DIRTT ENVIRONMENTAL SOLUTIONS LTD. (TSE:DRT) Files An 8-K Results of Operations and Financial Condition
On July 29, 2020, DIRTT Environmental Solutions Ltd. (the Company) issued a press release announcing its financial results for the three and six months ended June 30, 2020. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated into this Item 2.02 by reference.
The information set forth under Item 2.02 and in Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
(b) On July 29, 2020, Ms. Christine McGinley submitted her resignation as a director of the Company, effective August 31, 2020.
(d) On July 29, 2020, the board of directors of the Company (the Board) resolved to appoint Michael T. Ford and Shauna R. King to the Board as directors, effective August 1, 2020, each with a term expiring upon the earliest to occur of (i) the 2021 annual and special meeting of shareholders, (ii) the date their successor is elected and qualified, and (iii) their death, disability, resignation, disqualification, or removal from the Board. Upon the effectiveness of their appointment, Mr. Ford and Ms. King will both join the Audit Committee, and Ms. King will assume the role of Audit Committee Chair.
Based on information provided by Mr. Ford and Ms. King concerning their respective backgrounds, employment, and affiliations, the Board determined that each of them meets the independence requirements under the rules of the Nasdaq Stock Market (the Nasdaq), including the additional independence requirements of the Nasdaq and U.S. Securities and Exchange Commission (the SEC) applicable to members of the Audit Committee. The Board has also determined that Ms. King qualifies as an audit committee financial expert within the meaning of applicable SEC regulations. There are no transactions between the Company and Mr. Ford or Ms. King that would require disclosure under Item 404(a) of Regulation S-K. There are no family relationships between Mr. Ford or Ms. King with any director or executive officer of the Company, and there are no arrangements or understandings between Mr. Ford or Ms. King with any other persons to which either of them was appointed as a director of the Company.
Mr. Ford and Ms. King will each receive the standard non-employee director compensation for their service as directors, which compensation currently consists of an annual base retainer of $100,000. Mr. Ford will be eligible to receive an additional annual retainer of $7,500 for his service on the Audit Committee and Ms. King will be eligible to receive an additional annual retainer of $15,000 for her service as Chair of the Audit Committee. At least 50% of Mr. Fords and Ms. Kings annual retainers will be paid in deferred share units (DSUs) under the Companys Deferred Share Unit Plan for Non-Employee Directors, payable on a quarterly basis. Non-employee directors may elect to receive up to 50% of their annual retainers in DSUs in lieu of cash. In addition, to the Companys Director Share Ownership Guidelines, Mr. Ford and Ms. King will each be required, within five years of joining the Board, to hold shares of the Companys common stock equal to three times the value of the annual base retainer.
In connection with their appointment, the Company and Mr. Ford and Ms. King will enter into the Companys standard form of indemnification agreement, which requires the Company, among other things, to indemnify each of them against liabilities that may arise by reason of their status or service, and to advance expenses incurred as a result of any proceeding against each of them as to which they could be indemnified.
For a full description of the compensation program for the Companys non-employee directors and the Companys indemnification agreements, please see the Companys Proxy Statement for its 2020 annual and special meeting of shareholders, filed with the SEC on April 27, 2020.
Mr. Ford is currently the Head of Global Real Estate and Security for Microsoft Corporation, with responsibility for a multi-billion-dollar real estate portfolio including more than 38 million square feet across 113 countries. Mr. Ford was previously Senior Controller for Microsofts Cloud & Enterprise business, overseeing financial processes which included long-range strategic planning, budgeting, forecasting, accounting and earnings activities. Mr. Ford was also previously a Senior Director in Microsofts Internal Audit and Risk Management Group. The Board believes that Mr. Fords extensive real estate, technology, financial, audit and risk management experience qualify him to serve as a director.
Ms. King is an independent businessperson. From 2006 to 2015, Ms. King was Vice President, Finance and Business Operations for Yale University and, prior to that, held various leadership positions with PepsiCo, Inc., including Global Chief Information Officer and Chief Transformation Officer from 2000 to 2003. Ms. King served as a member of the board of directors of Ignite Restaurant Group, Inc. from 2014 to 2018, including as a member of its Nominating & Governance Committee, the Chair of the Audit Committee, and Co-Chair of a Transaction Special Committee. She also serves, and has served, on a variety of charitable and non-profit boards. The Board believes that Ms. Kings extensive financial and information technology experience, as well as her prior board experience, qualify her to serve as a director.