October 26, 2011

 

RGJR Capital Partners LLC

Attn: Mr. Robert Garrett, Jr., Manager

 

Dear Mr. Garrett,

 

This letter agreement (this “agreement”) sets forth the terms and conditions
under which RGJR Capital Partners LLC, a New York limited liability company
(“You” or the “Adviser”) shall provide the consulting services described below
to the Board of Directors (“Board”) of Forward Industries, Inc., a New York
corporation (“Company”). You hereby agree that Robert Garrett, Jr. shall provide
the services described herein on your behalf. Each party hereto acknowledges the
mutual covenants and obligations hereinafter set forth and, intending to be
legally bound, hereby agrees as follows:

 

1.  Scope of Assignment and Responsibilities

 

You are hereby engaged as Senior Adviser to the Executive Committee (“EC”) of
the Board.  As such, you shall devote your full professional time and efforts to
perform certain services at the direction of the EC to the best of your
abilities, with the overall objective being to facilitate: (i) efficient
implementation of management’s strategy and (ii) expense reductions that do not
impair such implementation.

 

In performing such services Adviser shall report to and take direction from the
EC exclusively.  Adviser shall spend approximately half the working month in
Santa Monica, CA, as shall be reasonably necessary to enable him to discharge
the responsibilities assigned to him herein.  The Company shall facilitate
Adviser’s performance by making available a dedicated work space, phone, Company
cell phone, and Company systems access at such offices.  Apart from regularly
scheduled meetings and conference calls with the EC, John Chiste and Frank
LaGrange Johnson shall be Adviser’s primary contacts. 

 

Adviser represents and warrants that he (i) has no obligations or undertakings
during the Term (set forth below) that would prevent or restrict him from
performing the services as described above and (ii) is not to his knowledge
subject to any conflict of interest, or apparent conflict of interest, involving
the Company, any of its affiliates, or any director or officer of the Company,
or any entity with which the Company is doing business or proposes to do
business, or any person who may control or be an officer of any such entity.  If
Adviser becomes aware of any actual or apparent conflict of interest, he shall
promptly advise the Board’s Nominating and Governance Committee Chair as to all
relevant facts and circumstances.

 

2.  Term

 

Adviser shall perform the services set forth herein commencing on October 1,
2011 (“effective date”) and terminating six months after the effective date
(“termination date”).   Either party may terminate this agreement prior to the
termination date but with effect not earlier than the two-month anniversary of
the effective date by giving notice to the other party not fewer than 15 days
prior to the date of early termination set forth in such notice. 

 

 

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3.  Compensation

 

In consideration of services duly performed under this agreement by Adviser he
shall be entitled to receive the following as compensation therefor:

 

(a)

$30,000.00 per month as base compensation, payable in arrears on the first of
each calendar month;

(b)

Reimbursement of reasonable, out-of-pocket and properly documented expenses
incurred in travel, transportation, meals and lodging reasonably required in
connection with the performance of services as set forth herein.  Expense
reports shall be submitted on a monthly basis to the EC, with a copy to the
corporate controller. All travel shall be done on the most economical terms
available.

(c)

Options to purchase 160,000 shares of common stock of the Company in accordance
with its 2011 Long Term Incentive Plan (“Plan”), to vest in six equal
installments on November 15, 2011, November 30, 2011, December 31, 2011, January
31, 2012, February 29, 2012 and March 31, 2011.  The grant date of the options
shall be the second business day after the final execution of this agreement,
and the exercise price shall be the last sales price of the common stock on the
Nasdaq Stock Market on the grant date.  Options may be exercised in the same
manner as provided in the Plan and available to other grantees.  The options
shall expire and no longer be exercisable after the third anniversary of the
grant date.  In the case of early termination under paragraph two, options that
shall not have fully vested as a result of the number of completed months in
service shall be canceled and become null and void. The options granted pursuant
to this Section 3(c) shall be issued to Robert Garrett, Jr., individually.

(d)

Such additional compensation, in the form of cash or equity compensation, as the
Board may in its sole discretion determine to award to Adviser based on his
performance and the progress of the Company in achieving goals and milestones
under its business plan and strategy.

 

The Company, not the EC or the Board, is in all respects the exclusive obligor
of compensation and any other obligation owed to Adviser hereunder, and Adviser
hereby agrees that he shall in no event bring any action or proceeding against
the EC or any member of the Board in his or her individual or director’s
capacity arising out of or relating to this agreement.

 

4.  Confidentiality

 

(a) Protected Information shall mean trade secrets, confidential or proprietary
information, and all other knowledge, know-how, information, documents or
materials, owned or developed by the Company, licensed by or to the Company, or
otherwise in the possession of the Company, whether in tangible or intangible
form, pertaining to the business of the Company, the confidentiality of which
the Company takes reasonable measures to protect, including, but not limited to,
financial data, budgets, accounting records, customer data, customer contacts
and profiles, Company and customer strategies, marketing campaigns, marketing
processes, marketing information, business methods, future business plans,
future products, product development plans, product specifications, data bases,
operating procedures, knowledge of the organization, and other information
owned, developed, licensed or possessed by the Company; provided, however, that
Protected Information shall not include information that shall become generally
known to the public or the trade without violation of this Agreement.
 Unauthorized shall mean: (i) in contravention of the Company's policies or
procedures; (ii) otherwise inconsistent with the Company's measures to protect
its interests in its Protected Information; or (iii) in contravention of this
agreement or any duty existing under law.

 

 

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(b) The Company shall grant the Adviser access to Protected Information for use
solely in connection with the performance of his assigned duties.  Adviser shall
not use, disclose, divulge, furnish or make accessible to anyone, directly or
indirectly through any medium, any Protected Information in any Unauthorized
manner or for any Unauthorized purpose. In no event shall Adviser down-load or
transfer any Company computer or data files to any location or Unauthorized
computer or other electronic device.  After the termination date Adviser shall
not use, disseminate, or disclose Protected Information for any purpose,
directly or indirectly, except with the Company’s prior written consent.  For
purposes of clarity this provision does not apply in the event that Adviser is
required to make such disclosures pursuant to a court order. 

 

(c)  Adviser acknowledges that he will have access to Protected Information
vital to the Company's and its affiliates' businesses.  Accordingly, Adviser
consents and agrees that if he violates any of the confidentiality provisions of
this agreement, the Company and its affiliates would sustain irreparable harm
and damages at law would not be an adequate remedy for violation of this
agreement. The provisions of paragraphs 1, 3, 4, 5, and 6 of this agreement
shall survive the termination of Adviser's services to the Company, irrespective
of the reason therefor.  Further, Adviser hereby covenants and agrees that he
shall not compete with the Company or any subsidiary thereof in the carry case
or officeplace electronic accessories business, or solicit any employee of the
Company or any subsidiary while such employee is under any employment or
contractual obligation to the Company or subsidiary for a period of six months
after the termination date.

 

5.  Relationship

 

The Adviser shall be an independent contractor to the Company.  Adviser is
solely responsible for all applicable Federal, State, and local taxes,
withholding, and other obligations in respect of compensation paid him
hereunder.  This Agreement is not a contract of employment, and Adviser shall
not by the terms hereof be or become entitled to any employee benefits generally
made available to employees of the Company.  Notwithstanding anything to the
contrary in the foregoing, Adviser shall acquaint himself with the Company’s
Code of Business Conduct and Ethics and Corporate Insider Trading Policy, as
they may be revised from time to time, and shall be bound by the terms thereof
during the term of, and for 90-days after, this agreement.

 

6. Entire Agreement; Miscellaneous

 

This agreement embodies the entire agreement of the parties with respect to
advisory services and Protected Information. This agreement may not be amended,
changed, or terminated orally but only by an agreement in writing signed by the
parties hereto, in the case of the Company by a principal thereunto duly
authorized. This agreement cancels and supersedes any and all prior agreements
and understandings, oral or written, between the parties hereto.  This agreement
shall be governed by the internal laws of the State of New York without regard
to principles of conflicts of laws.

 

 

 

 

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ADVISER: RGJR CAPITAL PARTNERS LLC

FORWARD INDUSTRIES, INC.

 

 

/s/ Robert Garrett, Jr.               

/s/ Frank LaGrange Johnson

Mr. Robert Garrett, Jr., Manager

By: Frank LaGrange Johnson

Date: October 31, 2011

Date:

 

Acknowledged:

 

On behalf of

 

Executive Committee

 

 

 

/s/ Frank LaGrange Johnson

 

By: Frank LaGrange Johnson

 

Date:

 

 

 

 

 

 

 

 

 

 

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