Document:

EX-10.5

 Exhibit 10.5 
  

EMPLOYEE SHARE PURCHASE PLAN 
 Effective
April 16th, 2014 

 EMPLOYEE SHARE PURCHASE PLAN 

 
  
  

 Article 1 – Purpose 

 

	 	1.1	 This document constitutes the Employee Share Purchase Plan (hereinafter referred to as the “Plan”).

  

	 	1.2	 The purpose of this Plan is to provide an opportunity for Employees to invest in Equity Shares through Employee
savings and Employer Contributions. 

 Article 2 - Definitions 

 

	 	2.1	 In this Plan, unless the context otherwise requires: 

 

	 	(a)	 “Administrative Agent” means such corporation with whom, as, from time to time, the Corporation
enters into an Administration Agreement in respect of matters contemplated under this Plan; 

  

	 	(b)	 “Administration Agreement” means the agreement between the Corporation and the Administrative Agent
in respect of the Plan, dated April 16, 2014 as amended or replaced from time to time; 

  

	 	(c)	 “Affiliate” has the meaning ascribed thereto in the Canada Business Corporations
Act. 

  

	 	(d)	 “Blackout Period” means a blackout period contemplated in the Corporation’s Insider Trading
and Disclosure Policy, which, for the sake of clarity, will include both quarterly blackout periods and other blackout periods as determined by the Corporation from time to time; 

 

	 	(e)	 “Board” means the Board of Directors of the Corporation; 

 

	 	(f)	 “Brokerage Agent” means a person or company as may from time to time be engaged by the Company
to perform brokerage services and such other services as may be required pursuant to this Plan, including without limitation the purchase and sale of Shares; 

 

	 	(g)	 “Calendar Year” means a period of twelve consecutive months ending on December 31st of each year;

  

	 	(h)	 “Corporation” means DIRTT Environmental Solutions Ltd.; 

  
  

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	 	(i)	 “Contribution Period” means the period beginning on any Purchase Date and ending on the day preceding
the next Purchase Date; 

  

	 	(j)	 “Earnings” means the basic salary or compensation received by an Employee, including overtime pay,
before payroll deductions for taxes or other purposes but does not include any cash bonus, profit sharing, incentive pay, shift premiums, commissions, allowances or other special compensation payments; 

 

	 	(k)	 “Employee” means a full-time or part-time employee of the Corporation or any Affiliate company
approved by the Corporation who has made or is entitled to make contributions to the Plan in accordance with the provisions of the Plan, and does not include the following: 

 

	 	(i)	 casual employees, seasonal employees, term employees, temporary employees, retired employees, employees on layoff or
unpaid leave of absence; or 

  

	 	(ii)	 employees receiving benefits under Worker’s Compensation, Employment Insurance, the Long-Term Disability Plan,
the Weekly Indemnity Plan or other disability income benefits; 

  

	 	(l)	 “Employer Contributions” means contributions made by the Corporation or an approved Affiliate company
on behalf of a Participant under this Plan; 

  

	 	(m)	 “Equity Shares” means common shares in the capital of the Corporation which are traded on the Toronto
Stock Exchange; 

  

	 	(n)	 “Group RRSP” means the RRSPs established by the Trustee on the instructions of individual
Participants in accordance with Section 4.3; 

  

	 	(o)	 “Participant” means an Employee who has enrolled in the Plan in accordance with the provisions
thereof; 

  

	 	(p)	 “Personal Account” means the account maintained for record keeping

  
  

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	 	 purposes by the Administrative Agent in the name of a Participant for Employer Contributions and Personal Contributions;

  

	 	(q)	 “Personal Contributions” means the contributions made by a Participant under this Plan;

  

	 	(r)	 “Plan” has the meaning set out in Section 1.1; 

 

	 	(s)	 “Purchase Date” means as soon as practicable after the remittance of contributions each pay period;

  

	 	(t)	 “RRSP” means a registered retirement savings plan established under the Income Tax Act
(Canada); 

  

	 	(u)	 “Securities Trading and Reporting Policy” means the Corporation’s Insider Trading and
Disclosure Policy, as it may be amended or supplemented from time to time; 

  

	 	(v)	 “Trustee” means such trust company as may from time to time be appointed by the Board to act as
trustee for the Group RRSP; and 

  

	 	(w)	 “Undisclosed Material Information” means any material information, as defined in the
Corporation’s Insider Trading and Disclosure Policy as it may be amended or supplemented from time to time, that has not been publicly disseminated by the Corporation. 

 

	 	2.2	 In this Plan, all references to the masculine include the feminine; and reference to the singular shall include the
plural and vice versa, as the context shall require. If any provision of the Plan or part hereof is determined to be void or unenforceable in whole or in part, such determination shall not affect the validity or enforcement of any other provision or
part hereof. Headings wherever used herein are for reference purposes only and do not limit or extend the meaning of the provisions contained herein. References to “Article” or “Articles” mean an article or articles contained in
the Plan unless expressly stated otherwise. 

  
  

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 Article 3 - Eligibility 

 

	 	3.1	 An Affiliate company may include employees as Participants in the Plan only if the Corporation has previously approved
the inclusion of such Affiliate company’s employees in the Plan including any applicable cost-sharing arrangements or transfer pricing. 

  

	 	3.2	 Any Employee may become a Participant in the Plan, unless excluded from participation in the Plan by the Corporation
or by an approved Affiliate company. 

  

	 	3.3	 An Employee may become a Participant of the Plan beginning on the first day of the month coincident with, or next
following the date that the Employee has completed 90 days of continuous service with the Corporation or an approved Affiliate company, or a lesser period of time if so determined by the Corporation or an approved Affiliate company.

 Article 4 - Enrolment in the Plan and the Canadian Group RRSP 

 

	 	4.1	 No Participant is eligible to hold any part of the Equity Shares acquired through Personal or Employer Contributions
in a 401 (k) plan. 

  

	 	4.2	 To enroll in the Plan, an Employee must, at least 15 days before the day on which Personal Contributions are to begin,
complete and submit notice in the form prescribed by the Corporation confirming that the Employee is not aware of any Undisclosed Material Information at the time of such notice and authorizing the Corporation or an approved Affiliate company to
deduct from the Employee’s Earnings the amount designated by the Employee in accordance with Section 5.1 until such authorization shall be revised, revoked or terminated, and agreeing to the terms and conditions of the Plan. This will
constitute written notice of the Employee’s election to participate in and be a member of the Plan. This notice may not be given by a Participant during a Blackout Period. 

 

	 	4.3	 Subject to the provisions of Article 15, all funds and Equity Shares held by the Administrative Agent pursuant to the
Plan are held on behalf of the individual Participants.    Subject to the provisions of Article 15, a Participant if applicable, shall be the beneficial owner of all Equity Shares purchased on his or her behalf.

  
  

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	 	4.4	 A Participant who is a permanent Canadian resident may elect to hold all or part of the Equity Shares acquired with
Personal or Employer Contributions in an RRSP by filing with the Administrative Agent a completed application for an RRSP in the form prescribed by the Corporation and indicating the portion of the Equity Shares purchased with the Participant’s
Personal Contributions or Employer Contributions to be allocated to the RRSP. In the event that a Participant should wish to transfer any Equity Shares previously acquired with Personal or Employer Contributions pursuant to the Plan into an RRSP, he
or she may do so by giving notice in the form prescribed by the Corporation and authorizing the Administrative Agent to transfer the specified number of Equity Shares into the Group RRSP. It is solely the Participant’s responsibility to ensure
that any Equity Shares allocated to or transferred into the Group RRSP do not, in conjunction with other RRSP contributions of that Participant, exceed the RRSP contribution room of that Participant, and neither the Corporation, an approved
Affiliate company, the Administrative Agent, nor the Trustee shall be liable for any tax or other liability which may arise as a result of any Participant’s over-contribution to an RRSP. 

Article 5 - Participant Contributions 
  

	 	5.1	 A Participant shall elect to make Personal Contributions to the Plan of at least 1% of the Participant’s Earnings
for the pay period, up to a maximum of 10% of the Participant’s Earnings for the pay period, by giving notice in the form prescribed by the Corporation. Such contributions shall be in increments of 1% of the Participant’s Earnings for the
pay period. The Corporation, or an approved Affiliate company, shall deduct from each Participant’s pay, the amount of that Participant’s Personal Contributions. This specified rate of contribution filed by a Participant at the time of
election of participation in the Plan shall remain in effect until changed pursuant to Section 5.2. 

  

	 	5.2	 Once making Personal Contributions to the Plan, a Participant may change the amount of his or her Personal
Contributions no more than once quarterly by giving notice to the Corporation in the form prescribed by the Corporation. All 

  
  

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	 	 requested changes in Personal Contributions will be effective as of the first Contribution Period occurring after notice
is received provided the notice is received 15 days prior to the next Contribution Period. This notice may not be given if an Employee is aware of any Undisclosed Material Information at the time of such notice and may not be given if the Employee
is subject to the Corporation’s Insider Trading and Disclosure Policy, such notice may not be given during a Blackout Period. 

A Participant may voluntarily elect to suspend participation in the Plan by providing instructions directing the Corporation to cease
making the Participant’s Personal Contributions for the remainder of a Calendar Year if and when the RRSP contribution maximum is reached during a particular Calendar Year. Under this suspension arrangement, Participants will be responsible for
notifying the Administrative Agent they wish to resume contributions in the following Calendar Year by giving notice in the form prescribed by the Corporation. 
  

	 	(a)	 Notice of such instructions must be received by the Corporation from the Participant, in the form prescribed by the
Corporation, at least 15 days prior to the next Contribution Period in which the instructions are to be applied. 

  

	 	(b)	 The Participant must confirm that he or she is not aware of any Undisclosed Material Information at the time of giving
such instructions and such instructions may not be given during a Blackout Period. 

 Instructions given pursuant
to this section will apply until the Participant provides notice to the Corporation that he or she wishes to revoke such instructions. 
  

	 	5.3	 A Participant may voluntarily suspend his or her Personal Contributions at any time that they wish to temporarily
cease participating in the Plan, no more than twice annually, by giving notice in the form prescribed by the Corporation, to the Corporation. This notice will be effective as of the next Contribution Period following the date of notice, provided
notice is given 15 days prior to the commencement of the next Contribution Period. The Participant must confirm 

  
  

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 that he or she is not aware of any Undisclosed Material Information at the time of
giving such notice and if the Participant is, subject to the Corporation’s Insider Trading and Disclosure Policy, such notice may not be given during a Blackout Period. 

 

	 	5.4	 A Participant who voluntarily suspends his or her Personal Contributions pursuant to Section 5.3 above, may
resume his or her Personal Contributions by giving notice in the form prescribed by the Corporation, to the Corporation. Participants will be eligible to resume making Personal Contributions effective as of the first Contribution Period provided
that a Participant provides at least 15 days prior notice to the Corporation of their intention to resume making Personal Contributions. The Participant must confirm that he or she is not aware of any Undisclosed Material Information at the time of
giving such notice and if the Participant is, subject to the Corporation’s Insider Trading and Disclosure Policy, such notice may not be given during a Blackout Period. 

 

	 	5.5	 During any period of suspension, Personal Contributions shall not be accumulated or carried forward for later payment.
A Participant shall continue to be a member of the Plan and the Group RRSP, if applicable, for all purposes other than the making of Personal Contributions until that Participant resumes his or her Personal Contributions pursuant to Sections 5.2 or
5.4, is terminated from the Plan pursuant to Article 11 or terminates his or her participation in the Plan pursuant to Article 12. 

Article 6 - Employer Contributions 
  

	 	6.1	 The Corporation (or an approved Affiliate company, as the case may be) will make Employer Contributions to the Plan as
follows: 

  

	 	a)	 where a Participant has made a Personal Contribution, an Employer Contribution for the benefit of that Participant
shall be made in an amount equal to 50% of the Participant’s Personal Contribution during the relevant Contribution Period, 

  

	 	6.2	 Employer Contributions referred to in Subsection 6.1(a) will be made every Contribution Period as follows:

  
  

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	 	a)	 Employer Contributions made with regard to Personal Contributions made to the RRSP component of a Participant’s
Personal Account will be allocated to the RRSP component of the Participant’s Personal Account; 

  

	 	b)	 Employer Contributions made with regard to Personal Contributions made to the non-RRSP component of a
Participant’s Personal Account will be allocated to the non-RRSP component of the Participant’s Personal Account. 

 

	 	6.3	 It is a term and condition of the Corporation (or an approved Affiliate company making the Employer Contributions, as
the case may be) that the Employer Contributions shall not be considered as salary compensation paid to an Employee for any reason including for the purposes of calculating salary in lieu of notice upon termination of employment of an Employee. For
greater certainty, the Employer Contributions are considered a taxable benefit for Employees pursuant to applicable income tax rules. 

Article 7 - Personal Accounts 
  

	 	7.1	 The Administrative Agent shall establish a Personal Account for each Participant and shall record in each Personal
Account the amount of all Personal Contributions made by the Participant and all Employer Contributions made on behalf of the Participant, the number of Equity Shares purchased for that Personal Account with Personal Contributions, the number of
Equity Shares purchased with Employer Contributions and the amount of any expenses allocated to such Personal Account. 

Article 8 - Investment of Funds 
  

	 	8.1	 On the last day of each Contribution Period, the Corporation or an approved Affiliate company shall deposit with the
Administrative Agent the amount of all Personal Contributions and all Employer Contributions for that period, and shall advise the Administrative Agent of the Personal Contributions received from each Participant and the amount of Employer
Contributions made on behalf of each Participant. 

  

	 	8.2	 Upon receipt of the funds and the information outlined in Section 8.1, the Administrative Agent shall record in
each Participant’s Personal Account the amount 

  
  

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 of that Participant’s Personal Contributions and the amount of any Employer
Contributions made on behalf of that Participant. 
  

	 	8.3	 Subject to Section 8.6, the Administrative Agent shall use all funds received by it from Personal Contributions
and Employer Contributions, as well as all cash dividends paid on the Equity Shares held on record by the Administrative Agent, or Trustee, as the case may be, for and on behalf of the Participant, to purchase Equity Shares, through normal market
facilities at the prevailing market price for Equity Shares on the Purchase Date. 

  

	 	8.4	 Subject to Section 8.6, the Administrative Agent shall purchase on each Purchase Date such number of Equity
Shares as will satisfy all Personal Contributions and Employer Contributions received for the preceding Contribution Period from or on behalf of all Participants under the Plan. Each Participant shall thereupon have an interest in the Equity Shares
purchased by the Administrative Agent in proportion to his or her Personal Contributions and Employer Contributions made on his or her behalf during the preceding Contribution Period. 

 

	 	8.5	 Subject to Section 8.6, following the end of a Contribution Period, the Administrative Agent shall allocate the
Equity Shares purchased during that Contribution Period on behalf of the Participants, on a full and fractional Equity Share basis, as appropriate, to the Personal Account of each Participant in proportion to the Personal Contributions and Employer
Contributions made on behalf of that Participant. 

  

	 	8.6	 If, for any reason, the Administrative Agent is unable to purchase a sufficient number of Equity Shares on a Purchase
Date to satisfy all Personal Contributions and Employer Contributions for the preceding Contribution Period, the Administrative Agent shall purchase Equity Shares as they become available and shall allocate the Equity Shares so purchased to
Participants’ Personal Accounts in the order of the Contribution Periods in respect of which the Personal Contributions and/or Employer Contributions were received by the Administrative Agent. The Administrative Agent shall ensure that all
Personal Contributions and Employer Contributions are converted to full and fractional Equity Shares as soon as practicable. 

The proceeds from any dividends received by the Administrative Agent for 

  
  

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 Equity Shares held pursuant to the Plan shall be used to purchase additional Equity
Shares at the prevailing market price for Equity Shares on the date of purchase. Such additional Equity Shares shall be allocated to the respective Participants’ Personal Accounts as to Personal Contributions or Employer Contributions, as the
case may be, in proportion to the number of Equity Shares in those Personal Accounts before the payment of the dividend. 
  

	 	8.7	 Brokerage commissions, transfer taxes and other charges or expenses pursuant to the purchase of Equity Shares by the
Administrative Agent as provided in Section 8.6, will be the responsibility of the Corporation. 

 Article 9
- Registration and Voting 
  

	 	9.1	 Equity Shares purchased by the Administrative Agent under this Plan shall be registered in the name of the
Administrative Agent or Trustee, as the case may be, or such other name as the Administrative Agent or Trustee, as the case may be, determines. 

  

	 	9.2	 Whole Equity Shares allocated to a Participant’s Personal Account will be voted by the Participant. Whole Equity
Shares allocated to a Participant’s RRSP will be voted by the Trustee in accordance with the directions, if any, of the Participant, or the Participant’s Estate, if applicable. 

 

	 	9.3	 The Administrative Agent will provide the transfer agent with a current shareholder register at the time of the
transfer agent’s request. 

 Article 10 - Withdrawals While a Participant 

 

	 	10.1	 A Participant may make withdrawals of Equity Shares from his or her Personal Account only as set out in this Article
10. 

  

	 	10.2	 Subject to a maximum of two notices of withdrawal in any twelve month period, a Participant may, in accordance with
Section 10.3, request that all or a portion of the Equity Shares in that Participant’s Personal Account that were purchased from a Participant’s Personal Contributions and/or Participant’s Employer Contributions be transferred to
his or her name, or an external account in his or her name, or be sold or, where the Participant holds Equity Shares in the 

  
  

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	 	 Group RRSP, that all or a portion of the Equity Shares in that Participant’s RRSP be transferred to, be sold and
the proceeds transferred to another RRSP in the Participant’s name, or be sold and the proceeds, net of withholding tax, be remitted to the Participant. Any fractional Equity Shares credited to the Participant’s Personal Account or RRSP
shall be disregarded on any sale or transfer and the Participant shall be entitled to receive the cash equivalent thereof. 

  

	 	10.3	 A Participant shall give the Administrative Agent or Trustee, as the case may be, notice in the form prescribed by the
Corporation of any instructions for sale or transfer of Equity Shares pursuant to Section 10.2. The Participant must confirm that he or she is not aware of any Undisclosed Material Information at the time of giving such notice and such notice
may not be given during a Blackout Period. 

  

	 	10.4	 Upon receiving such notice from the Participant, the Administrative Agent shall sell the specified number of Equity
Shares and or transfer them to the other designated RRSP as soon as practicable. The net proceeds of any sale will be transferred as soon as practicable to the Participant or such personal bank or brokerage account as the Participant may designate.

 Article 11 - Termination of Participation 

 

	 	11.1	 A Participant’s participation in the Plan shall terminate immediately on the first to occur of the following
events, unless otherwise specified below: 

  

	 	(a)	 the Participant becomes totally and permanently disabled, unless he or she makes alternative arrangements with the
Corporation or an approved Affiliate company for remittance of Personal Contributions; 

  

	 	(b)	 the Participant retires from employment with the Corporation or an approved Affiliate company; 

 

	 	(c)	 the Participant dies; 

  

	 	(d)	 the Participant’s employment with the Corporation or an approved Affiliate company is terminated. A
Participant’s employment will be considered to have terminated on the last day of his or her actual and active employment, whether such day is selected by agreement with the individual or unilaterally

  
  

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by the Corporation or an approved Affiliate company. For the avoidance of doubt, no period of notice that is or ought to have been given under applicable law in respect of such termination of
employment shall be considered for such purpose; 

  

	 	(e)	 the Participant has been placed on layoff and all recall rights or opportunities have been exhausted; or

  

	 	(f)	 the Plan is terminated. 

  

	 	11.2	 A Participant whose participation in the Plan has been terminated as provided in Section 11.1 (or his or her
executors or administrators, as the case may be) may complete a notice in the form prescribed by the Corporation and file it with the Administrative Agent within 90 days after termination of the Participant’s participation in the Plan
requesting that one or more of the following occur: 

  

	 	(a)	 all or a portion of the Equity Shares in his or her Personal Account be transferred to his or her name or an external
account in his or her name; 

  

	 	(b)	 all or a portion of the Equity Shares be sold and the net proceeds distributed to the Participant or an external
account in his or her name; and/or 

  

	 	(c)	 if the Participant’s Equity Shares are held in an RRSP, to the extent permitted by law, all or a portion of the
Equity Shares be transferred to another RRSP in the Participant’s name, or, in the event of death, the name of his or her spouse; 

provided that the Participant (or his or her executors or administrators, as the case may be) confirms that he or she is not aware of
any Undisclosed Material Information at the time of giving such notice. 
  

	 	11.3	 In relation to some or all of the Equity Shares held by the Participant as at the date the Participant’s
participation in the Plan is terminated, as provided in Section 11.1, if no notice is filed within 90 days after such date, the Participant (or his or her executors or administrators, as the case may be) shall be deemed to have elected to:

  
  

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	 	(a)	 request that the Equity Shares in his or her Personal Account be sold and the net proceeds distributed to the
Participant or an external account in his or her name; and 

  

	 	(b)	 request that the Equity Shares held in an RRSP be sold and the net proceeds be distributed to the Participant, or his
or her estate, as applicable, as provided in Section 10.4. Applicable taxes will apply. 

  

	 	11.4	 After receiving any such notice as contemplated within this Article 11, the Administrative Agent shall make the
necessary arrangements for the sale of the Equity Shares, or the issuance and delivery of the appropriate certificate representing the Equity Shares to such terminating Participant or other RRSP, as soon as practicable thereafter. The Administrative
Agent will forward the net proceeds from the sale of the Equity Shares of a terminating Participant as soon as practicable following the receipt of any notice by the terminating Participant or the Corporation, as applicable. Any fractional Equity
Shares credited to the Participant’s Personal Account or RRSP shall be disregarded on any sale or transfer and the Participant shall be entitled to receive the cash equivalent thereof. 

Article 12 - Termination by a Participant 
  

	 	12.1	 Once a Participant has temporarily ceased participating in the Plan as provided in Section 5.3, the Participant
may terminate his or her participation in the Plan by requesting that one or more of the following occur: 

  

	 	(a)	 all of the Equity Shares in his or her Personal Account be transferred to his or her name or an external account in
his or her name; 

  

	 	(b)	 all of the Equity Shares in his or her Personal Account be sold and the net proceeds distributed to the Participant or
an external account in his or her name, provided that the Participant confirms that he or she is not aware of any Undisclosed Material Information at the time of giving such notice and such notice may only be given outside of a Blackout Period; and

  
  

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	 	(c)	 if the Participant’s Equity Shares in his or her Personal Account are held in an RRSP, then to the extent
permitted by law, all of the Equity Shares be transferred to another RRSP in the Participant’s name or, in the event of the Participant’s death, to his or her spouse; 

 

	 	12.2	 If, at the end of any calendar year, a Participant has not contributed to his or her Personal Account during such
calendar year, the Corporation (or an approved Affiliate company, as the case may be) may elect to give written notice requiring that Participant to terminate his or her participation in the Plan and withdraw, subject to Article 15, all of his or
her Personal Account in the manner set forth in Section 12.1 in cash or Equity Shares. If no election under Section 12.1 is made by the Participant within a period of 90 days after notice from the Corporation or an approved Affiliate
company, the Participant shall be deemed to have elected to: 

  

	 	(a)	 request that the Equity Shares in his or her Personal Account be sold and the net proceeds distributed to the
Participant or an external account in his or her name; and 

  

	 	(b)	 if the Participant’s Equity Shares are held in an RRSP, have all of his or her Equity Shares be sold and the net
proceeds be distributed to the Participant or his or her estate, as applicable. 

  

	 	12.3	 After receiving any such notice as contemplated within this Article 12, the Administrative Agent shall make the
necessary arrangements for the sale of the Participant’s Equity Shares, or the issuance and delivery of the appropriate certificate representing the Equity Shares to such terminating Participant or other RRSP, as soon as practicable thereafter.
The Administrative Agent will forward the net proceeds from the sale of the Equity Shares of a terminating Participant as soon as practicable following the receipt of any notice by the terminating Participant or the Corporation, as applicable. Any
fractional Equity Shares credited to the Participant’s Personal Account or RRSP shall be disregarded on any sale or transfer and the Participant shall be entitled to receive the cash equivalent thereof.

  
  

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	 	12.4	 Any Participant who has terminated his or her participation in the Plan under Section 12.1 or is deemed to have
terminated his or her participation in the Plan under Section 12.2, shall not be permitted to enroll and become a Participant in the Plan or entitled to make Personal Contributions again until a period of six calendar months has elapsed since
his or her termination or deemed termination. 

 Article 13 - Prohibition of Assignment of Interest 

 

	 	13.1	 All rights of participation in the Plan are personal and no assignment or transfer of any interest in the Equity
Shares held by the Administrative Agent or Trustee under the Plan will be permitted or recognized, except as expressly set out elsewhere in this Plan. 

Article 14 – Taxes and Fees 
  

	 	14.1	 The Participant shall be responsible for paying all income taxes and other taxes applicable to Employer Contributions
and to transactions involving the Equity Shares held by the Administrative Agent or Trustee on his or her behalf, including, without limitation, any taxes payable in respect of: 

 

	 	(a)	 Employer Contributions made on behalf of the Participant; 

 

	 	(b)	 the transfer of Equity Shares out of the Group RRSP to the Participant,; 

 

	 	(c)	 the sale or other disposition of Equity Shares of the Participant; and 

 

	 	(d)	 dividends paid on the Equity Shares. 

For greater clarification, the Corporation or an approved Affiliate company will be responsible for reporting the taxable benefit
arising from the Employer Contributions on Participants’ T4 slips (or other forms, as required, outside of Canada) and deducting the appropriate withholding taxes from Participants’ Earnings. 

 

	 	14.2	 The Administrative Agent is authorized to deduct from any amounts payable to a Participant following a sale of that
Participant’s Equity Shares held in an RRSP, any amounts which are required to be withheld on account of taxes. Neither the Corporation, an approved Affiliate company, the Trustee nor the Administrative

  
  

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	 	 Agent, assumes any responsibility for any income tax or other tax consequences for the Participants in the Plan. Neither
the Corporation, an approved Affiliate company, the Trustee nor the Administrative Agent, shall provide any tax advice to any Participant. Each Participant is expected to consult his/her own professional advisors in this regard.

  

	 	14.3	 The Participant or the Participant’s designate, as applicable, will be responsible for paying any and all
brokerage commissions and share sale processing fees on all Equity Share sales initiated by, or deemed to be initiated by, the Participant. 

Article 15 – Holding Period 
  

	 	15.1	 All funds and Equity Shares acquired with the Employer Contributions made on behalf of the Participant shall be
subject to a 12-month holding period. Once participation in the Plan has been terminated provided in Article 11 the 12-month holding period will be immediately waived.

 Article 16 - Offer for Equity Shares of the Corporation 

 

	 	16.1	 In the event that, at any time, an offer to purchase is made to all holders of Equity Shares, the Administrative Agent
will provide a current shareholder register to the transfer agent at the time of the transfer agent’s request. The transfer agent will provide notice of such offer to purchase to each applicable Participant. 

Article 17 - Subdivision, Consolidation, Conversion or Reclassification 

 

	 	17.1	 In the event that the Equity Shares are subdivided, consolidated, converted or reclassified by the Corporation, or any
action of a similar nature affecting such Equity Shares is taken by the Corporation, then the Equity Shares held by the Administrative Agent or Trustee for the benefit of the Participants shall be appropriately adjusted. 

Article 18 - Amendment or Termination of the Plan 
  

	 	18.1	 The Board may, at any time, amend this Plan in whole or in part or terminate this Plan. The Corporation may amend this
Plan without approval of the Board when 

  
  

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 EMPLOYEE SHARE PURCHASE PLAN 

 
  
  

  

	 	 such amendments are of an administrative and/or housekeeping nature. However, neither the Corporation nor the Board may
amend or terminate this Plan in a manner which would deprive a Participant of any benefits that have accrued to the date of amendment or termination or which would cause or permit any Equity Shares or cash held pursuant to the Plan or any Personal
Contributions or Employer Contributions to revert to or become the property of the Corporation. 

  

	 	18.2	 If the Plan is terminated, all funds and Equity Shares in the Participant’s Personal Account and RRSP shall be
transferred to the Participant or on behalf of the Participant or handled as otherwise directed by the Participant, within 90 days of the termination of the Plan. 

Article 19 - Administration 
  

	 	19.1	 The Corporation shall have full power and authority to interpret and administer the Plan, including the power to
appoint any person or persons to carry out its provisions in conformity with the objectives of the Plan and under such rules as the Corporation may from time to time establish. Decisions of the Corporation shall be final and binding upon any
approved Affiliate companies, Employees, Participants, and their executors and administrators. 

  

	 	19.2	 The Corporation has entered into an Administration Agreement with the Administrative Agent. A copy of the
Administration Agreement is available for inspection in the Corporation’s principal executive office. 

  

	 	19.3	 The Corporation may from time to time enter into such further agreements with the Trustee, the Administrative Agent or
other parties as it may deem necessary or desirable to carry out this Plan. 

  

	 	19.4	 The Corporation and any approved Affiliate companies will make a copy of the Plan available to all new Participants.

  

	 	19.5	 Records of the Trustee, the Administrative Agent and the Corporation and any approved Affiliate companies will be
conclusive as to all matters involved in the administration of the Plan. 

  
  

Page 18 of 20 

 EMPLOYEE SHARE PURCHASE PLAN 

 
  
  

  

	 	19.6	 Except as set out in Sections 8.7, 14.1, and 14.3, all costs and expenses of administering the Plan, including the
Administrative Agent’s compensation, will be paid by the Corporation and/or any approved Affiliate companies. 

 Article 20
- Reporting 
  

	 	20.1	 As soon as practicable after the end of the relevant period, the Trustee or Administrative Agent will issue to each
Participant RRSP contribution receipts reporting the total amount of contributions to the Participant’s RRSP, if any. 

  

	 	20.2	 The Administrative Agent shall furnish to each Participant a statement of his or her Personal Account. Unless written
notice to the contrary is received by the Administrative Agent within 60 days after the mailing or delivery of such statement to the Participant, such statement shall be conclusively deemed to be correct and the Administrative Agent and Trustee
shall be relieved of all liability for any error contained therein or disclosed thereby. 

 Article 21 - Limitation of Rights of
the Employee 
  

	 	21.1	 This Plan is a voluntary program on the part of both the Corporation or approved Affiliate company, as the case may
be, and the Employee and shall not constitute an inducement to, or condition of, the employment of any Employee. 

  

	 	21.2	 Participation by an Employee in the Plan shall not: 

 

	 	(a)	 give any Employee, whether a Participant or not, the right to be or continue to be employed by the Corporation or
approved Affiliate company, as the case may be; 

  

	 	(b)	 interfere with the right of the Corporation (or an approved Affiliate company, as the case may be) to discharge any
Employee, whether a Participant or not, at any time; and 

  

	 	(c)	 give any Participant or beneficiary or spouse of a Participant any right or claim to any benefit, except to the extent
provided for in the Plan. 

  
  

Page 19 of 20 

 EMPLOYEE SHARE PURCHASE PLAN 

 
  
  

  

	 	21.3	 None of the Corporation, any approved Affiliate companies, the Trustee, nor the Administrative Agent shall be liable
to any Employee for any loss resulting from a decline in the market value of any Equity Shares purchased under the Plan. Neither the Corporation, any approved Affiliate companies, the Trustee nor the Administrative Agent shall be liable to any
Employee for any change in the market price of the Equity Shares between the time an Employee authorizes the purchase or sale of the Equity Shares and the time such purchase or sale takes place. 

Article 22 - Administrative Agent 
  

	 	22.1	 In the event of the resignation of the Administrative Agent, its successor shall be appointed by the Corporation. Any
successor Administrative Agent shall be vested with all the powers, rights, duties and immunities of the Administrative Agent hereunder to the same extent as if originally named as the Administrative Agent. 

Article 23 - Applicable Laws 
  

	 	23.1	 The Plan shall be construed, and the rights and obligations of the parties governed by the Plan shall be determined,
in accordance with the laws of the Province of Alberta. 

  
  

Page 20 of 20EX-10.6

 Exhibit 10.6 
  

 
  

2019 Variable Pay Plan (VPP) 
 Reference
Document 
  
  

April 2019 

  
 Table of
Contents 
  

							
	 1
	 	 Introduction
	  	 	3	 
			
	 2
	 	 Underlying Principles
	  	 	3	 
			
	 3
	 	 Administration
	  	 	3	 
			
	 4
	 	 Measurement Period
	  	 	3	 
			
	 5
	 	 Eligibility & Incentive Amounts
	  	 	3	 
			
	 6
	 	 Measures
	  	 	4	 
			
	 7
	 	 Assessment of Measures
	  	 	4	 
			
	 8
	 	 Payment & Forfeiture
	  	 	4	 
	 8.1
	 	 Calculation of Payment & Local Legislation Requirements
	  	 	5	 
	 8.2
	 	 Leave of Absence
	  	 	5	 
	 8.3
	 	 Payment Information Finalised
	  	 	5	 
			
	 9
	 	 VPP Duration
	  	 	5	 
			
	 10
	 	 Responsibilities under the VPP
	  	 	5	 
			
	 11
	 	 Miscellaneous
	  	 	5	 
	 11.1
	 	 No Right of Participation; Incentive Amounts Discretionary
	  	 	5	 
	 11.2
	 	 Effect on Other Plans.
	  	 	6	 
	 11.3
	 	 Section 409A.
	  	 	6	 
	 11.4
	 	 Amendment; Termination.
	  	 	6	 

  

	1	 Introduction 

The DIRTT Variable Pay Plan (“VPP” or the “Plan”) has been adopted by DIRTT Environmental Solutions Ltd. (“DIRTT”),
effective as of March 15, 2019 (the “Effective Date”). The purpose of the VPP is to promote the long-term growth and profitability of DIRTT by providing eligible employees with the opportunity to earn a cash incentive payment when the
business meets or exceeds financial target expectations for an applicable measurement period. This does not mean that other aspects of performance are unimportant to the business; regular assessment and feedback of overall employee performance will
be provided to the employee by their business leader on a periodic basis. 
  

 

	2	 Underlying Principles 

The VPP is designed to: 
  

	 	●	 	 be easy to understand and communicate; 

 

	 	●	 	 have clear criteria relating to eligibility and amounts that may earned; 

 

	 	●	 	 include measures which have strong line of sight for participants but are linked to organisational strategy and business
objectives; 

  

	 	●	 	 attract and retain skilled individuals to the organisation; 

 

	 	●	 	 encourage employee engagement with the business; and 

 

	 	●	 	 motivate employees to demonstrate high levels of performance and desired behaviours. 

 
  

	3	 Administration 

The VPP is administered by the Compensation Committee (the “Committee”) of the Board of Directors of DIRTT as well as the Chief Financial
Officer of DIRTT (the “CFO”) and the Chief Talent Officer of DIRTT (the “CTO”). The Committee has the authority to: (1) determine the employees who are eligible to participate in the VPP, (2) set the target incentive
amount payable to a participant under the VPP, (3) establish the performance metrics for measurement periods under the VPP, (4) determine the incentive payment earned by a participant under the VPP for a given measurement period and
(5) take any other action it deems necessary and advisable for the administration of the VPP. The CFO and the CTO, individually or collectively, have the authority to: (1) administer the VPP, (2) prescribe rules, regulations and
procedures in connection with the operation of the VPP, (3) make decisions on any disputed questions that arise under the VPP, including questions of construction, interpretation and administration and (4) take any other action directed or
permitted by the Committee. Any determination made by the Committee, the CFO or the CTO under the VPP will be given deference in the event it is subject to judicial review and will be overturned by a court of law only if it is arbitrary and
capricious. 
  
  

	4	 Measurement Period 

The VPP is intended to operate based on an annual measurement period. The first measurement period under the VPP commenced on the Effective Date and
ends on December 31, 2019 (the “2019 measurement period”). Future measurement periods, if any, will be established by the Committee. 
  

 

	5	 Eligibility & Incentive Amounts 

Full-time, non-commissioned salaried employees are eligible to participate in the VPP. Participants in the VPP
will be selected for participation in the VPP by the Committee. 
 The target incentive amount that may be earned under the VPP for a given
measurement period by a participant will be based on a specific percentage of such participant’s base salary and communicated to such participant 

 
through a formal notice of participation delivered to a participant by DIRTT or in a participant’s applicable employment contract. The maximum incentive amount that a participant may earn
under the VPP is equal to 150% of such participant’s target incentive amount. For example, a participant may be eligible to earn a target incentive amount under the VPP that is equal to 10% of such participant’s gross pay, which equals a
maximum incentive amount of 15%. 
  
  

	6	 Measures 

The two primary drivers of DIRTT’s stock price are (1) Adjusted EBITDA and (2) Revenue, and accordingly those represent the performance
metrics under the VPP for the 2019 measurement period and, unless specified otherwise by the Committee, any future measurement periods under the VPP. The Committee is authorized to specify new performance metrics for any measurement period under the
VPP. 
 For purposes of the VPP: 
  

	 	●	 	 “Adjusted EBITDA” means earnings (loss) before interest, taxes, depreciation and amortization, plus: non-cash foreign exchange gains or losses on debt revaluation; gains or losses on disposal of property, plant and equipment and intangible assets; write-off of property, plant
and equipment and intangible assets; non-cash stock-based compensation expense; reorganization costs; and other non-recurring gains or losses, as reported in
DIRTT’s publicly-filed financial statements for the applicable fiscal year. 

  

	 	●	 	 “Revenue” means DIRTT’s total revenue from all sources determined in accordance with generally accepted
accounting principles, as reported in DIRTT’s publicly-filed financial statements for the applicable fiscal year. 

 For the
2019 measurement period, a participant will earn the target incentive amount applicable to such participant based on attainment of the following levels of Adjusted EBITDA and Revenue, with the Adjusted EBITDA component weighted 75% and the Revenue
component weighted 25%: 
  

	 	●	 	 Adjusted EBITDA must equal or exceed 2018’s Adjusted EBITDA; 

 

	 	●	 	 Revenue must be at least 96.5% of 2018’s Revenue. 

For future measurement periods, the Committee will establish the applicable performance targets during the first quarter of each calendar year. 

 
  

	7	 Assessment of Measures 

At the end of a measurement period, the Committee, with assistance from the CFO and the CTO, will assess achievement with respect to the applicable
performance metrics and determine the amount earned, if any, by each participant under the VPP. 
  

 

	8	 Payment & Forfeiture 

Following the end of a measurement period, payments under the VPP will be made in a single lump sum cash payment on the next normal payroll date
following the Committee’s determination of the amounts earned by participants under the VPP, but in no event later than March 15 of the calendar year following the calendar year to which such measurement period relates; provided that, as
of the applicable payment date, a participant must be employed by DIRTT or its affiliate. For the avoidance of doubt, if a participant’s employment is terminated for any reason prior to an applicable payment date, such participant will forfeit
any and all amounts payable to such participant or that such participant is eligible to receive under the VPP. Notwithstanding the foregoing, if the participant is subject to an employment agreement with the Company, the terms and conditions set
forth in such employment agreement will determine payments of VPP in the event of termination of employment. 

	8.1	 Calculation of Payment & Local Legislation Requirements 

The total incentive amounts earned by participants under the VPP are pro-rated, if applicable,
to reflect any partial length of service during a measurement period and are subject to deduction for all applicable withholding taxes determined by DIRTT to apply to such amounts. 

In the case of expatriated employees, the total incentive amounts earned by participants under the VPP may also be subject to local
taxation legislation depending on the expatriate’s compensation package conditions. In countries where the responsibility for paying taxes rests with the participant, DIRTT assumes no responsibility for the payment of such taxes and, as a
condition to receive or retain payment under the VPP, such participant must comply with applicable tax requirements. 
  

	8.2	 Leave of Absence 

Short-term absences (less than six weeks per annum), excluding annual vacation or paid time off, will have no effect on the total
incentive amount earned by a participant. 
 In the case of long-term absences (six weeks per annum or more) will not affect a
participant’s eligibility to participate in the VPP but the total incentive amount earned by such participant, if any, will be prorated based on the period that such participant was not absent. 

 

	8.3	 Payment Information Finalised 

Final payments will be processed through payroll, with the letter of advice generated by DIRTT’s Talent team. 

 
  

	9	 VPP Duration 

The VPP is effective as of the Effective Date for the 2019 measurement period. Future measurement periods, if any, will be established by the Committee.

  
  

	10	 Responsibilities under the VPP 

In addition to the duties, powers and responsibilities set forth in Section 3 above for the Committee, the following parties shall have the
responsibilities described below under the VPP: 
  

					
	 	 
	
Position
  
	 	
Responsibilities
  

	 	 	 
	 Director,
Talent
  
	 	 ●
	  	 Responsible for maintaining database containing
participant information.
  

	 	 	 
	 Senior
Management
  
	 	 ●
	  	 Responsible for identifying potential eligible
participants and assignment of tiers (in partnership with the Talent team).
  

	 	 	 
	 SVP, Talent

 
	 	 ●
	  	 Responsible for administration of participants.

 

	 	 	 
	 CFO

 
	 	 ●
	  	 Responsible for calculating achievement with respect to
performance metrics.
  

	 	 	 
	 CEO/BOD

 
	 	 ●
	  	 Responsible for recommendation of payments under the
VPP.
  

  
  

	11	 Miscellaneous 

11.1 No Right of Participation; Incentive Amounts Discretionary. No individual shall have any right to participate in the VPP. The VPP does not
confer upon any individual any right to continued employment or affect in any manner the right of DIRTT or its affiliate to terminate the employment of any individual at any time without liability hereunder. Incentive amounts are forfeitable upon
termination of employment. The incentive amounts, if any, payable to participants under the VPP are not guaranteed and are subject, in all cases, to the discretion of 

 
the Committee. Participation in one measurement period does not entitle a participant to be eligible to participate in the VPP for any future measurement period.  

11.2 Effect on Other Plans. No incentive amount under the VPP will be taken into consideration in the calculation of any pension, severance or
other benefit under any employee benefit plan, program or arrangement of DIRTT or its affiliate, except as required by law.  
 11.3
Section 409A. All provisions of the VPP are intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance
issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall be construed and administered in accordance with such intent. Notwithstanding any provision in the VPP to the contrary, if any payment provided for
herein would be subject to additional taxes and interest under Section 409A if a participant’s receipt of such payment is not delayed until the earlier of (a) the date of such participant’s death or (b) the date that is six
months after the date of such participant’s termination (as applicable, such date, the “Section 409A Payment Date”), then such payment shall not be provided to such participant until the Section 409A Payment Date.
Notwithstanding the foregoing, DIRTT makes no representations that the payments provided under the VPP are exempt from, or compliant with, Section 409A and in no event shall the Committee, DIRTT or any of its Affiliates be liable for all or any
portion of any taxes, penalties, interest or other expenses that may be incurred by a participant on account of non-compliance with Section 409A.  

11.4 Amendment; Termination. The Committee may, from time to time, in its sole discretion, amend, in whole or in part, any or all of the
provisions of the VPP or terminate the VPP in its entirety.

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