S-8

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company

Emerging Growth Company

0001193125-20-151454.txt : 20200526 0001193125-20-151454.hdr.sgml : 20200526 20200526152738 ACCESSION NUMBER: 0001193125-20-151454 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20200526 DATE AS OF CHANGE: 20200526 EFFECTIVENESS DATE: 20200526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIRTT ENVIRONMENTAL SOLUTIONS LTD CENTRAL INDEX KEY: 0001340476 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: A0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-238689 FILM NUMBER: 20910178 BUSINESS ADDRESS: STREET 1: 7303 30 ST S E CITY: CALGARY ALBERTA T2C 1N6 CAN STATE: A0 ZIP: T2C 1N6 BUSINESS PHONE: 403-723-5000 MAIL ADDRESS: STREET 1: 7303 30 ST S E CITY: CALGARY ALBERTA T2C 1N6 CAN STATE: A0 ZIP: T2C 1N6 S-8 1 d924438ds8.htm S-8 S-8

As filed with the Securities and Exchange Commission on May 26, 2020

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

(Exact name of registrant as specified in its charter)


Alberta, Canada		90-0840530
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7303 30th Street S.E. Calgary, Alberta, Canada		T2C IN6
(Address of Principal Executive Offices)		(Zip Code)

DIRTT ENVIRONMENTAL SOLUTIONS LTD. LONG TERM INCENTIVE PLAN

(Full title of the plan)

Charles R. Kraus

Senior Vice President and General Counsel

DIRTT Environmental Solutions Ltd.

7303 30th Street S.E.

Calgary, Alberta, Canada T2C 1N6

(Name and address of agent for service)

(403) 671-7152

(Telephone number, including area code, of agent for service)

Copies to:

Robert L. Kimball

Michael A. Saslaw

Vinson & Elkins L.L.P.

2001 Ross Avenue, Suite 3900

Dallas, TX 75201

(214) 220-7700

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”). ☒

CALCULATION OF REGISTRATION FEE



Title of securities to be registered	Amount to be registered (1)(2)	Proposed maximum offering price per share (3)	Proposed maximum aggregate offering price (3)	Amount of registration fee
Common shares, without par value	5,850,000	$1.09	$6,376,500	$828

(1)	This Registration Statement (as defined below) registers 5,850,000 common shares (the “Shares”) of DIRTT Environmental Solutions Ltd. (the “Registrant”) that may be delivered with respect to awards under the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan (the “Plan”).

(2)

Pursuant to Rule 416(a) under the Securities Act, this Registration Statement on Form S-8 (this “Registration Statement”) shall be deemed to cover an indeterminate number of additional Shares that may become issuable pursuant to the adjustment provisions of the Plan. Additionally, pursuant to Rule 416(b) under the Securities Act, if prior to the completion of the distribution of the Shares registered under this Registration Statement all Shares are combined by a reverse stock split into a lesser number of Shares, the number of undistributed Shares covered by this Registration Statement shall be proportionately reduced.

(3)

In accordance with Rule 457(h)(1) of the Securities Act, the price of the securities has been estimated pursuant to Rule 457(c) of the Securities Act solely for the purpose of calculating the registration fee, and the price listed is the average of the high and low prices of the Shares as reported by the Nasdaq on May 19, 2020 (a date within five business days prior to the date of filing the Registration Statement) of U.S. $1.09.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The Registrant will send or give to all participants in each of the Plan document(s) containing the information required by Part I of Form S-8, as specified in Rule 428(b)(1) promulgated by the Securities and Exchange Commission (the “Commission”) under the Securities Act. In accordance with Rule 428, the Registrant has not filed such document(s) with the Commission, but such documents (along with the documents incorporated by reference into this Registration Statement pursuant to Item 3 of Part II hereof) shall constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

Except to the extent that information is deemed furnished and not filed pursuant to securities laws and regulations, the Registrant hereby incorporates by reference into this Registration Statement the following documents:

(a)

The Registrant’s Annual Report on Form 10-K (File No. 001-39061), originally filed with the Commission on February 26, 2020;

(b)

The Registrant’s Quarterly Report on Form 10-Q (File No. 001-39061), originally filed with the Commission on May 6, 2020;

(c)

The Registrant’s Current Reports on Form 8-K (File No. 001-39061), other than with respect to Items 2.02 or 7.01, originally filed with the Commission on March 17, 2020 and May 22, 2020;

(d)

All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the registration document referred to in (a) above; and

(e)

The description of the Shares included under the caption “Description of Securities to be Registered” contained in the Registration Statement on Form 10 (File No. 001-39061), originally filed with the Commission on September 20, 2019, including any amendment or report filed for the purpose of updating such description.

Except to the extent that information is deemed furnished and not filed pursuant to securities laws and regulations, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act and all reports on Form 8-K subsequent to the date hereof and prior to the filing of a post-effective amendment that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold shall also be deemed to be incorporated by reference herein and to be a part hereof from the dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

Under Section 124 of the Business Corporations Act (Alberta) (the “ABCA”), except in respect of an action by or on behalf of the Registrant or a Body Corporate (as defined below) to procure a judgment in its favor, the Registrant may indemnify a current or former director or officer of the Registrant or a person who acts or acted at the Registrant’s request as a director or officer of a body corporate of which the Registrant is or was a shareholder or creditor (a “Body Corporate”) and the heirs and legal representatives of any such persons (collectively, “Indemnified Persons”) against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by any such Indemnified Person in respect of any civil, criminal or administrative actions or proceedings to which the Indemnified Person is made a party by reason of being or having been a director or officer of the Registrant or a Body Corporate, if (i) the Indemnified Person acted honestly and in good faith with a view to the Registrant’s best interests, and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnified Person had reasonable grounds for believing that such Indemnified Person’s conduct was lawful (collectively, the “Discretionary Indemnification Conditions”).

Notwithstanding the foregoing, the ABCA provides that an Indemnified Person is entitled to indemnity from the Registrant in respect of all costs, charges and expenses reasonably incurred by the Indemnified Person in connection with the defense of any civil, criminal or administrative action or proceeding to which the Indemnified Person is made a party by reason of being or having been a director or officer of the Registrant or a Body Corporate, if the Indemnified Person (i) was substantially successful on the merits in the Indemnified Person’s defense of the action or proceeding, (ii) fulfills the Discretionary Indemnification Conditions, and (iii) is fairly and reasonably entitled to indemnity (collectively, the “Mandatory Indemnification Conditions”). The Registrant may advance funds to an Indemnified Person in order to defray the costs, charges and expenses of such a proceeding; however, the Indemnified Person shall repay the funds if the Indemnified Person does not fulfill the Mandatory Indemnification Conditions. The indemnification may be made in connection with a derivative action only with court approval and only if the Discretionary Indemnification Conditions are met.

As contemplated by Section 124(4) of the ABCA and the Registrant’s amended and restated bylaws, the Registrant has acquired and maintain liability insurance for its directors and officers with coverage and terms that are customary for a company of the Registrant’s size in its industry of operations. The ABCA provides that the Registrant may not purchase insurance for the benefit of an Indemnified Person against a liability that relates to the Indemnified Person’s failure to act honestly and in good faith with a view to the Registrant’s best interests.

The Registrant’s amended and restated bylaws provide that it shall, to the maximum extent permitted under the ABCA or otherwise by applicable law, indemnify present and former directors and officers of the Registrant as well as any person who acts or acted at the Registrant’s request as a director or officer, or an individual acting in a similar capacity, of another entity, and their heirs and legal representatives, against all costs, charges and expenses, including any amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other action or proceeding to which he or she is made a party to or involved by reason of that association with the Registrant or such other entity.

The Registrant’s amended and restated bylaws also provide that none of its directors or officers shall be liable for the acts, receipts, neglects or defaults of any other director, officer or employee, or for joining in any receipt or act for conformity, or for any loss, damage or expense happening to the Registrant through the insufficiency or deficiency of title to any property acquired by the Registrant or for or on behalf of the Registrant or for the insufficiency or deficiency of any security in or upon which any of the Registrant’s moneys or belongings shall be placed or invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person, firm or corporation, including any person, firm or corporation with whom or with which any moneys, securities or effects shall be lodged or deposited, or for any loss, conversion, misapplication or misappropriation of or any damage resulting from any dealings with the Registrant’s moneys, securities or other assets or belongings, or for any other loss, damage or misfortune whatsoever which may happen in the execution of the duties of his or her office or trust or in relation thereto; provided that nothing in the Registrant’s amended and restated bylaws shall relieve any director or officer from the duty to act in accordance with the ABCA and the regulations thereunder. The foregoing is premised on the requirement under the Registrant’s amended and restated bylaws that each of the Registrant’s directors and officers, in exercising his or her powers and discharging his or her duties of his or her office, shall act honestly, in good faith and with a view to the Registrant’s best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

The Registrant entered into indemnification agreements with all of its directors and executive officers. Subject to certain exceptions, these agreements generally require that the Registrant indemnify and hold its directors and officers and their respective heirs, executors, administrators and other legal representatives (collectively, the “DIRTT Indemnified Parties”) harmless, to the fullest extent permitted by law, for any losses that they may incur in relation to their association with the Registrant and its subsidiaries as directors and officers. Such indemnity will only be available if the DIRTT Indemnified Party: (i) acted honestly and in good faith with a view to the Registrant’s best interest or, as the case may be, to the best interest of an entity for which the DIRTT Indemnified Party acted as a director, officer or in a similar capacity at the Registrant’s request and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had acted with a reasonable belief that his or her conduct was lawful. The indemnification agreements also provide that, upon the request of a DIRTT Indemnified Party, the Registrant shall advance expenses to the DIRTT Indemnified Parties so that they may properly investigate, defend or appeal any applicable claim.

The Plan provides that no member of the committee that administers the Plan, nor any officer or employee of the Registrant or any subsidiary of the Registrant acting on behalf of the committee, shall be personally liable for any action or determination taken or made in good faith with respect to the Plan, and all members of the committee and each and any officer or employee of the Registrant and of any subsidiary of the Registrant acting on their behalf shall be indemnified by the Registrant in respect of any such action or determination.

The above discussion of the ABCA, the Registrant’s amended and restated bylaws, the indemnification agreements and the Plan is not intended to be exhaustive and is qualified in its entirety by reference to such statute or applicable document.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

Unless otherwise indicated below as being incorporated by reference to another filing of the Registrant with the Commission, each of the following exhibits is filed herewith:


Exhibit Number		Description
4.1		Restated Articles of Amalgamation of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form 10 (File No. 001-39061), filed with the Commission on September 20, 2019).

4.2		Amended and Restated Bylaw No. 1 of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39061), filed with the Commission on May 22, 2020).

4.3		DIRTT Environmental Solutions Ltd. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39061), filed with the Commission on May 22 2020).

4.4*		Form of Option Award Agreement under the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan.

4.5*		Form of Time-Based Restricted Share Unit Award Agreement under the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan.

4.6*		Form of Performance-Based Restricted Share Unit Award Agreement under the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan.

5.1*		Opinion of Bennett Jones LLP as to the legality of the securities being registered.



23.1*		Consent of Bennett Jones LLP (contained in Exhibit 5.1).

23.2*		Consent of PricewaterhouseCoopers LLP.

24.1*		Powers of Attorney (included on the signature page of this Registration Statement).

* Filed herewith.

Item 9. Undertakings.

(a)

The undersigned Registrant hereby undertakes:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)

to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii)

to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)

to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.

(2)

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(h)

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calgary, Alberta, Canada on May 26, 2020.


DIRTT ENVIRONMENTAL SOLUTIONS LTD.

By:		/s/ Kevin O’Meara

		Name: Kevin O’Meara

		Title: Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kevin O’Meara and Geoffrey D. Krause, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully and to all intents and purposes as they might or could not in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on May 26, 2020.


Signature		Title

/s/ Kevin O’Meara		Chief Executive Officer and Director (Principal Executive Officer)
Kevin O’Meara

/s/ Geoffrey D. Krause		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Geoffrey D. Krause

/s/ Steven Parry		Director
Steven Parry		Director

/s/ Wayne Boulais		Director
Wayne Boulais		Director

/s/ John (Jack) Elliott		Director
John (Jack) Elliott		Director

/s/ Denise Karkkainen		Director
Denise Karkkainen		Director



/s/ Todd W. Lillibridge		Director
Todd W. Lillibridge		Director

/s/ Christine McGinley		Director
Christine McGinley		Director

SIGNATURE OF AUTHORIZED REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act, the undersigned, a duly authorized representative of the Company in the United States, has signed the Registration Statement in the City of Dallas, State of Texas on May 26, 2020.


DIRTT ENVIRONMENTAL SOLUTIONS, INC.

By:		/s/ Kevin O’Meara
Name:		Kevin O’Meara
Title:		President and Chief Executive Officer

EX-4.4 2 d924438dex44.htm EX-4.4 EX-4.4

Exhibit 4.4

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

FORM OF

OPTION AWARD AGREEMENT

DIRTT Environmental Solutions Ltd. (the “Corporation”), has granted to the individual listed below (the “Participant”) an Award in the form of Options pursuant to the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan (as amended and/or restated from time to time, the “Plan”). Each Option represents an option to acquire a common share of the Corporation (a “Share”), at the time, in the manner, and subject to the terms contained herein (which includes, for Participants who are U.S. Participants, the additional terms and conditions provided under Exhibit A hereto). By electronically accepting this Award Agreement through his or her Shareworks account with Morgan Stanley, the Participant is deemed to have accepted the terms and conditions of the Plan and this Award Agreement.

In the event of any conflict or inconsistency between the terms of the Plan and this Award Agreement, the terms of the Plan shall supersede and govern in all respects. Any capitalized terms not defined herein are defined in the Plan.

1. Grant Terms.

Participant Name: [ ]

The Participant is a (Participant to check one box): U.S. Participant ☐ or Canadian Participant ☐ or Both ☐

Date of Grant: [ ] (the “Date of Grant”)

Number of Options Granted: [ ] Options (the “Options”)

Expiry Date: [ ] (the “Expiry Date”)

[Not to extend beyond 10 years of Date of Grant. In the case of an Incentive Stock Option (or ISO) granted to a 10% shareholder of the Corporation, not to extend beyond five years from the Date of Grant.]

Exercise Price: $[ ] (the “Exercise Price”)

[Except as provided in Section 8 of the Plan, not to be less than the Fair Market Value of a Share on the Date of Grant. In the case of an ISO granted to a 10% shareholder of the Corporation, the Exercise Price must be at least 110% of the Fair Market Value of a Share on the Date of Grant.]

2. Designation of Options

The Options granted hereunder are intended to be (Corporation to check one box):

☐ Incentive Stock Options (ISOs) or

☐ Nonstatutory Options

3. Vesting and Forfeiture.

a. General Rule. Subject to the terms of the Plan and this Award Agreement, provided that the Participant has been continuously employed by the Corporation or its Affiliates from the Date of Grant through the applicable date below (each, a “Vesting Date”), the Options will vest as follows:

[ ]

b. Effect of Termination of Employment on Vesting and Forfeiture. [ ]. Further, if the Participant’s service, consulting relationship, or employment with the Corporation, an Affiliate, or a successor entity is terminated for Cause, all Options, whether vested or unvested, will be forfeited in full as of the Termination Date, and the Participant will cease to have any right or entitlement to acquire Shares under those forfeited Options, or to any other compensation for such forfeited Options.

c. Effect of Termination of Employment on Exercisability. Options may only be exercised prior to the Termination Date, except as follows:

[ ]

4. Time and Method of Exercise.

a. General. The Options may be exercised pursuant to this Section 4 at any time and from time to time from and including the applicable Vesting Date through to and including the Expiry Date. For greater certainty, no Option may be exercised unless such Option has vested in accordance with Section 3 of this Award Agreement and the Option shall in all events terminate at the close of business on the Expiry Date. In no event will the Participant be entitled to exercise the Options for a fraction of a Share.

b. Standard Exercise. Subject to the Plan, to exercise Options to acquire Shares, the Participant must deliver to the Committee, prior to the Expiry Time, a written notice of the exercise of such Options, in the form set by the Committee from time to time, duly executed by the Participant, and a certified cheque or bank draft payable to the Corporation in an amount equal to the aggregate of the Exercise Price in respect of which such Options are being exercised, plus any Applicable Withholding Taxes which may be required by the Corporation to be paid as a condition to the exercise of such Options. Subject to the terms of the Plan, the Committee may decide to accept any of the following forms of payment for the Exercise Price: cash or cash equivalents, Shares (including previously owned Shares or through a cashless exercise, i.e., “net settlement”, a broker-assisted exercise, or other reduction of the amount of Shares otherwise issuable pursuant to the Option. In the case of a Canadian Participant, the Shares cannot be Shares acquired pursuant to the exercise of an Option in the preceding twenty-four (24) months), other Awards or awards granted under other plans of the Corporation or any Affiliate, other property, or any other legal consideration the Committee deems appropriate to be satisfied through different forms of payment, and will notify the Participant of the same.

c. Issuance of Shares. Upon exercise of the Options as set forth in Section 4(b), the Corporation shall issue, or cause to the issued, the applicable number of Shares to the Participant. All Options granted to Canadian Participants shall be exercisable only for the issuance by the Corporation of authorized and previously unissued Shares from treasury.

5. Acknowledgement. The Participant has received and reviewed a copy of the Plan and agrees to be bound by the terms and conditions of the Plan.

6. Additional Provisions.

a. Withholding. The Corporation or any Affiliate is authorized to take any actions, including deducting or withholding from Shares deliverable upon exercise of an Option or requiring a payment by the Participant as a condition to exercise, as may be necessary to ensure the Corporation and any Affiliate will be able to comply with any Applicable Withholding Taxes. The Committee shall determine, in its sole discretion, the form of payment acceptable to satisfy such tax withholding obligations. For additional information please see Section 9(j) of the Plan.

b. Clawback. The Options are subject to any written clawback policies that the Corporation, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date of the Plan, including, but not limited to, any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the SEC and that the Corporation determines should apply to Awards. Any such policy may subject the Options and amounts paid or realized, or Shares acquired, with respect to the Options to reduction, cancellation, forfeiture, or recoupment if certain specified events or wrongful conduct occur, including an accounting restatement due to the Corporation’s material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy.

c. No Shareholder Rights. The Options shall not entitle the Participant to exercise voting rights or any other rights attaching to the ownership of Shares or other securities of the Corporation, including, without limitation, entitlement to receive dividends or other distributions, or rights on liquidation. The Participant shall not have any such shareholder rights unless and until Shares are issued to the Participant pursuant to the exercise of Options.

d. Additional Terms. The terms and conditions of this Award are governed by the Plan, and this Award is also subject to all interpretations, amendments, rules and regulations which may from time to time be adopted under the Plan.

e. Entire Agreement. This Award Agreement and the Plan and the Exhibits and Schedules thereto constitute the entire agreement of the parties hereto with regard to the subject matter hereof. They supersede in their entirety all other prior undertakings, agreements, representations or understandings (whether oral or written and whether express or implied) of the Participant and the Corporation which relate to the subject matter hereof; provided, however, that in case of inconsistencies or ambiguities, the provisions of the Plan shall prevail over the provisions of this Award Agreement.

f. Agreement Severable. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person under any law deemed applicable by the Committee, that provision will be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Award Agreement, that provision will be stricken and the remainder of this Award Agreement will remain in full force and effect.

g. Service Provider Relationship. The grant of the Options will not be construed as giving the Participant the right to be employed or serve as an officer, director, or consultant of the Corporation or any Affiliate. Further, the Corporation or an Affiliate may at any time dismiss the Participant from employment or from service as an officer, director, or consultant free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan.

h. Governing Law. Except where foreign law is applicable, the validity, construction, and effect of the Plan, this Award Agreement, and any rules and regulations relating to the Plan and this Award Agreement will be determined in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable in Alberta.

i. Electronic Delivery. The Corporation may deliver any documents (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports and all other forms of communications) related to the Options granted under this Award Agreement by electronic means and may request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan and sign this Award Agreement through an on-line or electronic system established and maintained by the Corporation or another third party designated by the Corporation.

j. Amendment, Suspension and Termination. This Award Agreement and the Plan may be amended or otherwise modified, suspended or terminated at any time or from time to time as provided in Sections 5 and 8 of the Plan, Section 8 of Schedule A to the Plan, and Exhibit A of this Award Agreement.

k. Notices. Any notice or other communication to be given under or in connection with this Award Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt or, in the case of notices from the Corporation to the Participant, five days after deposit in the mail, postage prepaid, addressed to the Participant at the address on file with the Corporation or Employer or at such other address as the Participant may hereafter designate by notice to the Corporation.

l. Transferability. No Option may be assigned, alienated, pledged, attached, sold, or otherwise transferred by a Participant other than by will, by the laws of descent, or by the designation of a Beneficiary by a Participant and any such purported assignment, alienation, pledge, attachment, sale, or other transfer or encumbrance will be void and unenforceable against the Corporation or any Affiliate.

m. Successors and Assigns. The Corporation may assign any of its rights under this Award Agreement to single or multiple assignees, and this Award Agreement shall inure to the benefit of the successors and assigns of the Corporation. Subject to the restrictions on transfer set forth in the Plan and in Section 6(m) of this Award Agreement, the provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and to the Participant, the Participant’s executors, administrators, heirs, successors, representatives and assignees.

n. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

o. Compliance with Securities Law. Notwithstanding any provision of this Award Agreement to the contrary, no exercise of the Option will be permitted and no Shares will be issued hereunder if such exercise or issuance would constitute a violation of any applicable law or regulation or the requirements of any stock exchange or market system upon which the Shares are then listed. In addition, so long as the Corporation is subject to the Securities Act, no exercise of the Option will be permitted and no Shares will be issued hereunder unless (a) a registration statement under the Securities Act is in effect at the time of such exercise and issuance with respect to the Shares or (b) in the opinion of legal counsel to the Corporation, such Option exercise and Shares issuance are permitted in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Corporation to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Corporation’s legal counsel to be necessary for the lawful exercise of the Option and issuance of any Shares hereunder will relieve the Corporation of any liability in respect of the failure to permit such Option exercise and issue such Shares as to which such requisite authority has not been obtained. As a condition to any exercise of Options hereunder, the Corporation may require the Participant to satisfy any requirements that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Corporation.

p. Extension if Exercise Prevented by Law. Notwithstanding the other provisions of this Award Agreement, if the exercise of the Option within the applicable time periods set forth herein is prevented by the provisions of Section 6(p), the Option will remain exercisable until 30 days after the date you are notified by the Corporation that the Option is exercisable, but in any event no later than the Expiry Date. The Corporation makes no representation as to the tax consequences of any such delayed exercise. The Participant should consult with his or her own tax advisor as to the tax consequences of any such delayed exercise.

q. Data Privacy Waiver. By accepting the grant of the Options, the Participant hereby agrees and consents to:

i. the collection, use, processing and transfer by the Corporation and its Affiliates (collectively, the “Group”) of Data (as defined below);

ii. any members of the Group transferring Data amongst themselves for the purposes of implementing, administering and managing the Plan;

iii. the use of such Data by any such person for such purposes; and

iv. the transfer to and retention of such Data by third parties in connection with such purposes.

For the purposes of this Section 6(r), “Data” means the Participant’s name, home address and telephone number, date of birth, other employee information, any tax or other identification number, details of all rights to acquire Shares granted to the Participant and of Shares issued or transferred to the Participant pursuant to the Plan.


DIRTT ENVIRONMENTAL SOLUTIONS LTD.

By:
Name:
Title:

EXHIBIT A

ADDITIONAL PROVISIONS FOR

OPTION AWARD AGREEMENT

FOR U.S. PARTICIPANTS IN THE

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

The additional terms and conditions of this Exhibit A shall apply to the Award of Options for any Participant who is a U.S. Participant.

1. ISOs Generally. Any ISO granted to an individual who owns Shares possessing more than 10% of the total combined voting power of all classes of Shares or its parent or any of its subsidiaries shall (i) have an Exercise Price equal to at least 110% of the Fair Market Value per Share on the Date of Grant and (ii) not be exercisable for a period for more than five years following the Date of Grant of the ISO. The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. ISOs may only be granted to employees of the Corporation or employees of a “related corporation” as defined in Treasury Regulation Section 1.421-1(i)(2) (a “Related Corporation”). No term of the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under Section 422 of the Code, unless notice has been provided to the Participant that such change will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Corporation’s stockholders. Notwithstanding the foregoing, to the extent that the aggregate Fair Market Value of Shares subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code) subject to any other incentive stock options of the Corporation or a parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code) that are exercisable for the first time by a Participant during any calendar year exceeds $100,000, or such other amount as may be prescribed under Section 422 of the Code, such excess shall be treated as Nonstatutory Options in accordance with the Code. As used in the previous sentence, Fair Market Value shall be determined as of the date the ISO is granted. For the avoidance of doubt, ISOs shall not be transferable by the Participant other than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant, in each case, unless otherwise specifically permitted by the Committee in compliance with Section 9(e) of the Plan and pursuant to Section 422 of the Code and the regulations issued thereunder. With respect to ISOs, if the Plan, the Award Agreement or this Exhibit A does not contain any provision required to be included in the Plan, the Award Agreement or this Exhibit A under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, that to the extent any Option that is intended to qualify as an ISO cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.

2. Exercise Period following Termination Date for ISOs. [ ].

3. Notice of Disqualifying Dispositions. If the Option is designated as an ISO in the Notice of Grant, the Participant must comply with the provisions of this Section 3. The Participant must notify the Chief Financial Officer of the Corporation if the Participant disposes of any of the Shares acquired pursuant to the Option within one year after the date the Participant exercises all or part of the Option or within two years after the Date of Grant no later than thirty (30) days following such disposition. Until such time as the Participant disposes of such Shares in a manner consistent with the provisions of this Section 3 and the Award Agreement, unless otherwise expressly authorized by the Corporation, the Participant must hold all

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Shares acquired pursuant to the Option in the Participant’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after the Date of Grant. At any time during the one-year or two-year periods set forth above, the Corporation may place a legend on any certificate representing Shares acquired pursuant to the Option requesting the transfer agent for the Corporation’s Shares to notify the Corporation of any such transfers. The Participant’s obligation to notify the Corporation of any such transfer will continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.

4. Code Section 409A. It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the limitations and requirements of Section 409A, and Awards will be operated and construed accordingly. Neither the Plan nor the Award Agreement contains any representation regarding the tax consequences of the grant, vesting, exercise, surrender or sale of the Options (or the Shares acquired following the exercise of such Options), and should not be interpreted as such. In no event shall the Corporation or Employer be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A. Notwithstanding any provision in the Plan or the Award Agreement to the contrary, in the event that a “specified employee” (as defined under Section 409A) becomes entitled to a payment under an Option that would be subject to additional taxes and interest under Section 409A if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (a) the date of the Participant’s death, or (b) the date that is six (6) months after the Participant’s “separation from service,” as defined under Section 409A (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of Section 409A are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith; provided, however, in the case of a U.S. Participant that is also a Canadian Participant, if the applicable provisions of Section 409A are contrary to the provisions of the Tax Act, the more restrictive body of law shall control.

5. Termination Date. The Termination Date shall not occur until the date that the Participant experiences a “separation from service” within the meaning of Section 409A.

6. Employment Relationship. Unless otherwise provided in a written employment agreement or by applicable law, the Participant’s employment or service relationship with the Employer shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Participant or the Employer for any reason whatsoever, with or without cause. Any question as to whether and when there has been a termination of the employment or service relationship, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

7. Conformity to Applicable Law. The Participant acknowledges that the Plan, the Award Agreement and this Exhibit A are intended to conform to the extent necessary with all applicable laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Options granted, only in such a manner as to conform to Applicable Law. To the extent permitted by applicable law, the Plan, the Award Agreement and this Exhibit A shall be deemed amended to the extent necessary to conform to applicable law.

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8. Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Award Agreement or this Exhibit A, if the Participant is subject to Section 16 of the Exchange Act, the Plan, the Options, and the Award Agreement and this Exhibit A shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable laws, the Award Agreement and this Exhibit A shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

9. Additional Disclosure. Along with the Award Agreement, the Participant also received a copy of the Form S-8 prospectus summarizing the principal features of the Plan. The Participant should review the plan prospectus carefully so that he or she fully understands his or her rights and benefits under the Award and the limitations, restrictions and vesting provisions applicable to the Award.

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EX-4.5 3 d924438dex45.htm EX-4.5 EX-4.5

Exhibit 4.5

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

FORM OF TIME-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

DIRTT Environmental Solutions Ltd. (the “Corporation”), has granted to the individual listed below (the (“Participant”) an Award in the form of Restricted Share Units pursuant to the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan (as amended and/or restated from time to time, the “Plan”). Each Restricted Share Unit represents the future conditional right of the Participant to receive a cash payment equal to the Fair Market Value of a common share of the Corporation (a “Share”) calculated at the date of such payment, or, at the Corporation’s and Employer’s sole discretion, its equivalent in Shares (or a combination of cash and Shares), at the time, in the manner, and subject to the terms contained herein (which includes, for Participants who are U.S. Participants, the additional terms and conditions provided under Exhibit A hereto). By electronically accepting this Award Agreement through his or her Shareworks account with Morgan Stanley, the Participant is deemed to have accepted the terms and conditions of the Plan and this Award Agreement.

1. Grant Terms.

Participant Name: [ ]

The Participant is a (Participant to check one box): U.S. Participant ☐ or Canadian Participant ☐ or Both ☐

Date of Grant: [ ] (the “Date of Grant”)

RSU Service Year: (Canadian Participants only): [ ]

Number of Restricted Share Units Granted: [ ] Restricted Share Units (the “Restricted Share Units”)

2. Restricted Share Unit Account; No Shareholder Rights.

a. Restricted Share Unit Account. An account, to be known as a “Restricted Share Unit Account”, shall be maintained by the Corporation for the Participant. On the Date of Grant, the Restricted Share Unit Account will be credited with the number of Restricted Share Units granted to the Participant on that date.

Value of a Share on the Dividend Payment Date. The terms and conditions of any such additional Restricted Share Units shall be identical to the underlying Restricted Share Units held by the Participant, including conditions of vesting and timing of settlement. For the avoidance of doubt, no additional Restricted Share Units will be credited or granted pursuant to this Section 2(b) where the Dividend Record Date relating to dividends falls after the termination of the Participant’s employment with or the cessation of services to the Corporation and its Affiliates, as applicable, or the settlement of such Restricted Share Units, whichever occurs first.

c. The Restricted Share Units shall not entitle the Participant to exercise voting rights or any other rights attaching to the ownership of Shares or other securities of the Corporation, including, without limitation, entitlement to receive dividends or other distributions, or rights on liquidation.

3. Vesting and Forfeiture.

[ ]

b. Termination of Employment. [ ].

4. Settlement.

a. General. On a date to be determined by the Committee, in its sole discretion, following the day on which any Restricted Share Units become Vested Restricted Share Units (and, where the Participant is a Canadian Participant prior to or on the date which is three (3) years following the end of the relevant RSU Service Year) (the “Restricted Share Unit Entitlement Date”), such Vested Restricted Share Units shall be paid by the Participant’s Employer to the Participant or the Participant’s Beneficiary, as applicable. The Fair Market Value of the Vested Restricted Share Units so paid at such time shall, after deduction of any applicable taxes and other source deductions required to be withheld by the Employer, be paid in cash. At the Employer’s discretion, the Employer may elect to settle the cash payment obligation in respect of a Restricted Share Unit in the form of Shares (or in a combination of cash and Shares), in which case the Employer shall cause the Corporation to deliver such Shares directly to the Participant. For greater certainty, (i) the Participant shall not have any right to demand, be paid in, or receive Shares in respect of any Restricted Share Units; and (ii) notwithstanding any election by the Corporation or Employer to settle any Restricted Share Unit in the form of Shares, the Corporation and Employer reserves the right to change its election in respect thereof at any time until payment is actually made.

b. Fractional Units. If the Corporation and Employer exercise their discretion to settle a Restricted Share Unit in Shares, any fractional Restricted Share Unit that becomes a Vested Restricted Share Unit shall be rounded down at the time Shares are issued in settlement of such Restricted Share Unit. No fractional Shares, nor the cash value of any fractional Shares, will be issuable or payable to the Participant pursuant to this Agreement. Any Shares issued hereunder shall be delivered either by delivering one or more certificates for such Shares to the Participant or by entering such shares in book-entry form, as determined by the Committee in its sole discretion. The value of any Shares or cash delivered upon settlement of the Restricted Share Unit shall not bear any interest owing to the passage of time. Neither this Section 4 nor any action taken pursuant to or in accordance with this Agreement shall be construed to create a trust or a funded or secured obligation of any kind.

5. Acknowledgement. The Participant has received and reviewed a copy of the Plan and agrees to be bound by the terms and conditions of the Plan.

6. Additional Provisions.

a. Withholding. The Corporation or any Affiliate is authorized to deduct or withhold from any payment due or transfer made upon settlement of Vested Restricted Share Units such amount as may be necessary so as to ensure the Corporation and any Affiliate will be able to comply with any Applicable Withholding Taxes. The Committee shall determine, in its sole discretion, the form of payment acceptable to satisfy such tax withholding obligations. For additional information please see Section 9(j) of the Plan.

b. Clawback. The Restricted Share Units are subject to any written clawback policies that the Corporation, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date of the Plan, including, but not limited to, any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the SEC and that the Corporation determines should apply to Awards. Any such policy may subject the Participant’s Restricted Share Units and amounts paid or realized with respect to Restricted Share Units to reduction, cancellation, forfeiture, or recoupment if certain specified events or wrongful conduct occur, including an accounting restatement due to the Corporation’s material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy.

c. Additional Terms. The terms and conditions of this Award are governed by the Plan, and this Award is also subject to all interpretations, amendments, rules and regulations which may from time to time be adopted under the Plan.

d. Entire Agreement. This Award Agreement and the Plan and the Exhibits and Schedules thereto constitute the entire agreement of the parties hereto with regard to the subject matter hereof. They supersede in their entirety all other prior undertakings, agreements, representations or understandings (whether oral or written and whether express or implied) of the Participant and the Corporation which relate to the subject matter hereof; provided, however, that in case of inconsistencies or ambiguities, the provisions of the Plan shall prevail over the provisions of this Award Agreement.

e. Agreement Severable. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person under any law deemed applicable by the Committee, that provision will be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Award Agreement, that provision will be stricken and the remainder of this Award Agreement will remain in full force and effect.

f. Service Provider Relationship. The grant of the Restricted Share Units will not be construed as giving the Participant the right to be employed or serve as an officer, director, or consultant of the Corporation or any Affiliate. Further, the Corporation or an Affiliate may at any time dismiss the Participant from employment or from service as an officer, director, or consultant free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan.

g. Governing Law. Except where foreign law is applicable, the validity, construction, and effect of the Plan, this Award Agreement, and any rules and regulations relating to the Plan and this Award Agreement will be determined in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable in Alberta.

h. Electronic Delivery. The Corporation may deliver any documents (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports and all other forms of communications) related to the Restricted Share Units granted under this Award Agreement by electronic means and may request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan and sign this Award Agreement through an on-line or electronic system established and maintained by the Corporation or another third party designated by the Corporation.

i. Amendment, Suspension and Termination. This Award Agreement and the Plan may be amended or otherwise modified, suspended or terminated at any time or from time to time as provided in Sections 5 and 8 of the Plan, Section 8 of Schedule A to the Plan, and Exhibit A of this Award Agreement.

j. Notices. Any notice or other communication to be given under or in connection with this Award Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt or, in the case of notices from the Corporation to the Participant, five days after deposit in the mail, postage prepaid, addressed to the Participant at the address on file with the Corporation or Employer or at such other address as the Participant may hereafter designate by notice to the Corporation.

k. Transferability. No Restricted Share Unit may be assigned, alienated, pledged, attached, sold, or otherwise transferred by a Participant other than by will, by the laws of descent, or by the designation of a Beneficiary by a Participant and any such purported assignment, alienation, pledge, attachment, sale, or other transfer or encumbrance will be void and unenforceable against the Corporation or any Affiliate.

l. Successors and Assigns. The Corporation may assign any of its rights under this Award Agreement to single or multiple assignees, and this Award Agreement shall inure to the benefit of the successors and assigns of the Corporation. Subject to the restrictions on transfer set forth in the Plan and in Section 6(k) of this Award Agreement, the provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and to the Participant, the Participant’s executors, administrators, heirs, successors, representatives and assignees.

m. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

n. Compliance with Securities Law. Notwithstanding any provision of this Award Agreement to the contrary, if the Corporation and Employer exercise their discretion to settle a Restricted Share Unit in Shares, no Shares will be issued hereunder if such issuance would constitute a violation of any applicable law or regulation or the requirements of any stock exchange or market system upon which the Shares are then listed. In addition, so long as the Corporation is subject to the Securities Act, if the Restricted Share Unit is settled in Shares, Shares will not be issued hereunder unless (a) a registration statement under the Securities Act is in effect at the time of such issuance with respect to the Shares or (b) in the opinion of legal counsel to the Corporation, the Shares to be issued are permitted to be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Corporation to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Corporation’s legal counsel to be necessary for the lawful issuance and sale of any Shares hereunder will relieve the Corporation of any liability in respect of the failure to issue such Shares as to which such requisite authority has not been obtained. If the Restricted Share Unit is settled in Shares, as a condition to any issuance of Shares hereunder, the Corporation may require the Participant to satisfy any requirements that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Corporation.

o. Data Privacy Waiver. By accepting the grant of the Restricted Share Units, the Participant hereby agrees and consents to:

i. the collection, use, processing and transfer by the Corporation and its Affiliates (collectively, the “Group”) of Data (as defined below);

ii. any members of the Group transferring Data amongst themselves for the purposes of implementing, administering and managing the Plan;

iii. the use of such Data by any such person for such purposes; and

iv. the transfer to and retention of such Data by third parties in connection with such purposes.

For the purposes of this Section 6(o), “Data” means the Participant’s name, home address and telephone number, date of birth, other employee information, any tax or other identification number, details of all rights to acquire Shares granted to the Participant and of Shares issued or transferred to the Participant pursuant to the Plan.


DIRTT ENVIRONMENTAL SOLUTIONS LTD.

By:
Name:
Title:

EXHIBIT A

ADDITIONAL PROVISIONS FOR

TIME-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

FOR U.S. PARTICIPANTS IN THE

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

The additional terms and conditions of this Exhibit A shall apply to the Award of Restricted Share Units for any Participant who is a U.S. Participant.

1. Settlement of Awards. Irrespective of Section 9(y) of the Plan and Section 4 of the Award Agreement, the Restricted Share Units shall be settled no later than seventy (70) days after becoming Vested Restricted Share Units. Notwithstanding the foregoing, the Corporation may delay a distribution or payment in settlement of Vested Restricted Share Unit if it reasonably determines that such payment or distribution will violate federal securities laws or any other applicable law, provided that such distribution or payment shall be made at the earliest date at which the Corporation reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 1 if such delay will result in a violation of Section 409A of the Code.

2. Code Section 409A. It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the limitations and requirements of Section 409A, and Awards will be operated and construed accordingly. Neither the Plan nor this Award Agreement contains any representation regarding the tax consequences of the grant, vesting, settlement, or sale of the Restricted Share Units (or the Shares underlying such Award), and should not be interpreted as such. In no event shall the Corporation or Employer be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A. Notwithstanding any provision in the Plan or the Award Agreement to the contrary, in the event that a “specified employee” (as defined under Section 409A) becomes entitled to a payment under the Restricted Share Unit that would be subject to additional taxes and interest under Section 409A if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (a) the date of the Participant’s death, or (b) the date that is six (6) months after the Participant’s “separation from service,” as defined under Section 409A (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date; provided, however, that if the U.S. Participant is also a Canadian Participant, the Restricted Share Units must be settled by the date specified in Section 7(c)(iv) of the Plan. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date; provided, however, if the U.S. Participant is also a Canadian Participant, such payment will not be made later than the date specified in Section 7(c)(iv) of the Plan. The applicable provisions of Section 409A are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith; provided, however, in the case of a U.S. Participant that is also a Canadian Participant, if the applicable provisions of Section 409A are contrary to the provisions of the Tax Act, the more restrictive body of law shall control.

3. Termination Date. The Termination Date shall not occur until the date that the Participant experiences a “separation from service” within the meaning of Section 409A.

4. Employment Relationship. Unless otherwise provided in a written employment agreement or by applicable law, the Participant’s employment or service relationship with the Employer

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shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Participant or the Employer for any reason whatsoever, with or without cause. Any question as to whether and when there has been a termination of the employment or service relationship, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

5. Conformity to Applicable Law. The Participant acknowledges that the Plan, the Award Agreement and this Exhibit A are intended to conform to the extent necessary with all applicable laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Restricted Share Units are granted, only in such a manner as to conform to applicable law. To the extent permitted by applicable law, the Plan, the Award Agreement and this Exhibit A shall be deemed amended to the extent necessary to conform to applicable law.

6. Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Award Agreement or this Exhibit A, if the Participant is subject to Section 16 of the Exchange Act, the Plan, the Restricted Share Units, including Restricted Share Units resulting from Dividend-Equivalent Rights, and the Award Agreement and this Exhibit A shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Award Agreement and this Exhibit A shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

7. Additional Disclosure. Along with the Award Agreement, the Participant also received a copy of the Form S-8 prospectus summarizing the principal features of the Plan. The Participant should review the plan prospectus carefully so that he or she fully understands his or her rights and benefits under the Award and the limitations, restrictions and vesting provisions applicable to the Award.

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EX-4.6 4 d924438dex46.htm EX-4.6 EX-4.6

Exhibit 4.6

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

FORM OF PERFORMANCE-BASED RESTRICTED SHARE UNIT AWARD

AGREEMENT

1. Grant Terms.

Participant Name: [ ]

The Participant is a (Participant to check one box): U.S. Participant ☐ or Canadian Participant ☐ or Both ☐

Date of Grant: [ ] (the “Date of Grant”)

RSU Service Year: (Canadian Participants only): [ ]

Target Number of Restricted Share Units Subject to Award: [ ] Restricted Share Units (the “Target Number of Restricted Share Units”)

Performance Period: [ ] through [ ] (the “Performance Period”)

Performance Criteria: Subject to this Award Agreement, the Plan and the other terms and conditions set forth herein, this Restricted Share Unit shall become vested in the manner set forth on Exhibit B attached hereto (the “Performance Criteria”) so long as the Participant remains continuously employed by the Corporation or its Affiliates from the Date of Grant through the end of the Performance Period .

Determination Date: The date the Committee shall determine, in its sole discretion, whether the Performance Goal(s) have been achieved (the “Determination Date”), such date being as soon as administratively practicable following the end of the Performance Period after all necessary Corporation information is available.

2. Restricted Share Unit Account; No Shareholder Rights.

a. Restricted Share Unit Account. An account, to be known as a “Restricted Share Unit Account”, shall be maintained by the Corporation for the Participant. On the Date of Grant, the Restricted Share Unit Account will be credited with the Target Number of Restricted Share Units granted to the Participant on that date.

b. Dividend-Equivalent Right. Each Restricted Share Unit shall include a Dividend-Equivalent Right such that on the payment date for cash dividends paid on Shares (the “Dividend Payment Date”), the Participant’s Restricted Share Unit Account shall be credited with additional Restricted Share Units in respect of Restricted Share Units credited to and outstanding in the Participant’s Restricted Share Unit Account as of the record date for payment of such dividends (the “Dividend Record Date”). The number of such additional Restricted Share Units to be credited to the Participant’s Restricted Share Unit Account will be calculated (to two (2) decimal places) by dividing the total amount of the dividends that would have been paid to the Participant if the Restricted Share Units in the Participant’s Restricted Share Unit Account (including fractions thereof), as of the Dividend Record Date, were Shares, by the Fair Market Value of a Share on the Dividend Payment Date. The terms and conditions of any such additional Restricted Share Units shall be identical to the underlying Restricted Share Units held by the Participant, including conditions of vesting and timing of settlement. For the avoidance of doubt, no additional Restricted Share Units will be credited or granted pursuant to this Section 2(b) where the Dividend Record Date relating to dividends falls after the termination of the Participant’s employment with or the cessation of services to the Corporation and its Affiliates, as applicable, or the settlement of such Restricted Share Units, whichever occurs first.

3. Vesting and Forfeiture.

a. General Rule. Subject to the terms of the Plan and this Award Agreement, on the Determination Date the Committee shall determine the number of Restricted Share Units that become Vested Restricted Share Units based on the achievement of the Performance Criteria over the Performance Period, provided that the Participant has been continuously employed by the Corporation or its Affiliates from the Date of Grant through the end of the Performance Period . The number of Restricted Share Units which may become Vested Restricted Share Units will be between 0% and [ ]% of the Target Number of Restricted Share Units depending on whether and to what extent the Performance Criteria are achieved. If none of the Restricted Share Units become Vested Restricted Share Units, then the Participant will automatically forfeit his or her rights to all Restricted Share Units in the Restricted Share Unit Account as of the Determination Date.

b. Termination of Employment. [ ].

4. Settlement.

payment obligation in respect of a Restricted Share Unit in the form of Shares (or in a combination of cash and Shares), in which case the Employer shall cause the Corporation to deliver such Shares directly to the Participant. For greater certainty, (i) the Participant shall not have any right to demand, be paid in, or receive Shares in respect of any Restricted Share Units; and (ii) notwithstanding any election by the Corporation or Employer to settle any Restricted Share Unit in the form of Shares, the Corporation and Employer reserves the right to change its election in respect thereof at any time until payment is actually made.

5. Acknowledgement. The Participant has received and reviewed a copy of the Plan and agrees to be bound by the terms and conditions of the Plan.

6. Additional Provisions.

a. Withholding. The Corporation or any Affiliate is authorized to deduct or withhold from any payment due to transfer made upon settlement of Vested Restricted Share Units such amount as may be necessary so as to ensure the Corporation and any Affiliate will be able to comply with any Applicable Withholding Taxes. The Committee shall determine, in its sole discretion, the form of payment acceptable to satisfy such tax withholding obligations. For additional information please see Section 9(j) of the Plan.

m. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

o. Data Privacy Waiver. By accepting the grant of the Restricted Share Units, the Participant hereby agrees and consents to:

i. the collection, use, processing and transfer by the Corporation and its Affiliates (collectively, the “Group”) of Data (as defined below);

ii. any members of the Group transferring Data amongst themselves for the purposes of implementing, administering and managing the Plan;

iii. the use of such Data by any such person for such purposes; and

iv. the transfer to and retention of such Data by third parties in connection with such purposes.


DIRTT ENVIRONMENTAL SOLUTIONS LTD.

By:
Name:
Title:

EXHIBIT A

ADDITIONAL PROVISIONS FOR

PERFORMANCE-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

FOR U.S. PARTICIPANTS IN THE

DIRTT ENVIRONMENTAL SOLUTIONS LTD.

LONG TERM INCENTIVE PLAN

The additional terms and conditions of this Exhibit A shall apply to the Award of Restricted Share Units for any Participant who is a U.S. Participant.

1. Settlement of Awards. Irrespective of Section 9(y) of the Plan and Section 4 of the Award Agreement, the Restricted Share Units shall be settled no later than seventy (70) days after becoming Vested Restricted Share Units and in any event before March 15 of the year following the year in which the Performance Period ends. Notwithstanding the foregoing, the Corporation may delay a distribution or payment in settlement of Vested Restricted Share Unit if it reasonably determines that such payment or distribution will violate federal securities laws or any other applicable law, provided that such distribution or payment shall be made at the earliest date at which the Corporation reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 1 if such delay will result in a violation of Section 409A of the Code.

3. Termination Date. The Termination Date shall not occur until the date that the Participant experiences a “separation from service” within the meaning of Section 409A.

A-1

4. Employment Relationship. Unless otherwise provided in a written employment agreement or by applicable law, the Participant’s employment or service relationship with the Employer shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Participant or the Employer for any reason whatsoever, with or without cause. Any question as to whether and when there has been a termination of the employment or service relationship, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

A-2

EXHIBIT B

PERFORMANCE CRITERIA FOR

PERFORMANCE-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

[ ]

B-1

EX-5.1 5 d924438dex51.htm EX-5.1 EX-5.1

Exhibit 5.1

May 26, 2020

DIRTT Environmental Solutions Ltd.

7303 — 30^th Street S.E.

Calgary, Alberta, Canada T2C 1N6

Dear Sirs/Mesdames:

Re: DIRTT Environmental Solutions Ltd. – Registration Statement on Form S-8

We have acted as Canadian counsel to DIRTT Environmental Solutions Ltd., a corporation amalgamated under the laws of Alberta, Canada (the “Company”), in connection with the proposed issuance of up to 5,850,000 common shares in the capital of the Company, no par value per share (the “Shares”) issuable pursuant to the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan (the “Plan”). The Shares are included in a Registration Statement on Form S-8 (the “Registration Statement”) under The Securities Act of 1933 filed with the United States Securities and Exchange Commission (the “Commission”) on May 26, 2020.

This opinion is being delivered in connection with the Registration Statement, to which this opinion appears as an Exhibit.

For the purposes of the opinions expressed below, we have examined such statutes, regulations, public and corporate records and other documents and have made such investigations and considered such questions of law as we have considered necessary as a basis of the opinions hereinafter expressed. We have also examined the Registration Statement and the Plan, which has been filed with the Commission as an exhibit to the Registration Statement. We have relied on a certificate of an officer of the Company as to various questions of fact material to our opinion that we have not verified independently. In rendering the opinion expressed in paragraph 1 below, we have relied exclusively on a certificate of status dated the date hereof issued pursuant to the Business Corporations Act (Alberta).

In all such examinations, we have assumed the genuineness of all signatures and the authority and legal capacity of all persons signing documents reviewed by us, the authenticity of all documents submitted to us as originals and the completeness and conformity to authentic original documents of all documents submitted to us as true, certified or notarial copies or as reproductions (including documents received by facsimile), all documents submitted to us have been executed in the form reviewed by us and have not been amended or modified since the date they were submitted to us, by written or oral agreement or by conduct of the parties thereto, or otherwise, and the truthfulness and accuracy of all certificates of public officials and officers of the Company. We have also assumed the awards granted under the Plan will be duly granted by the board of directors of the Company (the “Board”), a Committee of the Board (a “Committee”) or pursuant to a delegation of authority granted by the Board or a Committee, all in accordance with the terms of the Plan.

We are solicitors qualified to practice law in the Province of Alberta and we express no opinion as to any laws or any matters governed by any laws other than the laws of the Province of Alberta and the federal laws of Canada applicable therein. The opinions expressed herein are given as at the date hereof and are based upon, and subject to, legislation and regulations in effect as of the date hereof and the facts as of the date hereof. We specifically disclaim any obligation, and make no undertaking to supplement our opinions herein, as changes in the law occur and facts come to our attention that could affect such opinions, or otherwise advise any person of any change in law or fact which may come to our attention after the date hereof.

Based upon and subject to the foregoing, we are of the opinion that:

1.	The Company is a corporation amalgamated under the Business Corporations Act (Alberta) and has not been dissolved.

An aggregate of up to 5,850,000 Shares, when issued from time to time upon the due settlement, exercise or redemption, as applicable, of awards granted under and in accordance with the terms of the Plan and the terms and conditions of any agreement governing the grant of any such award will be validly issued by the Company as fully paid and non-assessable common shares in the capital of the Company.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving the foregoing consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of The Securities Act of 1933 or the rules and regulations of the SEC promulgated thereunder.

This opinion is for the benefit of the addressee in connection with the transaction to which it relates, and may not be relied upon, used, or quoted from or referred to in any other documents, by any other person or for any other purpose without our express written consent.

Yours truly,

/s/ Bennett Jones LLP

EX-23.2 6 d924438dex232.htm EX-23.2 EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in this Registration Statement on Form S-8, of DIRTT Environmental Solutions Ltd. (the Registrant) of our report dated February 25, 2020 relating to the financial statements of the Registrant, which appear in the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants

Calgary, Alberta, Canada

May 26, 2020