0001341004-14-000499.txt : 20140624 0001341004-14-000499.hdr.sgml : 20140624 20140606110628 ACCESSION NUMBER: 0001341004-14-000499 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20140606 DATE AS OF CHANGE: 20140606 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FORWARD INDUSTRIES INC CENTRAL INDEX KEY: 0000038264 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 131950672 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45773 FILM NUMBER: 14895492 BUSINESS ADDRESS: STREET 1: 1801 GREEN ROAD STREET 2: SUITE E CITY: POMPANO BEACH STATE: FL ZIP: 33064 BUSINESS PHONE: 9544199544 MAIL ADDRESS: STREET 1: 1801 GREEN RD STREET 2: SUITE E CITY: POMPANO BEACH STATE: FL ZIP: 33064 FORMER COMPANY: FORMER CONFORMED NAME: PROGRESS HEAT SEALING CO INC DATE OF NAME CHANGE: 19721111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Terence Bernard Wise CENTRAL INDEX KEY: 0001536431 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: BRAMBLEDOWN, 8 VALLEY WAY, CITY: GERRARDS CROSS, BUCKS. STATE: X0 ZIP: SL9 7PN BUSINESS PHONE: 914.669.5559 MAIL ADDRESS: STREET 1: BRAMBLEDOWN, 8 VALLEY WAY, CITY: GERRARDS CROSS, BUCKS. STATE: X0 ZIP: SL9 7PN SC 13D/A 1 sc13da3.htm SCHEDULE 13D, AMENDMENT NO. 3 sc13da3.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 3)*

 
FORWARD INDUSTRIES, INC.
(Name of Issuer)
 
Common Stock, $ 0.01 par value
(Title of Class of Securities)
 
349862300
(CUSIP Number)
 
Michael Mies, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 1100
Palo Alto, CA 94301
+1 650 470 3130
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
 
June 6, 2014
(Date of Event which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  ¨
 
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
 
*
 
The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 

 

1.
 
Name of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
 
     
 
 
Terence Bernard Wise
 
 
2.
 
Check the Appropriate Box if a Member of a Group
 
  
 
 
(a)  ¨
 
  
 
 
(b)  x
 
 
3.
 
SEC Use Only
 
  
 
 
 
 
 
4.
 
Source of Funds
 
  
     
 
 
PF
 
 
5.
 
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
 
¨
     
 
 
 
 
 
6.
 
Citizenship or Place of Organization
 
  
     
 
 
UK
 
 
     
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With
 
  7.      Sole Voting Power
 
  
 
1,608,541 shares of Common Stock
 
  8.      Shared Voting Power
 
  
 
0
 
  9.      Sole Dispositive Power
 
  
 
1,608,541 shares of Common Stock
 
10.      Shared Dispositive Power
 
  
 
0
         
11.
 
Aggregate Amount Beneficially Owned by Each Reporting Person
 
 
     
 
 
1,608,541 shares of Common Stock
 
 
12.
 
Check If the Aggregate Amount in Row (11) Excludes Certain Shares
 
¨
 
 
 
 
 
13.
 
Percent of Class Represented by Amount in Row (11)
 
  
     
 
 
19.6% of Common Stock
 
 
14.
 
Type of Reporting Person
 
  
     
 
 
IN
 
 

 
 
 
 
Item 1. Security and Issuer.
 
This Amendment No. 3 (“Amendment”) to Schedule 13D relates to the Common Stock, $.01 par value per share (the “Common Stock”), of Forward Industries, Inc. (“Forward” or the "Company"), a New York corporation. The address of the principal executive office of Forward is 477 Rosemary Avenue, Suite 219, West Palm Beach FL 33401. The initial statement on Schedule 13D, previously filed by Terence Bernard Wise on December 15, 2011, as amended, is hereby amended and supplemented with respect to the items set forth in this Amendment.
 
Item 2. Identity and Background.
 
(a) - (c).  This statement is filed by an individual, Terence Bernard Wise (“Mr. Wise”), who resides at Flat 2, 11 Cadogan Square, London SW1X OHT, United Kingdom.  Mr. Wise is a U.K. resident and citizen and is a private businessman involved in the furniture, plastics, luggage and accessories industries.
 
(d) - (f).  Mr. Wise, who is a U.K. citizen, has not, during the past five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any civil proceeding or a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.
 
Item 3. Source and Amount of Funds or Other Consideration.

As stated below, on December 11, 2013, the Company granted Mr. Wise 15,000 shares of restricted common stock as part of his compensation for serving on the Company's Board of Directors.  No funds were paid by Mr. Wise in connection with the grant.
 
Item 4. Purpose of Transaction.

On June 6, 2014, Mr. Wise delivered a letter to Forward (the “Nomination Letter”) nominating Mr. Wise, Howard Morgan, Michael Luetkemeyer and Eric Freitag, as nominees (the "Nominees") for election to the Board of Directors of Forward (the “Board”) at the 2014 annual meeting of stockholders of Forward (the “2014 Annual Meeting”).   Mr. Wise has engaged, and intends to continue to engage, in discussions with management and the Board regarding the nomination of directors at the 2014 Annual Meeting and the composition of Forward's Board, generally, as well as ways to enhance stockholder value.

On June 6, 2014, Mr. Wise delivered a letter to the Chairman of the Board, Frank LaGrange (Grange) Johnson, and other Board members, expressing strong disappointment at the management and Board’s failure to address the numerous issues facing Forward or engage in a constructive dialogue with Mr. Wise regarding the clear and compelling need for change in the composition of the Board. The full text of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In the letter, Mr. Wise expressed his concern with Forward's chronic underperformance, poor corporate governance standards and lack of independence on the Board.  Mr. Wise also expressed serious misgivings about a recent series of related-party transactions involving Mr. Johnson.  Accordingly, Mr. Wise intends to solicit proxies for the election of himself and his three independent, highly-qualified candidates, including two veterans of the medical device and healthcare sector, Forward's largest market, with high level operational or board experience at medical device companies,  a seasoned executive in the consumer durable products industry and a direct stockholder representative with 30 years of experience in the furniture, plastics, luggage and accessories industries. Mr. Wise concluded that he remains open to a constructive dialogue with management and the Board regarding Board composition and maximizing value at Forward.
 
In addition, on December 11, 2013, the Company granted Mr. Wise 15,000 shares of restricted common stock pursuant to the 2007 Equity Incentive Plan as part of his compensation for serving on the Company's Board of Directors.  The restricted common stock vests on December 11, 2014, the first anniversary of the date of grant.

 
 
 

Mr. Wise does not have any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein.  Mr. Wise intends to review his investment in Forward on a continuing basis.  Depending on various factors including, without limitation, Forward’s financial position and investment strategy, changes in market prices of Forward's Common Stock and conditions in the securities markets and general economic and industry conditions, Mr. Wise may in the future take such actions with respect to his investment in Forward as he deems appropriate including, without limitation, continuing to engage in communications with management and the Board, engaging in discussions with stockholders of Forward and others about Forward and Mr. Wise’s investment, making proposals to Forward concerning changes to the capitalization, ownership structure, board structure (including board composition), corporate governance or operations of Forward,  or changing his intentions with respect to any and all matters referred to in Item 4. Mr. Wise may further purchase, hold, vote, trade, dispose or otherwise deal in the Common Stock at times, and in such manner, as he deems advisable depending on various factors including those set forth above.
 
Mr. Wise reserves the right to formulate other plans and/or make other proposals, and take such actions with respect to his investment in Forward, including any or all of the actions set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D, or acquire additional Common Stock or dispose of all or part of the Common Stock beneficially owned by him, in the public market or privately negotiated transactions.  Mr. Wise may at any time reconsider and change his plans or proposals relating to the foregoing.
 
Item 5. Interest in Securities of the Issuer.

(a) and (b) As of the date hereof, Mr. Wise beneficially owns 1,608,541 shares of Forward’s Common Stock, representing 19.62% of the issued and outstanding shares of Common Stock (based on an aggregate of 8,195,808 shares of Common Stock outstanding as reported in Forward's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2014), including 10,000 shares of common stock subject to options exercisable within 60 days of the date hereof and 15,000 shares of restricted common stock that vest on the first anniversary of the grant date, December 11, 2014.  Mr. Wise has sole voting power over all shares owned by him and sole dispositive power over all the shares owned by him other than the 15,000 shares of unvested restricted common stock over which he does not have dispositive power.
 
(c) In the 60 days prior to this filing, Mr. Wise has not acquired any of Forward's Common Stock.

(d) and (e) Not applicable.
 
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
 
Mr. Wise has entered into letter agreements with each of Messrs. Howard Morgan, Eric Freitag and  Michael Luetkemeyer,  (the "Nominee Indemnification Agreements"), under which each has agreed to serve as Mr. Wise's nominee for election to the Board and to serve as a director if elected. Pursuant to the Nominee Indemnification Agreements, Mr. Wise has agreed to indemnify each Nominee for losses arising out of such Nominee's service as a nominee for election to the Board. The foregoing summary of the Nominee Indemnification Agreement is qualified in its entirety by reference to the full text of the Nominee Indemnification Agreements, the form of which is attached as Exhibit 99.2 hereto and is incorporated by reference herein.
 
Item 7. Material to be Filed as Exhibits.
 
The information in Item 7 is hereby amended and supplemented as follows:
 
Exhibit 99.1
  
Letter to the Chairman and Board of Forward, dated June 6, 2014
     
Exhibit 99.2
  
Form of Nominee Indemnification Agreement.

 
 
 
 
SIGNATURE
 
After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this Amendment is true, complete and correct.
 
Date: June 6, 2014
 
  
 
 
By:
 
/s/Terence Bernard Wise
 
 
Name:
 
Terence Bernard Wise

EX-99.1 2 ex99-1.htm EXHIBIT 99.1 - LETTER TO CHAIRMAN OF THE BOARD OF FORWARD ex99-1.htm
 
Exhibit 99.1
 
 
June 6, 2014
 
Mr. Frank LaGrange Johnson, Chairman
Members of the Board of Directors
Forward Industries, Inc.
477 Rosemary Ave., Suite 219
West Palm Beach, FL 33401
 
Dear Members of the Board:
 
I am writing to provide more information regarding my decision to nominate four highly-qualified candidates for election to the Board of Directors (the “Board”) of Forward Industries, Inc. (“Forward” or the “Company”) at its 2014 annual meeting of shareholders.
 
I am Forward’s largest shareholder, owning 19.6% of the Company’s common stock. I am also a member of Forward’s Board, and have over 30 years of experience in the furniture, plastics, luggage and accessories industries. My large investment in Forward reflects my belief that it is a company with great potential, with many talented long-term employees, an attractive core business and what I believe to be underappreciated intrinsic value.  Unfortunately, however, I have lost confidence in the ability of the current Board, under the leadership of Chairman Frank LaGrange Johnson, to effectively oversee the Company and reverse the ongoing destruction of shareholder value.
 
For over six months, I have expressed my significant disappointment with the Company’s chronic underperformance, poor corporate governance standards, including a number of questionable related-party transactions involving Mr. Johnson, and what I believe to be a lack of independence on the Board. I have attempted to communicate constructively with management and the Board in the hope that we could work collaboratively to implement proper corporate governance measures and address these troubling transactions. Unfortunately, Mr. Johnson and his supporters on the Board have shown no interest in handling or even engaging in a productive dialogue regarding these problems. Accordingly, I am compelled to bring my concerns directly to Forward’s shareholders and nominate a new slate of director nominees for election.
 
To be clear, my goal is not to control the Board or to take the Company private. Rather, I am engaging in this election contest only as a last resort in order to introduce two new, truly independent and qualified members to the Board, along with myself and independent incumbent director Howard Morgan. In doing so, my aim is to establish an independent and balanced board that will represent the best interests of all shareholders.
 
Mr. Johnson and His Management Team Have
 Presided Over a 61.98% DECLINE in Value for Shareholders
 
Forward's stock is worth 31.72% less than it was one year ago and 61.98% less than it was on August 9, 20101, the day prior to the Company's public announcement that it had appointed Frank LaGrange Johnson as director and Chairman, along with the appointment of two additional individuals selected by Mr. Johnson as directors and the replacement of Forward's CEO with his chosen candidate.2
 
_______________________
1 Based on the closing price of Forward's common stock on June 5, 2014.
 
2 On August 10, 2010, Forward entered into a Settlement Agreement with Mr. Frank LaGrange Johnson, LaGrange Capital and certain other entities related to Mr. Johnson (collectively, the "LaGrange Group"), in order to avoid the expense and disruption of a contested election of directors.  Pursuant to the agreement, the LaGrange Group abandoned its efforts to call a special meeting of the Company’s shareholders for such purpose and the Company agreed to certain changes to the composition of the Company's Board and management team.

 
 
 

During this time, the Company's balance sheet value (i.e., total assets less total liabilities) has fallen significantly—dropping from $22,473,167 as at June 30, 2010 (the last reporting date prior to Grange's appointment as Chairman) to $10,076,759 as at March 31, 20143  (a nearly 55.2% decline in less than four years). Over the same period, we have also witnessed a significant decline in cash reserves. Forward's reported cash and cash equivalents (including marketable securities) have dropped from $19,877,077 as at June 30, 2010 to $7,351,549 as at March 31, 2014. This represents a reduction in cash and cash equivalents (including marketable securities) of $12,525,528, or a 63.0% decline.
 
It is abundantly clear in my view that present leadership at Forward lacks the necessary business acumen to implement a directional strategy that successfully manages current assets in order to create sales growth with sustained profitability. I believe the above statistics, among many others, demonstrate the clear and compelling need for change at Forward.
 
I am Proposing Board Candidates That Are Well Qualified to
Oversee the Restoration of Value and Sound Governance at Forward
 
Forward requires a fresh perspective, independent thinking and analytical rigor—traits that I believe the Board as currently composed and under Mr. Johnson’s leadership lacks.  I have nominated four highly qualified candidates, including myself, whose experience should add immediate value to a Board that is entrenched and should be held accountable. My nominees are:
 
Michael Luetkemeyer. Mr. Luetkemeyer, has extensive executive experience in the medical device industry, Forward's largest market, having served as the Chief Financial Officer of TranS1, Inc., a NASDAQ-listed medical device company from April 2007 through March 2010. He currently works as an independent consultant in the areas of strategic planning, financial management and infrastructure development. Prior to serving as CFO of TranS1, Mr. Luetkemeyer served as Senior Vice President and Chief Financial Officer of Micromuse, Inc., a NASDAQ-listed provider of network management software, from October 2001 to May 2006. He also served as a member of Micromuse's board of directors from January 2003 through February 2005, and as its interim CEO during 2003.  Prior to Micromuse, Mr. Luetkemeyer also served as Chief Financial Officer at NASDAQ-listed companies Rawlings Sporting Goods and Electronic Retailing Systems. Mr. Luetkemeyer has held a variety of senior finance positions throughout his career, including more than 10 years with General Electric, where he served with GE Aerospace, GE Semiconductor, and GE Plastics. Mr. Luetkemeyer will bring extensive financial and accounting experience to the Board.
 
Eric Freitag. Mr. Freitag currently acts as the Group Director of Product Innovation for R/GA, an international digital advertising agency, focusing on brand development and technology. Mr. Freitag specializes in the healthcare sector with extensive experience working with pharmaceutical, medical device and healthcare provider clients. Mr. Freitag has previously held leadership management positions at Smart Design, an innovation consulting firm, subsequent to a career in product development, having served as Global Director of its Healthcare Practice and Director of Engineering Services for nearly a decade.   Mr. Freitag will bring crucially needed experience in product design and strategic innovation to the Board.
 
Howard Morgan. Mr. Morgan has served as an independent director of Forward since February 2012.  Mr. Morgan has been the Managing Director of The Justwise Group Limited, a consumer durable products company, since 1997, having previously been employed by Justwise in various senior executive roles since 1989.  Mr. Morgan has also served as a Director of Eurofresh, a wholesale distribution company of fresh produce, since March 2013. Mr. Morgan brings significant business management and operational skills and experience to the Board.
 
_______________________
3 Total shareholders' equity as reported in the Company's Form 10-Q for the periods ended June 30, 2010 and March 31, 2014, respectively.
 
 
 
 
 
Terence Bernard Wise. Mr. Wise has served as a director of Forward since February 2012 and has over 30 years of experience in the furniture, plastics, luggage and accessories industries.  Mr. Wise serves as principal and Chairman of The Justwise Group Limited, which he founded in 1977, a company that specializes in the procurement of consumer durable products from Asia and is an established supplier to a list of major UK multi-channel retailers. Mr. Wise also serves as a principal of Forward Industries Asia-Pacific Corporation (f/k/a Seaton Global Corporation). In addition to his business management skills, Mr. Wise brings extensive experience in Asian markets to the Board.
 
 
 
I believe that Forward and its shareholders deserve a Chairman, Board and management focused solely on what is best for the Company.  I have lost faith that our current leadership fits this bill. Forward’s continued discouraging operating and share performance and poor governance practices all further solidify my view that material change in Board composition, executive leadership, and corporate strategy is immediately required. Accordingly, I will be filing proxy materials over the coming weeks, and I will seek support from shareholders to replace certain members of the current Board with highly qualified director nominees. Following the filing of proxy materials, I will be sharing more information on my plans for the Company and my strategy to unlock substantial value for the benefit of all shareholders. As the largest shareholder of Forward, my interests are directly aligned with those of Forward's other shareholders and my incentive for value creation incontrovertibly exceeds that of the rest of the collective Board.
 
I remain open to, and am hopeful for, a meaningful dialogue with you regarding these issues and how to maximize value for Forward’s shareholders.
 
 
 
Kind Regards,
   
  /s/ Terence Bernard Wise
   
  Terence Bernard Wise
 
 
ADDITIONAL INFORMATION:
 
Terence Bernard Wise, together with the other participants named herein, intends to file a preliminary proxy statement and accompanying proxy card with the Securities and Exchange Commission (the “SEC”) to be used to solicit votes for the election of his director nominees at the 2014 annual meeting of stockholders of Forward Industries, Inc. ("Forward"), a New York corporation.  

FORWARD STOCKHOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, AS IT WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY STATEMENT AND OTHER PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO INNISFREE M&A INCORPORATED TOLL-FREE AT (888) 750-5834 (BANKS AND BROKERS MAY CALL COLLECT AT (212) 750-5833).

The Participants in the proxy solicitation are Terence Bernard Wise, Howard Morgan, Michael Luetkemeyer and Eric Freitag (collectively, the “Participants”).

As of the date hereof, Mr. Wise beneficially owns 1,608,541 shares of the Company's common stock, constituting approximately 19.6% of the class. As of the date hereof, Mr. Morgan beneficially owns 25,000 shares of the Company's common stock.
 
 EX-99.2 3 ex99-2.htm EXHIBIT 99.2 - FORM OF NOMINEE INDEMNIFICATION AGREEMENT ex99-2.htm
 
Exhibit 99.2
 

CONFIDENTIAL
[DATE]

[NOMINEE NAME]
[NOMINEE ADDRESS]

Dear ____________:

Thank you for agreeing to be nominated (as such, a “Nominee”) for election to the Board of Directors ("Board") of Forward Industries, Inc., a New York corporation, (the "Company"), in connection with the proxy solicitation that I am considering undertaking to nominate and elect directors at the Company's 2014 annual meeting of shareholders, or any other meeting held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the "Solicitation"). Your outstanding qualifications, I believe, will prove a valuable asset to the Company and all of its shareholders.  This letter agreement (the "Agreement") will set forth the terms of our agreement.

A.  Agreement as Nominee.

(a)  You hereby agree: (i) to be named as a Nominee in any and all solicitation or other materials I prepare in connection with my nomination of candidates for election to the Board and/or the Solicitation, (ii) to provide all information as I may reasonably request from time to time (including, without limitation, all information required under federal securities laws or by the Company’ bylaws and applicable policies, and all other information necessary for any materials to be prepared in connection with the nomination, the Solicitation and/or a proxy statement by the Company (each a “Proxy Statement”)), and (iii) that your agreement to be a Nominee, and the information referred to above, may be disclosed in my notice of nomination and/or Solicitation materials or otherwise or by the Company in a Proxy Statement or otherwise. You represent that the information provided to me by you or on your behalf, including in your completed Questionnaire (as defined below) relating to your being a Nominee, is true and complete and does not omit any material information. You agree that you will promptly provide me with any updates to the information you have previously provided under paragraph (a)(ii) of this Section A and your representations in the Questionnaire.
 
(b)  You agree, if elected or appointed, to serve as a director of the Company, and in that capacity to act in the best interests of the Company and its stockholders and to exercise your independent judgment in accordance with your fiduciary duties in all matters that come before the Board. You agree that you are not an employee or an agent or otherwise a representative of me or my affiliates, that you are independent of me and my affiliates, and that, if elected or appointed, you will in no way be controlled by or act at the direction of me or my affiliates.

(c)  Concurrently with execution of this Agreement, you will execute a consent, in the form attached as Exhibit A, confirming your consent to being a Nominee, to being named in the nomination and Solicitation materials and/or a Proxy Statement and other materials as a Nominee, and to serving as a director of the Company if elected.

(d)  You understand that it may be difficult, if not impossible, to replace a nominee who, such as yourself, has agreed to serve as Nominee and, if elected or appointed, as a director of the Company, if such nominee later changes his mind and determines not to serve as Nominee or, if elected or appointed, as a director of the Company. Accordingly, provided you are not involuntarily precluded from serving solely as a result of a mental or physical disability or your death, I am relying upon your agreement to serve as Nominee and, if elected or appointed, as a director of the Company. In that regard, you are being supplied with a questionnaire (the "Questionnaire") in which you will provide certain information necessary for me to make appropriate disclosure to the Company and to use in creating the proxy solicitation materials to be sent to stockholders of the Company and filed with the Securities and Exchange Commission (the "Commission") in connection with the Solicitation. You further understand that this Agreement will be publicly disclosed to the Commission.

(e)  Notwithstanding anything in this Agreement to the contrary, I am not obligated to nominate you to the  Board or to identify you as an actual or potential Nominee or to commence or complete the Solicitation.

 
 
 

B.  Indemnification.

(a)  I hereby agree to indemnify and hold you harmless from and against any and all losses, claims, damages, liabilities, judgments, costs, and expenses (including reasonable fees and disbursements of counsel and costs of investigation) (collectively, “Losses”) to which you may become subject or which you may incur in connection with being made, or threatened with being made, a party or witness (or in any other capacity) to any proceeding at law or in equity or before any governmental agency or board or any other body whatsoever (whether arbitral, civil, criminal, trial, appeal, administrative, formal, informal, investigative or other), arising out of or based upon your being a Nominee (but not in connection with or based upon your being a director of the Company); provided, however, that you will not be entitled to indemnification for claims arising from your gross negligence, wilful misconduct, intentional and material violations of law, criminal actions, provision to me of false or misleading information (including false or misleading information on any questionnaire that I request you to complete), or material breach of the terms of this Agreement, in each case as judicially determined; provided further, that the indemnification and other obligations hereunder shall terminate upon your becoming a director of the Company or the conclusion of the Company's 2014 annual meeting of shareholders.

(b)  You will give prompt written notice to me when you become aware of the commencement or threatened commencement of any action in respect of which you may seek indemnification from me hereunder; provided that the failure to so provide prompt notice shall not relieve me of my indemnification obligations hereunder except to the extent that I am materially prejudiced as a result thereof. Upon receipt of such written notice, I will provide you with counsel to represent you.  Such counsel shall be reasonably acceptable to you.

(c)  I may not enter into any settlement of any Loss or claim without your consent unless such settlement includes a release of you from any and all liability in respect of such Loss or claim.  Notwithstanding anything to the contrary set forth in this letter agreement, I shall not be responsible for any fees, costs or expenses of separate legal counsel retained by you without my prior written approval.  In addition, you agree not to enter into any settlement of any Loss or claim without my written consent, which consent will not be unreasonably withheld.

(d)  Notwithstanding anything to the contrary, if I have made payments to you pursuant to the indemnification provisions hereof and you subsequently are reimbursed by a third party therefor, you will remit such subsequent reimbursement to me.

C.  Confidentiality.

(a) You hereby agree to keep confidential and not disclose to any party, without my consent, any confidential, proprietary or non-public information, including information relating to me, your nomination, the Solicitation and the existence of this Agreement, (collectively, “Information”) that you have heretofore obtained or may obtain in connection with the Solicitation or your service as a Nominee hereunder.  Notwithstanding the foregoing, Information shall not include any information that is publicly disclosed by me or my affiliates or any information that you can demonstrate is now, or hereafter becomes, through no act or failure to act on your part, otherwise generally known to the public.
 
(b) Notwithstanding the foregoing, if you are required by applicable law, rule, regulation or legal process to disclose any Information you may do so provided that you first promptly notify me so that I or any of my representatives may seek a protective order or other appropriate remedy or, in my sole discretion, waive compliance with the terms of this Agreement.  In the event that no such protective order or other remedy is obtained or I do not waive compliance with the terms of this Agreement, you may furnish only that portion of the Information which you are advised by counsel is legally required to be so disclosed and you will request that the party(ies) receiving such Information maintain it as confidential.
 
(c) All Information, all copies thereof, and any studies, notes, records, analysis, compilations or other documents prepared by you containing such Information, shall be and remain my property and, upon my request, all such information shall be returned or, at my option, destroyed by you, with such destruction confirmed by you to in writing.
 
 
 

D.  General.

(a)  This Agreement: (i) shall be governed by the laws of the State of New York, without regard to the principles of the conflicts of laws thereof; (ii) contains the entire understanding of the parties with respect to the subject matter contained herein and may not be modified or amended except by mutual written consent; (iii) may not be assigned by you without my prior written consent; and (iv) may be executed in counterparts and delivered by facsimile signatures.

(b)  Both you and I agree that money damages would not be a sufficient remedy for any breach of this Agreement by you and that in addition to all other remedies I may be entitled to, I shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy for any such breach.

(c)  I shall have the right, at any time and in my sole discretion, to terminate this Agreement and/or to withdraw your name from consideration as a Nominee. In addition, this Agreement shall automatically terminate on the earliest to occur of (i) the conclusion of the Company's  2014 annual meeting of shareholders (regardless of the outcome), (ii) your election or appointment to the Board or (iii) my communication to you of my intent not to proceed with the Solicitation. My obligations under Section B (Indemnification) and your obligations under Section C (Confidentiality) hereof shall survive any such termination or withdrawal.




[remainder of page intentionally left blank]



 
 
 

If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this Agreement.
 
 
 
 
Very truly yours,
 
 
 
 
 
Terence Bernard Wise
 
 
 
 
 
 
By:
/s/ Terence Bernard Wise
 
 
Name: 
Terence Bernard Wise
 
 
 
 
 
Accepted and agreed to:
 
 
 
 
 
 
 
 
By: 
 
 
 
Name: [NOMINEE]