DRTTF 8-K
Dirtt Environmental Solutions Ltd (DRTTF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Executive Employment Agreements
On March 3, 2025 DIRTT Environmental Solutions Ltd. (the “Company”) entered into addendums to the existing executive employment agreements with Benjamin Urban, originally effective June 22, 2022 (the “Urban Employment Agreement Addendum”) and Fareeha Khan, originally effective August 25, 2023 (the “Khan Employment Agreement Addendum” and together with the Urban Employment Agreement Addendum, the “Employment Agreement Addendums”). Additionally, on April 15, 2025, the Company entered into an amended and restated executive employment agreement with Richard Hunter, originally effective August 12, 2022 (the “Amended and Restated Hunter Employment Agreement”).
The Employment Agreement Addendums and the Amended and Restated Hunter Employment Agreement both provide that in the event of a “Change in Control” of the Company (as defined in the applicable equity award plan or agreement), the executive’s outstanding unvested time-based Restricted Share Units shall vest in full. Additionally, the Amended and Restated Hunter Employment Agreement provides that if Mr. Hunter’s employment is terminated without Just Cause (as defined in the Amended and Restated Hunter Employment Agreement) or for Good Reason (as defined in the Amended and Restated Hunter Employment Agreement) all outstanding unvested Restricted Share Units shall vest in full.
The Amended and Restated Hunter Employment Agreement provides for an annual base salary of CAD $506,250, four weeks paid vacation, and eligibility to participate in the Company’s health and dental plans, equity-based arrangements, Employee Share Purchase Plan, and Variable Pay Plan, with an initial target bonus of 50-100% of Mr. Hunter’s annual base salary. Mr. Hunter’s agreement also provides for reimbursement for reasonable travel and other out of pocket expenses and a tax equalization guarantee (applicable during the period he is employed from January 1, 2024 through December 31, 2026).
Pursuant to the Amended and Restated Hunter Employment Agreement, if Mr. Hunter is terminated by the Company with Just Cause (as defined in the Amended and Restated Hunter Employment Agreement), by him without Good Reason (as defined in the Amended and Restated Hunter Employment Agreement), or by reason of his death, he is entitled payment of any wages, benefits, prorated bonus, vacation pay, statutory pay, and reimbursable expenses accrued up to the date of his termination (the “Severance Benefits”). If the Company terminates Mr. Hunter without Just Cause or Mr. Hunter terminates his employment for Good Reason, he will be entitled to (i) the greater of (a) 24 months’ base salary or (b) the minimum termination notice or payment in lieu of notice required by the Employment Standards Code (the “ESC”), (ii) continued participation in the Company’s Canadian benefit plans until the earlier of the conclusion of the statutory notice period under the ESC or the date the Executive obtains any alternative benefit coverage, and (iii) reimbursement for any US benefit coverage that the executive elects to continue pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for a 24-month period or earlier (as applicable).
The termination benefits described in the preceding paragraph are subject to Mr. Hunter’s execution of release of claims in favor of the Company and his abiding by the non-competition, non-solicitation, confidentiality, and proprietary and moral rights provisions of the Hunter Amended and Restated Employment Agreement.
The foregoing description of the Employment Agreement Addendums and the Amended and Restated Hunter Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Urban Employment Agreement Addendum, Khan Employment Agreement Addendum, and Amended and Restated Hunter Employment Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2, and 10.3, respectively.
Amendment to Time-Based Restricted Share Unit Awards
On April 23, 2025 the Company amended its Time-Based Restricted Share Unit Agreements by and between the Company and each of Benjamin Urban, Fareeha Khan and Richard Hunter (each an “Amendment to the Executive RSU Agreement”) to provide that upon a Change in Control or the termination of the executive’s employment by the executive for Good Reason, by the Company without Just Cause, or by reason of executive’s death, all of the outstanding unvested Restricted Share Units held by the executive shall vest in full.
The foregoing description of the Amendment to the Executive RSU Agreement does not purport to be complete and is qualified in its entirety by reference to the Form of Amendment to the Executive RSU Agreement, a copy of which is attached hereto as Exhibit 10.4.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit |
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Description |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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Form of Restricted Stock Unit Agreement Amendment for Executives, effective April 23, 2025. |
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104 |
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Cover Page Interactive Data (embedded within the Inline XBRL document). |
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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 hereunto duly authorized.
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DIRTT Environmental Solutions Ltd. |
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Date: |
April 24, 2025 |
By: |
/s/ Fareeha Khan |
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Fareeha Khan |
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT Addendum
THIS EXECUTIVE EMPLOYMENT AGREEMENT ADDENDUM is made as of March 3, 2025.
BETWEEN:
DIRTT ENVIRONMENTAL SOLUTIONS, LTD.
(the “Company”)
- and -
Benjamin Urban
(the “Executive”)
NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Company and the Executive agree to the following additional terms to the existing contract dated on June 22, 2022.
The Addendum to Section 9a (vii) of the existing contract:
Vesting of Restricted Stock Units (RSUs) Upon Termination
Notwithstanding any provision to the contrary in the Company’s equity award plan or the Executive's grant agreement, the Executive's Restricted Stock Units (RSUs) shall vest in full (100%) under the following circumstance:
General Provisions:
All other terms and conditions in the agreement on June 22, 2022, remain unchanged.
The parties acknowledge and agree that they have read and understand the terms of this Agreement and have executed this Agreement as of the Effective Date.
Signatures are on the next page….
Exhibit 10.1
DIRTT ENVIRONMENTAL SOLUTIONS, LTD.
By: _/s/ Aron English__________________________
Name: Aron English
Title: Chair of the CGCC
Benjamin Urban_____________________ Executive Name
/s/ Benjamin Urban_____________________
Executive Signature
Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT ADDENDUM
THIS EXECUTIVE EMPLOYMENT AGREEMENT ADDENDUM is made as of March 3, 2025.
BETWEEN:
DIRTT ENVIRONMENTAL SOLUTIONS, LTD.
(the “Company”)
- and -
Fareeha Khan
(the “Executive”)
NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Company and the Executive agree to the following additional terms to the existing contract dated on August 2, 2023.
The Addendum to Section 9a (vii) of the existing contract:
Vesting of Restricted Stock Units (RSUs) Upon Retirement or Termination
Notwithstanding any provision to the contrary in the Company’s equity award plan or the Executive's grant agreement, the Executive's Restricted Stock Units (RSUs) shall vest in full (100%) under the following circumstance:
General Provisions:
All other terms and conditions in the agreement on August 2, 2023, and in the salary amendment letter on August 16, 2024 remain unchanged.
The parties acknowledge and agree that they have read and understand the terms of this Agreement and have executed this Agreement as of the Effective Date.
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Exhibit 10.2
Signatures on next page……
DIRTT ENVIRONMENTAL SOLUTIONS, LTD.
By: /s/ Aron English Name: Aron English
Title: Chair of the CGCC
Fareeha Khan
Executive Name
/s/ Fareeha Khan
Executive Signature
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Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of March 20, 2025.
BETWEEN:
DIRTT ENVIRONMENTAL SOLUTIONS, Ltd.
(the “Company”)
- and -
RICHARD J. HUNTER
(the “Executive”)
RECITALS:
NOW THEREFORE in consideration of the Executive’s recent promotion to the role of President & Chief Operating Officer, the increased compensation pursuant to that promotion, the increased entitlements to termination notice and severance as provided in this Agreement, the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Company and the Executive agree as follows:
DOCPROPERTY "CUS_DocIDChunk0" NATDOCS\85796955\V-5
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in an undertaking which carries on a business that competes with the Business, or any material part thereof. For greater certainty, Falkbuilt Ltd., or any affiliate or subsidiary of Falkbuilt Ltd., is competitive with the Business.
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Richard J. Hunter
***
DIRTT Environmental Solutions, Ltd.
***
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[Signature page follows]
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IN WITNESS WHEREOF the parties acknowledge and agree that they have read and understand the terms of this Agreement and have executed this Agreement as of the Effective Date.
DIRTT ENVIRONMENTAL SOLUTIONS, LTD.
By: /s/ Aron English Name: Aron English
Title: Chair of the CGCC
/s/*** /s/ Richard Hunter
Witness (Signature) Richard Hunter
***
Witness (Print)
***
Exhibit 10.4
DIRTT ENVIRONMENTAL SOLUTIONS LTD.
LONG TERM INCENTIVE PLAN
Amendment no. 1 to TIME-Based Restricted SHARE Unit Award Agreement
This Amendment No. 1 to the Time-Based Restricted Share Unit Award Agreement, dated as of April 23, 2025 (the “Amendment”), is by and between DIRTT Environmental Solutions Ltd. (the “Corporation”) and [●] (the “Participant,” and together with the Corporation, the “Parties”, and each, a “Party”).
WHEREAS, the Parties have entered into certain Time-Based Restricted Share Unit Agreements with respect to Time-Based Restricted Share Units that are outstanding as of the date of this Amendment (the “Existing Agreements”), pursuant to the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan, as amended and restated (the “Plan”);
WHEREAS, Section 8 of the Plan provides that the Board may amend awards granted under the Plan without the consent of the Participant so long as such amendment does not impair the rights of the Participant;
WHEREAS, the Corporation desires to amend the Existing Agreements to adjust the vesting provisions as set forth herein and these amendments do not impair the rights of the Participant.
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein and in the Existing Agreements, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
“b. Termination of Employment. Except as provided in Section 5 of the Plan or below in this Section 3(b), if the Participant’s service, consulting relationship, or employment with the Corporation, an Affiliate, or a successor entity is terminated for any reason prior to the last Vesting Date included in Section 3 of this Award Agreement, then the Restricted Share Units in the Restricted Share Unit Account that are not Vested Restricted Share Units as of the Termination Date will be forfeited and the Participant will cease to have any right or entitlement to receive any payment (whether in cash or Shares or other property) under those forfeited units.
i. If the Participant’s service, consulting relationship, or employment with the Corporation, an Affiliate, or a successor entity is terminated by reason of Disability prior to the last Vesting Date included in Section 3 of this Award Agreement, a pro-rata portion of the number of Restricted Share Units that are eligible to vest upon the next Vesting Date following the Termination Date shall become Vested Restricted Share Units immediately prior to the Participant’s Termination Date, based on the number of complete months from the Date of the immediately preceding Vesting Date, and if no Vesting Date has occurred as of the Termination Date, then from the Date of Grant to the Termination Date, divided by the total number of months in the period beginning on the Date of the immediately preceding Vesting Date, and if no Vesting Date has occurred as of the Termination
Exhibit 10.4
Date, then from the Date of Grant and ending on the next Vesting Date following the Termination Date. Any Restricted Share Units in the Restricted Share Unit Account that are not Vested Restricted Share Units on the Termination Date after giving effect to this Section 3(b)(i), will be forfeited and the Participant will cease to have any right or entitlement to receive any payment (whether in cash or Shares or other property) under those forfeited units.
“Disability” means a medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than twelve (12) months and which causes an individual to be unable to engage in any substantial gainful employment- related activity, or any other condition of impairment that the Committee, acting reasonably, determines constitutes a disability.
ii. If the Participant’s service, consulting relationship, or employment with the Corporation, an Affiliate, or a successor entity is terminated by the Corporation without “Just Cause” (as defined in the Employment Agreement between the Corporation and the Participant, as amended from time to time (the “Employment Agreement”)), by the Participant for Good Reason (as defined in the Employment Agreement), or by reason of Participant’s death, any Restricted Share Units in the Restricted Share Unit Account that are not Vested Restricted Share Units on the Termination Date shall become Vested Restricted Share Units on the Termination Date.
iii. Notwithstanding the foregoing, upon the occurrence of a Change of Control, any Restricted Share Units in the Restricted Share Unit Account that are not Vested Restricted Share Units shall become Vested Restricted Share Units.”