, discourages the taking of short-term risk at the expense of long-term performance. 15 Equity Compensation Plan Information
The following chart reflects the number of
competitive salary rates that represent a reasonableportionsecurities granted and the weighted average exercise price for our compensation plans as oftotal compensation and provide a reliable level of income on a regular basis,which decreases incentive onSeptember 30, 2022.Name of Plan Number of securities to be issued upon exercise of outstanding options, restricted stock units, warrants and rights
(a)
Weighted-average exercise
price of
outstanding options, warrants and rights
$ (b)
Number of securities remaining available for future issuance under compensation plans (excluding securities reflected in column (a))
(c)
Equity compensation plans approved by security holders 2021 Equity Incentive Plan 276,939 1.70 1,014,061 2011 Long Term Incentive Plan 807,719 1.41 0 Equity compensation plans not approved by security holders – – – Total 1,084,658 1,014,061 __________________
No more securities are being issued under the
part of our executives to take unnecessary or imprudentrisks;A portion of executive incentive compensation opportunity is tied to long-term incentivecompensation that emphasizes sustained performance over time. This reduces anyincentive to take risks that might increase short-term compensation at the expense oflonger term company results;Awards are not tied to formulas that could focus executives on specific short-termoutcomes;Equity awards may be recovered by us should a restatement of earnings occur uponwhich incentive compensation awards were based, or in the event of other wrongdoing bythe recipient; andEquity awards, generally, have multi-year vesting which aligns the long-term interests ofour executives with those of our shareholders and, again, discourages the taking of short-term risk at the expense of long-term performance.
2011 Long Term Incentive Plan.
13
| 16 |
PROPOSAL 2. RATIFICATION OF AMENDMENT TO INCREASE SHARES ISSUABLEUNDER THE 2011 LONG TERM INCENTIVE PLAN
Our Board has adopted a resolution declaring it advisable and in the best interests of Forward and its shareholders that the prior increase in the number of shares authorized under the 2011 Long Term Incentive Plan (“2011 Plan”) be ratified and approved by shareholders. The Board approved the increase in the number of shares of Common Stock reserved and available for issuance under the 2011 Plan from 850,000 to 1,850,000 shares.
Summary of the 2011 Plan
Purpose of the 2011 Plan
The 2011 Plan is intended as an incentive to attract, motivate, and retain employees, directors, consultants and other independent contractors, upon whose judgment, initiative, and efforts the financial success and growth of the business of the Company largely depend, and to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of the Company and create value for shareholders.
Administration of the 2011 Plan
The 2011 Plan is administered by the Compensation Committee consisting of two or more directors who are “non-employee directors” within the meaning of Rule 16b-3 and, “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986 (the “Tax Code”). In the event that for any reason the Committee is unable to act or if the Committee at the time of any grant, award or other acquisition under the 2011 Plan does not consist of two or more “non-employee directors,” or if there is no such Committee, then the 2011 Plan will be administered by the Board (such administrative body, for the purposes of this Proposal 2 only, the “Committee”).
Subject to the other provisions of the 2011 Plan, the Committee has the authority, in its discretion: (i) to grant cash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, all of which are referred to collectively as “Awards”; (ii) to determine the terms and conditions of each Award granted (which need not be identical); (iii) to interpret the 2011 Plan and all awards granted thereunder; and (iv) to make all other determinations necessary or advisable for the administration of the 2011 Plan.
Eligibility
The persons eligible for participation in the 2011 Plan as recipients of Awards include employees, directors, consultants and other independent contractors to the Company or any subsidiary or affiliate of the Company, except that only employees of the Company and certain corporate subsidiaries may receive incentive stock options. In selecting participants, and determining the number of shares of common stock covered by each Award, the Committee may consider any factors that it deems relevant.
Shares Subject to the 2011 Plan
Subject to the conditions outlined below, the total number of shares of Common Stock which may be issued pursuant to Awards granted under the 2011 Plan may not exceed 850,000 shares of Common Stock. However, the Company is seeking shareholder approval to increase this amount to 1,850,000. There is currently 321,479 shares of Common Stock available under the 2011 Plan.
In the event of certain corporate events or transactions (including, but not limited to, unusual or nonrecurring events or a change in the shares of the Company or the capitalization of the Company), the Committee, in its sole discretion, in order to prevent dilution or enlargement of a participant’s rights under the 2011 Plan, shall substitute or adjust, as applicable, the number and kind of shares of Common Stock that may be issued under the 2011 Plan or under particular forms of Awards, the number and kind of shares of Common Stock subject to outstanding Awards, the option price or grant price applicable to outstanding Awards, the annual Award limits, and other value determinations applicable to outstanding Awards.
14
Options
An option granted under the 2011 Plan is designated at the time of grant as either an incentive stock option or as a non-qualified stock option. Upon the grant of an option to purchase shares of Common Stock, the Committee will specify the option price, the maximum duration of the option, the number of shares of Common Stock to which the option pertains, the conditions upon which an option shall become vested and exercisable, and such other provisions as the Committee shall determine which are not inconsistent with the terms of the 2011 Plan. The purchase price of each share of Common Stock purchasable under an option will be determined by the Committee at the time of grant, but may not be less than 100% of the fair market value of such share of Common Stock on the date the option is granted. However, if the grantee of an incentive stock option is a person who owns, or who is deemed to own under Section 424(d) of the Tax Code, stock possessing more than ten percent (10%) of the total combined voting power of the Company or any subsidiary (a “Ten Percent Shareholder”), then the exercise price of the option shall be at least one hundred ten percent (110%) of the fair market value of such shares of Common Stock on the on the date the option is granted. No option shall be exercisable later than the tenth anniversary date of its grant, provided, that for Ten Percent Shareholders granted incentive stock options, the option may not be exercisable later than the fifth anniversary of its grant.
SARs
SARs will be exercisable at such time or times and subject to such terms and conditions as determined by the Committee. The term of SARs granted under the 2011 Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee, no stock appreciation right shall be exercisable later than the tenth anniversary date of its grant. SARs may be settled in stock, cash, or a combination of both.
Restricted Stock and Restricted Stock Units
Shares of restricted stock and/or restricted stock units may be granted under the 2011 Plan aside from, or in association with, any other Award and will be subject to certain conditions and contain such additional terms and conditions, not inconsistent with the terms of the 2011 Plan, as the Committee deems desirable. Except with respect to a maximum of 50% of the shares authorized under the 2011 Plan, any Awards of restricted stock and/or restricted stock units which vest on the basis of the participant’s continued employment with or provision of service to the Company shall not provide for vesting which is any more rapid than annual pro rata vesting over a three year period and any Awards of restricted stock and/or restricted stock units which vest upon the attainment of performance goals shall provide for a performance period of at least 3 months. The receipt of dividends on account of shares of restricted stock or restricted stock units shall be determined by the Committee.
Performance Units/Performance Shares
Subject to the terms and provisions of the 2011 Plan, the Committee, at any time and from time to time, may grant performance units and/or performance shares to participants in such amounts and upon such terms as the Committee shall determine. Each performance unit shall have an initial value that is established by the Committee at the time of grant. Each performance share shall have an initial value equal to the fair market value of a share of Common Stock on the date of grant. The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the value and/or number of performance units/performance shares that will be paid out to the participant.
Limits on Awards
Subject to the restrictions already mentioned above, the maximum number of shares of Common Stock that may be issued to any one participant in the 2011 Plan in a fiscal year is 300,000. This 300,000 share limit is an aggregate of all shares issued under the 2011 Plan, and includes shares of Common Stock subject to options, incentive stock options, SARs, restricted stock or restricted stock units, performance shares and performance units.
15
Restrictions on Transferability
Except as otherwise provided in an Award or as determined from time to time by the Compensation Committee, the Awards granted under the 2011 Plan are not transferable and may be exercised solely by a participant during his lifetime or after his death by the person or persons entitled thereto under his will or the laws of descent and distribution or as otherwise required by law. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, any Award contrary to the provisions set forth in the 2011 Plan will be void and ineffective and will give no right to the purported transferee.
Termination of the 2011 Plan
Unless sooner terminated as provided therein, the 2011 Plan shall terminate on March 7, 2021.
Amendments to the 2011 Plan
The Committee may at any time alter, amend, modify, accelerate, suspend, or terminate the 2011 Plan or any evidence of Award in whole or in part; provided, however, that, without the prior approval of the Company’s shareholders, options issued under the 2011 Plan will not be re-priced, replaced, or re-granted through cancellation, and no amendment of the 2011 Plan shall be made without shareholder approval if shareholder approval is required by law, regulation, or stock exchange rule. However, no such alteration, amendment, modification, suspension or amendment shall adversely affect in any material way any Award previously granted, without the grantee’s written consent, except as required under tax laws. Additional, the 2011 Plan can be amended from time to time to comply with Tax Code Section 409A.
The Committee may specify any conditions or events that may cause an Award to be forfeited, reduced, cancelled or subject to recoupment. The Committee may provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to certain performance measures. In addition, the Committee may accelerate the vesting and exercisability of outstanding options, freestanding SARS, or restricted stock or restricted stock units in the event of a change in control of the Company.
The 2011 Plan provides that any current or former executive officer who received any Awards within a 36-month period prior to the date the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws shall return such Award to the Company upon demand by the Company. The amount to be recovered shall be the amount of incentive-based Awards, including equity awards, in excess of what would have been paid without the restated results. The operation of these provisions of the 2011 Plan shall be in accordance with the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and any applicable guidance.
Federal Income Tax Consequences
Incentive Options
Options that are granted under the 2011 Plan and that are intended to qualify as incentive stock options must comply with the requirements of Section 422 of the Tax Code. An option holder is not taxed upon the grant or exercise of an incentive stock option; however, the difference between the fair market value of the shares of Common Stock on the exercise date and the option price will be an item of adjustment for purposes of the alternative minimum tax (unless the stock acquired through the exercise of the incentive stock option is disposed of in the same tax year). If an option holder holds shares of Common Stock acquired upon the exercise of an incentive stock option for at least two years following the date of the grant of the option and at least one year following the exercise of the option, the option holder’s gain, if any, upon a subsequent disposition of such shares will be treated as long-term capital gain for federal income tax purposes. The measure of the gain is the difference between the proceeds received on disposition and the option holder’s basis in the shares (which generally would equal the exercise price). If the option holder disposes of shares of Common Stock acquired pursuant to exercise of an incentive stock option before satisfying the one-and-two year holding periods described above, the option holder may recognize both ordinary income and capital gain in the year of disposition. The amount of the ordinary income will be the lesser of (i) the amount realized on disposition less the option holder’s adjusted basis in the shares (generally the option exercise price); or (ii) the difference between the fair market value of the shares on the exercise date and the option price. The balance of the consideration received on such disposition will be long-term capital gain if the shares had been held for at least one year following exercise of the incentive stock option.
16
The Company is not entitled to an income tax deduction on the grant or the exercise of an incentive stock option or on the option holder’s disposition of the shares of Common Stock after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company will generally be entitled to an income tax deduction in the year the option holder disposes of the shares, in an amount equal to the ordinary income recognized by the option holder.
Nonqualified Options
In the case of a non-qualified stock option, an option holder is not taxed on the grant of such option. Upon exercise, however, the participant recognizes ordinary income equal to the difference between the option price and the fair market value of the shares of Common Stock on the date of the exercise. The Company is generally entitled to an income tax deduction in the year of exercise in the amount of the ordinary income recognized by the option holder. Any gain on subsequent disposition of the shares of Common Stock is long-term capital gain if the shares are held for at least one year following the exercise. The Company does not receive an income tax deduction for this gain.
SARs
No taxable income will be recognized by an option holder upon receipt of a stock appreciation right and the Company will not be entitled to a tax deduction upon the grant of such right.
Upon the exercise of a stock appreciation right, the holder will include in taxable income, for federal income tax purposes, the fair market value of the cash and other property received with respect to the stock appreciation right and the Company will generally be entitled to a corresponding tax deduction.
Other Awards
A recipient of restricted stock, restricted stock units, performance shares and performance units will not have taxable income upon grant, but will have ordinary income at the time of vesting. The amount of income will equal the fair market value on the vesting date of the shares and/or cash received minus the amount, if any, paid by the recipient. A recipient of restricted stock may instead, however, elect to be taxed at the time of grant. The Company will generally be entitled to an income tax deduction for the taxable year for which the recipient includes the amount in income.
The 2011 Plan is intended to satisfy the performance-based compensation exception to the limitation on the Company’s tax deductions imposed by Section 162(m) of the Tax Code with respect to those grants for which such qualification as available and for such exception is intended. The 2011 Plan is also intended to be exempt from Tax Code Section 409A or to comply with Tax Code Section 401A to the extent it is applicable.
Equity Compensation Plan Information
The following chart reflects the number of awards granted under equity compensation plans approved and not approved by shareholders and the weighted average exercise price for such plans as of September 30, 2017.
17
Name Of Plan |
| Number of |
| Weighted |
| Number of |
Equity compensation plans approved by security holders |
|
|
|
|
|
|
2007 Equity Incentive Plan |
| 107,500 |
| 2.43 |
| 17,823 |
2011 Long Term Incentive Plan |
| 138,500 |
| 2.01 |
| 321,479 (1) |
Equity compensation plans not approved by security holders |
|
|
| |||
|
|
| ||||
Total |
| 246,000 |
| 2.19 |
| 339,302 |
———————
|
|
Prior Plans
There are 17,823 shares of common stock reserved for issuance under the Company’s 2007 Equity Incentive Plan (the “Prior Plan”). Forward will not issue any more awards under the Prior Plan.
New Plan Benefits
Because future grants of awards under the 2011 Plan are subject to the discretion of the Board and the Administrator, the future awards that may be granted to participants cannot be determined at this time. There are no grants that have been previously made which are contingent upon receiving shareholder approval of the grant.
The Board recommends a vote “For” this Proposal No. 2.
18
PROPOSAL 3. RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 20182023
Our Board has appointed CohnReznick LLP to serve as our independent registered public accounting firm for the fiscal year ending September 30, 2018.2023. CohnReznick LLP has been Forward’s independent registered public accounting firm since 2010.2011. Selection of Forward’s independent registered public accounting firm is not required to be submitted to a vote of the shareholders of Forward for ratification. However, Forward is submitting this matter to the shareholders as a matter of good corporate governance. Even if the appointment is ratified, the Board may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of Forward and its shareholders. If the appointment is not ratified, the Board will consider its options.
A representative of CohnReznick LLP is expected to be present at the Annual Meeting.
The Board recommends a vote “For” this ProposalProposal No. 32
The Audit Committee, which currently consists of Sangita Shah, Sharon Hrynkow and James Frost, and Howard Morgan,Ziglar, reviews Forward’s financial reporting process on behalf of the Board and administers our engagement of the independent registered public accounting firm. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of its examinations, the evaluations of our internal controls, and the overall quality of our financial reporting. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls.
The Audit Committee has met and held discussions with management and CohnReznick.CohnReznick LLP. Management represented to the Audit Committee that our financial statements were prepared in accordance with accounting principles generally accepted accounting principlesin the United States of America (“US GAAP”), and the Audit Committee has reviewed and discussed the financial statements with management and CohnReznick.CohnReznick LLP. The Audit Committee reviewed with CohnReznick LLP its judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee in accordance with the standards of the Public Company Accounting Oversight Board, which we refer to as the "PCAOB."
Audit Committee Report
The Audit Committee has:
reviewed and discussed the audited financial statements with management;met privately with the independent registered public accounting firm and discussedmatters required by Auditing Standard 1301,Communications with AuditCommittees, as adopted by the PCAOB;received the written disclosures and the letter from the independent registered publicaccounting firm, as required by the applicable requirements of the PCAOB regarding theindependent registered public accounting firm’s communications with the AuditCommittee concerning independence, and has discussed with its independent registeredpublic accounting firm its independence from us; andin reliance on the review and discussions referred to above, the Audit Committeerecommended to the Board that the audited financial statements be included in theAnnual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with theSEC.
| · | reviewed and discussed the audited financial statements with management; |
| · | met privately with the independent registered public accounting firm and discussed matters required by the PCAOB; |
| · | received the written disclosures and the letter from the independent registered public accounting firm, as required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence from us; and |
| · | in reliance on the review and discussions referred to above, recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2022 filed with the SEC. |
This report is submitted by the Audit Committee:
Sangita Shah
Sharon Hrynkow
James FrostHoward MorganZiglar
19
The above Audit Committee Report is not deemed to be “soliciting material,” is not “filed” with the SEC and is not to be incorporated by reference in any filings that Forward files with the SEC.
| 17 |
It is not the duty of the Audit Committee to determine that Forward’s financial statements and disclosures are complete and accurate and in accordance with generally accepted accounting principles or to plan or conduct audits. Those are the responsibilities of management and Forward’s independent registered public accounting firm. In giving its recommendation to the Board, the Audit Committee has relied on: (1) management’s representations that such financial statements have been prepared with integrity and objectivity and in conformity with US GAAP; and (2) the report of ForwardForward’s independent registered public accounting firm with respect to such financial statements.
Audit Committee’s Pre-Approval Policy
The Audit Committee pre-approves all audit and permissible non-audit services on a case-by-case basis. In its review of non-audit services, the Audit Committee considers whether the engagement could compromise the independence of our independent registered public accounting firm, and whether the reasons of efficiency or convenience is in our best interest to engage our independent registered public accounting firm to perform the services.
Principal Accountant
Fees andincurred by Forward for the Services Provided by CohnReznick LLP
The following table sets forth the aggregate fees paid for or accrued by Forward for audit and other services provided by CohnReznick LLP for the fiscal years ended 20172022 and 2016:2021:
| 2017 ($) |
|
| 2016 ($) | ||
Audit Fees (1) |
| 166,590 |
|
|
| 196,650 |
Audit Related Fees (2) |
| - |
|
|
| - |
Tax Fees (3) |
| - |
|
|
| - |
All Other Fees |
|
|
|
|
|
|
Total |
| 166,590 |
|
|
| 196,650 |
2022 ($) | 2021 ($) | |||||||
| Audit Fees (1) | 211,140 | 209,940 | ||||||
| Audit Related Fees | – | – | ||||||
| Tax Fees | – | – | ||||||
| All Other Fees | – | – | ||||||
| Total | 211,140 | 209,940 | ||||||
———————
| (1) | Audit fees – these fees relate to the annual audits and quarterly reviews of our financial statements as well as services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
| 18 |
PROPOSAL 3. ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Pursuant to Section 14A of the Exchange Act and recent legislation, we are asking our shareholders to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers, commonly referred to as the “say-on-pay” vote. In accordance with the Exchange Act requirements, we are providing our shareholders with an opportunity to express their views on our Named Executive Officers’ compensation.
Advisory Vote and Board Recommendation; Vote Required
We encourage shareholders to read the “Executive Compensation” section in this proxy statement, including the compensation tables and the related narrative disclosure, which describes the structure and amounts of the compensation of our Named Executive Officers in fiscal year 2022. The compensation of our Named Executive Officers is designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment. The Compensation Committee and our Board believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our Named Executive Officers to dedicate themselves fully to value creation for our shareholders.
This vote is not intended to address any specific element of compensation but rather the overall compensation of our Named Executive Officers and the compensation philosophy, policies, practices and disclosures described in this proxy statement.
Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to Forward’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion is hereby APPROVED.”
Although this advisory vote is nonbinding, our Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our Named Executive Officer compensation and related executive compensation programs.
The Board recommends a vote “For” this Proposal No. 3
| 19 |
Voting Securities and Principal Holders Thereof
The following table sets forth the number of shares of our common stock beneficially owned as of the record date by (i) those persons known by us to be owners of more than 5% of our common stock, (ii) each director, (iii) our Named Executive Officers, and (iv) all of our executive officers and directors as a group. Unless otherwise specified in the notes to this table, the address for each person is: c/o Forward Industries, Inc., 700 Veterans Memorial Highway, Suite 100, Hauppauge, New York 11788.
| Title of Class | Beneficial Owner | Amount of Beneficial Ownership (1) | Percent Beneficially Owned (1) | |||||||
| Directors and Named Executive Officers: | ||||||||||
| Common Stock | Terence Wise (2) | 1,813,936 | 17.7% | |||||||
| Common Stock | Anthony Camarda (3) | 0 | 0% | |||||||
| Common Stock | Paul Severino (4) | 57,918 | * | |||||||
| Common Stock | Robert Wild (5) | 18,606 | * | |||||||
| Common Stock | Tom KraMer (6) | 168,025 | 1.7% | |||||||
| Common Stock | Sharon Hrynkow (7) | 56,503 | * | |||||||
| Common Stock | Sangita Shah (8) | 624,757 | 5.9% | |||||||
| Common Stock | James Ziglar (9) | 152,765 | 1.5% | |||||||
| Common Stock | All directors, nominees and executive officers as a group (8 persons) (10) | 2,942,510 | 26.0% | |||||||
| 5% Shareholders: | ||||||||||
| Common Stock | Terence Wise (2) | 1,813,936 | 17.7% | |||||||
| Common Stock | Jenny Yu (11) | 1,113,564 | 11.1% | |||||||
| Common Stock | Renaissance Technologies LLC (12) | 609,640 | 6.1% | |||||||
| Common Stock | Sangita Shah (8) | 624,757 | 5.9% | |||||||
———————
* Less than one percent.
| (1) | Applicable percentages are based on 10,061,185 shares outstanding as of the record date, adjusted as required by rules of the SEC. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock underlying options and warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days of the record date are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, Forward believes that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them. The table includes only vested options and warrants or options and warrants that have or will vest and become exercisable within 60 days of the record date. |
| (2) | Wise. Mr. Wise is a director and executive officer. Includes 180,395 vested stock options. |
| (3) | Camarda. Mr. Camarda is an executive officer. |
| (4) | Severino. Mr. Severino is an executive officer of one of the Company’s wholly-owned subsidiaries. |
| 20 |
| (5) | Wild. Mr. Wild is an executive officer of one of the Company’s wholly-owned subsidiaries. Includes 18,606 vested stock options. |
| (6) | Kramer. Mr. Kramer is an executive officer of one of the Company’s wholly-owned subsidiaries. |
| (7) | Hrynkow. Dr. Hrynkow is a director. Includes 51,503 vested stock options. |
| (8) | Shah. Ms. Shah is a director. Includes 519,757 vested stock options and 105,000 shares of common stock owned by an entity of which she shares control with her husband. |
| (9) | Ziglar. Mr. Ziglar is a director. Includes 142,765 vested stock options. |
20
| (10) | All directors and executive officers as a group. Includes shares beneficially owned by executive officers who are not “Named Executive Officers” under SEC rules and regulations. |
| (11) | Yu. Address is 9255 Doheny Rd., Apartment 2905, West Hollywood, California, 90069. |
| (12) | Renaissance. Based on Schedule 13G/A filed on February 11, 2022. Address is 800 Third Avenue, New York, New York 10022. |
| 21 |
The Company has no knowledge of any other matters that may come before the Annual Meeting and does not intend to present any other matters. However, if any other matters shall properly come before the Annual Meeting or any adjournment, the persons soliciting proxies will have the discretion to vote as they see fit unless directed otherwise.
If you do not plan to attend the Annual Meeting, in order that your shares may be represented and in order to assure the required quorum, please sign, date and return your proxy promptly. In the event you are able to attend the Annual Meeting, at your request, the Company will cancel your previously submitted proxy.
FORWARD INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS – FEBRUARY 13, 201814, 2023 AT 10:00 AM
| VOTING INSTRUCTIONS | ||
| If you vote by phone or internet, please DO NOT mail your proxy card. | ||
| MAIL: | Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope. | |
| PHONE: | Call 1 (800) 690-6903 | |
| INTERNET: | https://www.proxyvote.com | |
| Before the Meeting – Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on February 13, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
Control ID:
Proxy ID:
Password:
MAIL: Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope.
PHONE: Call 1 (800) 690-6903
INTERNET: https://www.proxyvote.com
Control ID:Proxy ID:Password:
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ¨
| 22 |
The shareholder(s) hereby appoints Terence Wise and Michael Matte,Anthony Camarda, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of voting stock of FORWARD INDUSTRIES, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholder(s) to be held at 10:00 a.m., New York time on February 13, 2018,14, 2023, at 1301 Avenue of the Americas, Seventh Floor, in New York, New York, 10019 and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted “FOR” all of the nominees in Proposal 1 and “FOR” Proposals 2 and 3.Proposal 3. If any other business is presented at the meeting, this proxy will be voted by the above-named proxies at the direction of the Board of Directors. At the present time, the Board of Directors knows of no other business to be presented at the meeting.
Proposal:
1. ElectionTo elect members to Forward’s Board of Directors.
| FOR ¨ | WITHHOLD ¨ | Sangita Shah | FOR ¨ | WITHHOLD ¨ | |||
| FOR ¨ | WITHHOLD ¨ |
| FOR ¨ | WITHHOLD ¨ | |||
2. To ratify and approve the |
| |
| FOR ¨ AGAINST ¨ ABSTAIN ¨ | |
| 3. To approve, by advisory vote, the compensation paid to Forward’s named executive officers. | FOR ☐ AGAINST ☐ ABSTAIN ☐ |
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