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ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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As previously reported in the Current Report
on Form 8-K filed by the Company on April 20, 2020, the Court issued a preliminary order on April 15, 2020 (the “Preliminary
Order”) approving a Motion for Preliminary Approval of Settlement in the Derivative Action (as defined below) filed on
July 31, 2018. The Preliminary Order approved a definitive settlement agreement dated February 24, 2020, that was intended to settle
the Derivative Action (the “Settlement Agreement”).
As previously reported in the Current Report
on Form 8-K filed by the Company on July 17, 2020, DPW Holdings, Inc., a Delaware corporation (the “Company”),
issued a press release on that date announcing the issuance of the final order (the “Final Order”) by the United
States District Court in the Central District of California (the “Court”), which approved a Motion for Final
Approval of Settlement with respect to the derivative litigation captioned Ethan Young and Greg Young, Derivatively on Behalf
of Nominal Defendant, DPW Holdings, Inc. v. Milton C. Ault, III, Amos Kohn, William B. Horne, Jeff Bentz, Mordechai Rosenberg,
Robert O. Smith, and Kristine Ault and DPW Holdings, Inc., as the nominal defendant (Case No. 18-cv-6587) (the “Derivative
Action”). On July 16, 2020, the Court entered a Judgment based upon the Final Order (the “Judgement”).
Under the terms of the Final Order approving
the Settlement Agreement, the Company’s Board of Directors (the “Board”) has implemented certain reforms
to the Company’s bylaws, committee charters, corporate governance policies, and the composition of the Board, including the
resignation of a current director and the appointment of two new independent directors (collectively, the “Reforms”),
one of whom, Ms. Jodi Brichan, was appointed to the Board on December 30, 2019.
As of August 13, 2020, the Company had
fully complied with its obligations under the Final Order and the Judgment.
Amos Kohn
On August 13, 2020, Amos Kohn, a member
of the Board and the President of the Company, resigned from each position pursuant to the Settlement Agreement. There were no
disagreements between the Company and Mr. Kohn in connection with Mr. Kohn’s resignation as either a member of the Board
or as its President.
Howard Ash
On August 13, 2020, the Board appointed
Howard Ash to the Board. Mr. Ash will serve on the Audit Committee, the Compensation Committee and the Nominating and Corporate
Governance Committee. Further, Mr. Ash will be appointed as the Chairman of the Audit Committee and be paid $45,000.00 per annum.
Howard Ash is an accomplished executive
with extensive experience in business and finance, who served as CEO, COO and CFO to a variety of high profile, international companies.
Mr. Ash continues to serve as Chairman of Claridge Management since 2000. Mr. Ash was a director of Net Element, Inc., (NASDAQ-NETE)
from June 13, 2016 through July 13, 2020 serving as Chairman of both the Audit and Compensation committees, as well as the Nominating
and Governance Committees during his tenure. He served as Chief Operating Officer of BioCard Corporation from 1997 to 2007. He
served as Chief Operating Officer of CITA Americas, Inc. from 1996 to 1997. Mr. Ash served as Chief Executive Officer of IEDC Marketing,
Inc. from 1992 to 1996. He held a CFO/Chief Strategist position at Abrams, Ash & Associates from 1990 to 1992. Mr. Ash currently
serves on the Advisory Board of the UK based E2Exchange, the Institute of Entrepreneurs, since 2011, and is the only non-UK citizen
holding that position. Mr. Ash served from 2009 to 2014 in a senior development and strategic capacity for One Laptop Per Child,
a global NGO created to provide educational opportunities providing laptops to the world’s poorest children. Prior Chairmanships
include the 2009 through 2012 term for the Sturge Weber Foundation, a non-profit organization dedicated to curing this rare but
fatal syndrome affecting children. Previously, Mr. Ash was an Advisory Board Member to Edge Global Investment Limited which forged
a strategic partnership with the Africa Forum, consisting of 37 former Heads of State and Government. Mr. Ash started an interest-free
micro-loan society in 1987 that has provided more than $15 million in micro-loans throughout the United States and Israel. In 1999,
Mr. Ash founded the Circle of Life Resource Center, Inc., a food bank in Miami, Florida that feeds several hundred families per
week. Howard earned a Bachelor of Commerce degree, with Honors in Accounting and Law from the University of Witwatersrand (South
Africa) in 1980. The Company believes that Mr. Ash’s extensive experience as a business and finance executive and member
of multiple oversight bodies, provides him with the necessary skills to be qualified to serve as a director of the Company.
There were no arrangements or understandings
between the Company or any other person and Mr. Ash pursuant to his appointment.
There have been no transactions between
Mr. Ash and the Company and no disclosure is required under Item 404(a) of Regulation S-K.