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.
On August 28, 2024, RB Global, Inc. (the “Company”) announced the appointment of M. Steve Lewis, 49, as the Company’s Chief Operations Officer effective September 3, 2024.
Mr. Lewis brings with him extensive senior leadership experience in operations and supply chain management, as well as a honed approach to driving business growth through operational excellence. Before joining RB Global, Mr. Lewis was Division President at GXO Logistics from 2023 to 2024, where he was responsible for the operational processes, technological capabilities and safety standards at more than 120 distribution centers – across numerous verticals and products, including industrial, manufacturing and automotive. Mr. Lewis served as SVP, Commercial at GXO Logistics from 2021 to 2023 and as VP, Solutions & Strategy at XPO Logistics, a leading provider of freight transportation services, from 2019 to 2021. Mr. Lewis also held leadership positions at Penn Power Group, a provider of fleet services for highway equipment, transport refrigeration and power generation. Mr. Lewis is a retired U.S. Naval Officer, with over 20 years of operations and supply chain experience in the areas of product development, continuous improvement and lifecycle logistics. Mr. Lewis is a member of the Supply Chain Advisory Board at the University of Kansas. He holds an undergraduate degree from Chaminade University and a Master of Managerial Economics from the University of Oklahoma.
A copy of the press release announcing Mr. Lewis’s appointment is attached as Exhibit 99.1 to this report.
In connection with Mr. Lewis’s appointment as Chief Operations Officer, Ritchie Bros. Auctioneers (Canada) Ltd. (the “Employer”) and Mr. Lewis entered into an employment agreement (the “Employment Agreement”) on July 19, 2024, with a commencement date of September 3, 2024. Under the terms of the Employment Agreement, Mr. Lewis is entitled to: (i) an annual base salary of USD $650,000; (ii) an annual bonus opportunity (an “STI Bonus”) with a target amount equal to 100% of his base salary (with a maximum payout opportunity of 200% of base salary) consistent with the terms of the Company’s Short-Term Incentive Bonus Plan (the “STI Plan”); and (iii) an annual long-term incentive grant (“LTI Grant”) equal to 250% of his base salary to be comprised of a mix of equity that may include restricted share units, performance share units or stock options, and (iv) certain other benefits and perquisites. The specific terms and conditions for the LTI Grant will be based on the relevant plan and award documents. For 2024, Mr. Lewis’s STI Bonus will not be prorated but the maximum payout will be capped at 100% of target and will be no less than 80% of target, subject to continued employment. Mr. Lewis’s LTI Grant for 2024 will have an economic value of USD $1,625,000, with the actual number of performance share units and stock options to be granted to be determined at the grant date. The LTI Grant is subject to approval by the Compensation Committee of the Company’s board of directors.
In addition to the above, Mr. Lewis will be eligible for a sign-on grant having an economic value of USD $1,000,000 consisting of (i) restricted stock units with an economic value of USD $500,000 vesting in equal one-third parts in March of 2025, 2026 and 2027 and (ii) performance stock units with an economic value of USD $500,000 vesting in March 2027 based on the same pre-established performance criteria as the Company’s annual long-term incentive grants in 2024, with the number of shares that ultimately vest ranging from 0% to 200% of target based on actual performance.
The Employer may terminate Mr. Lewis for “cause,” as defined in the Employment Agreement, without any payment in lieu thereof, with at least 30 days’ notice, subject to a cure period of 15 days, in certain circumstances. Mr. Lewis may terminate his employment for “good reason,” as defined in the Employment Agreement, with at least 60 days’ prior written notice, subject to a cure period of 30 days. Mr. Lewis may also resign his employment under the Employment Agreement with three months’ notice.
If Mr. Lewis’s employment is terminated without “cause” or with “good reason,” Mr. Lewis will be entitled to:
| · | Eighteen (18) months’ base salary and STI Bonus at target; |
| · | All equity awards will be governed by the terms of the relevant plan; |
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| · | An STI Bonus (at target) for the year of termination of employment, pro-rated based on the number of days of employment in the year up to the termination date; and |
| · | Continued extended health and dental benefits coverage at active employee rates until the earlier of the first anniversary of the termination of Mr. Lewis’s employment or the date on which he begins new full-time employment; |
in each case, conditioned on Mr. Lewis signing, and not revoking, a full and general release of any and all claims against the Employer and its affiliates, among others.
Under the Employment Agreement, Mr. Lewis is prohibited from soliciting an employee of Employer to leave their employment with Employer or soliciting certain clients or customers of the Employer during a period of 12 months following termination. Further, the Employment Agreement prohibits Mr. Lewis from competing against the Company in Canada or the United States for a period of 12 months following termination. The Employment Agreement also prohibits Mr. Lewis from disclosing confidential information relating to the Employer.
Contemporaneously with entry into the Employment Agreement, the Employer and Mr. Lewis entered into a change of control agreement (the “Change of Control Agreement”). For purposes of the Change of Control Agreement, a “change of control” means:
| (i) | a person, or group of persons acting jointly or in concert, acquiring or accumulating beneficial ownership of more than 50% of the voting shares of the Company; |
| (ii) | a person, or group of persons acting jointly or in concert, holding at least 25% of the voting shares of the Company and being able to change the composition of the Board of Directors by having the person’s, or group of persons’, nominees elected as a majority of the Board of Directors of the Company; |
| (iii) | the arm’s length sale, transfer, liquidation or other disposition of all or substantially all of the assets of the Company, over a period of one year or less, in any manner whatsoever and whether in one transaction or in a series of transactions or by plan of arrangement; or |
| (iv) | a reorganization, merger or consolidation or sale or other disposition of substantially all the assets of the Company (a “Business Combination”), unless following such Business Combination the Company beneficially owns all or substantially all of the Employer’s assets either directly or through one or more subsidiaries. |
A “double trigger” event requires a change of control and either termination of Mr. Lewis employment with the Employer (i) by the Employer without “cause,” as defined in the Change of Control Agreement, upon a change of control or within two years following a change of control; or (ii) by Mr. Lewis for ”good reason”, as defined in the Change of Control Agreement, upon a change of control or within one (1) year following a change of control. Upon a “double trigger” event, Mr. Lewis will be entitled to a lump sum cash amount equal to the aggregate of one and one-half (1.5) times base salary; one and one-half (1.5) times at-target STI Bonus; one and one-half (1.5) times the annual premium cost that would be incurred by the Employer to continue to provide to Mr. Lewis all health, dental and life insurance benefits provided to Mr. Lewis immediately before the termination date; the earned and unpaid base salary and vacation pay to the termination date; and an amount calculated by dividing by 365 Mr. Lewis’s target bonus under the STI Bonus for the fiscal year in which the termination date occurs, and multiplying that number by the number of days completed in the fiscal year as of the termination date. In addition, Mr. Lewis will continue to have all rights under the applicable stock option and performance share unit plans and agreements with respect to outstanding stock options and performance share units. The Change of Control Agreement also provides that no payments will be made unless Mr. Lewis signs, and does not revoke, a full and general release of any and all claims against the Employer and its affiliates, among others.
Mr. Lewis has no family relationship with any of the executive officers or directors of the Company. Since the beginning of the Company’s last fiscal year, Mr. Lewis does not have a material interest, direct or indirect, in any other transaction or proposed transaction with the Company involving an amount exceeding $120,000.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | ||
| Number | Description | |
| 99.1 | Press Release, dated August 28, 2024. | |
| 104 | Cover Page Interactive Data File. |
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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.
| RB GLOBAL, INC. | ||
| By: | /s/ Ryan Welsh | |
| Ryan Welsh | ||
| VP Legal & Corporate Secretary | ||
| Date: August 28, 2024 | ||