DIRTT Environmental Solutions



DIRTT Environmental Solutions

April 03, 2014 18:05 ET

DIRTT Announces Shareholders Rights Plan and Amended and Restated By-Laws

CALGARY, ALBERTA--(Marketwired - April 3, 2014) -

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DIRTT Environmental Solutions Ltd. ("DIRTT" or the "Corporation") announces today that its board of directors (the "Board") has approved the adoption of (i) a shareholder rights plan (the "Rights Plan"); and (ii) an amended and restated by-law no. 1 (the "Amended and Restated By-Laws") which, among other things, incorporates advance notice provisions with respect to director nominations.

Rights Plan

The objectives of the Rights Plan are, to the extent possible, to prevent a creeping take-over of the Corporation by requiring that any offer to acquire the issued and outstanding common shares of the Corporation (the "Common Shares") be made to all holders of the Common Shares (the "Shareholders") for all of their Common Shares and cannot be completed unless Shareholders holding in the aggregate more than 50% of the Common Shares (other than the offeror and related parties) are tendered in favour of the offer. The Rights Plan also ensures all Shareholders are treated equally and fairly in connection with any take-over bid for the Corporation, discourages discriminatory, coercive or unfair take-overs of the Corporation and gives the Board time if, in the circumstances, the Board determines it is appropriate to take such time, to pursue alternatives to maximize Shareholder value in the event an unsolicited take-over bid is made for all or a portion of the Common Shares.

The Rights Plan provides one right (the "Right") of the Corporation in respect of each Common Share outstanding as of the close of business (Calgary time) on April 3, 2014 (the "Record Time"). In addition, the Board has authorized the issuance of one Right in respect of each Common Share or any other shares in the capital of the Corporation entitled to vote in the election of all directors (the "Voting Shares") issued after the Record Time. The Rights initially trade with and are represented by the Common Share certificates, including certificates issued prior to the Record Time. Accordingly, until such time as the Rights separate from the Common Shares and become exercisable, Rights certificates will not be distributed to Shareholders.

If a person, or a group acting in concert, acquires (other than pursuant to an exemption available under the Rights Plan) beneficial ownership of 20% or more of the Voting Shares, the Rights (other than those held by such acquiring person which will become void) will permit the holder thereof to purchase Common Shares at a substantial discount to their then prevailing market price. At any time prior to the Rights becoming exercisable, the Board may waive the operation of the Rights Plan with respect to certain events before they occur.

The issuance of the Rights is not dilutive and will not affect reported earnings or cash flow per share until the Rights separate from the Common Shares and become exercisable or until the exercise of the Rights. The issuance of the Rights will not change the manner in which Shareholders currently trade Common Shares.

The Rights Plan is subject to approval of the Toronto Stock Exchange and to Shareholder approval at the annual general and special meeting of Shareholders to be held May 13, 2014 (the "Meeting"). If the Rights Plan is not confirmed by Shareholders at that time, the Corporation will not have a shareholder rights plan. The full text of the Rights Plan is available under DIRTT's profile on SEDAR at www.sedar.com.

Amended and Restated By-Laws

The Amended and Restated By-Laws set forth a procedure requiring advance notice to the Corporation by any Shareholder who intends to nominate any person for election as a director of the Corporation other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the Business Corporations Act (Alberta) (the "ABCA"); or (ii) a Shareholder proposal made pursuant to the provisions of the ABCA. Among other things, the advance notice provisions set a deadline by which such Shareholders must notify the Corporation in writing of an intention to nominate directors prior to any meeting of Shareholders at which directors are to be elected and set forth the information that the Shareholder must include in the notice for it to be valid.

In the case of an annual general meeting of Shareholders, notice to the Corporation must be made not less than 30 and not more than 65 days prior to the date of the annual general meeting; provided, however, that in the event that the annual general meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual general meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement. In the case of a special meeting (which is not also an annual general meeting) of Shareholders called for the purpose of electing directors (whether or not called for other purposes), notice to the Corporation must be made not later than the close of business on the 15th day following the date on which the first public announcement of the date of the special meeting of Shareholders was made.

The Board believes that the advance notice provisions provide a clear and transparent process for all Shareholders to follow if they intend to nominate directors. In that regard, the advance notice provisions provide a reasonable time frame for Shareholders to notify the Corporation of their intention to nominate directors and require Shareholders to disclose information concerning the proposed nominees that is mandated by applicable securities laws. The Board will be able to evaluate the proposed nominees' qualifications and suitability as directors and respond as appropriate in the best interests of the Corporation. The advance notice provisions are also intended to facilitate an orderly and efficient meeting process.

The Amended and Restated By-Laws are effective immediately and will be subject to Shareholder approval at the Meeting. If the Amended and Restated By-Laws are not confirmed by Shareholders at that time, by-law no.1 will remain effective in its unamended form. The full text of the Amended and Restated By-Laws is available under DIRTT's profile on SEDAR at www.sedar.com.

About DIRTT

DIRTT - Doing It Right This Time - is a leading technology-driven manufacturer of highly customized interiors. DIRTT combines its proprietary 3D design, configuration and manufacturing ICE® software with integrated in-house manufacturing of its innovative prefabricated interior construction solutions and an extensive Distribution Partner network across two continents. DIRTT is underpinned by a strong entrepreneurial culture and provides a unique, end-to-end customer solution for the inefficient and fragmented construction industry.

Certain statements contained in this news release constitute forward-looking statements as defined under applicable securities laws. All statements in this news release, other than statements of historical facts, that address events or developments that management of the Corporation expect, are forward-looking statements. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond the Corporation's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.

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