Corporate Governance Guidelines

I. Introduction

These Corporate Governance Guidelines are established by the Board of Directors to provide a structure within which our directors and management can effectively pursue Fab-Form's objectives for the benefit of our stockholders. The Board intends these guidelines to serve as a flexible framework within which the Board may conduct its business, not as a set of binding legal obligations. These guidelines should be interpreted in the context of all applicable laws, Fab-Form's charter documents, other governing legal documents and Fab-Form policies. The policies shall prevail in the case of a conflict with guidelines.

The importance of an effective Board of Directors to ensure continued growth and profitability cannot be understated.

II. Board Structure and Composition

1. Size of the Board
   The authorized number of directors will be determined from time to time by resolution of the Board. As of 25 November 2024, the number is four.
2. Board Membership Criteria
   Fab-Form's Nominating and Corporate Governance Committee reviews and makes recommendations to the Board regarding the composition and size of the Board, determines the relevant criteria (including any minimum qualifications), and recommends to the Board the slate of nominees for election at the Annual Meeting of Stockholders or nominees for election to fill interim vacancies on the Board.
3. Director Independence
   A majority of directors on the Board will be independent as required by the TSX. The Board believes that it is often in the best interest of the company and its stockholders to have non-independent directors, including current and (in some cases) former members of management, serve as directors. Each independent director who experiences a change in circumstances that could affect such director's independence should deliver a notice of such change to Fab-Form's General Counsel.
4. Director's Tenure
   Directors are re-elected every three years. The Board does not believe it should establish term limits because directors who have developed increasing insight into Fab-Form and its operations over time provide an increasing contribution to the Board as a whole.

III. Principal Duties of the Board of Directors

1. To Oversee Management
   The fundamental responsibility of the Board is to exercise their business judgment to act in what they reasonably believe to be the best interests of Fab-Form and its shareholders. It is therefore the duty of the Board to oversee management’s performance to ensure that Fab-Form operates in an effective, efficient and ethical manner.
2. To Oversee Management's Strategic Plan
   The Strategic Plan is the future of the company. This plan should be reviewed and adjusted according to changing market conditions and industry trends. The new product pipeline forms part of this strategic plan.
3. Risk Oversight
   The Board has responsibility for risk oversight. Directors are expected to invest the time and effort necessary to understand Fab-Form's business and financial strategies and challenges. A significant risk for a small and growing company is ensuring continuity of management. The Board must evaluate this risk on a continual basis.
4. Attending Board and Committee Meetings
   The basic duties of the directors include attending quarterly Board and committee meetings and actively participating in Board and committee discussions. Directors are also expected to make themselves available outside of board meetings for advice and consultation.
5. To Select the Chair and Chief Executive Officer
   The Board will select the chairman of the Board and the chief executive officer in compliance with Fab-Form's Certificate of Incorporation and Bylaws.
6. To Evaluate Management Performance and Compensation
   Periodically, the Compensation Committee will evaluate the performance of the chief executive officer and other executive officers and review and approve the compensation plans, policies and arrangements for such executives. It will also evaluate the compensation plans, policies and programs for officers and employees to ensure they are appropriate, competitive and properly reflect Fab-Form's objectives and performance.
7. To Review Management Succession Planning
   The Nominating and Corporate Governance Committee will periodically review the succession planning for Fab-Form's executive officers, report its findings and recommendations to the Board, and work with the Board in evaluating potential successors to these executive management positions.
8. To Monitor and Manage Potential Conflicts of Interest
   The Nominating and Corporate Governance Committee is responsible for considering questions of possible conflicts of interest of Board members and of corporate officers and reviewing actual and potential conflicts of interest of Board members and corporate officers. The Audit Committee will review and approve all related party transactions for which audit committee approval is required by applicable law or the rules of the TSX Venture Stock Market.
9. To Ensure the Integrity of Financial Information
   The Audit Committee assists the Board in oversight of the integrity of Fab-Form's financial statements, Fab-Form's compliance with legal and regulatory requirements and Fab-Form's internal accounting and financial controls. The Audit Committee reports to the Board on a regular basis regarding such oversight.
10. To Monitor the Effectiveness of Board Governance Practices
    The Nominating and Corporate Governance Committee will review and evaluate the effectiveness of the governance practices under which the Board operates and make changes to these practices as needed.

IV. Board Procedures

Directors are expected to prepare for, attend in person, and contribute meaningfully in all Board and applicable committee meetings in order to discharge their obligations. Consistent with their fiduciary duties, directors are expected to maintain the confidentiality of the deliberations of the Board and its committees. If a board member is located at a distance from Company, he may attend meetings remotely.

1. Frequency of Board Meetings
   Regular meetings of the Board shall be held at such times and places as determined by the Board. There will be at least four regularly scheduled Board meetings each year, but the Board will meet more often if necessary. Board meetings are in person whenever possible.
2. Responsibilities of Board Chair
   The Chair shall ensure that an agenda is prepared in advance and sent to all directors. Concurrently the Chair shall ensure minutes are taken and distributed to all directors.
3. Other Commitments
   Each member of the Board is expected to ensure that other existing and future commitments, including employment responsibilities and service on the boards of other entities, do not materially interfere with the member's service as director. Board members should not have more public company memberships than would allow them to effectively and productively be a member of Fab-Form's board.
4. Executive Sessions of Independent Directors
   TSX rules require independent Board members to regularly meet in executive session. The independent Board members shall meet regularly in executive session and at other times as necessary. Committees of the Board may also meet in executive session as necessary.
5. Board Access to Management
   Members of the Board will have access to Fab-Form's management and employees as needed to fulfill their duties.
6. Code of Business Conduct and Ethics
   Fab-Form has adopted a Code of Business Conduct and Ethics to provide guidelines for the ethical conduct by directors, officers and employees. The Code of Business Conduct and Ethics is posted on Fab-Form's website and directors, officers and employees are expected to be familiar with it and comply with it.
7. Engaging Experts
   In performing its duties, the Board and each committee shall have the authority, at Fab-Form's expense, to retain, hire, and obtain advice reports or opinions from internal or external legal counsel and expert advisors, as they may deem necessary or appropriate, without consulting with, or obtaining approval from, management of Fab-Form in advance.

V. Board Committees

1. Number and Composition of Committees
   The Board currently has the following standing committees: an Audit Committee and a Compensation Committee. From time to time the Board may form a new committee or disband a current committee. Each committee complies with the independence and other requirements established by applicable law and regulations, including BCSC and TSX Venture rules.
2. Committee Appointments
   Members of all standing committees are appointed by the Board. The Board determines the exact number of members and can at any time remove or replace a committee member.
3. Committee Proceedings
   The Chair of each committee of the Board will, in consultation with appropriate committee members and members of management, and in accordance with the committee's charter, determine the frequency and length of committee meetings and develop the committee's agenda.

VI Director Orientation and Continuing Education

Fab-Form provides an orientation program for new directors that includes written materials, oral presentations, and meetings with senior members of management. The orientation program is designed to familiarize new directors with Fab-Form's business and strategy. The Board believes that ongoing education is important for maintaining a current and effective Board. Accordingly, the Board encourages directors to participate in ongoing education, as well as participation in accredited director education programs.

VII Board Compensation

The Compensation Committee has the responsibility to review and make recommendations to the Board with respect to compensation for service as a member of the Board or a Board committee. Each independent Board member is paid $12,000 per year in common shares as per the Share Compensation Plan (SCP). Dependent members are not paid.

VIII Incentivizing Company Personnel

Fab-Form believes that more closely aligning the interests of our directors, management and employees with those of our stockholders is important to promote accountability and prudence.

1. Employees as Owners
   Each year, 10% of Company after tax profits are paid to employees, consultants and directors in the form of common shares. A Share Compensation Plan ("Plan") governs this equity distribution. The Plan ensures employees feel a part of the Company and will work hard to maximize his/her profits. This is a core principle of the Company.
2. Board and CEO Minimum Stock Ownership Requirement
   Each director and Chief Executive Officer will be required to meet the following minimum stock ownership requirements: (i) each director shall own shares of Fab-Form stock equal in value to at least five times the annual retainer for directors; and (ii) the Chief Executive Officer shall own shares of Fab-Form stock equal in value to his/her base salary. Our directors and Chief Executive Officer shall have five years from the later of (i) March 3, 2015 and (ii) the date each such person assumed his/her roles at Fab-Form to come into compliance with these ownership requirements. Compliance with the minimum stock ownership level will be determined on the date when the grace period set forth above expires, and annually on each December 31 thereafter, by multiplying the number of shares held by each director and Chief Executive Officer and the average closing price of those shares during the preceding month.

IX Clawback Policy

The Board shall, in all appropriate circumstances, require reimbursement of any annual incentive payment or long-term incentive payment to an executive officer of Fab-Form where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a financial restatement of Fab-Form's financial statements; and (2) a lower payment would have been made to the executive based upon the restated financial results.

In each such instance, Fab-Form will, to the extent practicable, seek to recover from the individual executive the amount by which the individual executive’s incentive payments for the relevant period exceeded the lower payment that would have been made based on the restated financial results.

X Auditor Rotation

The Audit Committee will ensure that the lead audit partner and the audit review partner be rotated every five (5) years as is required by TSXV rules.

XI Communications with Shareholders

1. Stockholder Communications to the Board
   Stockholders may contact the Board to provide comments, to report concerns including issues related to Fab-Form's accounting practices, internal controls, financial statements or auditing matters, or to ask questions at the following address:
   
   Corporate Secretary
   Fab-Form Industries Ltd.
   Unit 19, 1610 Derwent Way
   Delta, BC V3M 6W1
   Canada
2. Annual Meeting of Stockholders
   Although Fab-Form does not have a formal policy regarding attendance by members of the Board of Directors at Fab-Form's annual meeting of stockholders, Fab-Form encourages directors to attend.

XII Promotion of Common Shares

The Board has a policy in place that there will be no contracting out of the promotion of common shares to stock promoters. The Board believes profits and invested capital is best used to develop and market new products. This will enhance long term growth of sales and earnings per share.

XIII Periodic Review of the Corporate Governance Guidelines

These guidelines shall be reviewed periodically and the Board will make appropriate changes.

Reviewed and approved by the board, 25 November 2024