Forward Industries, Inc. Announces Corporate Actions
The Board of Directors of Forward Industries, Inc. (the “Company”) (NASDAQ:FORD), to provide protection to shareholders and enable the Board to discharge its duties to all shareholders, today adopted a temporary Shareholder Protection Rights Plan (the “Rights Plan”) and declared a distribution of one Right on each outstanding share of Common Stock of the Company to shareholders of record at the close of business on June 21, 2010. The Rights Plan will not preclude accepting a cash offer, as set forth below.
This action was recommended to the Board unanimously by the Special Committee of the Board, which is comprised solely of independent directors and was formed to assess, independent of management, the Company’s strategic options in light of statements made by the LaGrange Group (as defined below) in its Schedule 13D filings.
Fred Hamilton, Chairman of the Special Committee of the Board, stated, “The Rights Plan is intended to protect shareholders and allow a transaction that is in the best interest of the Company and its shareholders because the Rights can be redeemed prior to a triggering event.” The Rights Plan is designed to cause dilution to a person or group that acquires 28% or more of the Company’s Common Stock unless the Rights are first redeemed by the Board pursuant to the Rights Plan.
The Rights Plan was adopted in response to (i) the purchase by LaGrange Capital Partners, L.P., LaGrange Capital Management, L.L.C., LaGrange Capital Partners Offshore Fund, Ltd. and LaGrange Special Situations Yield Master Fund, Ltd., LaGrange Capital Administration, L.L.C. and Frank LaGrange Johnson (collectively, the “LaGrange Group”), as reported on their Schedule 13D, most recently amended on June 2, 2010, of 2,058,445 shares of Common Stock, which the Schedule 13D states as constituting 25.8% of the Company’s outstanding Common Stock, (ii) their stated intention, reported by their Schedule 13D, to take certain actions including “offering proposals to the [Company] which may concern changes to the capitalization, ownership structure (including a potential sale of the [Company]), the advisability or inadvisability of acquisitions by the [Company], board composition, management composition, or operations of the [Company]” and (iii) their unwillingness, despite the Special Committee’s request for an earlier meeting, to agree to meet with the Special Committee until the week of July 12, 2010. The Rights Plan was adopted to deter coercive takeover tactics that can be used to deprive shareholders of the full value of their investment, to afford the Special Committee the opportunity to fully consider any proposal by the LaGrange Group and to enable the Board to discharge its duties to all shareholders.
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