UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Departure of Chief Executive Officer and Director
On January 18, 2022 (the “Departure Date”), Kevin O’Meara’s employment as the President and Chief Executive Officer of the Company ceased pursuant to the without just cause termination provisions of Mr. O’Meara’s Executive Employment Agreement with the Company. In addition, and also pursuant to the terms of Mr. O’Meara’s Executive Employment Agreement with the Company, Mr. O’Meara resigned as a director of the Company and its affiliates effective as of the Departure Date. As a result, Mr. O’Meara will be entitled to the rights and payments set forth in Section 9 of his Executive Employment Agreement for a termination without just cause, subject to the conditions stated therein. Mr. O’Meara’s Executive Employment Agreement is filed as Exhibit 10.7 to the Company’s Registration Statement on Form 10, filed on September 20, 2019. The foregoing summary of Mr. O’Meara’s rights under the Executive Employment Agreement does not purport to be complete and is qualified in its entirety by reference to that agreement, which is incorporated herein by reference.
Appointment of Interim Chief Executive Officer
On January 18, 2022, the board of directors of the Company (the “Board”) appointed the current Board Chair, Todd Lillibridge, to serve as Interim Chief Executive Officer effective immediately until a replacement is named (the “Service Period”). The Board has retained an executive search firm to identify a permanent Chief Executive Officer replacement. Mr. Lillibridge has served on the Board since 2017. A description of his background and experience can be found in the Company’s Proxy Statement filed with the Securities and Exchange Commission on March 26, 2021.
Mr. Lillibridge will remain on the Board. The Board has determined that Mr. Lillibridge is no longer independent as a result of his appointment as Interim Chief Executive Officer. Therefore, he has resigned from all committees of the Board, including the Nominating and Governance Committee, on which he served.
The Company and Mr. Lillibridge entered into a letter agreement (the “Letter Agreement”) effective as of January 18, 2022 (the “Effective Date”), which provides that Mr. Lillibridge will be entitled to (i) monthly grants of restricted share units (“Monthly RSUs”) pursuant to the Company’s Long Term Incentive Plan (“Plan”) during the Service Period, with a grant-date Fair Market Value (as defined in the Plan) equal to approximately $41,666 per month, and (ii) a one-time grant of 230,414 additional restricted share units (the “Additional RSUs,” and together with the Monthly RSUs, the “RSUs”). The Monthly RSUs will be prorated for partial months. All of the Monthly RSUs and one-half of the Additional RSUs will vest in three equal installments on each of the first, second and third anniversary of the Effective Date. The remaining one-half of the Additional RSUs will vest on the third anniversary of the Effective Date, subject to the satisfaction of certain performance measures set forth in the Letter Agreement. Vesting for the RSUs are subject to Mr. Lillibridge’s continued service as the Interim Chief Executive Officer or, if a new Chief Executive Officer has been appointed, as a member of the Board. Mr. Lillibridge will not receive any additional compensation for his service on the Board during the Service Period.
The foregoing summary of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is filed as Exhibit 10.1 and incorporated herein by reference.
| Item 7.01 | Regulation FD |
The Company issued a press release announcing these management and Board changes on January 18, 2022. A copy of that press release is furnished as Exhibit 99.1 to this Current Report and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information, including Exhibit 99.1, be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 8.01. | Other Events |
Appointment of New Lead Independent Director
The Board has named Michael Ford to serve as Lead Independent Director during the Service Period.
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| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit Number |
Description | |
| 10.1 | Letter Agreement, dated as of January 18, 2022, by and between Todd W. Lillibridge and DIRTT Environmental Solutions Ltd. | |
| 99.1* | Press Release issued by DIRTT Environmental Solutions Ltd. on January 18, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DIRTT Environmental Solutions Ltd. | ||||||
| Date: January 19, 2022 |
By: | /s/ Charles R. Kraus | ||||
| Charles R. Kraus | ||||||
| Senior Vice President, General Counsel & Corporate Secretary | ||||||
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