Israel (State or other jurisdiction of incorporation or organization) | | | 3577 (Primary Standard Industrial Classification Code Number) | | | Not Applicable (IRS Employer Identification Number) |
c/o Stratasys, Inc 7665 Commerce Way Eden Prairie, Minnesota 55344 (952) 937-3000 | | | 1 Holtzman Street, Science Park P.O. Box 2496 Rehovot, Israel 76124 +972-74-745-4400 |
J. David Chertok, Adv. Jonathan M. Nathan, Adv. Jonathan Atha, Adv. Meitar | Law Offices 16 Abba Hillel Silver Road Ramat Gan 52506, Israel +972-3-610-3100 | | | Adam O. Emmerich, Esq. Viktor Sapezhnikov, Esq. Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Tel: (212) 403-1000 | | | Ryan J. Maierson, Esq. Daniel Hoffman, Esq. Elisabeth M. Martin, Esq. Latham & Watkins LLP 200 Clarendon Street Boston, MA 02116 (617) 948-6000 | | | Lior Aviram, Adv. Maya Koubi Bara-nes, Adv. Ivor Krumholtz, Adv. Shibolet & Co. Tou Towers Yitzhak Sadeh 4 Tel Aviv-Yafo 6777504 +972-3-307-5000 |
NOTICE OF MEETING, PROXY STATEMENT AND PROSPECTUS OF STRATASYS LTD. | | | NOTICE OF MEETING AND PROXY STATEMENT OF DESKTOP METAL, INC. |
| |
Sincerely, | | | Sincerely, |
| | ||
Yoav Zeif Chief Executive Officer Stratasys Ltd. | | | Ric Fulop Co-founder, Chairman and Chief Executive Officer Desktop Metal, Inc. |
c/o Stratasys, Inc. 7665 Commerce Way Eden Prairie, Minnesota 55344 (952) 937-3000 | | | 1 Holtzman Street, Science Park P.O. Box 2496 Rehovot, Israel 76124 +972-74-745-4400 |
(1) | the approval of certain matters to be effected in connection with the Agreement and Plan of Merger (which is referred to as the Merger Agreement), dated May 25, 2023, by and among Stratasys, Tetris Sub Inc., a wholly-owned subsidiary of Stratasys, or Merger Sub, and Desktop Metal, Inc., a Delaware corporation, or Desktop Metal, pursuant to which Merger Sub will merge with and into Desktop Metal (which is referred to as the Merger), with Desktop Metal surviving as a direct, wholly-owned subsidiary of Stratasys, including: (i) the issuance of Stratasys ordinary shares, par value NIS 0.01 per share, or Stratasys ordinary shares, to the stockholders of Desktop Metal, in exchange for the shares of Desktop Metal Class A common stock, par value $0.0001 per share, or Desktop Metal Class A common stock, held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time, and until the due election and qualification of each designee’s respective successor, or until each such designee’s earlier resignation, replacement or removal; |
(2) | subject to the approval of Proposal 1, the approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan for a twelve (12)-month period from its original expiration date, i.e., until July 24, 2024; and |
(3) | the approval of an increase by 2,075,625, upon completion of the Stratasys EGM, and by an additional 1,065,867, upon and subject to completion of the Merger, in the number of Stratasys ordinary shares available for issuance under Stratasys’ 2022 Share Incentive Plan. |
| | By Order of the Board of Directors, | |
| | ||
| | Dov Ofer Chairman of the Board |
1. | to adopt the Agreement and Plan of Merger, dated as of May 25, 2023 (as it may be amended from time to time), which is referred to as the Merger Agreement, by and among Desktop Metal, Stratasys Ltd., an Israeli company, which is referred to as Stratasys, and Tetris Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Stratasys, which proposal is referred to the Desktop Metal Merger Agreement proposal; |
2. | to approve, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to Desktop Metal’s named executive officers that is based on or otherwise relates to the transactions contemplated by the Merger Agreement, which proposal is referred to as the Desktop Metal advisory compensation proposal; and |
3. | to approve the adjournment of the Desktop Metal special meeting to solicit additional proxies if there are not sufficient votes at the time of the Desktop Metal special meeting to approve the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders, which proposal is referred to as the Desktop Metal adjournment proposal. |
For Stratasys shareholders: | | | For Desktop Metal stockholders: |
| | ||
Stratasys Ltd. c/o Stratasys, Inc. 7665 Commerce Way Eden Prairie, Minnesota 55344 Attention: Investor Relations Email: Yonah.Lloyd@stratasys.com Telephone: 1-800-801-6491 | | | Desktop Metal, Inc. 63 3rd Avenue Burlington, MA 01803 Attention: Investor Relations Email: investors@desktopmetal.com Telephone: (978) 224-1244 |
| | ||
Morrow Sodali LLC 509 Madison Avenue Suite 1206 New York, NY 10022 1-800-662-5200 (toll-free within the United States) 1-203-658-9400 (outside the United States) Email: SSYS@info.morrowsodali.com | | | D.F. King & Co., Inc. 48 Wall Street New York, New York 10005 Stockholders call toll-free: (877) 478-5045 Banks and Brokers call: (212) 269-5550 Email: DM@dfking.com |
• | the audited consolidated financial statements of Stratasys as of December 31, 2022 and 2021 and for each of the three (3) years in the period ended December 31, 2022, as well as the unaudited, condensed consolidated financial statements of Stratasys as of, and for the three and six months ended, June 30, 2023, prepared in conformity with accounting principles generally accepted in the United States, or GAAP, except that, in the case of the unaudited financial statements, certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted (the foregoing financial statements are collectively referred to in this joint proxy statement/prospectus as the Stratasys consolidated financial statements); and |
• | the audited consolidated financial statements of Desktop Metal as of December 31, 2022 and 2021 and for each of the three (3) years in the period ended December 31, 2022, as well as the unaudited, condensed consolidated financial statements of Desktop Metal as of, and for the three and six months ended, June 30, 2023, prepared on the basis of GAAP, except that, in the case of the unaudited financial statements, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC (the foregoing financial statements are collectively referred to in this joint proxy statement/prospectus as the Desktop Metal consolidated financial statements). |
| | | | Page | ||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | |||||
| | |||||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | |||||
| | |||||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | |
Q: | Why am I receiving this joint proxy statement/prospectus? |
A: | On May 25, 2023, Stratasys, Merger Sub and Desktop Metal entered into the Merger Agreement pursuant to which Stratasys agreed to acquire Desktop Metal in a transaction in which Merger Sub, a wholly owned subsidiary of Stratasys, will merge with and into Desktop Metal with Desktop Metal surviving as a wholly owned subsidiary of Stratasys. The Merger Agreement attached to this joint proxy statement/prospectus as Annex A governs the terms of the transaction and requires, among other things, that Stratasys hold an extraordinary general meeting of its shareholders to approve the share issuance comprising the share consideration in the Merger, and that Desktop Metal hold a special meeting of its stockholders to approve the adoption of the Merger Agreement. |
Q: | When and where will the Desktop Metal special meeting and the Stratasys EGM take place? |
A: | The Desktop Metal special meeting will be held at www.virtualshareholdermeeting.com/DM2023SM, at 9:00 a.m., Eastern time, on Thursday, September 28, 2023. The Desktop Metal special meeting will be a completely virtual meeting, which will be conducted via live webcast. |
Q: | What matters will be considered at each of the stockholder/shareholder meetings? |
A: | At the Desktop Metal special meeting, Desktop Metal stockholders are being asked: |
• | To approve the adoption of the Merger Agreement, which proposal is referred to as the Desktop Metal Merger Agreement proposal; |
• | To approve, on an advisory (non-binding) basis, the Merger-related named executive officer compensation payments that will or may be paid by Desktop Metal to its named executive officers that is based on or otherwise relates to the Merger as disclosed in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 181, which proposal is referred to as the Desktop Metal advisory compensation proposal; and |
• | To approve the adjournment of the Desktop Metal special meeting to another date and place if necessary or appropriate to solicit additional votes in favor of the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders, which proposal is referred to as the Desktop Metal adjournment proposal. |
• | Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include, among other revisions to Stratasys’ existing articles of association, an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time of the Merger and upon the due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal (this proposal is referred to as the Stratasys Merger-related proposal); |
• | Subject to the approval of the Stratasys Merger-related proposal, approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan for a twelve (12)-month period from its original expiration date, i.e., until July 24, 2024 (this proposal is referred to as the Stratasys rights plan extension proposal); and |
• | Approval of an increase by 2,075,625, upon completion of the Stratasys EGM, and by an additional 1,065,867, upon and subject to completion of the Merger, in the number of Stratasys ordinary shares available for issuance under Stratasys’ 2022 Share Incentive Plan (this proposal is referred to as the Stratasys share incentive plan increase proposal). |
Q: | Does my vote matter? |
A: | Yes, your vote is very important. |
Q: | What will Desktop Metal stockholders receive if the Merger is completed? |
A: | In the Merger, each share of Desktop Metal Class A common stock issued and outstanding immediately prior to the effective time (other than (i) shares of Desktop Metal Class A common stock owned by Desktop Metal as treasury stock, (ii) shares of Desktop Metal Class A common stock owned by a direct or indirect wholly-owned subsidiary of Desktop Metal, and (iii) shares of Desktop Metal Class A common stock owned by Stratasys or Merger Sub) will be converted into the right to receive, subject to the Merger Agreement, 0.123 Stratasys ordinary shares, referred to as the Merger consideration. |
Q: | What will holders of Desktop Metal equity awards receive in the Merger? |
A: | Stock Options. At the effective time of the Merger, each option to purchase shares of Desktop Metal Class A common stock, which is referred to as a Desktop Metal Option, outstanding immediately prior to the effective time will be automatically converted into an option to purchase a number of Stratasys ordinary shares on substantially the same terms and conditions (including the same vesting and exercisability terms and conditions) |
Q: | What effect will the Merger have on Desktop Metal’s convertible notes? |
A: | Under the indenture governing Desktop Metal’s 6.0% Convertible Senior Notes due 2027 (which we refer to as the Convertible Notes), prior to the effective time, Desktop Metal, Stratasys and the trustee of the Convertible Notes will execute a supplemental indenture to, among other things, (i) change each Convertible Note holder’s right to convert Convertible Notes for shares of Desktop Metal into a right to convert Convertible Notes for the Merger consideration based on the exchange ratio on and after the effective date, and (ii) provide for Stratasys’ assumption of certain Desktop Metal’s obligations under the Convertible Notes, including providing a parent guarantee, upon consummation of the Merger, in each case pursuant to the terms of the indenture governing the Convertible Notes. At the effective time, the Convertible Notes will temporarily be exchangeable into, at the combined company’s election, cash or a combination of Stratasys ordinary shares and an amount of cash elected by Stratasys, which will at least be $1,000 per $1,000 principal amount of such Convertible Notes being exchanged. |
Q: | Who is entitled to vote at the Desktop Metal special meeting and how many votes do they have? |
A: | The Desktop Metal board of directors has fixed the close of business on Monday, July 31, 2023 as the record date of the Desktop Metal special meeting. If you were a holder of record of shares of Desktop Metal Class A common stock as of the close of business on the record date you are entitled to receive notice of and to vote at the Desktop Metal special meeting or any adjournments or postponements thereof. You are entitled to one vote for each share of Desktop Metal Class A common stock that you owned as of the close of business on the Desktop Metal record date. As of the close of business on the Desktop Metal record date, 322,892,034 shares of Desktop Metal Class A common stock were outstanding and entitled to vote at the Desktop Metal special meeting. |
Q: | What are Desktop Metal stockholders being asked to vote on? |
A: | At the Desktop Metal special meeting, Desktop Metal stockholders will be asked to vote on the following proposals, which are referred to herein as the Desktop Metal proposals: |
1. | Approval of the Desktop Metal Merger Agreement proposal; |
2. | Approval of the Desktop Metal advisory compensation proposal; and |
3. | Approval of the Desktop Metal adjournment proposal. |
Q: | What vote is required to approve each proposal at the Desktop Metal special meeting? |
A: | Except for the Desktop Metal adjournment proposal, the vote required to approve each of the Desktop Metal proposals listed below assumes the presence of a quorum. |
Proposal | | | Votes Required | | | Effects of Abstentions and Broker Non-Votes |
Desktop Metal Proposal 1: Desktop Metal Merger Agreement proposal | | | The affirmative vote of holders of a majority in voting power of the outstanding Desktop Metal Class A common stock entitled to vote thereon. | | | Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal. |
| | | | |||
Desktop Metal Proposal 2: Desktop Metal Advisory compensation proposal | | | The affirmative vote of the holders of a majority in voting power of the votes cast. | | | Abstentions and broker non-votes will have no effect. |
| | | | |||
Desktop Metal Proposal 3: Desktop Metal adjournment proposal | | | The affirmative vote of the holders of a majority in voting power of the votes cast. | | | Abstentions and broker non-votes will have no effect. |
Q: | How does the Desktop Metal board of directors recommend Desktop Metal stockholders vote? |
A: | The Desktop Metal board of directors unanimously recommends that you vote “FOR” the Desktop Metal Merger Agreement proposal, “FOR” the Desktop Metal advisory compensation proposal and “FOR” the Desktop Metal adjournment proposal. |
Q: | Why are Desktop Metal stockholders being asked to approve on a non-binding basis the Desktop Metal advisory compensation proposal? |
A: | Desktop Metal is seeking a non-binding, advisory vote to approve the compensation that may be paid or become payable to Desktop Metal’s named executive officers in connection with the Merger in accordance with SEC Rules. For more information regarding such payments, see the information provided in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 181. |
Q: | What happens if Desktop Metal stockholders do not approve on a non-binding basis the Desktop Metal advisory compensation proposal? |
A: | Approval of the Desktop Metal advisory compensation proposal is not a condition to completion of the Merger and is a vote separate and apart from the vote on the Desktop Metal Merger Agreement proposal. Accordingly, Desktop Metal stockholders may vote in favor of the Desktop Metal Merger Agreement proposal and not in favor of the Desktop Metal advisory compensation proposal, or vice versa. Approval of the Desktop Metal advisory compensation proposal is not a condition to completion of the Merger, and it is advisory in nature only, meaning it will not be binding on Desktop Metal or Stratasys. Accordingly, if the Merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of Desktop Metal stockholders. However, Desktop Metal seeks the support of its |
Q: | Are there any risks relating to the Merger or the combined company that Desktop Metal stockholders should consider in deciding whether to vote on the Desktop Metal proposals? |
A: | Yes. Before making any decision on whether and how to vote, Desktop Metal stockholders are urged to read carefully and in its entirety the information contained in the section entitled “Risk Factors” beginning on page 41. Desktop Metal stockholders should also read and carefully consider the risk factors of each of Desktop Metal and Stratasys that are incorporated by reference into this joint proxy statement/prospectus. |
Q: | What are Stratasys shareholders being asked to vote on? |
A: | At the Stratasys EGM, Stratasys shareholders will be asked to vote on the approval of the following proposals, which are referred to as the Stratasys proposals: |
1. | The Stratasys Merger-related proposal; |
2. | The Stratasys rights plan extension proposal (which will only be voted upon if the Stratasys Merger-related proposal is approved); and |
3. | The Stratasys share incentive plan increase proposal. |
Q: | Why is shareholder approval being sought for each of the Stratasys proposals? |
A: | Stratasys Proposal 1—Stratasys Merger-related proposal: |
(i) | Share issuance pursuant to Merger Agreement— Under the Nasdaq Listing Rules, to which Stratasys is subject, shareholder approval is required prior to the issuance of any shares by Stratasys as part of the acquisition of another company if the number of shares or voting power of the shares to be issued equals or exceeds 20% of the number of shares or voting power (as applicable) of outstanding shares prior to the issuance. It is expected that the number and voting power of the Stratasys ordinary shares to be issued by Stratasys pursuant to the Merger Agreement will exceed 20% of the number and voting power of the Stratasys ordinary shares outstanding prior to such issuance. Accordingly, Stratasys shareholders are being asked to consider and approve the issuance of Stratasys ordinary shares pursuant to the Merger Agreement as part of the Merger-related proposal. |
(ii) | Stratasys articles restatement— Under the Israeli Companies Law, any amendment to a company’s articles of association requires the approval of a company’s shareholders. Stratasys and Desktop Metal have agreed within the context of the Merger to make certain changes to Stratasys’ existing articles of association, in order to, among other matters, reflect certain arrangements agreed upon concerning the governance of the combined company during the first two years following the completion of the Merger. The amended and restated articles being proposed for adoption furthermore reflect certain updates to Israeli law that have been made since Stratasys’ existing articles of association were initially adopted, including, for example, the right of a U.S.-traded company such as Stratasys that lacks a controlling shareholder (as defined under the Israeli Companies Law) to comply with certain U.S. stock exchange requirements concerning board independence, and audit and compensation committee composition, in lieu of corresponding Israeli requirements, including the obligation to appoint two external directors in certain circumstances. |
(iii) | Election of Post-Merger Board Slate—The Merger Agreement requires the election of a newly comprised board of directors for the combined company, which will begin to serve on the effective time of the Merger and until the first annual general meeting of shareholders of the combined company to be held after the one-year anniversary of, the effective time of the Merger, and the due election and qualification of each designee’s respective successor, or until such respective designee’s earlier resignation, replacement or removal. In order to implement the joint, strategic vision of Stratasys and Desktop Metal, the parties have agreed upon the ideal make-up of the post-Merger board of directors, which will consist of five members designated by each of Desktop Metal (including Ric Fulop, as Chairman) and Stratasys (including Dov Ofer, as Lead Independent Director), as well as Dr. Yoav Zeif, the chief executive officer of the combined company. Under the Israeli Companies Law, the election of a public company’s board of directors is carried out by the shareholders, and the election of the proposed post-Merger board, as a single slate, is therefore being included in the Stratasys Merger-related proposal. The election of the post-Merger board pursuant to this proposal will also enable the combined company board to begin to work right away upon completion of the Merger to effect value creation on behalf of the combined company’s shareholders. |
• | initially, at the conclusion of the Stratasys EGM, the size of the pool under the Stratasys 2022 Plan would increase by 2,075,625, Stratasys ordinary shares; and |
• | upon, and subject to, the completion of the Merger, the size of the pool under the Stratasys 2022 Plan would increase by an additional 1,065,867 Stratasys ordinary shares. |
Q: | Is the approval of each of the proposals to be presented at the Stratasys EGM required for completion of the Merger? |
A: | No. Only the approval of the Stratasys Merger-related proposal at the Stratasys EGM is required for completion of the Merger. The approval of either or both of the other two Stratasys proposals—the Stratasys rights plan extension proposal and the Stratasys share incentive plan increase proposal—is not a condition to the completion of the Merger. |
Q: | What vote is required to approve each proposal at the Stratasys EGM? |
A: | The affirmative vote of a majority of the voting power represented at the Stratasys EGM in person or by proxy and voting on any particular proposal is required to approve that proposal. |
Q: | How does the Stratasys board of directors recommend Stratasys shareholders vote? |
A: | The Stratasys board of directors unanimously recommends that you vote “FOR” each of the Stratasys Merger-related proposal, the Stratasys rights plan extension proposal and the Stratasys share incentive plan increase proposal. |
Q: | How do recent events, including the recently expired unsolicited partial tender offer by Nano Dimension and the proposals received by Stratasys from 3D Systems Corporation, impact my decision as to how to vote on the Stratasys proposals at the Stratasys EGM? |
A: | Stratasys was recently the subject of an unsolicited partial tender offer by Nano to purchase Stratasys ordinary shares, which was launched on May 25, 2023 and expired on July 31, 2023, which is referred to as the Nano Tender Offer. Stratasys’ board of directors expressed its unanimous recommendation to Stratasys’ shareholders that the Nano Tender Offer was inadequate and substantially undervalued Stratasys. Given recent market volatility and given the potential for any party—including, but not limited to, Nano, which still holds approximately 14.1% of the outstanding Stratasys ordinary shares as of the date of this proxy statement/prospectus—to employ coercive tactics similar to those recently employed by Nano, the extension of Stratasys’ shareholder rights plan pursuant to the Stratasys rights plan extension proposal is intended to provide the Stratasys board of directors the ability to protect Stratasys shareholders from such coercive attempts to acquire control of Stratasys. Nano or another third party could launch an additional hostile partial tender offer similar to the Nano Tender Offer, which, like the Nano Tender Offer, could be a partial tender offer and/or may be inadequate and substantially undervalue Stratasys. Any such partial tender offer, if successful, could enable Nano or such other third party to purchase the shares held by the remaining shareholders at a significant discount to the price offered in such partial tender offer, resulting in substantially reduced liquidity for such remaining shareholders. |
Q: | Are there any risks relating to the Stratasys Merger-related proposal or the combined company that Stratasys shareholders should consider in deciding how to vote on the Stratasys proposals? |
A: | Yes. Before making any decision on whether and how to vote, Stratasys shareholders are urged to read carefully and in its entirety the information contained in the section entitled “Risk Factors” beginning on page 41. Stratasys shareholders should also read and carefully consider the risk factors of each of Desktop Metal and Stratasys that are incorporated by reference into this joint proxy statement/prospectus. |
Q: | How do I vote my Desktop Metal Class A common stock? |
A: | If you are a stockholder of record of Desktop Metal as of the Desktop Metal record date, you may vote by granting a proxy. Specifically, you may vote: |
• | By Internet—You can vote over the Internet at www.proxyvote.com by following the instructions on the proxy card; |
• | by Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions on the proxy card; |
• | by Mail—You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail; or |
• | Electronically at the Meeting—If you attend the meeting online, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials to vote electronically during the meeting. |
Q: | How do I vote my Stratasys ordinary shares? |
A: | Record Shareholders: |
1. | visit the website www.proxyvote.com to submit your proxy via the Internet; |
2. | call the toll-free number for telephone proxy submission shown on your proxy card; or |
3. | complete, sign, date and return the enclosed proxy card in the enclosed envelope. |
Q: | What if I sell my shares of Desktop Metal Class A common stock before the Desktop Metal special meeting, or I sell my Stratasys ordinary shares before the Stratasys EGM? |
A: | If you transfer your shares of Desktop Metal Class A common stock after the Desktop Metal record date but before the Desktop Metal special meeting, you will, unless you provide the transferee of your shares with a proxy, retain your right to vote at the Desktop Metal special meeting, but will have transferred the right to receive the Merger Consideration. In order to receive the Merger Consideration as a result of the Merger, you must hold your shares through the effective time of the Merger, which is referred to as the effective time. |
Q: | Who will solicit and pay the cost of soliciting proxies? |
A: | Stratasys has engaged Morrow Sodali LLC, referred to as Morrow Sodali, to assist in the solicitation of proxies for the Stratasys EGM. Stratasys estimates that Stratasys will pay Morrow Sodali a fee not to exceed $100,000, plus costs and expenses. Stratasys has agreed to indemnify Morrow Sodali against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). |
Q: | Should I send in my Desktop Metal stock certificates or otherwise attempt to surrender my Desktop Metal book-entry shares now? |
A: | No. To the extent Desktop Metal stockholders have certificated shares, such Desktop Metal stockholders should keep their existing stock certificates at this time. Similarly, holders of Desktop Metal stock that is held in book-entry form should not go about trying to surrender their shares currently. After the Merger is completed, Desktop Metal stockholders will receive from the exchange agent a letter of transmittal and written instructions for exchanging their stock certificates, or instructions as to how the share exchange process will work for receipt of the Merger consideration for shares held in book-entry form or in “street name” (by a bank, broker or other nominee). |
Q: | What constitutes a quorum for the Desktop Metal special meeting? |
A: | The holders of record of a majority of the voting power of the issued and outstanding shares of capital stock entitled to vote must be present in person or virtually or represented by proxy to constitute a quorum for the Desktop Metal special meeting. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Shares represented by “broker non-votes” (as described below) are counted as present and entitled to vote for purposes of determining a quorum. The proposals for consideration at the Desktop Metal special meeting are considered “non-routine” matters under the rules of the NYSE, and, therefore, shares of Desktop Metal special meeting held in “street name” through a bank, broker or other nominee will not be counted as present for the purpose of determining the existence of a quorum if no instructions have been provided to such entity on how to vote on any such proposals. |
Q: | What constitutes a quorum for the Stratasys EGM? |
A: | The presence of two (2) or more shareholders (present by proxy or in person) holding at least 25% of the voting rights (equivalent to 25% of the outstanding number of ordinary shares) in Stratasys as of the record date for the Stratasys EGM is necessary to constitute a quorum. A person holding a proxy may be deemed to be two or more Stratasys shareholders for purposes of determining a quorum if such person holds the proxy of more than one shareholder. Abstentions and shares represented by “broker non-votes” (as described below) are counted as present and entitled to vote for purposes of determining a quorum. |
Q: | What is the difference between holding shares as a shareholder of record and as a beneficial owner of shares held in “street name”? |
A: | If your shares are registered directly in your name with the issuer’s transfer agent, you are considered the shareholder of record with respect to those shares. As the shareholder of record, you have the right to vote, or to grant a proxy for your vote to a third party to vote. If your shares are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the shareholder of record with respect to those shares. Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. |
Q: | What is a “broker non-vote”? |
A: | A broker non-vote occurs if you hold your shares in street name, do not provide voting instructions to your broker on a proposal, and your broker does not have discretionary authority to vote on such proposal. In such |
Q: | If my shares are held in “street name” by a broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me? |
A: | If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to Desktop Metal or Stratasys or by voting in person at your respective company’s stockholder or shareholder meeting unless you obtain a “legal proxy,” which you must obtain from your broker, bank or other nominee. |
Q: | What if a Desktop Metal stockholder or Stratasys shareholder does not vote or returns a proxy or voting instruction form with an “abstain” vote? |
A: | Desktop Metal: If you are a Desktop Metal stockholder and you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your bank, broker or other nominee how to vote on the Desktop Metal Merger Agreement proposal, this will have the same effect as a vote cast against the Desktop Metal Merger Agreement proposal and will not count towards determining whether a quorum is present. If you are a Desktop Metal stockholder and you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your bank, broker or other nominee how to vote on the Desktop Metal adjournment proposal or the Desktop Metal advisory compensation proposal, this will have no effect on the vote count for such proposal, and will not count towards determining whether a quorum is present. If you respond with an “abstain” vote on the Desktop Metal Merger Agreement proposal, this will have the same effect as a vote cast against the Desktop Metal Merger Agreement proposal, but will count towards determining whether a quorum is present. If you respond with an “abstain” vote on the Desktop Metal adjournment proposal or the Desktop Metal advisory compensation proposal, this will have no effect on the vote count for such proposal, but will count towards determining whether a quorum is present. |
Q: | What will happen if I sign and return my proxy card without indicating how to vote? |
A: | If you sign and return your proxy card without indicating how to vote on any particular proposal (and you do not change your vote after delivering your proxy card), the shares of Desktop Metal Class A common stock represented by your proxy card will be voted for each Desktop Metal proposal in accordance with the recommendation of the Desktop Metal board of directors, or the Stratasys ordinary shares represented by your proxy card will be voted for each Stratasys proposal in accordance with the recommendation of the Stratasys board of directors. |
Q: | If I am a stockholder or shareholder of record, may I change my vote after I have delivered my proxy? |
A: | Desktop Metal: Yes. If you are a Desktop Metal stockholder of record, you may revoke your proxy and change your vote: |
• | by submitting a duly executed proxy bearing a later date; |
• | by granting a subsequent proxy through the Internet or telephone; |
• | by giving written notice of revocation to the Secretary of Desktop Metal prior to or at the Desktop Metal special meeting; or |
• | by voting online at the Desktop Metal special meeting |
• | delivering written notice to the Chief Legal Officer of Stratasys, to the below address, that is received at least four hours prior to the commencement of the Stratasys EGM stating that you have revoked your proxy: |
• | signing and returning by mail a proxy card with a later date so that it is received by Stratasys prior to the commencement of the Stratasys EGM; or |
• | attending the Stratasys EGM and voting in person. |
Q: | If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee? |
A: | If your shares are held in “street name”, i.e., held of record by a bank, broker or other nominee, and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions. You may also change your vote or revoke your proxy in person at the Desktop Metal special meeting or Stratasys EGM if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares. |
Q: | What should I do if I receive more than one set of voting materials? |
A: | Desktop Metal stockholders and Stratasys shareholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold Desktop Metal Class A common stock, or Stratasys ordinary shares, in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold such shares. If you are a holder of record of Desktop Metal Class A common stock, or Stratasys ordinary shares, and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a holder of both Desktop Metal Class A common stock, and Stratasys ordinary shares, you will receive one or more separate proxy cards or voting instruction forms for each company. Please complete, sign, date and return each proxy card and voting instruction form that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every share of Desktop Metal Class A common stock and/or every Stratasys ordinary share that you own. |
Q: | What if I hold shares in both Desktop Metal and Stratasys? |
A: | If you are both a stockholder of Desktop Metal and a shareholder of Stratasys, you will receive two separate packages of proxy materials. A vote cast as a Desktop Metal stockholder will not count as a vote cast as a |
Q: | Where can I find the voting results of the Desktop Metal special meeting and the Stratasys EGM? |
A: | Preliminary voting results will be announced at the Desktop Metal special meeting and the Stratasys EGM and will be set forth in press releases that Desktop Metal and Stratasys intend to issue after the Desktop Metal special meeting and the Stratasys EGM, respectively. Final voting results for the Desktop Metal special meeting and the Stratasys EGM are expected to be filed by Desktop Metal and Stratasys with the SEC within four (4) business days after the Desktop Metal special meeting and the Stratasys EGM, as applicable. |
Q: | Are Desktop Metal stockholders or Stratasys shareholders entitled to seek appraisal rights if they do not vote in favor of the adoption of the Merger Agreement? |
A: | No. In accordance with the DGCL, which governs the Merger, no appraisal rights are available to Desktop Metal stockholders in connection with the Merger. Stratasys shareholders are also not entitled to appraisal rights under Israeli law in connection with the Merger or the other transactions contemplated by the Merger Agreement. |
Q: | What are the U.S. federal income tax consequences of the Merger to the Desktop Metal stockholders? |
A: | Subject to the limitations and qualifications described in the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” below, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder, which we refer to as the Intended U.S. Tax Treatment. However, the closing of the Merger is not conditioned upon the receipt of an opinion of counsel or a ruling from the Internal Revenue Service (the “IRS”) regarding the U.S. federal income tax treatment of the Merger, and no opinion of counsel or ruling from the IRS will be requested regarding such treatment. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the Merger for the Intended U.S. Tax Treatment or that a court will not sustain such a challenge by the IRS. |
Q: | When is the Merger expected to be completed? |
A: | Subject to receipt of required regulatory approvals and satisfaction or waiver of the other conditions to completion of the Merger, Stratasys and Desktop Metal expect that the Merger will be completed in the fourth quarter of 2023. Neither Desktop Metal nor Stratasys can predict the actual date on which the Merger will be completed, or if the Merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. See the sections entitled “The Merger Agreement—Reasonable Best Efforts and Regulatory Approvals” beginning on page 156 and “Risk Factors—Risks Relating to the Merger—There is no assurance when or if the Merger will be completed” beginning on page 42. |
Q: | What are the conditions to the completion of the Merger? |
A: | In addition to approval of the Desktop Metal Merger Agreement proposal by Desktop Metal stockholders and approval of the Stratasys Merger proposals by Stratasys shareholders, completion of the Merger is subject to the satisfaction or waiver of a number of other conditions, including the receipt of certain regulatory clearances. See the section entitled “The Merger Agreement—Conditions to the Closing of the Merger” beginning on page 159. |
Q: | What effect will the Merger have on Desktop Metal and Stratasys? |
A: | The Merger is structured as a “reverse triangular Merger,” in which Merger Sub, a wholly owned subsidiary of Stratasys, will merge with and into Desktop Metal, with Desktop Metal surviving the Merger as a wholly owned subsidiary of Stratasys. Upon consummation of the Merger, Desktop Metal will no longer be a public company and its shares will be delisted from the NYSE, deregistered under the Exchange Act and cease to be publicly traded. Desktop Metal stockholders will receive Merger consideration consisting of Stratasys ordinary shares in the Merger. Stratasys ordinary shares will continue to be listed on Nasdaq and trade under the symbol “SSYS”, will continue to be registered under the Exchange Act, and Stratasys will continue to be subject to its reporting obligations under the Exchange Act. |
Q: | What happens if the Merger is not completed? |
A: | If the Merger is not completed, Desktop Metal stockholders will not receive any consideration for their shares of Desktop Metal Class A common stock. Instead, Desktop Metal and Stratasys will remain independent public companies and their shares of Class A common stock or ordinary shares, as applicable, will continue to be listed and traded separately on the NYSE and Nasdaq, respectively. If the Merger Agreement is terminated under specified circumstances, Desktop Metal may be required to pay Stratasys and Merger Sub a termination fee of $18.6 million or an expense reimbursement in an amount not to exceed $10 million, or Stratasys and Merger Sub may be required to pay Desktop Metal a termination fee of $32.5 million or $19 million or an expense reimbursement not to exceed $10 million. See the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 163 for a more detailed discussion of the termination fees. |
Q: | What respective equity stakes will Stratasys shareholders and Desktop Metal stockholders hold in the combined company immediately following the Merger? |
A: | Based on the number of Stratasys ordinary shares and shares of Desktop Metal Class A common stock outstanding on May 25, 2023, and the exchange ratio of 0.123 Stratasys ordinary shares per one share of Desktop Metal Class A common stock issuable in the Merger, Stratasys and Desktop Metal estimate that, immediately following completion of the Merger, former Desktop Metal stockholders and existing Stratasys shareholders will hold, in the aggregate, approximately 41% and 59%, respectively, of the shares of Stratasys on a fully-diluted basis. The exact equity stake of current Stratasys shareholders and former Desktop Metal stockholders in the combined company immediately following the Merger will depend on the number of Stratasys ordinary shares and Desktop Metal Class A common stock issued and outstanding immediately prior to the Merger. |
Q: | What do I need to do now? |
A: | You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be voted in accordance with your instructions. |
Q: | Who should I contact if I have any questions about the proxy materials or voting? |
A: | If you have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card or voting instruction form, you should contact the proxy solicitation agent for the company in which you hold shares. |
Q: | Where can I find more information about Desktop Metal and Stratasys? |
A: | You can find more information about Desktop Metal and Stratasys from the various sources described under the section entitled “Where You Can Find More Information” beginning on page 221. |
• | Stratasys Proposal 1 (Stratasys Merger-related proposal): Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time and due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal; |
• | Stratasys Proposal 2 (Stratasys rights plan extension proposal): Subject to the approval of the Stratasys Merger-related proposal, approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan for a twelve (12)-month period from its original expiration date, i.e., until July 24, 2024; and |
• | Stratasys Proposal 3 (Stratasys share incentive plan increase proposal): Approval of an increase by 2,075,625, upon completion of the Stratasys EGM, and by an additional 1,065,867, upon and subject to completion of the Merger, in the number of Stratasys ordinary shares, available for issuance under Stratasys’ 2022 Share Incentive Plan. |
• | Desktop Metal Proposal 1: The Desktop Metal Merger Agreement Proposal. To approve the adoption of the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus; |
• | Desktop Metal Proposal 2: The Desktop Metal Advisory Compensation Proposal: To approve, on an advisory (non-binding) basis, the Merger-related named executive officer compensation payments that will or may be paid by Desktop Metal to its named executive officers that are based on or otherwise relate to the Merger; and |
• | Desktop Metal Proposal 3: The Desktop Metal Adjournment Proposal: To approve the adjournment of the Desktop Metal special meeting to another date and place if necessary or appropriate to solicit additional votes in favor of the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders. |
• | the dismissal or replacement of the combined company’s Chief Executive Officer as of the effective time of the Merger, |
• | the dismissal or replacement of the Chairman of the Board of Directors of the combined company as of the effective time of the Merger; |
• | a change in the number of members serving on the board of directors of the combined company; or |
• | an election by the board of directors of the combined company to once again be subject to the Israeli Companies Law requirement to appoint external directors. |
• | the approval of the Stratasys Merger-related proposal by Stratasys shareholders and the approval of the Desktop Metal Merger Agreement proposal by Desktop Metal stockholders; |
• | the authorization for listing on Nasdaq of the Stratasys ordinary shares to be issued pursuant to the Merger Agreement, subject to official notice of issuance; |
• | (i) the termination or expiration of any waiting period (and any extension thereof) applicable to the Merger under the HSR Act; (ii) the expiration or termination of any agreement with the DOJ or the FTC not to consummate the Merger to which Desktop Metal and Stratasys are a party; (iii) obtaining the CFIUS Approval; and (iv) all other required regulatory approvals and certain conditions listed in Stratasys’ disclosure schedules to the Merger Agreement having been obtained or satisfied and remaining in full force and effect, or the expiration of the applicable waiting period (and any extension thereof) applicable in respect of such required regulatory approval; |
• | the effectiveness of the Registration Statement of which this joint proxy statement/prospectus forms a part under the Securities Act and the absence of any stop order or proceedings seeking a stop order; and |
• | the absence of any order, injunction (temporary or permanent) or decree or other similar legal restraint issued by any court or governmental entity of competent jurisdiction enjoining or preventing the consummation of the Merger being in effect and no law, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prohibits or makes illegal consummation of the Merger. |
• | the representation of Desktop Metal that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a |
• | certain of the representations and warranties of Desktop Metal related to its capitalization being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain of the representations and warranties of Desktop Metal related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain other representations and warranties of Desktop Metal set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have an material adverse effect on Desktop Metal, and the receipt by Stratasys of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect; |
• | the performance or compliance of Desktop Metal in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Stratasys of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect; |
• | the absence of any material adverse effect with respect to Desktop Metal after the date of the Merger Agreement that is continuing; and |
• | the amendment, modification or termination of certain identified agreements set forth in the Desktop Metal disclosure schedules (which are referred to as the Identified Agreements) shall have been amended, modified or terminated as provided in such disclosure schedules. |
• | the representation of Stratasys that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to Stratasys or its subsidiaries being true and correct in all respects at and as of the Closing Date as if made at and as of such time or such fact, circumstance, effect, change, event or development giving rise to the breach of such representation and warranty shall not be continuing as of the Closing Date; |
• | certain of the representations and warranties of Stratasys related to its subsidiaries and capitalization (in each case only with respect to Stratasys and not its subsidiaries) being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain of the representations and warranties of Stratasys related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain other representations and warranties of Stratasys set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such |
• | the performance or compliance of Stratasys and Merger Sub in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Desktop Metal of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Stratasys to such effect; and |
• | the absence of any material adverse effect with respect to Stratasys or its subsidiaries after the date of the Merger Agreement that is continuing. |
• | solicit, initiate, induce, facilitate, or knowingly encourage any Acquisition Proposal (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change of Recommendation”) or any inquiry or proposal that may reasonably be expected to lead to an Acquisition Proposal; |
• | take any action to make the provisions of any takeover statute (including, with respect to Desktop Metal, any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the Delaware General Corporation Law), or any restrictive provision of any applicable anti-takeover provision in the applicable party’s governing documents, inapplicable to any transactions contemplated by an Acquisition Proposal; |
• | make any third party acquirer exempt from the definition of an acquiring person in the applicable party’s rights plan or redeem or waive any provision in such rights plan; |
• | enter into, participate in, maintain or continue any communications or negotiations regarding, or make available any non-public information with respect to, or take any other action regarding, any actual or potential Acquisition Proposal; |
• | resolve, propose or agree to do any of the foregoing. |
• | it has received from such person a bona fide written Acquisition Proposal that, after consultation with its financial advisor and outside legal counsel, its board of directors determines in good faith is, or would reasonably be expected to result in, a Superior Proposal (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change of Recommendation”) (and such proposal has not been withdrawn); |
• | such Acquisition Proposal was not solicited, initiated, induced, facilitated or knowingly encouraged in violation of the terms of the Merger Agreement; |
• | its board of directors determines in good faith, after having consulted with its outside legal counsel, that failure to take such action would reasonably be expected to constitute a breach of its duties under applicable law; |
• | prior to furnishing any such information or entering into such negotiations or discussions, it obtains from such person an executed confidentiality agreement containing provisions at least as favorable to Stratasys or Desktop Metal, respectively, as the provisions of the Mutual Confidentiality, Non-Disclosure and Standstill Agreement between Stratasys and Desktop Metal, dated as of November 5, 2022, as amended on December 12, 2022, as in effect immediately prior to the execution of the Merger Agreement, and provides a copy of the same to the other party; and |
• | concurrently with furnishing any information to such person, it provides such information to or makes such information available in an electronic data room to the other party, to the extent such information has not been previously furnished by it to the other party or made available to the other party. |
• | withhold or withdraw or qualify, modify or amend in a manner adverse to the other party (or publicly propose to do so) its board recommendation; |
• | fail to reaffirm or re-publish its board recommendation, within ten business days after the other party so requests in writing that such action be taken (or, if earlier, at least five Business Days prior to such party’s shareholder or stockholder meeting, as applicable); |
• | fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Stratasys ordinary shares (in the case or Stratasys) or Desktop Metal Class A common stock (in the case of Desktop Metal) has been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that it recommends rejection of such tender or exchange offer; or |
• | publicly announce that it has recommended, adopted or approved any Acquisition Proposal with respect to such party. |
• | withhold or withdraw or qualify, modify or amend in a manner adverse to the other party (or publicly propose to do so) its board recommendation; |
• | fail to reaffirm or re-publish its board recommendation, within ten business days after the other party so requests in writing that such action be taken (or, if earlier, at least five Business Days prior to such party’s shareholder or stockholder meeting, as applicable); |
• | fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Stratasys ordinary shares (in the case or Stratasys) or Desktop Metal Class A common stock (in the case of Desktop Metal) has been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that it recommends rejection of such tender or exchange offer; or |
• | publicly announce that it has recommended, adopted or approved any Acquisition Proposal with respect to such party. |
• | such party has not breached its obligations under the Merger Agreement in connection with the Acquisition Proposal where, after the date of the Merger Agreement, such unsolicited, bona fide, written Acquisition Proposal is made to such party and is not withdrawn; |
• | the board of directors of such party determines in its good faith judgment, after consulting with its outside financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal; |
• | such party has provided the other party with five business days’ prior written notice advising that it intends to effect a change of recommendation and specifying, in reasonable detail, the reasons therefor, and which written notice shall include copies of all documents pertaining to such Superior Proposal; |
• | such party, during such five business-day period, if requested by the other party, engages in good faith negotiations to amend the Merger Agreement in such a manner that such Acquisition Proposal that was determined to constitute a Superior Proposal no longer constitutes a Superior Proposal; |
• | at the end of that five business-day period, such Acquisition Proposal has not been withdrawn and in the good faith reasonable judgment of such party’s board continues to constitute a Superior Proposal (taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet point or otherwise); and |
• | at the end of that five business-day period, the applicable board of directors determines in good faith, after having consulted with its outside legal counsel, that, in light of such Superior Proposal, a failure to change its recommendation would reasonably be expected to constitute a breach of its duties under applicable law; provided that, in the event of any material revisions to the applicable Acquisition Proposal (including any change in price or exchange ratio), such party is required to deliver a new written notice to the other party and to again comply with the foregoing requirements of the Merger Agreement with respect to such new written notice (including the five business day period referenced above). |
• | such party has provided the other party with five business days’ prior written notice advising the other party that it intends to effect a change in recommendation and specifying, in reasonable detail, the reasons therefor; |
• | such party, during such five business day period, if requested by the other party, must negotiate in good faith with respect to any changes or modifications to the Merger Agreement which would allow the board of such party not to make such change in recommendation; and |
• | at the end of such five business day period, the board of such party determines in good faith, after having consulted with its outside legal counsel, that, taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet or otherwise, a failure to make a change in recommendation would reasonably be expected to constitute a breach of the duties of such board under applicable law. |
• | was neither known by the applicable board, nor reasonably foreseeable by the applicable board, as of or prior to the date of the Merger Agreement; and |
• | does not relate to an Acquisition Proposal or a Superior Proposal or any inquiry or communications relating thereto. |
• | Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively; |
• | any inquiry, expression of interest, proposal, communication, request for access to non-public information relating to Stratasys or its subsidiaries, or Desktop Metal or its subsidiaries, respectively, or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; and |
• | any other communication or notice that any person is considering making an Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively. |
• | keep the other party informed in all material respects and on a reasonably current basis of the status and details (including any material change to the terms and conditions thereof (including any change in price or exchange ratio)) of any Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request; |
• | provide to the other party as soon as practicable after receipt or delivery thereof (but in no event more than 24 hours) (unless received on a day that is not a business day, in which case within 48 hours of the receipt thereof) copies of all material correspondence and other written material exchanged between Stratasys or Desktop Metal, respectively, or any of their representatives, on the one hand, and any person or any of their representatives that has made an Acquisition Proposal with respect to such party, inquiry, expression of interest, proposal, offer, notice or request, on the other hand, which describes any of the terms or conditions of such Acquisition Proposal; and |
• | after the date of the Merger Agreement, not enter into any agreement which prohibits it from complying with its non-solicitation provisions of the Merger Agreement. |
• | by mutual written consent of Desktop Metal and Stratasys; |
• | by either Desktop Metal or Stratasys, upon written notice to the other party if: |
○ | the Merger is not consummated on or before February 25, 2024 (which is referred to as the End Date), provided that each of Desktop Metal and Stratasys will be entitled to extend the End Date for up to two additional three-month periods if any of the required regulatory approvals have not been obtained at the applicable End Date but all of the other specified conditions to the closing of the Merger have been satisfied at such time (or are capable of being satisfied at the closing of the Merger); |
○ | (i) any governmental entity that must grant certain agreed-upon regulatory approval has denied approval of the Merger and such denial has become final and non-appealable; or (ii) any court or governmental Entity of competent jurisdiction shall have issued a final and non-appealable order, injunction or decree or other legal restraint or prohibition permanently enjoining or preventing the consummation of the Merger, provided, however, that this termination right is not available to any party if a breach by such party of its obligations under the Merger Agreement has been the principal cause of, or principally resulted in, such failure to obtain such required regulatory approval or the issuance of such order, injunction, decree or other legal restraint, as applicable; or |
○ | (i) the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal has not been obtained following a vote taken thereon at a meeting of Stratasys shareholders (subject to valid adjournment and postponement of any such meeting) or (ii) the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal has not been obtained following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting). |
• | by Desktop Metal if: |
○ | Stratasys or Merger Sub breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Stratasys or Merger Sub, as applicable, contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Stratasys or Merger Sub or failure of Stratasys’ and Merger Sub’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Stratasys’ receipt of written notice of such breach from Desktop Metal, and provided that Desktop Metal is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Desktop Metal contained in the Merger Agreement then fails to be true and correct such that certain closing conditions to the Merger Agreement could not then be satisfied; |
○ | a change of control transaction occurs with respect to Stratasys; or |
○ | prior to the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal, if the board of directors of Stratasys or any committee thereof has made a change in recommendation; |
• | by Stratasys if: |
○ | Desktop Metal breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Desktop Metal contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Desktop Metal or failure of Desktop Metal’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Desktop Metal’s receipt of written notice of such breach from Stratasys, and provided that Stratasys is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Stratasys contained in the Merger Agreement then fails to be true and correct such that the closing conditions to the Merger Agreement could not then be satisfied; |
○ | a change of control transaction occurs with respect to Desktop Metal; |
○ | prior to the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal, the board of directors of Desktop Metal or any committee thereof has made a change in recommendation; or |
○ | Desktop Metal has received a written communication from or on behalf of the counterparty to any Identified Agreement (which may be made electronically) that it will not amend or terminate such agreement such that the relevant closing condition to the Merger Agreement would be satisfied on commercially reasonable terms, or the passage of 30 calendar days after the date Desktop Metal has requested in writing that such counterparty amend or terminate the Identified Agreement such that the |
• | following the date of the Merger Agreement and prior to the Desktop Metal special meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Desktop Metal has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Desktop Metal stockholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Desktop Metal enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or |
• | if Stratasys terminates the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors or either Stratasys or Desktop Metal terminates the Merger Agreement as a result of the failure to obtain the approval of Desktop Metal stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of Desktop Metal’s stockholders (subject to valid adjournment and postponement of any such meeting) and, at the time of such termination, Stratasys was entitled to terminate the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors. |
• | following the date of the Merger Agreement but prior to the Stratasys shareholders’ meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Stratasys has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Stratasys shareholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Stratasys enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or |
• | if Desktop Metal terminates the Merger Agreement as a result of a change in recommendation by Stratasys’ board of directors or either party terminates the Merger Agreement as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon |
(in $ thousands other than per share amounts) | | | For the Six Months Ended June 30, 2023 | | | For the Year Ended December 31, 2022 |
Revenue | | | $403,730 | | | $860,506 |
Loss from operations | | | $(148,278) | | | $(831,035) |
Net loss attributable to the combined company | | | $(155,922) | | | $(806,445) |
Basic loss per share ($) | | | $(1.45) | | | $(7.60) |
Basic weighted average number of ordinary shares outstanding | | | 107,727 | | | 106,111 |
(in $ thousands) | | | As of June 30, 2023 |
Current assets | | | $912,489 |
Total assets | | | $2,099,737 |
Current liabilities | | | $470,428 |
Total liabilities | | | $607,110 |
Total equity | | | $1,492,627 |
| | For the Six Months Ended June 30, 2023 | | | For the year Ended December 31, 2022 | |
Stratasys historical per ordinary share data: | | | | | ||
Net income (loss) from continuing operations - basic | | | $(0.89) | | | $(0.44) |
Net income (loss) from continuing operations - diluted | | | $(0.89) | | | $(0.44) |
Book Value | | | $13.39 | | | $14.30 |
| | | | |||
Desktop Metal historical per common share data: | | | | | ||
Net income (loss) from continuing operations - basic | | | $(0.32) | | | $(2.35) |
Net income (loss) from continuing operations - diluted | | | $(0.32) | | | $(2.35) |
Book Value | | | $1.38 | | | $1.66 |
| | | | |||
Combined company unaudited combined pro forma per ordinary share data: | | | | | ||
Net income (loss) from continuing operations - basic | | | $(1.45) | | | $(7.60) |
Net income (loss) from continuing operations - diluted | | | $(1.45) | | | $(7.60) |
Book Value | | | $13.74 | | | |
| | | | |||
Desktop Metal unaudited equivalent pro forma per share data: | | | | | ||
Net income (loss) from continuing operations - basic | | | $(0.18) | | | $(0.93) |
Net income (loss) from continuing operations - diluted | | | $(0.18) | | | $(0.93) |
Book Value | | | $1.69 | | |
Date | | | Stratasys ordinary shares closing price per share | | | Desktop Metal Class A common stock closing price per share | | | Equivalent value of Merger consideration per share of Desktop Metal Class A common stock |
May 24, 2023 | | | $14.88 | | | $1.75 | | | $1.83 |
August 18, 2023 | | | $14.85 | | | $1.59 | | | $1.83 |
• | the market price for Stratasys ordinary shares and Desktop Metal Class A common stock could change before the completion of the Merger, including as a result of uncertainty as to the long-term value of Stratasys ordinary shares following the Merger or as a result of broader stock market movements; |
• | certain restrictions during the pendency of the proposed Merger that may impact the ability of Stratasys and Desktop Metal to pursue certain business opportunities or strategic transactions; |
• | the failure, or unexpected delays, of Desktop Metal stockholders to adopt the Merger Agreement or of Stratasys shareholders to approve the Stratasys Merger-related proposal, or the failure of Desktop Metal or Stratasys to satisfy other conditions to the completion of the Merger; |
• | uncertainties related to the timing of the receipt of required regulatory approvals for the Merger and the possibility that Stratasys and Desktop Metal may be required to accept conditions that could reduce or eliminate the anticipated benefits of the Merger as a condition to obtaining regulatory approvals, or that the required regulatory approvals might not be obtained at all; |
• | the risk that the proposed Merger and any announcement relating to the proposed Merger could have an adverse effect on the ability of Stratasys and Desktop Metal to retain and hire key personnel or maintain relationships with customers, clients, suppliers or strategic partners, or on Stratasys’ or Desktop Metal’s operating results and businesses generally; |
• | the impact of potential future hostile actions that may be taken by Nano, or other third parties, that may be similar to the recently expired unsolicited coercive partial tender offer of Nano and Nano’s withdrawn attempt to remove current members of the Stratasys board of directors and replace them with its own nominees, whether such actions are taken by Nano in its role as a shareholder of Stratasys or otherwise, and the effect of such potential actions on Stratasys’ or the combined company’s businesses; |
• | the impact of any additional potential unsolicited proposals by 3D Systems and whether any such proposal ultimately results in a “Superior Proposal” pursuant to the terms of the Merger Agreement; |
• | risks that the Merger and the transactions contemplated by the Merger Agreement could disrupt current plans and operations that may harm Stratasys’ and/or Desktop Metal’s businesses; |
• | the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the Merger Agreement, including a termination of the Merger Agreement under circumstances that could require Desktop Metal to pay a termination fee to Stratasys or require Stratasys to pay a termination fee to Desktop Metal; |
• | the amount of any costs, fees, expenses, impairments and charges related to the Merger; |
• | litigation relating to the proposed Merger that has been or could be instituted against Stratasys, Desktop Metal or their respective directors, including litigation involving Nano; |
• | delays in closing, or the failure to close, the Merger for any reason could negatively impact Stratasys or Desktop Metal; |
• | difficulties and delays in integrating the businesses, systems and processes of Stratasys and Desktop Metal following completion of the Merger or fully realizing the anticipated synergies and other benefits expected from the Merger; |
• | risks related to the diversion of the attention and time of Stratasys’ and Desktop Metal’s respective management teams from ongoing business concerns; |
• | unknown liabilities; |
• | changes in laws and regulations applicable to Stratasys and/or Desktop Metal; |
• | the extent of Stratasys’ and Desktop Metal’s success at introducing new or improved products and solutions that gain market share; |
• | the extent of growth of the 3D printing market generally; |
• | the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates and potential recessionary conditions; |
• | the effects of industry, market, economic, political or regulatory conditions outside of Stratasys’ or Desktop Metal’s control; |
• | the potential adverse impact that global interruptions and delays involving freight carriers and other third parties may have on Stratasys’ supply chain and distribution network and consequently, Stratasys’ and Desktop Metal’s abilities to successfully sell both Stratasys’ and Desktop Metal’s existing and newly-launched 3D printing products; |
• | infringement of Stratasys’ or Desktop Metal’s intellectual property rights by others (including for replication and sale of consumables for use in Stratasys’ systems), or infringement of others’ intellectual property rights by Stratasys or Desktop Metal; |
• | potential cyber attacks against, or other breaches to, Stratasys’ or Desktop Metal’s information technologies systems; |
• | impact of tax regulations on Stratasys’ or Desktop Metal’s results of operations and financial condition; and |
• | the factors set forth under the heading “Risk Factors” of (i) Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023, which is referred to herein as the Stratasys 2022 Form 20-F, and (ii) Desktop Metal’s Annual Report on Form 10-K, filed with the SEC on March 1, 2023, which is referred to herein as the Desktop Metal 2022 Form 10-K, and in subsequent filings by both companies with the SEC. |
• | Due to the fixed exchange ratio, Desktop Metal stockholders cannot be certain of the precise value of the Stratasys ordinary share consideration that they may receive in the Merger. |
• | The Merger may not be completed or completion may be delayed, and if the Merger Agreement is terminated, there may be a required payment of a significant termination fee by either side. |
• | Failure to complete the Merger could have material adverse effects on the business of either Stratasys and/or Desktop Metal. |
• | Stratasys and Desktop Metal are targets of shareholder lawsuits (including in respect of their respective shareholder/stockholder rights plans) which could result in substantial costs and may delay or prevent the Merger from being completed. |
• | If Nano’s legal challenge to Stratasys’ shareholder rights plan is successful, Nano launches and successfully completes an unsolicited tender offer that is similar to the recently-expired Nano Tender Offer, or Nano in the future succeeds at removing and replacing some or all of Stratasys’ or the combined company’s directors, that could result in a change of control of Stratasys which could have a material adverse impact on the parties’ ability to complete the Merger, or, if occurring following the Merger, could adversely impact shareholders’ investment in the combined company. |
• | The Merger Agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either company. |
• | The unaudited financial forecasts included in this joint proxy statement/prospectus may not accurately project the actual results of operations of the constituent companies to the Merger. |
• | The unaudited pro forma condensed combined financial information should not be considered an accurate indication of the results of operations or financial condition had Stratasys and Desktop Metal operated as a combined entity or of the combined company following completion of the Merger. |
• | The Stratasys ordinary shares, as shares of an Israeli company, to be received by Desktop Metal stockholders as a result of the Merger will have rights different from the Desktop Metal Class A common stock. |
• | Certain Desktop Metal stockholders have agreed to vote in favor of the adoption of the Merger Agreement, regardless of how Desktop Metal’s public stockholders vote, which could lead to approval of the Merger by Desktop Metal’s stockholders despite public stockholder opposition to it. |
• | The directors and executive officers of each company have interests and arrangements that may be different from, or in addition to, the interests of Stratasys shareholders and Desktop Metal stockholders generally. |
• | The Merger may be a taxable transaction for U.S. federal income tax purposes to U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) of Desktop Metal Class A common stock. |
• | Combining the businesses of Stratasys and Desktop Metal may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the Merger, which may negatively affect the market price of the ordinary shares of the combined company following the Merger. |
• | Stratasys may be unable to realize anticipated cost and tax synergies of the Merger, and expects to incur substantial expenses related to the Merger. |
• | The combined company may not be able to retain customers or suppliers, or attract new customers, or existing customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations. |
• | Nano may continue to hold, or may acquire at a later time, a substantial interest in the combined company’s voting equity, and may have substantial influence over the combined company, and the interests of Nano, as a competitor of the combined company, may not be aligned with those of combined company or its other shareholders. |
• | Current Stratasys shareholders and Desktop Metal stockholders will each have a reduced ownership and voting interest after the Merger and will exercise less influence over the management of the combined company. |
• | The market price of Stratasys ordinary shares may decline as a result of the transaction or from resales of ordinary shares following the Merger, including by Nano, which has indicated that it is considering selling its Stratasys ordinary shares. |
• | There may be less publicly available information concerning, and alternate governance practices for, Stratasys, as a foreign private issuer, than there are for issuers that are not foreign private issuers (such as Desktop Metal). |
• | It may be difficult to enforce a U.S. judgment against the combined company and its officers and directors in Israel or the United States, or to serve process on its officers and directors. |
• | Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, the combined company, which could prevent a change of control, even when the terms of such a transaction are favorable to the combined company and its shareholders. |
• | If a U.S. holder (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) is treated as owning at least 10% of the stock of Stratasys, such holder may be subject to adverse U.S. federal income tax consequences. |
• | If Stratasys or any of its subsidiaries is characterized as a passive foreign investment company, referred to as a PFIC, for U.S. federal income tax purposes, U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) may suffer adverse tax consequences. |
• | Each of Stratasys and Desktop Metal will be required to pay its respective expenses relating to the Merger, such as certain legal, accounting, financial advisory and printing fees, whether or not the Merger is completed; |
• | time and resources committed by Stratasys’ and Desktop Metal’s respective management teams to matters relating to the Merger (including integration planning) could otherwise have been devoted to their existing businesses and the pursuit of other opportunities that may have been beneficial to Stratasys or Desktop Metal, as applicable; |
• | the market prices of Stratasys ordinary shares or Desktop Metal Class A common stock could decline to the extent that the current market price reflects a market assumption that the Merger will be completed; |
• | Stratasys may face renewed hostile takeover pressure from Nano Dimension, whether via (i) a new tender offer that is similar to the recently-expired hostile Nano Tender Offer pursuant to which Nano Dimension sought to increase its holdings of Stratasys ordinary shares to approximately 46-51% of the outstanding Stratasys ordinary shares, (ii) an additional attempt to take control of the Stratasys board of directors, whether by proposing to remove current Stratasys directors and replace them with Nano’s own nominees, or otherwise, or (iii) any other means, and may face protracted litigation in relation to such tactics of Nano Dimension; |
• | Stratasys could face hostile takeover pressure from any other third party, including other competitors in the 3D printing industry or other outside players, which could distract Stratasys from its focus on its business strategies; |
• | each company may experience negative reactions from its suppliers, customers, distribution channels, business partners, industry contacts and other third parties, which in turn could affect each company’s marketing and sales operations or their ability to compete for new business or obtain renewals in the marketplace more broadly; |
• | either or both companies could experience negative reactions from market analysts, institutional shareholder groups, significant shareholders or others that could have an adverse impact on the trading price of their ordinary shares or common stock, as applicable; |
• | Stratasys and Desktop Metal may experience negative reactions from employees; |
• | Stratasys and/or Desktop Metal and/or their respective management teams could be subject to litigation related to any failure to complete the Merger or any enforcement proceeding commenced against Stratasys or Desktop Metal to perform their respective obligations under the Merger Agreement; |
• | Desktop Metal may be required, in certain circumstances, to pay a termination fee of $18.6 million or an expense reimbursement in an amount not to exceed $10.0 million to Stratasys and Merger Sub (see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 163); and |
• | Stratasys may be required, in certain circumstances, to pay a termination fee of $32.5 million (or $19 million in certain circumstances) or an expense reimbursement in an amount not to exceed $10.0 million to Desktop Metal (see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 163). |
• | solicit, initiate, induce, facilitate or knowingly encourage any Acquisition Proposal or any inquiry or proposal that may be reasonably be expected to lead to an Acquisition Proposal; |
• | enter into, participate in, maintain or continue any communications or negotiations regarding, or deliver or make available any non-public information with respect to, or take any other action regarding, any actual or potential Acquisition Proposal; |
• | take any action to make the provisions of any takeover statute (including, with respect to Desktop Metal, any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the Delaware General Corporation Law), or any restrictive provision of any applicable anti-takeover provision in the applicable party’s governing documents, inapplicable to any transactions contemplated by an Acquisition Proposal; |
• | make any third party acquirer exempt from the definition of an acquiring person in the applicable party’s rights plan or redeem or waive any provision in such rights plan; |
• | agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) any Acquisition Proposal; or |
• | enter into any letter of intent or any other contract, agreement, commitment or other written arrangement contemplating or otherwise relating to any Acquisition Proposal; or |
• | resolve, propose or agree to do any of the foregoing. |
• | combining the companies’ operations and corporate functions; |
• | combining the businesses of Stratasys and Desktop Metal and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve the synergies and other benefits anticipated to result from the Merger; |
• | integrating personnel from the two companies; |
• | integrating the companies’ technologies, systems and processes; |
• | integrating and unifying the offerings and services available to customers; |
• | identifying and eliminating redundant and underperforming functions and assets; |
• | harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; |
• | maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors; |
• | addressing possible differences in business backgrounds, corporate cultures and management philosophies; |
• | consolidating the companies’ administrative and information technology infrastructure; |
• | coordinating distribution and sales and marketing efforts; |
• | coordinating geographically dispersed organizations; and |
• | effecting actions that may be required in connection with obtaining regulatory approvals. |
• | Stratasys Proposal 1 (Stratasys Merger-related proposal): Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include, among other revisions to Stratasys’ existing articles of association, an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company chief’s executive officer, as the members of Stratasys’ board of directors, each of whose term will commence upon the effective time of the Merger and expire upon the first annual general meeting of shareholders of the combined company following the one-year anniversary of, and upon the due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal; |
• | Stratasys Proposal 2 (Stratasys rights plan extension proposal): Subject to the approval of the Stratasys Merger-related proposal, approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan for a twelve (12)-month period from its original expiration date, i.e., until July 24, 2024; and |
• | Stratasys Proposal 3 (Stratasys share incentive plan increase proposal): Approval of an increase by 2,075,625, upon completion of the Stratasys EGM, and by an additional 1,065,867, upon and subject to completion of the Merger, in the number of Stratasys ordinary shares available for issuance under Stratasys’ 2022 Share Incentive Plan. |
• | Stratasys Proposal 1 (Stratasys Merger-related proposal): “FOR” the Stratasys Merger-related proposal; |
• | Stratasys Proposal 2 (Stratasys rights plan extension proposal): “FOR” the Stratasys rights plan extension proposal; and |
• | Stratasys Proposal 3 (Stratasys share incentive plan increase proposal): “FOR” the Stratasys share incentive plan increase proposal. |
Stratasys Proposal | | | Vote Required | | | Effects of Abstentions and Broker Non-Votes |
Stratasys Proposal 1: Stratasys Merger-related proposal | | | The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted. | | | Abstentions and broker non-votes will have no effect. |
| | | | |||
Stratasys Proposal 2: Stratasys rights plan extension proposal | | | The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted. | | | Abstentions and broker non-votes will have no effect. |
| | | | |||
Stratasys Proposal 3: Stratasys share incentive plan increase proposal | | | The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted. | | | Abstentions and broker non-votes will have no effect. |
• | By Internet: Through the Internet by logging onto www.proxyvote.com and following the prompts using the control number located on the proxy card. |
• | By Telephone: By calling using the toll-free (from the United States, Puerto Rico and Canada) telephone number listed on the enclosed proxy card. |
• | By Mail: By completing, signing, dating and returning the enclosed proxy card in the envelope provided. |
(i) | Stratasys Share Issuance: |
(ii) | Stratasys Articles Restatement: |
• | An increase in Stratasys’ authorized share capital from NIS 1,800,000, divided into 180,000,000 Stratasys ordinary shares, to NIS 4,500,000, divided into 450,000,000 Stratasys ordinary shares (as described in further detail in the section entitled “—Increase in Authorized Share Capital under Amended and Restated Articles of Association”); |
• | Certain arrangements concerning the corporate governance of the combined company during the first two years following the completion of the Merger, including the following: |
○ | the approval of at least two-thirds of the directors then in office (excluding, in respect of clause (i) below, Stratasys’ Chief Executive Officer as of the effective time of the Merger, and in respect of clause (ii) below, the Chairman of Stratasys’ board of directors as of the effective time of the Merger) is needed to implement any of the following actions: |
(i) | the dismissal or replacement of Stratasys’ Chief Executive Officer as of the effective time of the Merger; |
(ii) | the dismissal or replacement of the Chairman of the Board of Stratasys as of the effective time of the Merger; |
(iii) | a change in the number of members serving on the board of directors of Stratasys as of the effective time of the Merger; or |
(iv) | an election by the board of directors of Stratasys to once again be subject to the Israeli Companies Law requirement to appoint external directors; |
○ | after the end of the initial two-year term following completion of the Merger, the Chairman of the Board of Stratasys will continue in his position until his dismissal or replacement by a simple majority of the members of the board of directors who are present and vote on such replacement (provided that in case of an equality of votes, the Chairman of the Board will not have a second vote, and the proposal shall be deemed to be defeated). |
• | Certain updates to Israeli law that have been made since Stratasys’ existing articles of association were initially adopted, including, for example, the right of a U.S.-traded company such as Stratasys to comply with certain U.S. stock exchange board independence and board committee composition requirements in lieu of the corresponding Israeli requirements, including the obligation to appoint two external directors pursuant to the Israeli Companies Law. |
(iii) | Election of Post-Merger Combined Company Board of Directors |
Name | | | Age | | | Prospective Position |
Ric Fulop | | | 48 | | | Chairman of the Board of Directors |
Dr. Yoav Zeif | | | 57 | | | Director and Chief Executive Officer |
Dov Ofer | | | 69 | | | Lead Independent Director |
James Eisenstein | | | 65 | | | Director |
Name | | | Age | | | Prospective Position |
Wen Hsieh | | | 50 | | | Director |
John J. McEleney | | | 61 | | | Director |
Stephen Nigro | | | 63 | | | Director |
Steve Papa | | | 50 | | | Director |
David Reis | | | 61 | | | Director |
Michael Schoellhorn | | | 58 | | | Director |
Adina Shorr | | | 63 | | | Director |
Compensation Element | | | Amount |
Board cash retainer (excluding non-executive Chairman of the Board) | | | $60,000 |
Board/committee meeting fees | | | None |
Equity compensation (including for non-executive Chairman of the Board) | | | $140,000 value (50% RSUs/50% share options) |
Equity vesting schedule | | | One-year “cliff” |
Non-executive Chairman of the Board cash retainer (in lieu of Board cash retainer) | | | $200,000 |
Audit Chair (including member retainer) | | | $20,000 |
Compensation Chair (including member retainer) | | | $20,000 |
Audit Committee member retainer | | | $10,000 |
Compensation Committee member retainer | | | $10,000 |
• | Preside at all meetings of the board of directors at which the Chairman of the Board is not present, including executive sessions of the independent directors. |
• | Has the authority to call meetings of the independent directors. |
• | If and as needed, serve as the principal liaison between the Chairman of the Board and the independent directors. |
• | All information sent to the board of directors, including the quality, quantity, appropriateness and timeliness of such information. |
• | Meeting agendas for the board of directors. |
• | The frequency of board of directors meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items. |
• | Recommend to the Nominating and Corporate Governance Committee and to the Chairman of the Board, selection for the membership and chairperson position for each Board committee, subject to any qualification requirements set forth in any applicable law (including the Israeli Companies Law). |
• | Interview all director candidates and make recommendations to the Nominating and Corporate Governance Committee, subject to any qualification requirements set forth in any applicable law (including the Israeli Companies Law). |
• | Be available, when appropriate, for consultation and direct communication with shareholders. |
• | Has the authority to retain outside advisors and consultants who report directly to the board of directors on board-wide issues. |
• | To the extent requested by the Lead Independent Director and where appropriate, the Company’s counsel shall provide advice and counsel to the Lead Independent Director in fulfilling the Lead Independent Director's duties. |
• | After the initial two-year term following completion of the Merger, the Lead Independent Director, in consultation with the other independent directors, will review the charter related to his authorities and recommend, for approval by the combined company board of directors, any modifications or changes, on an annual basis. |
(i) | pursuant to Nasdaq Listing Rule 5635(a), the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal, in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration in the Merger; |
(ii) | effective and conditioned upon the completion of the Merger under the Merger Agreement, the amendment and restatement of the existing articles of association of Stratasys as set forth in Annex B to the proxy statement/prospectus of Stratasys and Desktop Metal, dated [ ], in respect of the Merger, including, among other revisions to Stratasys’ existing articles of association, as provided in Articles 6 (“Share Capital”) thereof, an increase in the authorized share capital of Stratasys from NIS 1,800,000, divided into 180,000,000 Stratasys ordinary shares, par value NIS 0.01 each, to NIS 4,500,000, divided into 450,000,000 Stratasys ordinary shares, par value NIS 0.01 each; and |
(iii) | on the effective time of the Merger, the election of a slate of directors, consisting of: (a) five designees of Stratasys (Dov Ofer (who shall serve as Lead Independent Director), Mr. McEleney, Mr. Reis, Dr. Schoellhorn and Ms. Shorr; (b) five designees of Desktop Metal (Ric Fulop (who shall serve as non-executive Chairman of the Board), Mr. Eisenstein, Mr. Hsieh, Mr. Nigro and Mr. Papa); and (c) the combined company’s Chief Executive Officer, Dr. Yoav Zeif, each of whom will serve until the first annual general meeting of shareholders of the combined company to be held after the one-year anniversary of the effective time of the Merger, and until the due election and qualification of his or her successor, or until his or her earlier resignation, replacement or removal.” |
• | the signing of the Merger Agreement for the prospective Merger; |
• | the Nano Tender Offer, which has recently expired; |
• | Nano’s recent attempt to gain control of the Stratasys board via nomination of its affiliates for election as directors in place of Stratasys’ current directors at Stratasys’ 2023 annual general meeting of shareholders; and |
• | 3D Systems’ unsolicited proposals for a merger transaction with Stratasys. |
• | initially, at the conclusion of the Stratasys EGM, the size of the pool under the Stratasys 2022 Plan would increase by 2,075,625 Stratasys ordinary shares; and |
• | upon, and subject to, the completion of the Merger, the size of the pool under the Stratasys 2022 Plan would increase by an additional 1,065,867 Stratasys ordinary shares. |
• | Desktop Metal Proposal 1: The Desktop Metal Merger Agreement proposal. To approve the adoption of the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus; |
• | Desktop Metal Proposal 2: The Desktop Metal advisory compensation proposal: To approve, on an advisory (non-binding) basis, the merger-related named executive officer compensation payments that will or may be paid by Desktop Metal to its named executive officers that is based on or otherwise relates to the Merger; and |
• | Desktop Metal Proposal 3: The Desktop Metal adjournment proposal: To approve the adjournment of the Desktop Metal special meeting to another date and place if necessary or appropriate to solicit additional votes in favor of the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders. |
• | Desktop Metal Proposal 1: “FOR” the Desktop Metal Merger Agreement proposal; |
• | Desktop Metal Proposal 2: “FOR” the Desktop Metal advisory compensation proposal; and |
• | Desktop Metal Proposal 3: “FOR” the Desktop Metal adjournment proposal. |
Proposal | | | Votes Required | | | Effects of Abstentions and Broker Non-Votes |
Desktop Metal Proposal 1: Desktop Metal Merger Agreement proposal | | | The affirmative vote of holders of a majority in voting power of the outstanding Desktop Metal Class A common stock entitled to vote thereon. | | | Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal. |
| | | | |||
Desktop Metal Proposal 2: Desktop Metal advisory compensation proposal | | | The affirmative vote of the holders of a majority in voting power of the votes cast. | | | Abstentions and broker non-votes will have no effect. |
| | | | |||
Desktop Metal Proposal 3: Desktop Metal adjournment proposal | | | The affirmative vote of the holders of a majority in voting power of the votes cast. | | | Abstentions and broker non-votes will have no effect. |
• | by Internet—You can vote over the Internet at www.proxyvote.com by following the instructions on the proxy card; |
• | by Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions on the proxy card; |
• | by Mail—You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail; or |
• | Electronically at the Meeting—If you attend the Desktop Metal Special online, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials to vote electronically during the meeting. |
• | by submitting a duly executed proxy bearing a later date; |
• | by granting a subsequent proxy through the Internet or telephone; |
• | by giving written notice of revocation to the Secretary of Desktop Metal prior to or at the Desktop Metal special meeting; or |
• | by voting online at the Desktop Metal special meeting. |
• | “Contrary to statements made by Mr. Stern, Stratasys’ CEO Dr. Yoav Zeif has met with Mr. Stern only once, on March 9, 2023. This meeting was at Mr. Stern’s request. Dr. Zeif did not indicate any support for the proposal and made it clear that Stratasys would respond once the Board’s review of Nano’s proposal was completed. Other than this one meeting, there has been no contact or substantive discussion between Dr. Zeif and Mr. Stern, any directors or any other representatives from either company.” |
• | “Contrary to what was implied by Mr. Stern, Dr. Zeif fully agrees with the Board’s decision.” |
• | “Contrary to claims made by Mr. Stern, Stratasys directors receive the majority of their board compensation (which is approved by the Stratasys shareholders) in Stratasys equity and are aligned with the interests of Stratasys shareholders.” |
• | Desktop Metal’s belief that the increased size, scale and financial strength of the combined company following the Merger will result in one of the largest companies in the additive manufacturing industry, to serve customers and grow sales, targeting $1.1 billion in annual revenue by 2025 and an improved profitability creating sustained value for all stakeholders. |
• | Desktop Metal’s expectations that the combined company will have a broad product portfolio with little overlap to Stratasys and attractive positions across multiple additive manufacturing technologies and solutions with the ability to offer customers end-to-end solutions from designing, prototyping and tooling to mass production and aftermarket operations across the entire manufacturing lifecycle. |
• | Desktop Metal’s expectation that the Merger will combine two complementary intellectual property portfolios with more than 3,400 patents and pending patent applications and one of the largest R&D and engineering teams in the industry, with over 800 scientists and engineers focused on driving innovation across technologies and across a differentiated materials library. |
• | Desktop Metal’s expectation that the Merger brings together complementary products and technologies that cover a wide range of industry verticals and use cases with superior global go-to-market capabilities with enhanced market access for recognizable brands, backed up by premier customer support capabilities. With more than 27,000 industrial customers, Desktop Metal expects the combined company to have a large customer base across industries, materials and applications to drive significant recurring revenue from consumables. |
• | Desktop Metal’s view that Stratasys’ executive leaders are aligned with and share a similar conviction about the efficacy and appeal of the value proposition of the combined company. |
• | Desktop Metal’s belief that both Stratasys and Desktop Metal have exceptional technical teams with complementary skill sets, which will facilitate the integration of the two companies and deliver expected strong results from the combined company. |
• | Desktop Metal’s expectation that, by 2025, the Merger will generate approximately $50 million of revenue synergies as a result of existing customers benefitting from the broad and complementary products and services provided by the combined company, enabling cross-selling, as well as an additional amount of approximately $50 million in annual run-rate cost synergies by 2025 as a result of cost reductions in sales, general and administrative expenses, supply chain management and optimization of operational processes. |
• | Desktop Metal’s confidence that the Merger is more attractive to Desktop Metal than other strategic alternatives available to Desktop Metal because of the opportunity to integrate Desktop Metal’s and Stratasys’ respective technology portfolios and complementary additive manufacturing platform offerings, as well as the potential synergies resulting from the combination. |
• | Desktop Metal’s board of directors’ knowledge of, and discussions with Desktop Metal management and its advisors regarding each of Stratasys’ and Desktop Metal’s business operations, financial condition, strategy, earnings and prospects taking into account Stratasys’ publicly-filed information and the results of Desktop Metal’s due diligence investigation of Stratasys. |
• | The recommendation of Desktop Metal’s senior management team in support of the Merger. |
• | The oral opinion of Stifel rendered to the Desktop Metal board of directors on May 24, 2023, subsequently confirmed by delivery of the Stifel Opinion to the Desktop Metal board of directors, and attached to this joint proxy statement/prospectus as Annex D, to the effect that, as of the date of the Stifel Opinion and subject to and based on the various assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the Stifel Opinion, the Exchange Ratio was fair, from a financial point of view, to the holders of Desktop Metal Class A common stock. For additional information, see the section entitled “The Merger—Opinion of Desktop Metal’s Financial Advisor” and the full text of the Stifel Opinion attached as Annex D to this joint proxy statement/prospectus. |
• | Desktop Metal’s belief that the restrictions imposed on Desktop Metal’s business and operations during the pendency of the Merger are reasonable and not unduly burdensome. |
• | The risks facing Desktop Metal and its industry, including the inherent costs, risks and uncertainties associated with continuing to operate independently as a public company. |
• | Whether there were other potential parties that might have an interest in, and be financially capable of, engaging in an alternative transaction with Desktop Metal at a value higher than Stratasys’ proposal, the potential regulatory, commercial and financing issues or other risks and uncertainties that might arise in connection with pursuing such a transaction, the likelihood that the other potential parties would make an acquisition proposal at a price greater than Stratasys’ proposal, and the belief, based on discussions and negotiations with Stratasys, that Stratasys would withdraw from consideration of a potential transaction with Desktop Metal if Desktop Metal were to pursue other potential parties. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of Stratasys ordinary shares increase relative to the market price of shares of Desktop Metal Class A common stock between the date of the Merger Agreement and the completion of the Merger. |
• | The likelihood of consummation of the Merger and the Desktop Metal board of directors’ evaluation of the likely time period necessary to close the Merger. |
• | Desktop Metal’s expectation that the combined company will be led by a strong, experienced management team, with the current Chief Executive Officer of Stratasys, Mr. Yoav Zeif, continuing to serve as Chief Executive Officer of the combined company following the Merger, the current Chairman of the Board of Desktop Metal, Ric Fulop, serving as the Non-Executive Chairman of the Board of the combined company following the Merger, and Mr. Dov Ofer, Stratasys’ current Chairman, serving as Lead Independent Director of the combined company following the Merger. |
• | That the Desktop Metal stockholders will have the opportunity to vote on the Desktop Metal Merger Agreement Proposal, the approval of which is a condition precedent to the closing of the Merger. |
• | The representations, warranties, covenants and conditions contained in the Merger Agreement, including the following (which are not necessarily presented in order of relative importance): |
• | That Desktop Metal has the ability, in specified circumstances and subject to the limitations provided for therein, to provide information to and to engage in discussions or negotiations with a third party that makes an unsolicited acquisition proposal, as further described in the section entitled “The Merger Agreement—No Solicitation by Desktop Metal.” |
• | That the Desktop Metal board of directors has the ability, in specified circumstances, to change its recommendation to Desktop Metal stockholders in favor of the Desktop Metal Merger Agreement Proposal, as further described in the section entitled “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys and Desktop Metal.” |
• | That there are limited circumstances in which the Stratasys board of directors may terminate the Merger Agreement or change its recommendation that Stratasys shareholders approve the Stratasys Merger-related proposal, and if the Merger Agreement is terminated under specified circumstances, including by Desktop Metal as a result of a change in recommendation of the Stratasys board, then Stratasys has agreed to pay Desktop Metal a termination fee of $18.6 million. For additional information, see the sections entitled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | That if the Merger Agreement is terminated by either party because (a) prior to the Stratasys EGM, an acquisition proposal with respect to Stratasys is publicly proposed or disclosed (and not withdrawn at least two business days prior to the Stratasys EGM), (b) either party has terminated the Merger Agreement for failure to obtain Stratasys shareholder approval of the Stratasys Merger-related proposal and (c) within 12 months of termination, an acquisition proposal for 50% or more of Stratasys is consummated or a definitive agreement providing for such an acquisition proposal is entered into, then Stratasys has agreed to pay Desktop Metal a termination fee of $32.5 million. For additional information, see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | That if the Merger Agreement is terminated by Stratasys because a Rejection has occurred with respect to the Identified Agreements, but all other specified conditions to the closing of the Merger have been satisfied or waived (or are capable of being satisfied at the closing of the Merger), then Stratasys has agreed to pay Desktop Metal a termination fee of $19.0 million. For additional information, see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | That if the Merger Agreement is terminated by either party because Stratasys shareholders have not approved the Stratasys Merger-related proposal and at the time of the termination, the Stratasys board has not made a change in recommendation, then Stratasys has agreed to reimburse Desktop Metal for Desktop Metal’s transaction-related expenses in an amount not to exceed $10 million. For additional information, see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | The requirement that Stratasys hold a shareholder vote on the approval of the Stratasys Merger-related proposal, even if the Stratasys board has withdrawn or changed its recommendation in favor of that proposal, and the inability of Stratasys to terminate the Merger Agreement in connection with an acquisition proposal. For additional information, see the sections entitled “The Merger Agreement—No Solicitation by Stratasys” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal.” |
• | That the Merger may not be completed in a timely manner or at all and the potential consequences of non-completion or delays in completion. |
• | The effect that the length of time from announcement of the Merger until completion of the Merger could have on the market price of shares of Desktop Metal Class A common stock, Desktop Metal’s operating results and Desktop Metal’s relationship with its employees, shareholders and industry contacts and others who do business with Desktop Metal. |
• | That the integration of Stratasys and Desktop Metal may not be as successful as expected and that the anticipated benefits of the Merger may not be realized in full or in part, including the risk that revenue or cost synergies may not be achieved or not achieved in the expected time frame. |
• | That the attention of Desktop Metal’s senior management may be diverted from other strategic priorities to focus on implementing the Merger, including making arrangements for the integration of Desktop Metal’s and Stratasys’ operations, assets and employees following the Merger. |
• | That Desktop Metal stockholders may not approve the Desktop Metal Merger Agreement Proposal or that Stratasys shareholders may not approve the Stratasys Merger-related proposal. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of Desktop Metal Class A common stock increases relative to the market price of Stratasys ordinary shares between the date of the Merger Agreement and the completion of the Merger. |
• | That the Merger Agreement imposes restrictions on Desktop Metal’s ability to solicit alternative transactions and make certain acquisitions, which are described in the sections entitled “The Merger Agreement—Conduct of Business Pending the Merger” and “The Merger Agreement—No Solicitation by Desktop Metal.” |
• | That there are limited circumstances in which the Desktop Metal board of directors may terminate the Merger Agreement or change its recommendation that Desktop Metal stockholders approve the Desktop Metal Merger Agreement Proposal, and if the Merger Agreement is terminated under specified circumstances, including by Stratasys as a result of a change in recommendation of the Desktop Metal board of directors, then Desktop Metal has agreed to pay Stratasys a termination fee of $32.5 million. For additional information, see the sections entitled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | That if (a) prior to the Desktop Metal Stockholder Meeting, an acquisition proposal with respect to Desktop Metal is publicly proposed or disclosed (and not withdrawn at least two business days prior to the Desktop Metal Stockholder Meeting), (b) either party has terminated the Merger Agreement for failure to obtain stockholder approval of the Desktop Metal Merger Agreement Proposal and (c) within 12 months of termination, an acquisition proposal for 50% or more of Desktop Metal is consummated or a definitive agreement providing for such an acquisition proposal is entered into, then Desktop Metal has agreed to pay Stratasys a termination fee of $18.6 million. For additional information, see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | That if the Merger Agreement is terminated by either party because Desktop Metal stockholders have not approved the Desktop Metal Merger Agreement Proposal and at the time of the termination, the Desktop Metal board of directors has not made a change in recommendation, then Desktop Metal has agreed to reimburse Stratasys for Stratasys’ transaction-related expenses in an amount not to exceed $10 million. For additional information, see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement.” |
• | The requirement that Desktop Metal hold a stockholder vote on the approval of the Desktop Metal Merger Agreement Proposal, even if the Desktop Metal board of directors has withdrawn or changed its recommendation in favor of the Desktop Metal Merger Agreement Proposal, and the inability of Desktop Metal to terminate the Merger Agreement in connection with an acquisition proposal. For additional information, see the sections entitled “The Merger Agreement—No Solicitation by Desktop Metal” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal.” |
• | The transaction costs to be incurred by Desktop Metal in connection with the Merger. |
• | The other strategic alternatives available to Stratasys, including the Nano Tender Offer. |
• | The likelihood of lawsuits being brought against Stratasys, Desktop Metal or their respective boards in connection with the Merger or in connection with any alternative transaction. |
• | The risks associated with the occurrence of events that may materially and adversely affect the financial condition, properties, assets, liabilities, business or results of operations of Stratasys and its subsidiaries but that will not entitle Desktop Metal to terminate the Merger Agreement. |
• | The risk that a change of control may occur with respect to Desktop Metal prior to closing that would entitle Stratasys to terminate the Merger Agreement. |
• | The potential impact on the market price of the ordinary shares of the combined company as a result of the issuance of the merger consideration to holders of eligible shares of Desktop Class A common stock. |
• | Various other risks described in the section entitled “Risk Factors” beginning on page 41. |
• | Stratasys’ belief that the increased size, scale and financial strength of the combined company following the Merger will improve its ability, as one of the largest companies in the additive manufacturing industry, to serve customers and grow sales, targeting $1.1 billion in annual revenue by 2025 and creating sustained value for all stakeholders. |
• | Stratasys’ expectation that the combined company will have a broad product portfolio and attractive positions across multiple additive manufacturing technologies and solutions, from FDM and Polyjet to metal, with the ability to offer customers end to end solutions for designing, prototyping and tooling as well as mass production and aftermarket operations across the entire manufacturing lifecycle. |
• | Stratasys’ expectation that the Merger will combine two complementary intellectual property portfolios with more than 3,400 patents and pending patent applications and one of the largest R&D and engineering teams in the industry, with over 800 scientists and engineers focused on driving innovation across technologies and across a differentiated materials library. |
• | Stratasys’ expectation that the Merger brings together complementary products and technologies that cover a wide range of industry verticals and use cases with superior global go-to-market capabilities with enhanced market access for recognizable brands, backed up by premier customer support capabilities. With more than 27,000 industrial customers, Stratasys expects the combined company to have a large customer base across industries, materials and applications to drive recurring revenue from consumables. |
• | Stratasys’ belief that Desktop Metal’s metal manufacturing solution and advanced technology for mass production, alongside Stratasys’ robust polymer offering, will accelerate Stratasys’ mission to lead the additive manufacturing industry into mass production. |
• | Stratasys’ expectation that the Merger will further enhance Stratasys’ strong balance sheet by providing superior sustainability, resilience and flexibility. |
• | Stratasys’ view that Desktop Metal’s executive leaders are aligned with and share a similar conviction about the efficacy and appeal of the value proposition of the combined company. |
• | Stratasys’ belief that both Stratasys and Desktop Metal have exceptional technical teams with complementary skill sets, which will facilitate the integration of the two companies and deliver strong results from the combined company. |
• | Stratasys’ expectation that, by 2025, the Merger will generate approximately $50 million of revenue synergies as a result of existing customers benefitting from the broad and complementary products and services provided by the combined company, enabling cross-selling, as well as an additional amount of approximately $50 million in annual run-rate cost synergies by 2025 as a result of cost reductions in sales, general and administrative expenses, supply chain management and optimization of operational processes. |
• | Stratasys’ confidence that the Merger is more attractive to Stratasys than other strategic alternatives available to Stratasys, including proposals received from 3D Systems and the Nano Tender Offer, and because of the opportunity to integrate Desktop Metal’s and Stratasys’ respective technology portfolio and complementary additive manufacturing platform offerings, as well as the potential synergies resulting from the combination. |
• | The Stratasys board of directors’ knowledge of, and discussions with Stratasys management and its advisors regarding, each of Stratasys’ and Desktop Metal’s business operations, financial condition, earnings and prospects, taking into account Desktop Metal’s publicly-filed information and the results of Stratasys’ due diligence investigation of Desktop Metal. |
• | The recommendation of Stratasys’ senior management team in support of the Merger. |
• | The oral opinion of J.P. Morgan rendered to the Stratasys board of directors on May 24, 2023, subsequently confirmed by delivery of J.P. Morgan’s written opinion, dated May 25, 2023, to the Stratasys board of directors, and attached to this joint proxy statement/prospectus as Annex C, to the effect that, as of such date, and based upon and subject to the various assumptions, qualifications, limitations and other matters described in its written opinion, the exchange ratio in the proposed Merger was fair, from a financial point of view, to Stratasys; for additional information, see the section entitled “The Merger—Opinion of Stratasys’ Financial Advisor” and the full text of the written opinion of J.P. Morgan attached as Annex C to this joint proxy statement/prospectus. |
• | Stratasys’ belief that the restrictions imposed on Stratasys’ business and operations during the pendency of the Merger are reasonable and not unduly burdensome. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of Desktop Metal Class A common stock increases relative to the market price of Stratasys ordinary shares between the date of the Merger Agreement and the completion of the Merger. |
• | The likelihood of consummation of the Merger and the Stratasys board of directors’ evaluation of the likely time period necessary to close the Merger. |
• | Stratasys’ expectation that Stratasys will continue to be led by a strong, experienced Stratasys management team, with the current Chief Executive Officer of Stratasys, Mr. Yoav Zeif, continuing to serve as Chief Executive Officer of the combined company following the Merger, and Mr. Dov Ofer, Stratasys’ current Chairman, serving as Lead Independent Director of the combined company following the Merger. |
• | That the Stratasys shareholders will have the opportunity to vote on the Stratasys Merger-related proposal, the approval of which is a condition precedent to the closing of the Merger. |
• | The representations, warranties, covenants and conditions contained in the Merger Agreement, including the following (which are not necessarily presented in order of relative importance): |
• | That Stratasys has the ability, in specified circumstances and subject to the limitations provided for therein, to provide information to and to engage in discussions or negotiations with a third party that makes an unsolicited acquisition proposal, as further described in the sections entitled “The Merger Agreement—No Solicitation” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” |
• | That the Stratasys board of directors has the ability, in specified circumstances, to change its recommendation to Stratasys shareholders in favor of the Stratasys Merger-related proposal, as further described in the sections entitled “The Merger Agreement—No Solicitation” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” |
• | That there are limited circumstances in which the Desktop Metal board may terminate the Merger Agreement or change its recommendation that Desktop Metal stockholders approve the Desktop Metal Merger Agreement proposal, and if the Merger Agreement is terminated under specified circumstances, including by Stratasys as a result of a change in recommendation of the Desktop Metal board, then Desktop Metal has agreed to pay Stratasys a termination fee of $18.6 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | That if the Merger Agreement is terminated by either party because (a) prior to the Desktop Metal special meeting, an acquisition proposal with respect to Desktop Metal is publicly proposed or disclosed (and not withdrawn at least two business days prior to the Desktop Metal special meeting), (b) either party has terminated the Merger Agreement for failure to obtain Desktop Metal stockholders’ approval of the Desktop Metal Merger Agreement proposal and (c) within 12 months of termination, an acquisition proposal for 50% or more of Desktop Metal is consummated or a definitive agreement providing for such an acquisition proposal is entered into, then Desktop Metal has agreed to pay Stratasys a termination fee of $18.6 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | That if the Merger Agreement is terminated by either party because Desktop Metal stockholders have not approved the Desktop Metal Merger Agreement proposal and at the time of the termination, the Desktop Metal board has not made a change in recommendation, then Desktop Metal has agreed to reimburse Stratasys for Stratasys’ Termination Expenses in an amount not to exceed $10 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | The requirement that Desktop Metal hold a stockholder vote on the approval of the Desktop Metal Merger Agreement proposal, even if the Desktop Metal board has withdrawn or changed its recommendation in favor of that proposal, and the inability of Desktop Metal to terminate the Merger Agreement in connection with an acquisition proposal. For additional information, see the section entitled “The Merger Agreement—No Solicitation” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” |
• | That the Merger may not be completed in a timely manner or at all and the potential consequences of non-completion or delays in completion. |
• | The effect that the length of time from announcement of the Merger until completion of the Merger could have on the market price of Stratasys ordinary shares, Stratasys’ operating results and Stratasys’ relationship with its employees, shareholders and industry contacts and others who do business with Stratasys. |
• | That the integration of Stratasys and Desktop Metal may not be as successful as expected and that the anticipated benefits of the Merger may not be realized in full or in part, including the risk that revenue or cost synergies may not be achieved or not achieved in the expected time frame. |
• | That the attention of Stratasys’ senior management may be diverted from other strategic priorities to focus on implementing the Merger, including making arrangements for the integration of Desktop Metal’s and Stratasys’ operations, assets and employees following the Merger. |
• | That Desktop Metal stockholders may not approve the Desktop Metal Merger Agreement proposal or that Stratasys shareholders may not approve the Stratasys Merger-related proposal. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of Stratasys common stock increases relative to the market price of Desktop Metal Class A common stock between the date of the Merger Agreement and the completion of the Merger. |
• | That the Merger Agreement imposes restrictions on Stratasys’ ability to solicit alternative transactions and make certain acquisitions, which are described in the sections entitled “The Merger Agreement—Interim Operations of Desktop Metal and Stratasys Pending the Merger”, “The Merger Agreement—No Solicitation” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” |
• | That there are limited circumstances in which the Stratasys board of directors may terminate the Merger Agreement or change its recommendation that Stratasys shareholders approve the Stratasys Merger-related proposal, and if the Merger Agreement is terminated under specified circumstances, including by Desktop Metal as a result of a change in recommendation of the Stratasys board of directors, then Stratasys has agreed to pay Desktop Metal a termination fee of $32.5 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | That if (a) prior to the Stratasys EGM, an acquisition proposal with respect to Stratasys is publicly proposed or disclosed (and not withdrawn at least two business days prior to the Stratasys EGM), (b) either party has terminated the Merger Agreement for failure to obtain shareholders’ approval of the Stratasys Merger-related proposals and (c) within 12 months of termination, an acquisition proposal for 50% or more of Stratasys is consummated or a definitive agreement providing for such an acquisition proposal is entered into, then Stratasys has agreed to pay Desktop Metal a termination fee of $32.5 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | That if the Merger Agreement is terminated by either party because Stratasys shareholders have not approved the Stratasys Merger proposals and at the time of the termination, the Stratasys board of directors has not made a change in recommendation, then Stratasys has agreed to reimburse Desktop Metal for Desktop Metal’s Termination Expenses in an amount not to exceed $10 million. For additional information, see the section entitled “The Merger Agreement—Termination.” |
• | The requirement that Stratasys hold a shareholder vote on the approval of the Stratasys Merger proposals, even if the Stratasys board of directors has withdrawn or changed its recommendation in favor of the Stratasys Merger proposals, and the inability of Stratasys to terminate the Merger Agreement in connection with an acquisition proposal. For additional information, see the sections entitled “The Merger Agreement—No Solicitation” and “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” |
• | The transaction costs to be incurred by Stratasys in connection with the Merger. |
• | The likelihood of lawsuits being brought against Stratasys, Desktop Metal or their respective boards in connection with the Merger or in connection with any alternative transaction. |
• | The risks associated with the occurrence of events that may materially and adversely affect the financial condition, properties, assets, liabilities, business or results of operations of Desktop Metal and its subsidiaries but that will not entitle Stratasys to terminate the Merger Agreement. |
• | The risk that a change of control may occur with respect to Stratasys prior to closing that would entitle Desktop Metal to terminate the Merger Agreement. |
• | The potential impact on the market price of Stratasys ordinary shares as a result of the issuance of the merger consideration to holders of eligible shares of Desktop Class A common stock. |
• | Various other risks described in the section entitled “Risk Factors” beginning on page 41. |
• | reviewed the Merger Agreement; |
• | reviewed certain publicly available business and financial information concerning Desktop Metal and Stratasys and the industries in which they operate; |
• | compared the financial and operating performance of Desktop Metal and Stratasys with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Desktop Metal Class A common stock and Stratasys ordinary shares and certain publicly traded securities of such other companies; |
• | reviewed certain internal financial analyses and forecasts prepared by the management of Stratasys relating to Stratasys’ businesses, and certain internal financial analyses and forecasts prepared by the management of Desktop Metal relating to Desktop Metal’s businesses and adjusted by the management of Stratasys, as well as the estimated amount and timing of the synergies, cost savings and related expenses expected to result from the Merger, or the Synergies; and |
• | performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion. |
| | Implied Equity Value Per Share of Desktop Metal Class A Common Stock | ||||
| | Low | | | High | |
2023 FV/Revenue | | | $1.25 | | | $1.95 |
2024 FV/Revenue | | | $1.40 | | | $2.20 |
| | Implied Equity Value Per Share of Desktop Metal Class A Common Stock | ||||
| | Low | | | High | |
Discounted Cash Flow Analysis (before Cost Synergies) | | | $2.45 | | | $3.35 |
Discounted Cash Flow Analysis (with Cost Synergies) | | | $3.70 | | | $5.00 |
• | the historical range of trading prices of Desktop Metal’s Class A common stock for the 52-week period ending May 23, 2023, which indicated low to high closing trading prices during such period ranging from $1.13 to $3.65; and |
• | analyst share price targets for Desktop Metal’s Class A common stock in recently published, publicly available research analysts’ reports, with share price targets ranging from $1.60 to $2.00. |
| | Implied Equity Value Per Share of Stratasys Ordinary Shares | ||||
| | Low | | | High | |
2023 FV/Revenue | | | $15.70 | | | $23.00 |
2024 FV/Revenue | | | $16.60 | | | $25.20 |
2024 FV/EBITDA (pre-SBC) | | | $17.10 | | | $20.80 |
| | Implied Equity Value Per Share of Stratasys Ordinary Shares | ||||
| | Low | | | High | |
Discounted Cash Flow Analysis | | | $23.60 | | | $29.40 |
| | Implied Exchange Ratio | ||||
| | Low | | | High | |
Public Trading Multiples Analysis | | | | | ||
2023 FV/Revenue | | | 0.054x | | | 0.124x |
2024 FV/Revenue | | | 0.056x | | | 0.133x |
| | Implied Exchange Ratio | ||||
| | Low | | | High | |
Discounted Cash Flow Analysis | | | | | ||
Before Cost Synergies | | | 0.083x | | | 0.142x |
With Cost Synergies | | | 0.126x | | | 0.212x |
Historical Trading Exchange Ratio Range(1) | | | | | ||
52-Week Period | | | 0.099x | | | 0.213x |
(1) | Reference only. |
• | the historical range of trading prices of Stratasys’ ordinary shares for the 52-week period ending May 23, 2023, which indicated low to high closing trading prices during such period ranging from $11.04 to $21.44; and |
• | analyst share price targets for Stratasys’ ordinary shares in recently published, publicly available research analysts’ reports, with share price targets ranging from $15.00 to $22.00. |
(i) | discussed the Merger and related matters with Desktop Metal and Desktop Metal’s counsel and reviewed a draft dated May 24, 2023 of the Merger Agreement; |
(ii) | reviewed the audited consolidated financial statements of Desktop Metal contained in its Annual Report on Form 10-K for the three years ended December 31, 2022 and unaudited consolidated financial statements of Desktop Metal contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023; |
(iii) | reviewed the audited consolidated financial statements of Stratasys contained in its Annual Report on Form 20-F for the three years ended December 31, 2022 and the unaudited consolidated financial statements of Stratasys contained in its Current Reports on Form 6-K relating to the financial results for the quarter ended March 31, 2023; |
(iv) | reviewed and discussed with Desktop Metal’s management and Stratasys’ management certain other publicly available information concerning Desktop Metal and Stratasys; |
(v) | held discussions with Desktop Metal’s senior management, including estimates of certain cost savings, revenue and operating synergies, merger charges and the pro forma financial impact of the Merger on Stratasys, utilized per instruction of Desktop Metal; |
(vi) | reviewed certain non-publicly available information concerning Desktop Metal, including internal financial analyses and forecasts prepared by and provided to Stifel by Desktop Metal’s management and, based on assumptions approved by Desktop Metal’s management, certain extrapolations thereto approved by Desktop Metal’s management, which is referred to, collectively, as the Desktop Metal Projections, and utilized per instruction of Desktop Metal, and held discussion with Desktop Metal’s senior management regarding recent developments; |
(vii) | reviewed certain non-publicly available information concerning Stratasys, including internal financial analyses and forecasts prepared by and provided to Stifel by Desktop Metal’s management and, based on assumptions approved by Desktop Metal’s management, certain extrapolations thereto approved by Desktop Metal’s management, which is referred to, collectively, as the Stratasys Projections, and which, together with the Desktop Metal Projections, are referred to as the Projections, and utilized per instruction of Desktop Metal, and held discussion with Stratasys’ senior management regarding recent developments; |
(viii) | reviewed and analyzed certain publicly available information concerning the terms of selected merger and acquisition transactions that Stifel considered relevant to its analysis; |
(ix) | reviewed and analyzed certain publicly available financial and stock market data relating to selected public companies that Stifel deemed relevant to its analysis; |
(x) | participated in certain discussions and negotiations between representatives of Desktop Metal and Stratasys; |
(xi) | reviewed the reported prices and trading activity of Desktop Metal Class A common stock and Stratasys ordinary shares; |
(xii) | reviewed and analyzed, based on the Desktop Metal Projections and the Stratasys Projections, the cash flows generated by Desktop Metal and Stratasys, as applicable, on a stand-alone basis to determine the present value of Desktop Metal’s and Stratasys’ respective discounted cash flows; |
(xiii) | reviewed the relative financial contributions of Desktop Metal and Stratasys to the future financial performance of the combined company on a pro forma basis; |
(xiv) | considered the results of Stifel’s efforts, at the direction of Desktop Metal, to solicit indications of interest from selected third parties with respect to a merger or other transaction with Desktop Metal; |
(xv) | conducted such other financial studies, analyses and investigations and considered such other information as Stifel deemed necessary or appropriate for purposes of the Stifel Opinion; and |
(xvi) | took into account Stifel’s assessment of general economic, market and financial conditions and Stifel’s experience in other transactions, as well as Stifel’s experience in securities valuations and knowledge of Desktop Metal’s industry generally. |
• | 3D Systems Corporation; |
• | Kornit Digital Ltd.; |
• | Nano Dimension Ltd.; |
• | Velo3D, Inc.; |
• | Markforged Holding Corporation; |
• | Prodways Group SA; and |
• | voxeljet AG. |
Multiple: | | | 1st Quartile | | | Median | | | Mean | | | 3rd Quartile |
LTM EV/Revenue | | | 1.0x | | | 1.7x | | | 2.0x | | | 3.1x |
CY 2023E EV/Revenue | | | 1.0x | | | 1.6x | | | 1.8x | | | 2.5x |
CY 2024E EV/Revenue | | | 0.9x | | | 1.5x | | | 1.5x | | | 1.9x |
| | 1st to 3rd Quartile Multiple Range | | | Implied Value Per Share Ranges of Desktop Metal Class A Common Stock | | | Implied Value Per Share Ranges of Stratasys ordinary shares | | | Implied Range of Exchange Ratios | |
LTM EV/Revenue | | | 1.0x – 3.1x | | | $0.84 – $1.90 | | | $11.24 – $29.73 | | | 0.028x – 0.169x |
CY 2023E EV/Revenue | | | 1.0x – 2.5x | | | $0.93 – $1.85 | | | $11.66 – $26.07 | | | 0.036x – 0.159x |
CY 2024E EV/Revenue | | | 0.9x – 1.9x | | | $1.10 – $2.00 | | | $12.21 – $23.79 | | | 0.046x – 0.164x |
Methodology: | | | Range | | | Implied Value Per Share Ranges of Desktop Metal Class A Common Stock | | | Implied Value Per Share Ranges of Stratasys ordinary shares | | | Implied Range of Exchange Ratios |
Terminal Multiple | | | 1.0x – 3.0x | | | $1.66 – $4.45 | | | $13.29 – $36.62 | | | 0.045x – 0.335x |
Perpetuity Growth | | | 2.0% – 4.0% | | | $2.20 – $3.43 | | | $14.28 – $23.75 | | | 0.093x – 0.240x |
| | Relative Contribution | | | |||||
| | Stratasys | | | Desktop Metal | | | Implied Exchange Ratio | |
LTM Revenue | | | 71% | | | 29% | | | 0.070x |
2023 Revenue | | | 70% | | | 30% | | | 0.076x |
2024 Revenue | | | 67% | | | 33% | | | 0.088x |
LTM Gross Profit | | | 79% | | | 21% | | | 0.046x |
2023 Gross Profit | | | 75% | | | 25% | | | 0.058x |
2024 Gross Profit | | | 69% | | | 31% | | | 0.079x |
| | Stratasys Forecasts | | | Stratasys Extrapolations | |||||||||||||||||||||||||
| | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | |
Revenue | | | $670 | | | $791 | | | $919 | | | $1,061 | | | $1,225 | | | $1,385 | | | $1,530 | | | $1,653 | | | $1,744 | | | $1,796 |
Adjusted EBITDA(a) | | | $51 | | | $91 | | | $120 | | | $157 | | | $192 | | | $243 | | | $297 | | | $351 | | | $403 | | | $449 |
Unlevered FCF(b) | | | ($7) | | | $2 | | | $22 | | | $48 | | | $72 | | | $108 | | | $150 | | | $194 | | | $240 | | | $283 |
| | Stratasys Forecasts | |||||||
| | 2024E | | | 2025E | | | 2026E | |
Revenue | | | $727 | | | $843 | | | $978 |
Adjusted EBITDA(a) | | | $56 | | | $78 | | |
| | Stratasys Forecasts | | | Stratasys Extrapolations | |||||||||||||||||||||||||
| | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | |
Revenue | | | $235 | | | $305 | | | $390 | | | $530 | | | $690 | | | $820 | | | $948 | | | $1,062 | | | $1,147 | | | $1,205 |
Adjusted EBITDA(a) | | | ($49) | | | ($15) | | | $21 | | | $85 | | | $148 | | | $172 | | | $207 | | | $242 | | | $275 | | | $299 |
Unlevered FCF(b) | | | ($88) | | | ($53) | | | ($28) | | | $22 | | | $63 | | | $86 | | | $112 | | | $140 | | | $168 | | | $194 |
| | Stratasys Forecasts | |||||||||||||
| | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | |
Revenue | | | $235 | | | $284 | | | $342 | | | $407 | | | $487 |
Adjusted EBITDA(a) | | | ($49) | | | ($28) | | | ($8) | | | $15 | | | $42 |
(a) | Adjusted EBITDA is calculated as earnings before interest, income taxes, depreciation and amortization, adjusted to exclude stock-based compensation expense, restructuring, other related costs and other one-time expenses. |
(b) | Unlevered FCF, or unlevered free cash flow, is calculated as Adjusted EBITDA less capital expenditures, and adjusted for changes in net working capital. |
| | FY 2023E | | | FY 2024E | | | FY 2025E | | | FY 2026E | | | FY 2027E | |
| | (dollars in thousands, except Gross Margin data) | |||||||||||||
Total Revenue | | | $243,500 | | | $351,626 | | | $486,642 | | | $636,332 | | | $811,730 |
GAAP Cost of Sales(1) | | | $194,500 | | | $222,600 | | | $277,200 | | | $348,000 | | | $428,600 |
GAAP Gross Profit(2) | | | $49,000 | | | $129,000 | | | $209,400 | | | $288,300 | | | $383,100 |
GAAP Gross Margin(3) | | | 20% | | | 37% | | | 43% | | | 45% | | | 47% |
GAAP Operating Expenses(4) | | | $178,700 | | | $177,700 | | | $201,500 | | | $231,200 | | | $269,000 |
GAAP Net Operating Income/(Loss)(5) | | | $(129,700) | | | $(48,700) | | | $8,000 | | | $57,100 | | | $114,200 |
Net Income/(Loss)(6) | | | $(134,000) | | | $(55,200) | | | $1,400 | | | $50,600 | | | $110,000 |
(1) | GAAP Cost of Sales consists of the cost of products and cost of services. Cost of products includes the manufacturing cost of Desktop Metal’s additive manufacturing systems and consumables, which primarily consists of amounts paid to third-party contract manufacturers and suppliers and personnel-related costs directly associated with manufacturing operations. It also includes cost of labor, materials and overhead for Desktop Metal’s produced parts offerings. Cost of services includes personnel-related costs directly associated with the provision of support services to customers, which include engineers dedicated to remote support as well as, training, support and the associated travel costs. GAAP Cost of Sales also includes depreciation and amortization, cost of spare or replacement parts, warranty costs, excess and obsolete inventory and shipping costs, and an allocated portion of overhead costs. |
(2) | GAAP Gross Profit is calculated based on the difference between Total Revenue and GAAP Cost of Sales. |
(3) | GAAP Gross Margin is the percentage obtained by dividing GAAP Gross Profit by Total Revenue. |
(4) | GAAP Operating Expenses are expenses related to research and development, sales and marketing and general and administrative. |
(5) | GAAP Net Operating Income/(Loss) is GAAP Gross Profit less GAAP Operating Expenses. |
(6) | Net Income/(Loss) is GAAP Net Operating Income/(Loss) less other income (expense), interest income (expense), change in fair value of investments and income tax benefit. |
| | FY 2023E | | | FY 2024E | | | FY 2025E | | | FY 2026E | | | FY 2027E | |
| | (dollars in thousands, except Non-GAAP Gross Margin data) | |||||||||||||
Total Revenue | | | $243,500 | | | $351,626 | | | $486,642 | | | $636,332 | | | $811,730 |
Non-GAAP Cost of Sales(1) | | | $165,300 | | | $196,400 | | | $251,000 | | | $321,800 | | | $402,400 |
Non-GAAP Gross Profit(2) | | | $78,200 | | | $155,300 | | | $235,700 | | | $314,600 | | | $409,400 |
Non-GAAP Gross Margin(3) | | | 32% | | | 44% | | | 48% | | | 49% | | | 50% |
Non-GAAP Operating Expenses(4) | | | $124,600 | | | $128,200 | | | $151,000 | | | $180,100 | | | $217,400 |
Non-GAAP Net Operating Income/(Loss)(5) | | | $(46,500) | | | $27,000 | | | $84,700 | | | $134,400 | | | $192,000 |
Adjusted EBITDA(6) | | | $(33,300) | | | $41,200 | | | $99,400 | | | $149,400 | | | $207,300 |
(1) | Non-GAAP Cost of Sales is GAAP Cost of Sales less amortization, stock-based compensation and transaction and restructuring costs. |
(2) | Non-GAAP Gross Profit is calculated based on the difference between Total Revenue and Non-GAAP Cost of Sales. |
(3) | Non-GAAP Gross Margin is the percentage obtained by dividing Non-GAAP Gross Profit by Total Revenue. |
(4) | Non-GAAP Operating Expenses is GAAP operating expenses less stock-based compensation, amortization of acquired intangible assets, restructuring expense, and acquisition-related and integration costs. |
(5) | Non-GAAP Net Operating Income/(Loss) is GAAP Net Operating Income/(Loss) less stock-based compensation, amortization of acquired intangible assets, restructuring expense, acquisition-related and integration costs, and change in fair value of investments. |
(6) | Adjusted EBITDA is EBITDA adjusted for change in fair value of investments, stock-based compensation expense, restructuring expense, goodwill impairment and transaction costs associated with acquisitions. “EBITDA” is net loss plus net interest income, provision for income taxes, depreciation, and amortization expense. |
• | Significant growth opportunities in 2024 in its dental business due to the Desktop Health partnership with Align Technology, an increase in Flexcera resin sales through new supply contracts recently signed with additional printer companies, IP DLP royalties from competitors, an increased adoption of our best in class Einstein chair-side printers and continued dental labs growing adoption of category leading Flexcera resins and our new Pro XL systems. Desktop Metal forecasts these would result in an increase in revenue of approximately $30 million in 2024 over 2023. |
• | An increase in sales of industrial binder jet systems including S-Max Pro, S-Max Flex, Shop, 25 Pro, P-50 and X160Pro systems in 2023 and 2024, which Desktop Metal forecasted to increase revenue by approximately $20 million year over year. |
• | An increase in consumable consumption due to the increase in systems active with customers in the field, which Desktop Metal has projected to grow 30% to 40% per year. |
• | Additional growth opportunities are available from scale-up of printable foam materials and Xtreme8K systems as well as adoption of Figur digital sheet metal fabrication systems. |
• | Projected gross profit is driven by estimates of contribution margin per product, previously announced cost reductions plans, and improved absorption of global fixed production overhead costs. |
• | Other key assumptions impacting profitability projections include expectations for future investment in research and development projects targeted at materials and machine development activities as well as improved absorption of general and administrative expenses. |
(i) | the dismissal or replacement of the Chief Executive Officer as of the effective time; |
(ii) | the dismissal or replacement of the Chairman of the Board as of the effective time; |
(iii) | a change in the number of directors serving on the combined company board; or |
(iv) | an election by the board to once again be subject to the Israeli Companies Law requirement to appoint external directors. |
• | Quorum: Stratasys is exempt from provisions set forth in Nasdaq Rule 5620(c), which requires each issuer (other than limited partnerships) to provide for a quorum in its by-laws for any meeting of the holders of common stock, which shall in no case be less than 33.33% of the outstanding shares of the issuer’s common voting stock. As permitted under the Israeli Companies Law, Stratasys’ articles of association provide that a quorum required for an ordinary meeting of shareholders consists of at least two shareholders present in person, by proxy or by other voting instrument, who hold at least 25% of the voting power of its ordinary shares (and in an adjourned meeting, with some exceptions, two shareholders, regardless of the voting power associated with their shares). |
• | Executive Sessions of Independent Directors: Under the Israeli Companies Law, Stratasys’ independent directors (as defined under the Nasdaq Listing Rules) do not need to meet regularly in sessions at which only they are present, as is required of U.S. domestic issuers under Nasdaq Listing Rule 5605(b)(2). Instead, the various board committees described above under “Committees of Board of Directors”, which will meet from time to time, will consist solely of independent directors (under the Nasdaq definition). |
• | Shareholder Approval: Pursuant to Israeli law, Stratasys will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Israeli Companies Law, which are different from, or in addition to, the requirements for seeking shareholder approval under Nasdaq Listing Rule 5635. |
• | organization, standing and power; |
• | each company’s subsidiaries; |
• | capitalization; |
• | authority to execute and deliver the Merger Agreement and perform each party’s obligations thereunder and enforceability of the Merger Agreement; |
• | absence of conflicts of the Merger Agreement with, or any default or violation under, organizational documents, material agreements and instruments or applicable law; |
• | receipt of necessary authorizations; |
• | required governmental filings or consents in connection with the Merger; |
• | filings with the SEC and financial statements; |
• | absence of undisclosed liabilities; |
• | accuracy of information supplied for SEC filings; |
• | absence of certain changes or events from March 31, 2023 to the date of the Merger Agreement; |
• | employee benefit plans; |
• | labor matters and employment law compliance; |
• | litigation; |
• | compliance with applicable law and applicable court orders; |
• | environmental matters; |
• | material contracts; |
• | intellectual property matters; |
• | real property matters; |
• | tax matters; |
• | related party transactions; |
• | insurance; |
• | broker fees and expenses due in connection with the Merger; |
• | qualification of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder; |
• | receipt of the opinion of a financial advisor; and |
• | stock ownership. |
• | due issuance of Stratasys ordinary shares to be issued in the Merger |
• | absence of engagement in any business or activity other than activities related to its corporate organization and the execution and delivery of the Merger Agreement; and |
• | the adoption of resolutions by the Board of Directors of the Merger Sub with respect to the Merger Agreement. |
• | declare, set aside or pay any dividends or make other distributions; |
• | split, combine, subdivide or reclassify any of its capital stock, or securities convertible into or exchangeable or exercisable for capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock; |
• | repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any of its or its affiliates’ shares of capital stock or any securities convertible into or exchangeable or exercisable for its or its subsidiaries’ capital stock; |
• | except for new grants of time-based vesting Desktop Metal Options or Desktop Metal RSU Awards or time-based vesting restricted stock unit awards of Stratasys, in either case, granted pursuant to an existing equity plan in the ordinary course of business consistent with past practice, and provided that the aggregate number of ordinary shares of Stratasys or shares of Desktop Metal Class A common stock, as applicable, subject to such equity awards granted after the date of the Merger Agreement does not exceed 1.5% of the issued and outstanding Stratasys ordinary shares or shares of Desktop Metal Class A common stock, as applicable, issue, deliver, sell, grant, pledge or otherwise encumber or subject to any lien (other than certain permitted liens): any shares of capital stock of it or its subsidiaries; any securities convertible into or exchangeable or exercisable for capital stock of it or its subsidiaries; any warrants, calls, options or other rights to acquire any shares of capital stock of it or its subsidiaries; or any rights issued by it or its subsidiaries that are linked in any way to the value of it or its subsidiaries or any of their respective capital stock; |
• | amend (x) (i) in the case of Desktop Metal, the certificate of incorporation or bylaws of Desktop Metal, or (ii) in the case of Stratasys, the articles of association of Stratasys, or (y) amend in any material respect the charter or organizational documents of any of its subsidiaries; |
• | make any material change in financial accounting methods, principles or practices; |
• | merge or consolidate with, or directly or indirectly acquire in any transaction any equity interest in or business of any person, if the aggregate amount of consideration paid or transferred by it and its subsidiaries in connection with all such transactions would exceed a total amount equal to ten percent of the aggregate cash and cash equivalents of Desktop Metal and its subsidiaries at such time; |
• | sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise encumber or subject to any lien (other than certain permitted liens), or otherwise dispose of any properties or assets (other than sales of products or services in the ordinary course of business consistent with past practice) or any interests therein that, individually or in the aggregate, have a fair market value (or result in aggregate proceeds), in the aggregate for all such transactions, in excess of $15 million; |
• | incur or refinance any indebtedness (except indebtedness solely between such party and a wholly-owned subsidiary or between wholly-owned subsidiaries); |
• | waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (i) equal to or lesser than the amounts specifically reserved with respect thereto on the balance sheet included in its SEC documents or (ii) that do not exceed $3 million in the aggregate; |
• | assign, abandon, subject to a lien (other than a permitted lien), convey title (in whole or in part), exclusively license or grant (and, in the case of Stratasys, encumber) any right or other licenses to material intellectual property rights owned or exclusively licensed to it or any of its subsidiaries, other than the abandonment of intellectual property rights or the grant of non-exclusive licenses in the ordinary course of business consistent with past practice, or enter into licenses or agreements that impose material restrictions upon it or any of its affiliates with respect to its material licensed intellectual property; |
• | amend, modify, waive or terminate any material contract, in each case if such amendment, modification, waiver or termination would have an adverse effect that, individually or in the aggregate, is material to such party and its subsidiaries, taken as a whole or (ii) enter into any contract that would be a material contract if it had been entered into prior to the date of the Merger Agreement; |
• | enter into any new line of business outside of its existing business or discontinue any existing line of business, in each case other than in the ordinary course of business consistent with past practice; |
• | except in the ordinary course of business, make, change or revoke any material tax election, file any material amended tax return, or settle or compromise any material tax liability or refund; |
• | except as required by any benefit plan or collective bargaining agreement in effect as of the date of the Merger Agreement or for actions in the ordinary course of business consistent with past practice and aligned with the annual plan presented to the Desktop Metal board of directors or Stratasys board of directors, as applicable, (i) grant or announce any cash or equity-based incentive awards, severance or termination pay, retention bonuses, transaction or change-in-control bonuses or any increase in salary, wage or other compensation, to any of its current or former employees, officers, or directors, other than in connection with certain enumerated exceptions; (ii) hire, terminate (other than for cause), or promote any employees or officers, except in the ordinary course of business consistent with past practice with respect to an employee or officer with an annual base salary and incentive compensation opportunity that does not exceed $350,000 per employee or officer; (iii) establish, adopt, enter into, amend, modify or terminate in any material respect any collective bargaining agreement or material benefit plan; (iv) take any action or agree or commit to accelerate any rights, benefits or the lapsing of any restrictions, or the funding of any payments or benefits, payable to any current or former employee, officer, or director of the applicable company or its subsidiaries; or (v) amend the terms of any outstanding equity awards, grant or announce any cash or equity-based incentive awards, severance or termination pay, retention bonuses, transaction or change-in-control bonuses or any increase in salary, wage or other compensation, to any current or former employee, officer, or director of such party or any of its subsidiaries, other than certain enumerated exceptions; |
• | with respect to Desktop Metal, amend, modify, supplement or terminate its indenture or take any action that would result in a change to the conversion rate or that would cause the redemption of the indenture to be accelerated; or |
• | agree to take or make any commitment to take any of the foregoing actions. |
• | solicit, initiate, induce, facilitate, or knowingly encourage any Acquisition Proposal with respect to Stratasys or any inquiry or proposal that may reasonably be expected to lead to such an Acquisition Proposal; |
• | enter into, participate in, maintain or continue any communications or negotiations regarding, or deliver or make available to any person any non-public information with respect to, or take any other action regarding, any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal with respect to Stratasys; |
• | enter into any letter of intent or any other contract, agreement, commitment or other written arrangement contemplating or otherwise relating to any Acquisition Proposal with respect to Stratasys; or |
• | resolve, propose or agree to do any of the foregoing. |
• | solicit, initiate, induce, facilitate, or knowingly encourage any Acquisition Proposal with respect to Desktop Metal or any inquiry or proposal that may reasonably be expected to lead to such an Acquisition Proposal; |
• | take any action to make the provisions of any takeover statute (including approving any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the Delaware General Corporation Law) inapplicable to any transaction contemplated by an Acquisition Proposal with respect to Desktop Metal; |
• | enter into, participate in, maintain or continue any communications or negotiations regarding, or deliver or make available to any person any non-public information with respect to, or take any other action regarding, any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal with respect to Desktop Metal; |
• | enter into any letter of intent or any other contract, agreement, commitment or other written arrangement contemplating or otherwise relating to any Acquisition Proposal with respect to Desktop Metal; or |
• | resolve, propose or agree to do any of the foregoing. |
• | it has received from such person a bona fide written Acquisition Proposal that, after consultation with its financial advisor and outside legal counsel, its board of directors determines in good faith is, or would reasonably be expected to result in, a Superior Proposal (and such proposal has not been withdrawn); |
• | such Acquisition Proposal was not solicited, initiated, induced, facilitated or knowingly encouraged in violation of the terms of the Merger Agreement; |
• | its board of directors determines in good faith, after having consulted with its outside legal counsel, that failure to take such action would reasonably be expected to constitute a breach of its duties under applicable law; |
• | prior to furnishing any such information or entering into such negotiations or discussions, it obtains from such person an executed confidentiality agreement containing provisions (including nondisclosure provisions and use restrictions) at least as favorable to Stratasys or Desktop Metal, respectively, as the provisions of the Mutual Confidentiality, Non-Disclosure and Standstill Agreement between Stratasys and Desktop Metal, dated as of November 5, 2022, as amended on December 12, 2022, as in effect immediately prior to the execution of the Merger Agreement, and provides a copy of the same to the other party; and |
• | concurrently with furnishing any information to such person, it furnishes such information to or makes such information available in an electronic data room to the other party, to the extent such information has not been previously furnished by it to the other party or made available to the other party. |
• | Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively; |
• | any inquiry, expression of interest, proposal, communication, request for access to non-public information relating to Stratasys or its subsidiaries, or Desktop Metal or its subsidiaries, respectively, or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; |
• | any other communication or notice that any person is considering making an Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively. |
• | keep the other party informed in all material respects and on a reasonably current basis of the status and details (including any material change to the terms and conditions thereof (including any change in price or exchange ratio)) of any Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request; |
• | provide to the other party as soon as practicable after receipt or delivery thereof (but in no event more than 24 hours of the receipt thereof) (unless received on a day that is not a business day, in which case within 48 hours of the receipt thereof) copies of all material correspondence and other written material exchanged between it or its subsidiaries, or any of their representatives, on the one hand, and any person or any of their representatives that has made an Acquisition Proposal with respect to it, inquiry, expression of interest, proposal, offer, notice or request, on the other hand, which describes any of the terms or conditions of such Acquisition Proposal; and |
• | after the date of the Merger Agreement, not enter into any agreement which prohibits it from complying with its non-solicitation obligations of the Merger Agreement. |
• | withhold or withdraw or qualify, modify or amend in a manner adverse to the other party (or publicly propose to do so) its board recommendation; |
• | fail to reaffirm or re-publish its board recommendation, within ten business days after the other party so requests in writing that such action be taken (or, if earlier, at least five Business Days prior to such party’s shareholder or stockholder meeting, as applicable); |
• | fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Stratasys ordinary shares (in the case or Stratasys) or Desktop Metal Class A common stock (in the case of Desktop Metal) has been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that such board recommends rejection of such tender or exchange offer; or |
• | publicly announce that the board of such party has recommended, adopted or approved any Acquisition Proposal with respect to such party. |
• | such party has not breached its obligations under the Merger Agreement in connection with the Acquisition Proposal where, after the date of the Merger Agreement, such unsolicited, bona fide, written Acquisition Proposal is made to such party and is not withdrawn; |
• | the board of directors of such party determines in its good faith judgment, after consulting with its outside financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal; |
• | such party has provided the other party with five business days’ prior written notice advising that it intends to effect a change of recommendation and specifying, in reasonable detail, the reasons therefor, and which written notice shall include copies of all documents pertaining to such Superior Proposal; |
• | such party, during such five business-day period, if requested by the other party, engages in good faith negotiations to amend the Merger Agreement in such a manner that such Acquisition Proposal that was determined to constitute a Superior Proposal no longer constitutes a Superior Proposal; |
• | at the end of that five business-day period, such Acquisition Proposal has not been withdrawn and in the good faith reasonable judgment of such party’s board continues to constitute a Superior Proposal (taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet point or otherwise); and |
• | at the end of that five business-day period, such party’s board of directors determines in good faith, after having consulted with its outside legal counsel, that, in light of such Superior Proposal, a failure to change its recommendation would reasonably be expected to constitute a breach of its duties under applicable law; provided that, in the event of any material revisions to the applicable Acquisition Proposal (including any change in price or exchange ratio), such party is required to deliver a new written notice to the other party and to again comply with the foregoing requirements of the Merger Agreement with respect to such new written notice (including the five business day period referenced above). |
• | such party has have provided the other party with five business days’ prior written notice advising the other party that it intends to effect a change in recommendation and specifying, in reasonable detail, the reasons therefor; |
• | such party, during such five business day period, if requested by the other party, must negotiate in good faith with respect to any changes or modifications to the Merger Agreement which would allow the board of such party not to make such change in recommendation; and |
• | at the end of such five business day period, the board of such party determines in good faith, after having consulted with its outside legal counsel, that, taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet or otherwise, a failure to make a change in recommendation would reasonably be expected to constitute a breach of the duties of such board under applicable law. |
• | was neither known by the applicable board, nor reasonably foreseeable by the applicable board, as of or prior to the date of the Merger Agreement; and |
• | does not relate to an Acquisition Proposal or a Superior Proposal or any inquiry or communications relating thereto. |
(i) | make or cause to be made, in consultation and cooperation with the other and as promptly as practicable after the date of the Merger Agreement (but in no event later than 15 business days after the date of the Merger Agreement, unless otherwise agreed by counsel for the parties), any filing with the DOJ and the FTC required under the HSR Act relating to the Merger; |
(ii) | prepare and file a draft CFIUS Notice, and, after receipt of confirmation reasonably acceptable to both Stratasys and Desktop Metal that CFIUS has no further comments or inquiries related to the draft CFIUS Notice, Stratasys and Desktop Metal shall, as promptly as practicable after such receipt, submit the CFIUS Notice; |
(iii) | prepare and file other necessary and advisable registrations, declarations, notices, petitions, applications and filings relating to the Merger, including the notice required under 22 C.F.R. section 122.4(b) of the International Traffic in Arms Regulations, with other governmental entities under antitrust, competition, foreign direct investment, trade regulation or similar law as soon as reasonably practicable or where the ability to control timing of the registration, declaration, notice, petition, application or filing is not within the control of the submitting party, commence pre-submission consultation procedures for, any registrations, declarations, notices, petitions, applications and filings with such governmental entities (and thereafter make any other required submissions and respond as promptly as reasonably practicable to any requests for additional information or documentary material); |
(iv) | obtain all consents or nonactions from any governmental entity or other person which are required to be obtained under any other antitrust, competition, foreign direct investment, trade regulation or similar law in connection with the consummation of the Merger and the other transactions contemplated hereby, including the CFIUS Approval; |
(v) | seek to avoid or prevent the initiation of any investigation, inquiry, claim, action, suit, arbitration, litigation or proceeding by or before any governmental entity challenging the Merger or the consummation of the other transactions contemplated by the Merger Agreement; and |
(vi) | furnish to the other all assistance, cooperation and information required for any such registration, declaration, notice or filing in order to achieve the effects set forth in the foregoing bullets (i) and (v). |
(i) | propose, negotiate or offer to effect, or consent or commit to, any sale, leasing, licensing, transfer, disposal, divestiture or other encumbrance, or holding separate, of any assets, licenses, operations, rights, product lines, businesses or interest therein (which is referred to as a Divestiture); and |
(ii) | take or agree to take any other action, agree or consent to, make any concession in respect of, or permit or suffer to exist any condition or requirement setting forth, any limitations or restrictions on freedom of actions with respect to, or its ability to retain, or make changes in, any assets, licenses, operations, rights, product lines, businesses or interest therein (which are referred to collectively as a Remedy), provided that, notwithstanding anything in the Merger Agreement to the contrary, neither Desktop Metal nor Stratasys, |
(1) | oppose or defend against any investigation, inquiry, claim, action, suit, arbitration, litigation or proceeding by any governmental entity to prevent or enjoin the consummation of the Merger; and |
(2) | overturn any regulatory order by any such governmental entity to prevent consummation of the Merger, including by defending any investigation, inquiry, claim, action, suit, arbitration, litigation or proceeding brought by any such governmental entity in order to avoid the entry of, or to have vacated, overturned, terminated or appealed any order that would otherwise have the effect of preventing or materially delaying the consummation of the Merger or the consummation of the other transactions contemplated by the Merger Agreement. |
(i) | cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry relating to the Merger or the transactions contemplated by the Merger Agreement; |
(ii) | promptly notify the other party of any material communication it or any of its affiliates (or their respective representatives) receives from any governmental entity relating to the Merger or the transactions contemplated by the Merger Agreement and keep the other parties informed as to the status of any such request, inquiry, investigation, or communication; |
(iii) | subject to applicable law, and to the extent practicable, permit the other party to review in advance, and consider in good faith the other party’s comments to, any proposed material communication, filing or submission by such party to any governmental entity; |
(iv) | not agree to participate in any meeting or discussion with any governmental entity in respect of any filing, investigation or inquiry concerning the Merger Agreement or the Merger or transactions contemplated by the Merger Agreement unless it consults with the other party in advance and, to the extent not prohibited by such governmental entity, gives the other party the opportunity to attend; and |
(v) | furnish the other party with copies of all material correspondence, filings and written communications between them and their Affiliates and their respective representatives on one hand, and any such governmental entity or its staff on the other hand, with respect to the Merger Agreement or the Merger or the transactions contemplated by the Merger Agreement. |
• | the number of directors constituting the board of directors of the combined company as of the effective time to be eleven; |
• | the Combined Company Board as of the effective time to be composed of five directors designated by the board of directors of Stratasys (who are referred to as Stratasys designees), five directors designated by the board of directors of Desktop Metal (who are referred to as Desktop Metal designees) and Stratasys’ Chief Executive Officer in office immediately prior to the effective time; |
• | the Non-Executive Chairman of the board of directors of the combined company to be Mr. Ric Fulop (or, if he is no longer the Chairman of the board of directors of Desktop Metal immediately prior to the effective time, Stratasys and Desktop Metal shall together take such actions as are required to appoint to such role such other member of the combined company board as is designated by the board of directors of Desktop Metal); |
• | the Lead Independent Director of the board of directors of the combined company to be Mr. Dov Ofer (or, if he is no longer the Chairman of the board of directors of Stratasys immediately prior to the effective time, Stratasys and Desktop Metal shall together take such actions as are required to appoint to such role such other member of the combined company board as is designated by the Board of Directors of Stratasys); and |
• | the positions of Chairman of the combined company board and the Lead Independent Director of the combined company board to have the roles and responsibilities set forth in Exhibit B of the Merger Agreement. |
• | the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal and the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal; |
• | the authorization for listing on Nasdaq of the Stratasys ordinary shares to be issued pursuant to the Merger Agreement, subject to official notice of issuance; |
• | (i) the termination or expiration of any waiting period (and any extension thereof) applicable to the Merger under the HSR Act; (ii) the expiration or termination of any agreement with the DOJ or the FTC not to consummate the Merger to which Desktop Metal and Stratasys are a party; (iii) obtaining the CFIUS Approval; and (iv) all other required regulatory approvals and certain conditions listed in Stratasys’ disclosure schedules to the Merger Agreement having been obtained or satisfied and remaining in full force and effect, or the expiration of the applicable waiting period (and any extension thereof) applicable in respect of such required regulatory approval; |
• | the effectiveness of the Registration Statement of which this joint proxy statement/prospectus forms a part under the Securities Act and the absence of any stop order or proceedings seeking a stop order; and |
• | the absence of any order, injunction (temporary or permanent) or decree or other similar legal restraint issued by any court or governmental entity of competent jurisdiction enjoining or preventing the consummation of the Merger being in effect and no law, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prohibits or makes illegal consummation of the Merger. |
• | the representation of Desktop Metal that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to Desktop Metal or its subsidiaries being true and correct in all respects at and as of the Closing Date as if made at and as of such time or such fact, circumstance, effect, change, event or development giving rise to the breach of such representation shall not be continuing as of the Closing Date; |
• | certain of the representations and warranties of Desktop Metal related to its capitalization being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain of the representations and warranties of Desktop Metal related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain other representations and warranties of Desktop Metal set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have an material adverse effect on Desktop Metal and its subsidiaries, and Stratasys having received a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect; |
• | the performance or compliance of Desktop Metal in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Stratasys of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect; |
• | the absence of any material adverse effect with respect to Desktop Metal or its subsidiaries after the date of the Merger Agreement that is continuing; and |
• | the amendment, modification or termination of certain agreements set forth in the Desktop Metal disclosure schedules (which are referred to as the Identified Agreements) as provided in such disclosure schedules. |
• | the representation of Stratasys that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to Stratasys or its subsidiaries being true and correct in all respects at and as of the Closing Date as if made at and as of such time or such fact, circumstance, effect, change, event or development giving rise to the breach of such representation shall not be continuing as of the Closing Date; |
• | certain of the representations and warranties of Stratasys related to its subsidiaries and capitalization (in each case only with respect to Stratasys and not its subsidiaries) being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain of the representations and warranties of Stratasys related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | certain other representations and warranties of Stratasys set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have an material adverse effect on Stratasys and its subsidiaries, and the receipt by Desktop Metal of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Stratasys to such effect; |
• | the performance or compliance of Stratasys and Merger Sub in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Desktop Metal of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Stratasys to such effect; and |
• | the absence of any material adverse effect with respect to Stratasys or its subsidiaries after the date of the Merger Agreement that is continuing. |
• | by mutual written consent of Desktop Metal and Stratasys; |
• | by either Desktop Metal or Stratasys, upon written notice to the other party if: |
○ | the Merger is not consummated on or before February 25, 2024 (which is referred to as the End Date), provided that each of Desktop Metal and Stratasys will be entitled to extend the End Date for up to two additional three-month periods if any of the required regulatory approvals have not been obtained at the applicable End Date but all of the other specified conditions to the closing of the Merger have been satisfied at such time (or are capable of being satisfied at the closing of the Merger); |
○ | (i) any governmental entity that must grant certain agreed-upon regulatory approval has denied approval of the Merger and such denial has become final and non-appealable; or (ii) any court or governmental Entity of competent jurisdiction shall have issued a final and non-appealable order, injunction or decree or other legal restraint or prohibition permanently enjoining or preventing the consummation of the Merger, provided, however, that this termination right is not available to any party if a breach by such party of its obligations under the Merger Agreement has been the principal cause of, or principally resulted in, such failure to obtain such required regulatory approval or the issuance of such order, injunction, decree or other legal restraint, as applicable; or |
○ | (i) the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal has not been obtained following a vote taken thereon at a meeting of Stratasys shareholders (subject to valid adjournment and postponement of any such meeting) or (ii) the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal has not been obtained following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting). |
• | by Desktop Metal if: |
○ | Stratasys or Merger Sub breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Stratasys or Merger Sub, as applicable, contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Stratasys or Merger Sub or failure of Stratasys’ and Merger Sub’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Stratasys’ receipt of written notice of such breach from Desktop Metal, and provided that Desktop Metal is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Desktop Metal contained in the Merger Agreement then fails to be true and correct such that certain closing conditions to the Merger Agreement could not then be satisfied; |
○ | a change of control transaction occurs with respect to Stratasys; |
○ | prior to the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal, if the board of directors of Stratasys or any committee thereof has made a change in recommendation; |
• | by Stratasys if: |
○ | Desktop Metal breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Desktop Metal contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Desktop Metal or failure of Desktop Metal’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Desktop Metal’s receipt of written notice of such breach from Stratasys, and provided that Stratasys is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Stratasys contained in the Merger Agreement then fails to be true and correct such that the closing conditions to the Merger Agreement could not then be satisfied; |
○ | a change of control transaction occurs with respect to Desktop Metal; |
○ | prior to the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal, the board of directors of Desktop Metal or any committee thereof has made a change in recommendation; or |
○ | Desktop Metal has received a written communication from or on behalf of the counterparty to any Identified Agreement (which may be made electronically) that it will not amend or terminate such agreement such that the relevant closing condition to the Merger Agreement would be satisfied on commercially reasonable terms, or the passage of 30 calendar days after the date Desktop Metal has requested in writing that such counterparty amend or terminate the Identified Agreement such that the relevant closing condition in the Merger Agreement would be satisfied on commercially reasonable terms without the counterparty’s engagement in substantive discussions relating to such request (which is referred to as a Rejection), provided that if Stratasys has failed to terminate the Merger Agreement under this termination right within 20 business days after Stratasys’ receipt of written notice that Desktop Metal has received such Rejection, such termination right, together with the closing condition relating to the Identified Agreements, will each be deemed to have been irrevocably waived. |
• | following the date of the Merger Agreement and prior to the Desktop Metal special meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Desktop Metal has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Desktop Metal stockholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Desktop Metal enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or |
• | if Stratasys terminates the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors or either Stratasys or Desktop Metal terminates the Merger Agreement as a result of the failure to obtain the approval of Desktop Metal stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of Desktop Metal’s stockholders (subject to valid adjournment and postponement of any such meeting) and, at the time of such termination, Stratasys was entitled to terminate the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors. |
• | following the date of the Merger Agreement but prior to the Stratasys shareholders’ meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Stratasys has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Stratasys shareholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Stratasys enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or |
• | if Desktop Metal terminates the Merger Agreement as a result of a change in recommendation by Stratasys’ board of directors or either party terminates the Merger Agreement as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and, at the time of such termination, Desktop Metal was entitled to terminate the Merger Agreement as a result of a change in recommendation by Stratasys’ board of directors. |
• | Audited consolidated financial statements of Stratasys as of and for the year ended December 31, 2022, included in Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023; |
• | Unaudited condensed consolidated financial statements of Stratasys as of and for the six months ended June 30, 2023, included in Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on August 9, 2023; |
• | Audited consolidated financial statements of Desktop Metal included in Desktop Metal’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023; and |
• | Unaudited condensed consolidated financial information of Desktop Metal as of and for the six months ended June 30, 2023, included in Desktop Metal's Quarterly Report on Form 10-Q filed with the SEC on August 3, 2023. |
June 30, 2023 | | | Stratasys Historical | | | Desktop Metal Historical | | | Transaction Adjustments (See Sections 3 & 4) | | | Notes | | | Pro Forma Combined Company |
| | $ In thousands | |||||||||||||
ASSETS | | | | | | | | | | | |||||
Current Assets: | | | | | | | | | | | |||||
Cash and cash equivalents | | | $144,366 | | | $121,660 | | | $— | | | | | $266,026 | |
Current portion of restricted cash | | | — | | | 824 | | | — | | | | | 824 | |
Short-term deposits | | | 61,000 | | | — | | | — | | | | | 61,000 | |
Short-term investments | | | — | | | 5,933 | | | — | | | | | 5,933 | |
Accounts receivable, net | | | 156,264 | | | 41,235 | | | — | | | | | 197,499 | |
Inventory | | | 211,186 | | | 100,330 | | | 15,000 | | | 4(c) | | | 326,516 |
Prepaid expenses and other current assets | | | 37,650 | | | 17,041 | | | — | | | | | 54,691 | |
Total current assets | | | 610,466 | | | 287,023 | | | 15,000 | | | 4(c) | | | 912,489 |
Other Assets: | | | | | | | | | | | |||||
Restricted cash, net of current portion | | | — | | | 612 | | | — | | | | | 612 | |
Property, plant and equipment, net | | | 200,994 | | | 42,307 | | | — | | | | | 243,301 | |
Goodwill | | | 92,946 | | | 112,741 | | | 58,823 | | | 4(b) | | | 264,510 |
Intangible assets, net | | | 148,613 | | | 199,609 | | | 118,391 | | | 4(b) | | | 466,613 |
Operating right-of-use assets | | | 20,513 | | | 27,973 | | | — | | | | | 48,486 | |
Long-term investments | | | 138,624 | | | — | | | — | | | | | 138,624 | |
Other non-current assets | | | 18,269 | | | 6,833 | | | 69,600 | | | 4(e) | | | 25,102 |
| | | | | (69,600) | | | 4(e) | | | |||||
Total Assets | | | $1,230,425 | | | $677,098 | | | $192,214 | | | | | $2,099,737 | |
| | | | | | | | | | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | |||||
Accounts payable | | | $69,793 | | | $25,041 | | | $— | | | | | $94,834 | |
Accrued expenses and other current liabilities | | | 50,763 | | | 28,724 | | | 24,273 | | | 5(c) | | | 103,760 |
Customer deposits | | | — | | | 9,275 | | | — | | | | | 9,275 | |
Convertible notes | | | — | | | — | | | 155,199 | | | 4(d) | | | 155,199 |
Accrued compensation and related benefits | | | 29,534 | | | — | | | — | | | | | 29,534 | |
Deferred revenues - short term | | | 51,865 | | | 12,799 | | | — | | | | | 64,664 | |
Operating lease liabilities - short term | | | 6,842 | | | 5,931 | | | — | | | | | 12,773 | |
Current portion of long term debt, net of Deferred financing costs | | | — | | | 389 | | | — | | | | | 389 | |
Total current liabilities | | | 208,797 | | | 82,159 | | | 179,472 | | | | | 470,428 | |
Long-term debt, net of current portion | | | — | | | 187 | | | | | | | 187 | ||
Convertible notes | | | — | | | 112,199 | | | 43,000 | | | 4(d) | | | — |
| | | | | | (155,199) | | | 4(d) | | | ||||
Deferred revenues - long term | | | 27,399 | | | 3,711 | | | — | | | | | 31,110 | |
Deferred income taxes - long term | | | 6,995 | | | — | | | — | | | | | 6,995 | |
Deferred tax liability | | | — | | | 8,060 | | | — | | | | | 8,060 | |
Operating lease liabilities - long term | | | 13,346 | | | 23,196 | | | — | | | | | 36,542 | |
Contingent consideration - long term | | | 26,151 | | | — | | | — | | | | | 26,151 | |
Other non-current liabilities | | | 24,510 | | | 3,127 | | | — | | | | | 27,637 | |
Total liabilities | | | 307,198 | | | 232,639 | | | 67,273 | | | | | 607,110 | |
Equity | | | | | | | | | | | |||||
Ordinary shares | | | 193 | | | 32 | | | 364 | | | 4(f) | | | 589 |
Additional paid-in capital | | | 3,073,396 | | | 1,893,548 | | | (1,300,271) | | | 4(f) | | | 3,666,673 |
Accumulated other comprehensive loss | | | (12,671) | | | (37,798) | | | 37,798 | | | 4(f) | | | (12,671) |
Accumulated deficit | | | (2,137,691) | | | (1,411,323) | | | 1,387,050 | | | 4(f) | | | (2,161,964) |
Total equity | | | 923,227 | | | 444,459 | | | 124,941 | | | | | 1,492,627 | |
Total Liabilities and Shareholders’ Equity | | | $1,230,425 | | | $677,098 | | | $192,214 | | | | | $2,099,737 |
June 30, 2023 | | | STRATASYS Historical | | | DESKTOP METAL Historical | | | Transaction Adjustments (See Sections 3 & 4) | | | Notes | | | Pro Forma Combined Company |
| | $ In thousands | |||||||||||||
Revenues | | | | | | | | | | | |||||
Products | | | $210,083 | | | $84,095 | | | $— | | | | | $294,178 | |
Services | | | 99,045 | | | 10,507 | | | — | | | | | 109,552 | |
| | 309,128 | | | 94,602 | | | — | | | | | 403,730 | ||
Cost of revenues | | | | | | | | | | | |||||
Products | | | 108,689 | | | 82,115 | | | (418) | | | 5(b) | | | 190,386 |
Services | | | 68,822 | | | 7,762 | | | — | | | 5(b) | | | 76,584 |
| | 177,511 | | | 89,877 | | | (418) | | | | | 266,970 | ||
Gross profit | | | 131,617 | | | 4,725 | | | 418 | | | | | 136,760 | |
Operating expenses: | | | | | | | | | | | |||||
Research and development, net | | | 45,780 | | | 44,367 | | | (1,154) | | | 5(b) | | | 88,993 |
Selling, general and administrative | | | 136,293 | | | 61,192 | | | (1,440) | | | 5(b) | | | 196,045 |
Total cost and expenses | | | 182,073 | | | 105,559 | | | (2,594) | | | | | 285,038 | |
Operating loss | | | (50,456) | | | (100,834) | | | 3,012 | | | | | (148,278) | |
Financial income (expenses), net | | | 1,460 | | | (1,920) | | | — | | | | | (460) | |
Interest and other (expense) income, net | | | — | | | (149) | | | 4,274 | | | 5(d) | | | 4,125 |
Loss before income taxes | | | (48,996) | | | (102,903) | | | 7,286 | | | | | (144,613) | |
Income tax benefit (expenses) | | | (4,500) | | | 534 | | | — | | | | | (3,966) | |
Net income (loss) before share in losses of associated companies | | | (53,496) | | | (102,369) | | | 7,286 | | | | | (148,579) | |
Share in losses of associated companies | | | (7,343) | | | — | | | — | | | | | (7,343) | |
Net loss | | | $(60,839) | | | $(102,369) | | | $7,286 | | | | | $(155,922) | |
| | | | | | | | | | ||||||
Net loss per share | | | | | | | | | | | |||||
Basic | | | $(0.89) | | | $(0.32) | | | — | | | 5(f) | | | $(1.45) |
Diluted | | | $(0.89) | | | $(0.32) | | | — | | | | | $(1.45) | |
Weighted average ordinary shares outstanding | | | | | | | | | | | |||||
Basic | | | 68,107 | | | 320,383 | | | — | | | | | 107,727 | |
Diluted | | | 68,107 | | | 320,383 | | | — | | | | | 107,727 |
December 31, 2022 | | | STRATASYS Historical | | | DESKTOP METAL Historical | | | Transaction Adjustments (See Sections 3 & 4) | | | Notes | | | Pro Forma Combined Company |
| | $ In thousands | |||||||||||||
Revenues | | | | | | | | | | | |||||
Products | | | $452,124 | | | $190,248 | | | $— | | | | | $642,372 | |
Services | | | 199,359 | | | 18,775 | | | — | | | | | 218,134 | |
| | 651,483 | | | 209,023 | | | — | | | | | 860,506 | ||
Cost of revenues | | | | | | | | | | | |||||
Products | | | 234,601 | | | 178,952 | | | 19,168 | | | 5(a),5(b) | | | 432,721 |
Services | | | 140,415 | | | 15,000 | | | (1,000) | | | 5(b) | | | 154,415 |
| | 375,016 | | | 193,952 | | | 18,168 | | | | | 587,136 | ||
Gross profit | | | 276,467 | | | 15,071 | | | (18,168) | | | | | 273,370 | |
Operating expenses: | | | | | | | | | | | |||||
Research and development, net | | | 92,876 | | | 96,878 | | | (1,855) | | | 5(b) | | | 187,899 |
Selling, general and administrative | | | 240,750 | | | 151,156 | | | (4,200) | | | 5(b) | | | 387,706 |
Goodwill impairment | | | — | | | 498,800 | | | — | | | | | 498,800 | |
Transaction related cost | | | — | | | — | | | 30,000 | | | 5(c) | | | 30,000 |
Total cost and expenses | | | 333,626 | | | 746,834 | | | 23,945 | | | | | 1,104,405 | |
Operating loss | | | (57,159) | | | (731,763) | | | (42,113) | | | | | (831,035) | |
Financial income (expenses), net | | | 39,136 | | | — | | | — | | | | | 39,136 | |
Interest and other (expense) income, net | | | 229 | | | (10,078) | | | 4,985 | | | 5(d) | | | (4,864) |
Loss before income taxes | | | (17,794) | | | (741,841) | | | (37,128) | | | | | (796,763) | |
Income tax benefit (expenses) | | | (5,454) | | | 1,498 | | | — | | | | | (3,956) | |
Net income (loss) before share in losses of associated companies | | | (23,248) | | | (740,343) | | | (37,128) | | | | | (800,719) | |
Share in losses of associated companies | | | (5,726) | | | — | | | — | | | | | (5,726) | |
Net loss | | | $(28,974) | | | $(740,343) | | | $(37,128) | | | | | $(806,445) | |
| | | | | | | | | | ||||||
Net loss per share | | | | | | | | | | | |||||
Basic | | | $(0.44) | | | $(2.35) | | | — | | | 5(f) | | | $(7.60) |
Diluted | | | $(0.44) | | | $(2.35) | | | — | | | | | $(7.60) | |
Weighted average ordinary shares outstanding | | | | | | | | | | | |||||
Basic | | | 66,491 | | | 314,817 | | | — | | | | | 106,111 | |
Diluted | | | 66,491 | | | 314,817 | | | — | | | | | 106,111 |
• | the impact of any potential revenues, benefits or synergies that may be achievable in connection with the Merger or related costs that may be required to achieve such revenues, benefits or synergies; |
• | changes in cost structure or any restructuring activities as such changes, if any, have yet to be determined; |
• | expenses related to those employees and executives who may not be retained in the same roles after the Merger, where such agreements have not been reached at the date of this joint proxy statement/prospectus. These expenses may include both cash and equity payments, and which amounts could be substantial. These amounts will be reflected once agreements are reached with those employees or executives. |
Outstanding shares of Desktop Metal Class A common stock as of May 25, 2023 (shares in millions) | | | 321.55 |
Desktop Metal non-employee directors RSU award | | | 0.56 |
Total of Outstanding shares of Desktop Metal Class A common stock as of May 25, 2023 (shares in millions including vested equity awards) | | | 322.11 |
Exchange ratio | | | 0.123 |
Stratasys ordinary shares to be issued (shares in millions) | | | 39.62 |
Price per share as of August 18, 2023 | | | $14.85 |
Fair value of Stratasys ordinary shares to be issued ($’millions) | | | $588.1 |
Fair value of Desktop Metal equity awards attributable to pre-combination service | | | $5.6 |
Merger consideration ($’millions) | | | $593.7 |
Purchase consideration | | | Note | | | Amount ($ in thousands) |
Fair value of total Merger consideration transferred | | | (3) | | | 593,673 |
| | | | |||
Recognized amount of identifiable assets acquired and liabilities assumed | | | | | ||
Book value of net assets | | | 4(a) | | | 444,459 |
Elimination of Desktop Metal historical intangibles | | | 4(b) | | | (199,609) |
Elimination of Desktop Metal historical deferred tax liabilities on intangibles | | | 4(e) | | | 56,794 |
Valuation allowance of Desktop Metal historical deferred tax assets | | | 4(e) | | | (56,794) |
Elimination of Desktop Metal historical goodwill | | | 4(b) | | | (112,741) |
| | | | 132,109 | ||
| | | | |||
Preliminary estimate of fair value adjustments of net assets acquired | | | | | ||
Inventories step-up | | | 4(c) | | | 15,000 |
Convertible notes adjustment | | | 4(d) | | | (43,000) |
Intangible assets, net | | | 4(b) | | | 318,000 |
Deferred tax liabilities on intangibles | | | 4(e) | | | 69,900 |
Reversal of valuation allowance on deferred tax assets of Desktop Metal | | | 4(e) | | | (69,900) |
Net assets to be acquired | | | | | 290,000 | |
Goodwill | | | 4(b) | | | 171,564 |
Total Merger consideration | | | | | 593,673 |
| | Stratasys Historical | | | Desktop Metal Historical | | | Transaction accounting adjustments | | | Notes | | | Pro forma combined | |
| | $’000 | | | $’000 | | | $’000 | | | | | $’000 | ||
Intangible assets | | | 148,613 | | | 199,609 | | | 118,391 | | | (i), (ii) | | | 466,613 |
Goodwill | | | 92,946 | | | 112,741 | | | 58,823 | | | (iii) | | | 264,510 |
i. | Reflects the elimination of the historical Desktop Metal’s intangible assets of $199.6 million and the recognition of the fair value estimate for identifiable intangible assets of $318.0 million. As part of the preliminary valuation analysis, Stratasys identified intangible assets,including developed technology, IPR&D, tradenames and customer relationships. The fair value of developed technology assets is determined primarily using the “income approach,” which requires a forecast of all of the expected future cash flows. The fair value of the tradenames assets is determined using a “Relief-from-Royalty” approach. Since all information required to perform a detailed valuation analysis of Desktop Metal’s intangible assets could not be obtained as of the date of this filing, for purposes of these unaudited pro forma condensed combined financial statements, Stratasys used certain assumptions based on publicly available transaction data for the industry to determine the fair value of the customer relationships and IPR&D. |
ii. | The following table summarizes the estimated fair values of Desktop Metal’s identifiable intangible assets and their estimated useful lives. Stratasys uses a straight-line method of amortization: |
Intangible Assets | | | Estimated fair value | | | Estimated useful life in years | | | Annual amortization expense |
| | $’000 | | | (years) | | | $’000 | |
Developed technology | | | 215,000 | | | 8 | | | 26,875 |
Customer Relationships | | | 72,000 | | | 10 | | | 7,200 |
Tradenames | | | 17,000 | | | 10 | | | 1,700 |
IPR&D | | | 14,000 | | | | | ||
Amortization expense | | | | | | | 35,775 |
iii. | Reflects adjustment to eliminate Desktop Metal’s historical goodwill of $112.7 million and record goodwill resulting from the Merger of $171.6 million. The condensed combined unaudited pro forma statement of operations for the year ended December 31, 2022 include goodwill impairment at the amount of $498.8 million in respect of Desktop Metal’s historical goodwill balance. The goodwill balance recorded following the Merger is not subject to this historical impairment. |
i. | Finished goods at estimated selling prices less the sum of costs of disposal and a reasonable profit allowance for the selling effort of a market participant; |
ii. | Work in process at estimated selling prices of finished goods less the sum of costs to complete, costs of disposal, and a reasonable profit allowance for the completing and selling effort of a market participant based on profit for similar finished goods; and |
i. | the issuance of 39.62 million Stratasys ordinary shares to Desktop Metal shareholders with a fair value of $593.7 million. Such amount includes the estimated fair value of $5.6 million of Desktop Metal equity awards exchanged for Stratasys equity awards attributable to pre-combination service; |
ii. | the elimination of the historical equity balances of Desktop Metal including share capital, additional paid-in capital, accumulated deficit, accumulated other comprehensive loss and retained earnings; |
iii. | the pro forma reduction in retained earnings of $24.3 million to reflect the estimated Merger related fees and expenses expected to be incurred by Stratasys upon completion of the Merger. |
| | Stratasys Historical | | | Desktop Metal Historical | | | Transaction accounting adjustments | | | Pro forma combined | |
| | $’000 | | | $’000 | | | $’000 | | | $’000 | |
Amortization expense year ended December 31, 2022 | | | 37,100 | | | 38,662 | | | (2,887) | | | 72,875 |
Amortization expense six months ended June 30, 2023 | | | 13,300 | | | 20,899 | | | (3,012) | | | 31,187 |
| | Six months ended June 30, 2023 | | | Year ended December 31, 2022 | |
| | (in $’thousands) | | | (in $’thousands) | |
Net loss attributable to the combined company(1) | | | (155,924) | | | (806,445) |
Historical weighted average Stratasys shares outstanding | | | 68,107 | | | 66,491 |
Desktop Metal shares converted to Stratasys shares(2) | | | 39,620 | | | 39,620 |
Pro forma basic weighted average shares outstanding | | | 107,727 | | | 106,111 |
Pro forma basic net loss per share | | | (1.45) | | | (7.60) |
Pro forma diluted net loss per share(3) | | | (1.45) | | | (7.60) |
(1) | Net loss attributable to the combined company reflects the loss as presented in the Unaudited Pro Forma Condensed Combined Statement of Operations for the combined company, including the transaction adjustments. |
(2) | Represents the estimated number of Stratasys ordinary shares to be issued to Desktop Metal stockholders after giving effect to the exchange ratio. |
(3) | The unaudited pro forma diluted earnings per share for the year ended December 2022 and six month ended June 30, 2023 is equal to the unaudited pro forma basic earnings per share due to the pro forma net loss for the combined company, which would cause the impact of share-based awards to be anti-dilutive. |
| | Six months ended June 30, 2023 | | | Year ended December 31, 2022 | |
| | | | |||
Stratasys equity awards | | | 3,298 | | | 5,116 |
Desktop Meal equity awards converted to Stratasys equity awards | | | 17,933 | | | 17,693 |
Total equity awards excluded from diluted earnings/ (loss) per share computation | | | 21,231 | | | 22,809 |
| | STRATASYS (in US$) | | | DESKTOP METAL (in US$) | |||||||
| | High | | | Low | | | High | | | Low | |
2022 | | | 27.89 | | | 11.07 | | | 5.26 | | | 1.15 |
2021 | | | 54.37 | | | 18.65 | | | 33.50 | | | 4.75 |
2020 | | | 23.03 | | | 12.07 | | | 24.77 | | | 9.40 |
2019 | | | 29.88 | | | 17.96 | | | 9.98 | | | 9.70 |
2018 | | | 25.73 | | | 17.35 | | | | |
| | STRATASYS (in US$) | | | DESKTOP METAL (in US$) | |||||||
| | High | | | Low | | | High | | | Low | |
2023 | | | 21.72 | | | 11.90 | | | 2.55 | | | 1.31 |
Third Quarter (through August 18, 2023) | | | 21.72 | | | 14.25 | | | 2.00 | | | 1.49 |
Second Quarter | | | 18.14 | | | 13.46 | | | 2.37 | | | 1.54 |
First Quarter | | | 16.55 | | | 11.90 | | | 2.55 | | | 1.31 |
2022 | | | 28.00 | | | 11.04 | | | 5.39 | | | 1.13 |
Fourth Quarter | | | 15.21 | | | 11.04 | | | 2.89 | | | 1.13 |
Third Quarter | | | 21.44 | | | 13.97 | | | 3.65 | | | 1.97 |
Second Quarter | | | 26.44 | | | 15.86 | | | 5.28 | | | 1.26 |
First Quarter | | | 28.00 | | | 19.56 | | | 5.39 | | | 3.25 |
2021 | | | 56.95 | | | 17.82 | | | 34.94 | | | 4.66 |
Fourth Quarter | | | 42.83 | | | 21.06 | | | 9.69 | | | 4.66 |
Third Quarter | | | 26.44 | | | 18.55 | | | 11.63 | | | 7.12 |
Second Quarter | | | 28.74 | | | 17.82 | | | 15.70 | | | 10.20 |
First Quarter | | | 56.95 | | | 20.35 | | | 34.94 | | | 14.02 |
Date | | | Stratasys (in US$) | | | Desktop Metal (in US$) | | | Equivalent value of Merger consideration per share of Desktop Metal Class A common stock based on price of Stratasys on Nasdaq (in US$) |
May 24, 2023 | | | 14.88 | | | 1.75 | | | 1.83 |
August 18, 2023 | | | 14.85 | | | 1.59 | | | 1.83 |
Name | | | Cash ($)(1) | | | Equity ($)(2) | | | Benefits ($)(3) | | | Total ($) |
Ric Fulop | | | 1,073,000 | | | — | | | 24,090 | | | 1,097,090 |
Jason Cole | | | 1,100,000 | | | 2,820,000 | | | 14,498 | | | 3,934,498 |
James Haley(4) | | | — | | | — | | | — | | | — |
Jonah Myerberg | | | 700,000 | | | 1,024,629 | | | 24,090 | | | 1,748,719 |
Thomas Nogueira | | | 640,000 | | | 1,374,547 | | | 24,090 | | | 2,038,637 |
Arjun Aggarwal(4) | | | — | | | — | | | — | | | — |
Michael Jafar(4) | | | — | | | — | | | — | | | — |
(1) | The amount shown consists of a lump sum cash severance payment equal to one times the sum of the applicable named executive officer’s annual base salary and target bonus for the 2023 calendar year. Such severance payment is considered to be a “double-trigger” payment, which means that both a change of control, such as the Merger, and a qualifying termination of employment (on or within 12 months following the Merger) must occur prior to any payment being provided to such named executive officer. |
(2) | The amount shown reflects the potential value that the applicable named executive officer could receive in connection with accelerated vesting and settlement of the Desktop Metal equity awards. The accelerated vesting of the Desktop Metal Options, Desktop Metal RSUs and performance-based RSU awards is considered to be a “double-trigger” benefit, because both a change of control, such as the Merger, and a qualifying termination of employment (within the 12 months following the Merger) must occur for such accelerated vesting to be provided to the named executive officer. The estimated value of the benefit with respect to each type of award is set forth in the table below: |
Name | | | Value of Desktop Options ($) | | | Value of Desktop Restricted Stock Awards (S) | | | Value of Desktop RSU Awards (S) | | | Value of Desktop Performance- Based RSU Awards ($)* | | | Total ($) |
Ric Fulop | | | — | | | — | | | — | | | — | | | — |
Jason Cole | | | — | | | — | | | 2,820,000 | | | — | | | 2,820,000 |
Jonah Myerberg | | | 2,891 | | | — | | | 1,021,739 | | | — | | | 1,024,629 |
Thomas Nogueira | | | 13,227 | | | — | | | 1,361,319 | | | — | | | 1,374,547 |
* | The 2021 Founder Awards vest upon a termination without cause or resignation for good reason following a change of control provided that the market capitalization goal applicable to the award has been achieved as of the date of the change of control. As of July 31, 2023, no market capitalization goals have been achieved, and Desktop Metal does not anticipate any market goals to be achieved before the completion of the Merger. Accordingly, Desktop Metal expects that the 2021 Founder Awards will be forfeited upon the completion of the Merger, and there is no expected payout with respect to the awards. |
(3) | The amounts shown in this column represent the value of COBRA premiums for continued group health, dental and vision benefits for 12 months for the applicable named executive officer. Like the severance payments, these COBRA benefits would be considered “double-trigger” benefits. |
(4) | Mr. Haley, Mr. Jafar and Mr. Aggarwal each terminated employment with Desktop Metal in 2022. Each such named executive officer’s separation was not in connection with the Merger and none of them will be entitled to any Merger-related compensation. |
• | brokers and dealers or traders in securities subject to a mark-to-market method of accounting; |
• | mutual funds; |
• | tax-exempt organizations, qualified retirement plans, individual retirement accounts or other tax deferred accounts or governmental agencies, instrumentalities or other governmental organizations; |
• | banks or other financial institutions, underwriters, insurance companies, real estate investment trusts or regulated investment companies; |
• | U.S. expatriates or former citizens or long-term residents of the United States; |
• | persons that own (directly, indirectly or by attribution) 5% or more (by vote or value) of the stock of Desktop Metal prior to the Merger or of Stratasys after the Merger (except as specifically addressed herein); |
• | partnerships, other entities or arrangements classified as partnerships for U.S. federal income tax purposes, “S corporations” or other pass-through entities or arrangements for U.S. federal income tax purposes or beneficial owners of such entities or arrangements; |
• | persons holding Desktop Metal Class A common stock or Stratasys ordinary shares as part of a straddle, hedging or conversion transaction, constructive sale or other integrated or conversion transaction or other arrangement involving more than one position; |
• | persons subject to special tax accounting rules as a result of any item of income relating to Desktop Metal Class A common stock or Stratasys ordinary shares being recognized on an applicable financial statement; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | U.S. holders that hold Desktop Metal Class A common stock or Stratasys ordinary shares in connection with a trade or business conducted outside the United States; |
• | persons that hold or received Desktop Metal Class A common stock or Stratasys ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation for services; |
• | grantor trusts; and |
• | controlled foreign corporations, passive foreign investment companies, expatriated entities subject to Section 7874 of the Code and corporations that accumulate earnings to avoid U.S. federal income tax. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income tax regardless of its source; or |
• | a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) are authorized to control all substantial decisions of the trust; or (2) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a “United States person” for U.S. federal income tax purposes. |
• | 75% or more of its gross income for such year is passive income; or |
• | 50% or more of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. |
• | the gain or excess distribution will be allocated ratably over the period during which the U.S. holder held the Stratasys ordinary shares; |
• | the amount allocated to the current taxable year, and to any taxable year during the U.S. holder’s holding period before the first day of the first taxable year in which Stratasys became a PFIC, will be treated as ordinary income; and |
• | the amount allocated to other prior taxable years not described in the preceding bullet will be subject to the highest tax rate in effect for that taxable year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
• | the gain is effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. holder), in which case the non-U.S. holder generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. holder and, in the case of a non-U.S. holder that is a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable income tax treaty rate; |
• | the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met, in which case such non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% on the amount by which such non-U.S. holder’s capital gains allocable to U.S. sources, including gain realized upon the exchange of Desktop Metal Class A common stock for Stratasys ordinary shares, exceed any capital losses allocable to U.S. sources, except as otherwise required by an applicable income tax treaty; or |
• | Desktop Metal is or has been a “United States real property holding corporation” (referred to as a USRPHC) for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the disposition or the non- U.S. holder’s holding period for the Desktop Metal Class A common stock, except, in the case where shares of the Desktop Metal Class A common stock are “regularly |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
Authorized and Outstanding Share Capital | | | Stratasys’ authorized capital is one class of ordinary shares, NIS 0.01 par value. Under the amended articles, the authorized share capital will consist of NIS 4,500,000, divided into 450,000,000 ordinary shares, NIS 0.01 par value. | | | As of the date of this joint proxy statement/prospectus, Desktop Metal is authorized to issue 550,000,000 shares of capital stock, divided into two classes consisting of: 500,000,000 shares of Class A Common Stock, par value $0.0001 per share, which is referred to as the Desktop Metal Class A common stock; and 50,000,000 shares of preferred stock, par value $0.0001 per share. The Desktop Metal Board is authorized to provide, from time to time, for the issuance of Desktop Metal preferred stock in one or more series. |
| | | |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
Size of the Board | | | Under the amended articles, the number of members of the board of directors shall be between seven and eleven, as to be determined from time to time by the combined company’s board. Upon consummation of the Merger, the combined company’s board of directors will consist of eleven (11) directors. During the initial two-year term following completion of the Merger, any change to the size of the board requires approval by at least two-thirds of the directors then in office. Under the Israeli Companies Law, a public company must generally have at least two external directors who meet certain independence and non-affiliation criteria. Pursuant to regulations under the Companies Law, companies with shares traded on certain U.S. stock exchanges, including Nasdaq, may, subject to certain conditions (primarily that the company does not have a controlling shareholder), “opt out” of the Israeli Companies Law requirement to appoint external directors. Stratasys has made such an “opt out”. Under the amended articles, during the initial two-year term after completion of the Merger, a board decision to reverse that “opt out” requires approval by at least two-thirds of the directors then in office. | | | The Desktop Metal charter provides that the total number of directors of Desktop Metal will be determined from time to time by resolution the Desktop Metal Board. The Desktop Metal bylaws provide that directors need not be stockholders. The Desktop Metal Board currently has 9 members. |
| | | | |||
Election and Term of Directors | | | Under the amended articles, commencing as of the first annual general meeting of shareholders to be held after the one-year anniversary of the effective time, directors will be elected at each annual general meeting of shareholders by a majority of the participating votes cast by holders of shares present or represented by proxy. Directors serve until the next annual general meeting of shareholders (approximately for one-year terms). | | | The Desktop Metal charter provides that Desktop Metal stockholders shall elect directors for a term of three years or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. At all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect directors. |
Shareholder/Stockholder-Nominated Director | | | Any shareholder of the Company holding at least one percent (1%) of the voting rights of the Company may request to include on the agenda of a General Meeting the nomination of a person to be proposed to the shareholders for election | | | The Desktop Metal bylaws provide that a stockholder must give advance written notice to Desktop Metal of a director nomination. In order to make such a nomination a stockholder must satisfy certain procedural requirements including, |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | as a director, provided that such proposal complies with the amended articles and applicable law. Unless otherwise determined by the board, such a proposal request is deemed to be a matter that is appropriate to be considered only at an annual general meeting of shareholders. | | | among others, providing timely notice of the nomination as well as the disclosure of certain information about both the nominating stockholder and the nominee. The Desktop Metal bylaws do not provide stockholders holding shares of Desktop Metal Class A common stock with the ability to include director nominations in Desktop Metals’ proxy statement. | |
| | | | |||
Removal of Directors | | | Directors may be removed from office only upon: (a) resignation; (b) the vote of holders of a majority shareholders present and voting at the applicable annual general meeting of the combined company; (c) court order is given in accordance with Section 233 of the Israeli Companies Law; (d) incapacitation or death; (e) being prevented by applicable law from serving as a director of the combined company; (f) declared bankrupt; (g) the board terminates his office according to Section 231 of the Israeli Companies Law; or (h) his period of office has terminated in accordance with the provisions of the amended articles. During the initial two-year term after completion of the Merger, the dismissal or replacement of the Chairman of the Board of Directors as of the effective time of the Merger requires approval by at least two-thirds of the directors then in office. | | | The Desktop Metal charter provides that, subject to the Stockholders Agreement and the rights of holders of any series of Desktop Metal preferred stock, if any, to elect directors, no director may be removed except for cause, and directors may be removed for cause only by the affirmative vote of shares representing at least two-thirds (66 and 2/3%) of the shares then entitled to vote at an election of directors. |
| | | | |||
Vacancies on the Board | | | In the case of a vacancy on the board, or an opening on the board due to the number of directors then serving being less than the then-current authorized size of the board set by the board from time to time, the remaining or incumbent directors then in office may (1) appoint additional director(s) in place of the director(s) whose office(s) have been vacated, or to fill an unoccupied seat within the then-authorized size of the board, as applicable, for a term of office equal to the remaining period of the term of office of the director(s) whose office(s) have been vacated or, in the case of a new opening, until the next annual general meeting, or (2) in the case of a vacated board seat, continue to act for the | | | The Desktop Metal charter provides that, subject to the Stockholders Agreement and the special rights of the holders of any class or series of Desktop Metal preferred stock, if any, to elect directors, newly created directorships resulting from any increase in the number of directors and any vacancies on the Desktop Metal Board resulting from death, resignation, disqualification, retirement, removal, disqualification or other cause will be filled exclusively by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | remainder of the term of the vacated director so long as their number does not fall below the seven director minimum prescribed by the amended articles. If the number of directors falls below that minimum, the board of directors must either appoint additional directors or call a shareholder meeting for the appointment of additional directors or for the election of a new board of directors | | | ||
| | | | |||
Board Quorum and Vote Requirements | | | The Board of Directors may prescribe the quorum required for the conduct of business. Until otherwise decided a quorum shall be constituted by the presence of a majority of the members of the board then serving in office. Except as otherwise required by the Israeli Companies Law or the amended articles, a resolution is adopted if approved by a simple majority of the directors present and voting at any meeting at which a quorum is present. | | | The Desktop Metal bylaws provide that the holders of a majority of all of the shares of the stock entitled to vote at a meeting, present in person, by remote communication or represented by proxy, will constitute a quorum for the meeting. The Desktop Metal charter provides that, except as otherwise may be provided by law or by the Desktop Metal charter, each holder of Desktop Metal Class A common stock is entitled to one (1) vote for each share of Desktop Metal Class A common stock held of record by such holder as of the record date for determining stockholders entitled to vote on each matter submitted to a vote of stockholders. The Desktop Metal charter and the Desktop Metal bylaws do not provide for cumulative voting. The Desktop Metal bylaws provide that a stockholder entitled to vote may vote in person or by proxy. |
| | | | |||
Action of the Board of Directors Without a Meeting | | | Actions required or permitted to be taken at a meeting of the board may be taken without a meeting in any manner permitted by applicable law, if all members of the board that are entitled to vote on the applicable matter consent thereto. | | | The Desktop Metal charter provides that stockholders may not take action by written consent, but may only take action at annual or special meetings of stockholders. As a result, a holder controlling a majority of capital stock would not be able to amend the bylaws or remove directors without holding a meeting of stockholders called in accordance with the bylaws. Further, the Desktop Metal charter provides that only the chairperson of the board of directors, a majority of the board of directors, the Chief Executive Officer or the President may call special meetings of stockholders, thus prohibiting a stockholder from calling a special meeting. These |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | | | provisions might delay the ability of stockholders to force consideration of a proposal or for stockholders controlling a majority of capital stock to take any action, including the removal of directors. | ||
| | | | |||
Approval of Certain Transactions and Matters | | | Under the Israeli Companies Law, a merger is generally required to be approved by the shareholders and board of directors of each of the merging companies. If the share capital of the company that will not be the surviving company is divided into different classes of shares, the approval of each class is also required, unless determined otherwise by a court. A merger will not be approved if it is objected to by shareholders holding a majority of the voting rights participating and voting at the meeting, after excluding the shares held by the other party to the merger, by any person who holds 25% or more of the other party to the merger or any other person on behalf of such other party and by the relatives of and corporations controlled by these persons. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties of the merger. In addition, a merger can be completed only after all approvals have been submitted to the Israeli Registrar of Companies, or the Registrar, and 30 days have passed from the time that shareholder resolutions were adopted in each of the merging companies and 50 days have passed from the time that a proposal for approval of the merger was filed with the Registrar. | | | |
| | | | |||
Stockholder/ Shareholder Meetings | | | The annual general meeting of the combined company’s shareholders is to be held at such date and time as determined by the board of directors, but must be held each calendar year and no later than fifteen months after the last annual meeting. | | | The Desktop Metal charter provides that special meetings of stockholders may be called only by or at the direction of the Desktop Metal Board, the chairperson of the Desktop Metal Board, Desktop Metal’s chief executive officer or Desktop Metal’s president. Desktop Metal stockholders may not call nor request a |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | Under the Israeli Companies Law and the amended articles, extraordinary general meetings of the combined company’s shareholders may be called by the board of directors at any time and shall be called at the request of (a) two directors, (b) one-quarter of the directors in office, (c) shareholder(s) holding at least 5% of the outstanding ordinary shares of the combined company and at least 1% of the combined company’s voting rights, or (d) shareholder(s) holding at least 5% of the combined company’s voting rights. The chairman of the board of directors or such other person who is appointed for such purpose by the board of directors serves as chairman at a shareholders’ meeting. If within 15 minutes from the time appointed for the meeting, the designated chairman for the meeting is not present, the shareholders present at the meeting shall instead elect any shareholder to serve as chairman of the meeting. | | | special meeting. No business may be transacted at any special meeting of stockholders other than the business specified in the notice of such meeting. The Desktop Metal Board may postpone, reschedule or cancel any previously scheduled special meeting of stockholders. | |
| | | | |||
Stockholder/ Shareholder Quorum Requirements | | | The presence in person or by proxy of two or more shareholders who jointly hold 25% of the combined company’s voting rights at a general meeting of shareholders constitutes a quorum for the transaction of business at such meeting. If no quorum is present within half an hour after the time set for the meeting, whether an annual or extraordinary general meeting, the meeting shall be adjourned to one week from that date, or to such other, later date and time determined by the board of directors and indicated in the notice of the original meeting, unless such day shall fall on a statutory holiday (either in Israel or in the U.S.), in which case the meeting will be adjourned to the first business day afterwards which is not a statutory holiday. At such adjourned meeting, the presence of two or more shareholders holding any number of shares constitutes a quorum for the transaction of business, unless the original meeting was called based on the request of shareholders (as described above under “Stockholder/Shareholder Meetings”), in which case the presence of one or more shareholders holding the number of | | | The Desktop Metal bylaws provide that the holders of a majority of all of the shares of the stock entitled to vote at a meeting, present in person, by remote communication or represented by proxy, will constitute a quorum for the meeting. |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | shares required for making the request constitutes a quorum at the adjourned meeting. | | | ||
| | | | |||
Notice of Meetings | | | Under the Israeli Companies Law and the regulations promulgated thereunder, general meetings generally require prior notice of not less than twenty-one (21) days, and for certain matters specified in the Israeli Companies Law (for example, the appointment or dismissal of directors, the approval of a merger or transactions with a controlling shareholder), not less than thirty-five (35) days. Under the amended articles, Stratasys is not required to deliver notice of general meetings of Stratasys’ shareholders or of any adjournments thereof to any shareholder, and notice by Stratasys which is published in a press release via an international wire service and furnished in a Form 6-K or 8-K to the SEC, shall be deemed to have been duly given to all of the shareholders on the date of such publication. Action may only be taken concerning any agenda item included in the notice provided to shareholders. | | | The Desktop Metal bylaws provide that written notice of the place, if any, date and time of the meeting, means of remote communication, if any, of each meeting of the stockholders will be given not less than ten (10) days nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting. The notice of a special meeting will also state the purpose or purposes for which the meeting is called. |
| | | | |||
Advance Notice Provisions | | | Pursuant to the Companies Law and regulations promulgated thereunder, shareholders holding at least one percent (1%) of the combined company’s voting rights may propose any matter appropriate for deliberation at a general meeting of shareholders to be included on the agenda of such meeting, by submitting a proposal to the board of directors. Such proposal must be submitted within three (3) days or, in case the agenda for the meeting includes certain matters specified in the Israeli Companies Law, within seven (7) days following the company’s publishing notice of the meeting. In the alternative, a company may publish a preliminary notice regarding its intention to convene a general meeting of shareholders at least twenty-one (21) days prior to publishing the actual notice of the general meeting, in which case requests for adding matters to the agenda of the meeting may be submitted by shareholders within fourteen (14) days of the preliminary notice. Any proposal to | | | The Desktop Metal bylaws provide that a stockholder must give advance written notice to Desktop Metal of any proposal for business to be transacted at an annual meeting of the stockholders. In order to make such a proposal a stockholder must satisfy certain procedural requirements including, among others, providing timely notice of the proposal as well as the disclosure of certain information about the nominating stockholder and the proposal. |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | add a matter to the agenda of a general meeting must further comply with the information requirements under applicable law and the combined company’s amended articles. | | | ||
| | | | |||
Action of Stockholders/ Shareholders by Written Consent | | | The Israeli Companies Law does not allow action of shareholders of a public company by written consent in lieu of a meeting. | | | The Desktop Metal charter provides that any action required or permitted to be taken by the stockholders must be effected at an annual or special meeting of the stockholders, and shall not be taken by written consent in lieu of a meeting. Any action required or permitted to be taken by the holders of any series of Desktop Metal preferred stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable certificate of designation relating to such series of Desktop Metal preferred stock, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the relevant series of Desktop Metal preferred stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to Desktop Metal in accordance with the applicable provisions of the DGCL. |
| | | | |||
Shareholder/Stockholder Rights Plan | | | Stratasys currently has a limited duration shareholder rights plan that will expire at the Stratasys EGM. If Stratasys Proposal 2 is presented and approved at the Stratasys EGM, the plan will be amended to extend until July 24, 2024 (the one-year anniversary of its original expiration date) and will therefore remain in effect for the combined company (as applicable) until that date, even after completion of the Merger. | | | On May 26, 2023, Desktop Metal adopted a limited duration stockholder rights plan, which is scheduled to expire on the earlier of (i) July 24, 2024 and (ii) the effective date of the Merger. |
| | | | |||
Amendment of Certificate of Incorporation, Bylaws, Articles of Association | | | Under the Israeli Companies Law, the articles of association set forth substantially all of the provisions that under Delaware law are split between the certificate of incorporation and the bylaws of a company. | | | The Desktop Metal charter provides that, in addition to any affirmative vote required by law, the affirmative vote of the holders of at least two-thirds (66 and 2/3% ) of the total voting power of all outstanding shares of capital stock of Desktop Metal entitled to |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | Other than as specifically provided in the Companies Law and in the amended articles, an amendment to the amended articles requires approval by the holders of a majority of the voting power represented at the meeting in person or by proxy and voting thereon. Any amendment relating to insurance, indemnity and exculpation will only take effect prospectively, unless otherwise provided by applicable law. During the initial two-years following completion of the Merger, the approval of two-thirds of the voting power of the shareholders of the combined company is required for an amendment to the amended articles provisions that require the approval of two-thirds of the directors then in office to change certain key provisions related to the agreed-upon governance scheme for the combined company, such as the removal of the Chairman of the Board or Chief Executive Officer of the combined company. These provisions are described in more detail under “The Merger—Governance of the Combined Company after the Merger—Management; Board of Directors.” | | | vote thereon, voting together as a single class, is required to amend Part B of Article IV (relating to the Desktop Metal preferred stock), Article V (relating to the Desktop Metal Board), Article VI (relating to action by the stockholders), Article VII (relating to liability of directors), Article VIII (relating to indemnification of directors and officers of the Company), Article IX (relating to forum selection) and Article X (relating to amendments). The Desktop Metal charter provides that the Desktop Metal Board may adopt, amend or repeal the Desktop Metal bylaws. Further, the Desktop Metal bylaws may be amended, in whole or in part, by the affirmative vote of the shares representing not less than two-thirds (66 and 2/3%) of the voting power of all outstanding shares of capital stock of Desktop Metal generally entitled to vote in an election of directors, voting together as a single class. | |
| | | | |||
Indemnification and Insurance of Directors, Officers and Employees | | | As permitted under the Companies Law, the amended articles provide that the combined company is entitled to agree in advance or retroactively to indemnify any office holder (that is, executive officer or director) for any obligation or expense imposed on him or her in consequence of any action which was performed by the office holder in his or her capacity as an office holder of the combined company, in respect of any of the following: (a) a monetary obligation imposed on the office holder in favor of another person pursuant to a judgment, including a judgment given in settlement, or a court approved settlement or arbitrator’s award; (b) reasonable litigation expenses, including legal fees, incurred by an office holder or which he is ordered to pay by a court, in proceedings filed against him or her by the combined company or on its behalf or by another person, or in a criminal charge of which he or she is acquitted, or in a criminal charge of which he or she is convicted of an offense that does not require proof of criminal intent; (c) reasonable litigation | | | The Desktop Metal bylaws provide that Desktop Metal will indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director of officer of Desktop Metal who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Desktop Metal or, while serving as a director or officer of Desktop Metal, is or was serving at the request of Desktop Metal as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise, or non-profit entity only if such proceeding was authorized in the specific case by the Desktop Metal Board. The right to indemnification covers all liability and loss suffered and expenses |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | expenses, including legal fees, incurred by an office holder as a consequence of an investigation or proceedings carried out against the office holder by an authorized body and which concluded without the filing of an indictment against the office holder and without imposing any financial liability on the office holder as an alternative to criminal proceedings, or which ended without the filing of an indictment against the office holder but with the imposition of financial liability as an alternative to criminal proceedings, in an offense where criminal intent is not required. However, the combined company may undertake in advance to indemnify any officer holder for obligations and expenses as set out above, only provided that such undertaking is limited to events which in the board of directors’ opinion are foreseeable at the time of providing the indemnity undertaking in view of the combined company’s activities at that time, and in such amount and/or criteria as the board of directors deems reasonable in view of the combined company’s activities at that time and such events, sums and criteria shall be detailed in the undertaking instrument. The Israeli Companies Law provide that these indemnification provisions do not apply in the following cases: (a) breach of the duty of loyalty to the combined company, unless the office holder acted in good faith and had a reasonable basis for presuming that the act would not adversely affect the best interests of the combined company; (b) a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder, (c) an act or omission committed with intent to derive illegal personal benefit; or (d) a fine, civil fine, monetary sanction or forfeit levied against the office holder. The combined company may also purchase insurance to cover the liability of any office holder as a result of any of the following: (a) a breach of the duty of care to the combined company or to another person; (b) a breach of the duty of loyalty to the combined company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not | | | (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred by such person in connection with such proceeding. It also includes the right to be paid by the Company the expenses incurred in defending any proceeding in advance of its final disposition; provided, however, that such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified for the expenses. Such rights will continue as to an indemnitee who has ceased to be a director or officer and will inure to the benefit of his or her estate, heirs, executors, administrators, legatees and distributees. |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | adversely affect the best interests of the combined company; and (c) a monetary obligation imposed on him or her in favor of another person in respect of an act done in his or her capacity as an office holder. Pursuant to the Israeli Companies Law, indemnification of, exculpation of and procurement of insurance coverage for, office holders in a public company that are not directors must be approved by the audit committee, the board of directors and, if the office holder is a director or a controlling shareholder, also by the company’s shareholders. | | | ||
| | | | |||
Conflict of Interest; Fiduciary Duty | | | The Israeli Companies Law provides that an office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of loyalty requires avoiding any conflict of interest, not competing with the company, not exploiting any business opportunity of the company in order to receive personal advantage for himself or herself or others, and revealing documents or information relating to the combined company’s affairs which the office holder has received by virtue of his or her position as an office holder. Under the amended articles, the combined company may exempt an office holder in advance for all or any of his or her liability for damage in consequence of a breach of his or her duty of care to the combined company. Such waiver in advance shall not apply to breach of duty of care in a distribution, as defined in the Israeli Companies Law. Under the Israeli Companies Law, approval of compensation of office holders who are not directors generally requires approval of the audit committee and board of directors. Compensation of directors of a publicly traded company requires the approval of the audit committee, the board of directors and the company’s shareholders. The Israeli Companies Law requires that an office holder promptly disclose any “personal interest” that he or she may have | | | The Desktop Metal charter provides that a director of Desktop Metal will not be personally liable to Desktop Metal or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same now exists or may hereafter be amended. The amendment, repeal or modification of such provision in Desktop Metal’s charter, or the adoption or any provision of the Desktop Metal charter inconsistent with this provision shall not adversely affect any right or protection of a director of Desktop Metal occurring prior to such amendment, repeal, modification or adoption. Under Delaware law, Directors and officers must: (i) act in good faith, with due care, and in the best interest of the corporation and all of its stockholders; (ii) refrain from self-dealing, usurping corporate opportunities and receiving improper personal benefits; and (iii) make decisions on an informed basis, in good faith and in the honest belief that the action was taken in the best interest of the corporation and its stockholders will be protected by the “business judgment rule.” |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | and all related material information known to him or her, in connection with any existing or proposed transaction of the company. In the case of a transaction with an office holder or with another person in which an office holder has a “personal interest” which is not an extraordinary transaction, subject to the office holder’s disclosure of his or her interest, board approval is sufficient for the approval of the transaction. The transaction must not be adverse to the company’s interest. If the transaction is an extraordinary transaction (a transaction not in the ordinary course, or which is not on market terms, or that is likely to have a material impact on the company’s profitability, properties or obligations), it must be approved by the audit committee and the board of directors. Generally, an office holder who has a personal interest in a matter that is considered at a meeting of the board of directors or the audit committee may not be present at the meeting or vote thereon. Under the Israeli Companies Law, a shareholder has a duty to act in good faith towards the company and the other shareholders and refrain from abusing his or her power in the company. Under the Israeli Companies Law, the duty of loyalty requires that each director (and officer) shall act in good faith and in the best interests of the company (including, inter alia, refraining from any activity that is competitive with the business of the company and refraining from exploiting any business opportunity of the company for the purpose of gaining a personal advantage or otherwise and disclosing to the company of any information pertinent to its affairs and which came into the possession of the director or officer in his or her capacity as such). | | | ||
| | | | |||
Business Combinations; Interested Shareholder Transactions; Anti-Takeover Effects | | | Under the Israeli Companies Law, the acquisition of shares in a public company such as the combined company whereby the acquiring person would obtain a controlling interest (an interest of 25% or more) is not | | | The Desktop Metal charter and bylaws contain provisions that may delay, defer or discourage another party from acquiring control of Desktop Metal. Desktop Metal expects that these provisions will |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | permitted if the company does not already have a shareholder that has a controlling interest, and an acquisition whereby the acquiring shareholder would thereafter hold more than 45% of the voting rights in the company is not permitted if there is no other 45% shareholder in the company, in each case except by way of a tender offer in accordance with the provisions of special tender offer. These anti-takeover limitations do not apply to a purchase of shares by way of a private placement in certain circumstances provided under the Israeli Companies Law. The Israeli Companies Law provides that an extraordinary transaction of a public company with a controlling shareholder thereof (in general defined as a person who has the ability, directly or indirectly, to direct the activities of the company, including, without limitation, the holding of at least 25% of the voting power) or of a public company with another entity in which a controlling shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest, or payment of compensation to a controlling shareholder, requires approval of such company’s audit committee (or in the case of payment of compensation, the compensation committee), board of directors and a majority of the shares voting on the matter, provided that either (i) at least a majority of the votes of shareholders who have no personal interest in the matter, participating at the meeting vote in favor of the transaction, or (ii) the total number of objecting votes of such disinterested shareholders does not exceed 2% of the total voting rights in the company. | | | discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of Desktop Metal to first negotiate with the board of directors, which may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give the board of directors the power to discourage acquisitions that some stockholders may favor. Section 203 of the DGCL generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder unless: • prior to such transaction, the corporation’s board of directors approved either the business combination or the transaction in which the stockholder became an interested stockholder; • upon completion of such transaction, the interested stockholder owns at least 85% of the outstanding voting stock (with certain exclusions); or • at the time or after the person became an interested stockholder, the business combination was approved by the corporation’s board of directors and authorized by a vote of at least 662∕3% of the outstanding voting stock of the corporation not owned by the interested stockholder. A “business combination” includes mergers, asset sales, stock sales and other transactions resulting in a financial benefit to the stockholder. An “interested stockholder” is defined as an entity or person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) beneficially owning 15% or more of the outstanding |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
| | | | voting stock of the corporation, based on voting power, and any entity or person affiliated with or controlling or controlled by such an entity or person. A Delaware corporation may opt out of Section 203. Desktop Metal has not done so. | ||
| | | | |||
Dissenters’ or Appraisal Rights | | | The Israeli Companies Law does not provide for shareholders’ appraisal rights except for the appraisal by a court under limited circumstances in connection with an acquisition by means of a tender offer for all of the shares of a publicly traded company. | | | Under Section 262 of the DGCL a stockholder of a Delaware corporation generally has appraisal rights in connection with certain mergers or consolidations in which the corporation is participating, subject to specified procedural requirements. The DGCL does not confer appraisal rights, however, if the corporation’s stock is either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders. Even if a corporation’s stock meets these requirements, the DGCL still provides appraisal rights if stockholders of the corporation are required to accept for their stock in certain mergers or consolidations anything other than: • shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; • shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders; • cash in lieu of fractional shares or fractional depository receipts described in the foregoing; or • any combination of the foregoing. In accordance with the DGCL, no appraisal rights are available to Desktop Metal stockholders in connection with the Merger. |
| | | |
| | Stratasys Shareholder Rights | | | Desktop Metal Stockholder Rights | |
Forum Selection | | | The amended articles do not contain a forum selection clause. | | | The Desktop Metal charter provides that unless Desktop Metal consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of Desktop Metal, (ii) any claim of breach of a fiduciary duty owed by any directors, officers, or stockholders of Desktop Metal, (iii) any claim against Desktop Metal arising under its charter, bylaws or the DGCL or (iv) any claim against Desktop Metal governed by the internal affairs doctrine. The Desktop Metal charter designates the federal district courts of the United States of America as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended |
• | the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment; |
• | the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and |
• | the judgment is executory in the state in which it was given. |
• | the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases); |
• | the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel; |
• | the judgment was obtained by fraud; |
• | the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court; |
• | the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel; |
• | the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or |
• | at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel. |
• | each person known to Desktop Metal to beneficially own more than 5% of the outstanding shares of Desktop Metal Class A common stock; |
• | each member of the Desktop Metal board of directors; |
• | each named executive officer of Desktop Metal; and |
• | all of Desktop Metal’s executive officers and directors as a group. |
| | Shares Beneficially Owned | ||||
Name of Beneficial Owner | | | Number of Shares of Class A Common Stock Beneficially Owned | | | Percentage Ownership of Outstanding Class A Common Stock |
5% or Greater Stockholders | | | | | ||
KPCB Holdings, Inc., as nominee(1) | | | 17,631,665 | | | 5.46% |
Entities affiliated with The Vanguard Group(2) | | | 22,051,032 | | | 6.83% |
Entities affiliated with BlackRock(3) | | | 20,629,705 | | | 6.39% |
Farhad Fred Ebrahimi and Mary Wilkie Ebrahimi(4) | | | 25,677,391 | | | 7.95% |
| | | | |||
Named Executive Officers and Directors | | | | | ||
Ric Fulop(5) | | | 22,173,559 | | | 6.87% |
Jason Cole(6) | | | 32,401 | | | * |
Jonah Myerberg(7) | | | 3,333,050 | | | 1.03% |
Thomas Nogueira(8) | | | 229,064 | | | * |
Scott Dussault(9) | | | 60,085 | | | * |
James Eisenstein(10) | | | 123,644 | | | * |
Dayna Grayson(11) | | | 123,413 | | | * |
Wen Hsieh(1) (12) | | | 17,707,118 | | | 5.48% |
Jeff Immelt(13) | | | 463,259 | | | * |
Stephen Nigro(14) | | | 124,961 | | | * |
Steve Papa(15) | | | 122,522 | | | * |
Bilal Zuberi(16) | | | 75,453 | | | * |
James Haley(17) | | | 100,000 | | | * |
Arjun Aggarwal(18) | | | 370,786 | | | * |
Michael Jafar | | | — | | | * |
Leo Hindery, Jr.(19) | | | 15,368 | | | * |
All executive officers and directors as a group (12 persons)(20) | | | 44,568,529 | | | 13.80% |
* | less than 1% |
(1) | All shares are held for convenience in the name of “KPCB Holdings, Inc., as nominee” for the accounts of such entities. Consists of 16,909,580 shares held by Kleiner Perkins Caufield & Byers XVI, LLC (“KPCB XVI”), 586,570 shares held by KPCB XVI Founders Fund, LLC (“XVI Founders”), 131,219 shares held by Kleiner Perkins Caufield & Byers XVII, LLC (“KPCB XVII”), and 4,296 shares held by |
(2) | This information is based solely on information reported on a Schedule 13G filed on February 9, 2023 by The Vanguard Group – 23-1945930. According to the report, The Vanguard Group – 23-1945930 has sole voting power with respect to no shares of Class A common stock, shared voting power with respect to 169,093 shares of Class A common stock, sole dispositive power with respect to 21,662,640 shares of Class A common stock and shared dispositive power with respect to 388,392 shares of Class A common stock. The business address of The Vanguard Group – 23-1945930 is 100 Vanguard Blvd., Malvern, PA 09355. |
(3) | This information is based solely on information reported on a Schedule 13G filed on February 3, 2023 by BlackRock, Inc.. According to the report, BlackRock Inc, has sole voting power with respect to 20,029,443 shares of Class A common stock, shared voting power with respect to no shares of Class A common stock, sole dispositive power with respect to 20,629,705 shares of Class A common stock and shared dispositive power with respect to no shares of Class A common stock. The business address of BlackRock is 55 East 52nd Street, New York, NY 10055. |
(4) | This information is based solely on information reported on a Schedule 13D/A filed on July 24, 2023 by Farhad Fred Ebrahimi and Mary Wilkie Ebrahimi. According to the report, Farhad Fred Ebrahimi and Mary Wilkie Ebrahimi have sole voting power with respect to no shares of Class A common stock, shared voting power with respect to 25,677,391 shares of Class A common stock, sole dispositive power with respect to no shares of Class A common stock and shared dispositive power with respect to 25,677,391 shares of Class A common stock. The business address of Farhad Fred Ebrahimi and Mary Wilkie Ebrahimi is 191 University Blvd, Suite 246, Denver, Colorado 80206. |
(5) | Consists of (a) 20,286,778 shares of Class A common stock held directly by Mr. Fulop, (b) 628,927 shares of Class A common stock held by Bluebird Trust, (c) 628,927 shares of Class A common stock held by Khaki Campbell Trust, and (d) 628,927 shares of Class A common stock held by Red Tailed Hawk Trust. The trustee of the Bluebird Trust, Khaki Campbell Trust and Red Tailed Hawk Trust is Steve Papa. Voting and investment power over the shares held of record by the trusts is exercised by Mr. Fulop and his wife. |
(6) | Consists of 32,401 shares of Class A common stock. |
(7) | Consists of (a) 2,289,664 shares of Class A common stock held directly by Mr. Myerberg, (b) 1,017,274 shares of Class A common stock held by his spouse, (c) 26,112 shares of Class A common stock subject to options held by Mr. Myerberg that are exercisable within 60 days of July 31, 2023. |
(8) | Consists of (a) 54,401 shares of Class A common stock, (b) 157,444 shares of Class A common stock subject to options held by Mr. Nogueira that are exercisable within 60 days of July 31, 2023 and (c) 17,219 shares of Class A common stock subject to restricted stock units held by Mr. Nogueira that vest within 60 days of July 31, 2023. |
(9) | Consists of 60,085 shares of Class A common stock. |
(10) | Consists of 123,413 shares of Class A common stock. |
(11) | Consists of (a) 16,259 shares of Class A common stock and (b) 47,069 shares of Class A common stock subject to options held by Ms. Grayson that are exercisable within 60 days of July 31, 2023. |
(12) | Consists of 75,453 shares of Class A common stock. |
(13) | Consists of (a) 115,210 shares of Class A common stock and (b) 348,049 shares of Class A common stock subject to options held by Mr. Immelt that are exercisable within 60 days of July 31, 2023. |
(14) | Consists of (a) 121,145 shares of Class A common stock held by Mr. Nigro and (b) 3,816 shares of Class A common stock subject to options held by Mr. Nigro that are exercisable within 60 days of July 31, 2023. |
(15) | Consists of (a) 75,453 shares of Class A common stock and (b) 47,069 shares of Class A common stock subject to options held by Mr. Papa that are exercisable within 60 days of July 31, 2023. |
(16) | Consists of 75,453 shares of Class A common stock. |
(17) | Consists of 100,000 shares of Class A common stock. |
(18) | Consists of (a) 10,525 shares of Class A common stock and (b) 360,261 shares of Class A common stock subject to options held by Mr. Aggarwal that are exercisable within 60 days of July 31, 2023. |
(19) | Consists of 15,368 shares of Class A common stock. |
(20) | Consists of (a) 43,921,751 shares of Class A common stock, (b) 625,743 shares of Class A common stock subject to options that are exercisable within 60 days of July 31, 2023, and (c) 21,035 shares of Class A common stock subject to restricted stock units that vest within 60 days of July 31, 2023. |
• | Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC on March 3, 2023; |
• | Reports of Foreign Private Issuer on Form 6-K furnished to the SEC on April 5, 2023 (excluding Exhibit 99.1 thereto), May 1, 2023, May 16, 2023 (only the second Form 6-K furnished to the SEC on that date), May 25, 2023 (excluding Exhibits 99.1 and 99.2 thereto), May 26, 2023, July 5, 2023, July 12, 2023 (including Exhibits 99.1 and 99.2, but excluding Exhibit 99.3, thereto), July 21, 2023, August 9, 2023 (only the second Form 6-K furnished to the SEC on that date), August 14, 2023 and August 21, 2023; and |
• | The description of Stratasys ordinary shares contained in “Item 1. Description of Registrant’s Securities to be Registered” in Stratasys’ registration statement on Form 8-A, filed with the Commission on December 3, 2012, as updated by Exhibit 2.2 to Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023, including any amendment or reports filed for the purpose of updating such description. |
• | Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC On March 1, 2023; |
• | Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2023 and June 30, 2023, filed with the SEC on May 10, 2023 and August 3, 2023, respectively; |
• | Current Report on Form 8-K/A filed with the SEC on February 2, 2023 (with respect to Item 2.05 only) and Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof) filed with the SEC on February 15, 2023, May 18, 2023, May 26, 2023, May 30, 2023, and June 12, 2023; |
• | Definitive Proxy Statement on Schedule 14A filed with the SEC on April 25, 2023; and |
• | The description of Desktop Metal, Inc.’s Class A common stock contained in Desktop Metal’s Registration Statement on Form 8-A, filed with the SEC on March 13, 2019, including any amendments or reports filed with the SEC for the purpose of updating such description, and the description of the preferred stock purchase rights to purchase shares of Desktop Metal, Inc’s Class A common stock contained in its Registration Statement on Form 8-A filed with the SEC on May 30, 2023, including any amendments or reports filed with the SEC for the purpose of updating such description. |
Stratasys shareholders may request a copy of such documents by contacting: | | | Desktop Metal stockholders may request a copy of such documents by contacting: |
| | ||
Stratasys Ltd. c/o Stratasys, Inc. 7665 Commerce Way Eden Prairie, Minnesota 55344 Attention: Investor Relations Email: Yonah.Lloyd@stratasys.com Telephone: 1-800-801-6491 | | | Desktop Metal, Inc. Desktop Metal, Inc. 63 3rd Avenue Burlington, Massachusetts 01803 Attention: Investor Relations Email: jaygentzkow@desktopmetal.com Telephone: (978) 224-1244 |
| | | | Page | ||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
Exhibit A | | | Sun Amended Articles of Association |
| | ||
Exhibit B | | | Duties of Chairman and Lead Independent Director |
| | ||
Exhibit C | | | Intended U.S. Tax Treatment Cooperation |
| | ||
Exhibit D | | | Form of Ironman Rights Plan |
| | ||
Exhibit E | | | Amendment to Sun Rights Plan |
| | ||
Exhibit F | | | Form of Residency Declaration |
| | (a) if to Ironman, to: | |||||||
| | | | | | ||||
| | | | | | Desktop Metal, Inc. | |||
| | | | | | 63 3rd Avenue | |||
| | | | | | Burlington, Massachusetts 01803 | |||
| | | | | | Email: meg.broderick@desktopmetal.com | |||
| | | | | | Attention: Meg Broderick | |||
| | | | | | ||||
| | | | with copies, not constituting notice, to: | |||||
| | | | | | ||||
| | | | | | Latham & Watkins LLP | |||
| | | | | | 811 Main Street, Suite 3700 | |||
| | | | | | Houston, Texas 77002 | |||
| | | | | | E-mail: ryan.maierson@lw.com and daniel.hoffman@lw.com | |||
| | | | | | Attention: Ryan Maierson and Daniel Hoffman | |||
| | | | | | ||||
| | | | | | and | |||
| | | | | | ||||
| | | | | | Shibolet & Co. | |||
| | | | | | 4 Yitzhak Sadeh St. | |||
| | | | | | Tel Aviv 6777504 | |||
| | | | | | Israel | |||
| | | | | | E-mail: l.aviram@shibolet.com and maya@shibolet.com | |||
| | | | | | Attention: Lior Aviram and Maya Koubi Bara-nes | |||
| | | | | | ||||
| | (b) if to Sun or Merger Sub, to: | |||||||
| | | | | | ||||
| | | | | | Stratasys Ltd. | |||
| | | | | | 1 Holtzman St. Science Park | |||
| | | | | | P.O. Box 2496 | |||
| | | | | | Rehovot 7670401 | |||
| | | | | | Israel | |||
| | | | | | Email: vered.benjacob@stratasys.com | |||
| | | | | | Attention: Vered Ben Jacob, Adv. Chief Legal Officer | |||
| | | | | | ||||
| | | | with copies, not constituting notice, to: | |||||
| | | | | | ||||
| | | | | | Meitar Law Offices | |||
| | | | | | Abba Hillel Silver Road 16 | |||
| | | | | | Ramat Gan 5250608 | |||
| | | | | | Israel | |||
| | | | | | Email: dchertok@meitar.com and jonathana@meitar.com | |||
| | | | | | Attention: J. David Chertok, Adv. and Jonathan Atha, Adv. |
| | | | | | ||||
| | | | | | and | |||
| | | | | | ||||
| | | | | | Wachtell, Lipton, Rosen & Katz | |||
| | | | | | 51 West 52nd Street | |||
| | | | | | New York, New York 10019 | |||
| | | | | | Email: AOEmmerich@wlrk.com and VSapezhnikov@wlrk.com | |||
| | | | | | Attention: Adam O. Emmerich and Viktor Sapezhnikov |
DESKTOP METAL, INC. | | | ||||
| | | | |||
By: | | | /s/ Ric Fulop | | | |
Name: | | | Ric Fulop | | | |
Title: | | | Chief Executive Officer | | |
STRATASYS LTD. | | | | | |||||
By: | | | /s/ Yoav Zeif | | | By: | | | /s/ Eitan Zamir |
Name: | | | Yoav Zeif | | | Name: | | | Eitan Zamir |
Title: | | | Chief Executive Officer | | | Title: | | | Chief Financial Officer |
TETRIS SUB INC. | | | | | |||||
By: | | | /s/ Yoav Zeif | | | By: | | | /s/ Eitan Zamir |
Name: | | | Yoav Zeif | | | Name: | | | Eitan Zamir |
Title: | | | President | | | Title: | | | Treasurer and Secretary |
1. | INTERPRETATION. |
1.1. | In these Articles, unless the context requires another meaning the words in the first column of the following table shall have the meanings set opposite them in the second column: |
“Articles” | | | these Articles of Association, as amended from time to time by a Resolution (as defined below); |
| | ||
“Auditors” | | | the auditors of the Company; |
| | ||
“Board of Directors” or the “Board” | | | all of the directors of the Company holding office pursuant to these Articles, including alternates, substitutes or proxies; |
| | ||
“Chief Executive Officer” | | | chief executive officer of the Company; |
| | ||
“Chairman of the Board of Directors” | | | as defined in Article 79; |
| | ||
“Companies Law” or the “Law” | | | the Companies Law, 5759-1999, of the State of Israel, as amended from time to time, or any other law which may come in its stead, including all amendments made thereto; |
| | ||
“Company” | | | Stratasys Ltd; |
| | ||
“Effective Time” | | | the closing of the Merger as defined in the Merger Agreement, at which time these Articles shall first become effective; |
| | ||
“General Meeting” | | | any annual or extraordinary meeting of the shareholders of the Company; |
| | ||
“Incapacitated Person” | | | according to the meaning thereof under the Legal Capacity and Guardianship Law, 5722-1962, of the State of Israel, as amended from time to time, including a minor who has not yet attained the age of 18 years, a person unsound of mind and a bankrupt in respect of whom no rehabilitation has been granted; |
| | ||
“Initial Term” | | | the period commencing at the Effective Time and ending on the second anniversary thereof; |
| | ||
“Ironman” | | | Ironman Corporation, a Delaware corporation; |
| |
“Merger” | | | the merger of Ironman with and into Ironman Merger Corp, a Delaware corporation and wholly owned indirect subsidiary of the Company (“Merger Sub”) pursuant to the General Corporation Law of the State of Delaware and pursuant to which Ironman will become a wholly owned indirect subsidiary of the Company; |
| | ||
“Merger Agreement” | | | the Agreement and Plan of Merger dated May 25, 2023, among the Company, Merger Sub and Ironman; |
| | ||
“Month” or “Year” | | | according to the Gregorian calendar; |
| | ||
“NIS” | | | New Israeli Shekels; |
| | ||
“Office” | | | the registered office of the Company at that time; |
| | ||
“Office Holder” | | | as defined in the Companies Law; |
| | ||
“Person” | | | includes an individual, corporation, company, cooperative society, partnership, trust of any kind or any other body of persons, whether incorporated or otherwise; |
| | ||
“Register” | | | the Register of Shareholders administered in accordance with Section 127 of the Law; |
| | ||
“Resolution” | | | a resolution of shareholders of the Company, including a resolution approving a merger, which, except as required under the Law or these Articles, shall be adopted by a majority of voting power present and voting at the applicable General Meeting, in person or by proxy; |
| | ||
“U.S. Rules” | | | the rules of the NASDAQ Stock Market (or other stock exchange on which the Company’s shares are then listed) and the U.S. securities rules and regulations applicable to the Company, as amended from time to time; |
| | ||
“writing” | | | handwriting, typewriting, photography, telex, email or any other legible form of writing. |
1.2. | Words and expressions defined in the Memorandum of Association of the Company shall have the meanings in these Articles as ascribed to them therein. |
1.3. | Subject to the provisions of this Article 1, in these Articles, unless the context necessitates another meaning, terms and expressions which have been defined in the Companies Law shall have the meanings ascribed to them therein. |
1.4. | Words in the singular shall also include the plural, and vice versa. Words in the masculine shall include the feminine and vice versa, and words which refer to persons shall also include corporations, and vice versa. |
1.5. | The captions to articles in these Articles are intended for the convenience of the reader only, and no use shall be made thereof in the interpretation of these Articles. |
2. | The Company is a limited liability company and each shareholder’s obligations for the Company’s obligations shall be limited to the payment of the nominal value of the shares held by such shareholder, subject to the provisions of the Companies Law. |
3. | The Company’s objectives are to conduct all types of business as are permitted by law. The Company may donate a reasonable amount of money for any purpose that the Board of Directors finds appropriate, even if the donation is not for business considerations or for the purpose of achieving profits for the Company. |
4. | Any branch or type of business that the Company is authorized to engage in, either expressly or implied, may be commenced or engaged in by the Board of Directors at all or any time as it deems fit. The Board of Directors, at its own discretion, shall be entitled to cease the conduct of any such branch or type of business, whether or not the actual conduct thereof has commenced. |
5. | The registered office shall be at such place as is decided from time to time by the Board of Directors. |
6. | The share capital of the Company consists of NIS 4,500,000 divided into 450,000,000 Ordinary Shares, of a nominal value of NIS 0.01 each (the “Ordinary Shares”). The powers, preferences, rights, restrictions, and other matters relating to the Ordinary Shares are as set forth in the Articles. |
7. | RIGHTS ATTACHING TO THE ORDINARY SHARES. |
7.1. | The Ordinary Shares in respect of which all calls have been fully paid shall confer on the holders thereof the right to attend and to vote at General Meetings of the Company, both ordinary as well as extraordinary meetings. At General Meetings of the Company every holder of an Ordinary Share in respect of which all of the calls on such share have been paid in full, who is personally present or represented by proxy, shall have one (1) vote in respect of such Ordinary Share held by him, without reference to the nominal value thereof. |
7.2. | The Ordinary Shares shall confer on a holder thereof the right to receive a dividend, to participate in a distribution of bonus shares and to participate in the distribution of the assets of the Company upon its winding-up, pro rata to the nominal amount paid up on the shares or credited as paid up in respect thereof, and without reference to any premium which may have been paid in respect thereof. |
7.3. | Except as may be expressly provided in these Articles, all Ordinary Shares shall rank pari passu in all respects. |
8. | INTENTIONALLY OMITTED |
9. | MODIFICATION OF CLASS RIGHTS. |
9.1. | Subject to applicable law, if at any time the share capital of the Company is divided into different classes of shares and unless the terms of issue of such class of shares otherwise stipulate, the rights attaching to any class of shares (including rights prescribed in the terms of issue of the shares) may be altered, modified or canceled, by a Resolution passed at a separate General Meeting of the shareholders of that class. |
9.2. | The provisions contained in these Articles with regard to General Meetings shall apply, mutatis mutandis as the case may be, to every such General Meeting of the holders of each class of the Company’s shares. |
9.3. | The special rights conferred on the holders of shares or any class of shares which have been issued, including without limitation shares issued with preferential rights or other special rights, shall not be deemed to have been altered by the creation or issue of additional shares ranking pari passu with them, unless otherwise stipulated in the conditions of issue of such shares. |
10. | ISSUANCE OF PREFERRED SHARES |
11. | UNISSUED SHARE CAPITAL |
12. | In every case of a rights offering the Board of Directors shall be entitled, in its discretion, to resolve any problems and difficulties arising or that are likely to arise in regard to fractions of rights, and without prejudice to the generality of the foregoing, the Board of Directors shall be entitled to specify that no shares shall be allotted in respect of fractions of rights, or that fractions of rights shall be sold and the (net) proceeds shall be paid to the persons entitled to the fractions of rights, or, in accordance with a decision by the Board of Directors, to the benefit of the Company. |
13. | The Company may, from time to time, by a Resolution, increase its share capital by way of the creation of new shares, whether or not all the existing shares have been issued up to the date of the Resolution, whether or not it has been decided to issue same, and whether or not calls have been made on all the issued shares. |
14. | The increase of capital shall be in such amount and divided into shares of such nominal value, and with such restrictions and conditions and with such rights and privileges as the Resolution dealing with the creation of the shares prescribes, subject to the special rights of an existing class of shares, and if no provisions are contained in the Resolution, then as the Board of Directors shall prescribe. |
15. | Unless otherwise stated in the Resolution approving the increase of the share capital, the new shares shall be subject to those provisions in regard to issue, allotment, alteration of rights, payment of calls, liens, forfeiture, transfer, transmission and other provisions which apply to the shares of the Company. |
16. | By Resolution, the Company may, subject to any applicable provisions of the Law: |
16.1. | consolidate its existing share capital, or any part thereof, into shares of a larger denomination than the existing shares: |
16.2. | sub-divide its share capital, in whole or in part, into shares of a smaller denomination than the nominal value of the existing shares and without prejudice to the foregoing, one or more of the shares so created may be granted any preferred or deferred rights or any special rights with regard to dividends, participation in assets upon winding-up, voting and so forth, subject to the provisions of these Articles; |
16.3. | reduce its share capital; or |
16.4. | cancel any shares which on the date of passing of the Resolution have not been issued and to reduce its share capital by the amount of such shares. |
17. | In the event that the Company shall adopt any of the Resolutions described in Article 16 above, the Board of Directors shall be entitled to prescribe arrangements necessary in order to resolve any difficulty arising or that is likely to arise in connection with such Resolutions, including in the event of a consolidation, in which it shall be entitled to prescribe which shares shall be consolidated into a particular class of shares, and may cause the transfer of fractional shares by certain shareholders of the Company to other shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees of such fractional shares to pay the transferors thereof the fair value thereof, and the Board of Directors is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractional shares, with full power of substitution, for the purposes of implementing the provisions of this Article 17. |
18. | To the extent shares are certificated, share certificates evidencing title to the shares of the Company shall be issued under the seal or rubber stamp of the Company, and together with the signatures of two members of the Board of Directors, or one director together with the Chief Executive Officer. The Board of Directors shall be entitled to decide that the signatures be effected in any mechanical or electronic form, provided that the signature shall be effected under the supervision of the Board of Directors in such manner as it prescribes. |
19. | Every shareholder shall be entitled, free of charge, to one certificate in respect of all the shares of a single class registered in his name in the Register. |
20. | The Board of Directors shall not refuse a request by a shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of the Board of Directors, unreasonable. Where a shareholder has sold or transferred some of his shares, he shall be entitled, free of charge, to receive a certificate in respect of his remaining shares, provided that the previous certificate is delivered to the Company before the issuance of a new certificate. |
21. | Every share certificate shall specify the number of the shares in respect of which such certificate is issued and also the amounts which have been paid up in respect of each share. |
22. | No person shall be recognized by the Company as having any right to a share unless he is the registered owner of the shares in the Register. The Company shall not be bound by and shall not recognize any right or privilege pursuant to the laws of equity, or a fiduciary relationship or a chose in action, future or partial, in any share, or a right or privilege to a fraction of a share, or (unless these Articles otherwise direct) any other right in respect of a share, except the absolute right to the share as a whole, where same is vested in the owner registered in the Register. |
23. | A share certificate registered in the names of two or more persons shall be delivered to one of the joint holders, and the Company shall not be obliged to issue more than one certificate to all the joint holders of shares and the delivery of such certificate to one of the joint holders shall be deemed to be delivery to all of them. |
24. | If a share certificate should be lost, destroyed or defaced, the Board of Directors shall be entitled to issue a new certificate in its place, provided that the certificate is delivered to it and destroyed by it, or it is proved to the satisfaction of the Board of Directors that the certificate was lost or destroyed and security has been received to its satisfaction in respect of any possible damages and after payment of such amount as the Board of Directors shall prescribe. |
25. | The Board of Directors may from time to time, in its discretion, make calls on shareholders in respect of amounts which are still unpaid in respect of the shares held by each of the shareholders (including premiums), and the terms of issue which do not prescribe that same be paid at fixed times, and every shareholder shall be obliged to pay the amount of the call made on him, at such time and at such place as stipulated by the Board of Directors. |
26. | In respect of any such call, prior notice of at least 14 (fourteen) business days shall be given, stating to whom the amount called is to be paid, the time for payment and the place thereof, provided that prior to the due date for payment of such call, the Board of Directors may, by written notice to the shareholders to which the call was made, cancel the call or extend the date of payment thereof. |
27. | If according to the terms of issue of any share, or otherwise, any amount is required to be paid at a fixed time or in installments at fixed times, whether the payment is made on account of the share capital in respect of the |
28. | Joint holders of a share shall be jointly and severally liable for the payment of all installments and calls due in respect of such share. |
29. | In the event that a call or installment due on account of a share is not paid on or before the date fixed for payment thereof, the holder of the share, or the person to whom the share has been allotted, shall be obliged to pay linkage differentials and interest on the amount of the call or the installment, at such rate as shall be determined by the Board of Directors, commencing from the date fixed for the payment thereof and until the date of actual payment. The Board of Directors may, however, waive the payment of the linkage differentials or the interest or part thereof. |
30. | A shareholder shall not be entitled (i) to receive a dividend or (ii) to exercise any right as a shareholder, including but not limited to, the right to attend and vote at a General Meeting of any type and to transfer the shares to another; unless he has paid all the calls payable from time to time and which apply to any of his shares, whether he holds same alone or jointly with another, plus linkage differentials, interest and expenses, if any. |
31. | The Board of Directors may, if it deems fit, accept payment from a shareholder wishing to advance the payment of all moneys which remain unpaid on account of his shares, or part thereof which are over and above the amounts which have actually been called, and the Board of Directors shall be entitled to pay such shareholder linkage differentials and interest in respect of the amounts paid in advance, or that portion thereof which exceeds the amount called for the time being on account of the shares in respect of which the advance payment is made, at such rate as is agreed upon between the Board of Directors and the shareholder, with this being in addition to dividends payable (if any) on the paid-up portion of the share in respect of which the advance payment is made. |
32. | If a shareholder fails to make payment of any call or other installment on or before the date fixed for the payment thereof, the Board of Directors may, at any time thereafter and for as long as the part of the call or installment remains unpaid, serve on him a notice demanding that he make payment thereof, together with the linkage differentials and interest at such rate as is specified by the Board of Directors and all the expenses incurred by the Company in consequence of such non-payment. |
33. | The notice shall specify a further date, which shall be at least 14 business days after the date of the delivery of the notice, and a place or places at which such call or installment is to be paid, together with linkage differentials and interest and expenses as aforesaid. The notice shall further state that, if the amount is not paid on or before the date specified, and at the place mentioned in such notice, the shares in respect of which the call was made, or the installment is due, shall be liable to forfeiture. |
34. | If the demands contained in such notice are not complied with the Board of Directors may treat the shares in respect of which the notice referred to in Articles 32 and 33 was given as forfeited. Such forfeiture shall include all dividends, bonus shares and other benefits which have been declared in respect of the forfeited shares which have not actually been paid prior to the forfeiture. |
35. | Any share so forfeited or waived shall be deemed to be the property of the Company and the Board of Directors shall be entitled, subject to the provisions of these Articles and the Law, to sell, re-allot or otherwise dispose thereof, as it deems fit, whether the amount paid previously in respect of that share is credited, in whole or in part. |
36. | The Board of Directors may, at any time before any share forfeited as aforesaid is sold or re-allotted or otherwise dispose of, cancel the forfeiture on such conditions as it deems fit. |
37. | Any person whose shares have been forfeited shall cease to be a shareholder in respect of the forfeited shares, but shall, nonetheless remain liable for the payment to the Company of all calls, installments, linkage differentials, interest and expenses due on account of or in respect of such shares on the date of forfeiture, in |
38. | The provisions of these Articles in regard to forfeiture shall also apply to cases of non-payment of any amount, which, according to the terms of issue of the share, or which under the conditions of allotment the due date for payment of which fell on a fixed date, whether this be on account of the nominal value of the share or in the form of a premium, as if such amount was payable pursuant to a call duly made and notified. |
39. | The Company shall have a first and paramount lien over all the shares which have not been fully paid up and which are registered in the name of any shareholder (whether individually or jointly with others) and also over the proceeds of the sale thereof, as security for the debts and obligations of such shareholder to the Company and his contractual engagements with it, either individually or together with others. This right of lien shall apply whether or not the due date for payment of such debts or the fulfillment or performance of such obligations has arrived, and no rights in equity shall be created in respect of any share, over which there is a lien as aforesaid. The aforesaid lien shall apply to all dividends or benefits which may be declared, from time to time, on such shares, unless the Board of Directors shall decide otherwise. |
40. | In order to foreclose on such lien, the Board of Directors may sell the shares under lien at such time and in such manner as, it shall deem fit, but no share may be sold unless the period referred to below has elapsed and written notice has been given to the shareholder, his trustee, liquidator, receiver, the executors of his estate, or anyone who acquires a right to shares in consequence of the bankruptcy of a shareholder, as the case may be, stating that the Company intends to sell the shares, if he or they should fail to pay the aforesaid debts, or fail to discharge or fulfill the aforesaid obligations within 14 business days from the date of the delivery of the notice. |
41. | The net proceeds of any such sale of shares, as contemplated by Article 40 above, after deduction of the expenses of the sale, shall serve for the discharge of the debts of such shareholder or for performance of such shareholder’s obligations (including debts, undertaking and contractual engagements, the due date for the payment or performance of which has arrived) and the surplus, if any, shall be paid to the shareholder, his trustee, liquidator, receiver, guardians, or the executors of his estate, or to his successors- in-title. |
42. | In every case of a sale following forfeiture or waiver, or for purposes of executing a lien by exercising all of the powers conferred above, the Board of Directors shall be entitled to appoint a person to sign an instrument of transfer of the shares sold, and to arrange for the registration of the name of the buyer in the Register in respect of the shares sold. |
43. | An affidavit signed by the Chairman of the Board of Directors that a particular share of the Company was forfeited, waived or sold by the Company by virtue of a lien, shall serve as conclusive evidence of the facts contained therein as against any person claiming a right in the share. The purchaser of a share who relies on such affidavit shall not be obliged to investigate whether the sale, re-allotment or transfer, or the amount of consideration and the manner of application of the proceeds of the sale, were lawfully effected, and after his name has been registered in the Register he shall have a full right of title to the share and such right shall not be adversely affected by a defect or invalidity which occurred in the forfeiture, waiver, sale, re-allotment or transfer of the share. |
44. | No transfer of shares shall be registered unless a proper instrument of transfer is delivered to the Company or to such other place specified for this purpose by the Board of Directors. Subject to the provisions of these Articles, an instrument of transfer of a share in the Company shall be signed by the transferor and the transferee. The transferor shall be deemed to remain the holder of the share up until the time the name of the transferee is registered in the Register in respect of the transferred share. |
45. | Insofar as the circumstances permit, the instrument of transfer of a share shall be drawn up in the form set out below, or in any other form that the Board of Directors may approve (the “Deed of Transfer”). |
46. | The Company may close the transfer registers and the Register for such period of time as the Board of Directors shall deem fit, provided that such period of time shall not in total exceed 30 (thirty) days each year. |
47. | Every instrument of transfer shall be submitted to the Office or to such other place as the Board of Directors shall prescribe, for purposes of registration, together with the share certificates to be transferred, or if no such certificate was issued, together with a letter of allotment of the shares to be transferred, and/or such other proof as the Board of Directors may demand in regard to the transferor’s right of title or his right to transfer the shares. The Board of Directors shall have the right to refuse to recognize an assignment of shares until appropriate security under the circumstances has been provided, as shall be determined by the Board of Directors in a specific case or from time to time in general. Instruments of transfer which serve as the basis for transfers that are registered shall remain with the Company. |
48. | The executors of the will or administrator of a deceased shareholder’s estate (such shareholder not being one of a joint owners of a share) or, in the absence of an administrator of the estate or executor of the will, shall be entitled to demand that the Company recognize them as owners of rights in the share. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
49. | In the case of a share registered in the names of two or more Persons, the Company shall recognize only the surviving owners as Persons having rights in the share. However, the aforementioned shall not be construed as releasing the estate of a deceased joint shareholder from any and all undertakings in respect of the shares. Any Person who shall become an owner of shares following the death of a shareholder shall be entitled to be registered as owner of such shares after having presented to an officer of the Company to be designated by the Chief Executive Officer an inheritance order or probation order or order of appointment of an administrator of estate and any other proof as required - if these are sufficient in the opinion of such officer - testifying to such Person’s right to appear as shareholder in accordance with these Articles, and which shall testify to his title to such shares. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
50. | The receiver or liquidator of a shareholder who is a company or the trustee in bankruptcy or the official receiver of a shareholder who is bankrupt, upon presenting appropriate proof to the satisfaction of an officer of the Company to be designated by the Chief Executive Officer that he has the right to appear in this capacity and which testifies to his title, may, with the consent of the Board of Directors (the Board of Directors shall not be obligated to give such consent) be registered as the owner of such shares. Furthermore, he may assign such shares in accordance with the rules prescribed in these Articles. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
51. | A Person entitled to be registered as a shareholder following assignment pursuant to this Article shall be entitled, if approved by the Board of Directors and to the extent and under the conditions prescribed by the Board of Directors, to dividends and any other monies paid in respect of the shares, and shall be entitled to give the Company confirmation of the payments; however, he shall not be entitled to be present or to vote at any General Meeting of the Company or, subject to the provisions of these Articles, to make use of any rights of shareholders, until he has been registered as owner of such shares in the Register. |
52. | An annual General Meeting shall be held once in every year, not later than 15 (fifteen) months after the last annual General Meeting, at such time and at such place as the Board of Directors shall determine. All other meetings of the Company’s shareholders shall be called extraordinary meetings. |
53. | The Board of Directors may call an extraordinary General Meeting whenever it sees fit to do so. |
54. | The Board of Directors shall be obliged to call an extraordinary General Meeting upon a request in writing in accordance with the Law. |
55. | The Company shall provide prior notice in regard to the holding of an annual meeting or an extraordinary meeting in accordance with the requirements of these Articles, the Law and the regulations promulgated thereunder. Subject to the provisions of the Law and the regulations promulgated thereunder, in counting the number of days of prior notice given, the day of publication of notice shall not be counted, but the day of the meeting shall be counted. The notice shall specify those items and contain such information as shall be required by the Companies Law, the regulations promulgated thereunder and any other applicable law and regulations. Subject to Article 64 below, in the event that the Company has established that an adjourned meeting shall be held on such date which is later than the date provided for in Section 78(b) of the Law, such later date shall be included in the notice. The Company may add additional places for shareholders to review the full text of the proposed resolutions, including an internet site. The notice shall be provided in the manner prescribed below under the heading “Notices” in Articles 128 to 131 below. |
56.1 | Any shareholder or shareholders of the Company holding at least one percent (1%) of the voting rights of the Company (the “Proposing Shareholder(s)”) may request, subject to the Companies Law, that the Board of Directors include a matter on the agenda of a General Meeting to be held in the future, provided that the Board determines that the matter is appropriate to be considered at a General Meeting (a “Proposal Request”). In order for the Board of Directors to consider a Proposal Request and whether to include the matter stated therein in the agenda of a General Meeting, notice of the Proposal Request must be timely delivered, and the Proposal Request must comply with the requirements of these Articles (including this Article 56) and any applicable law and stock exchange rules and regulations. The Proposal Request must be in writing, signed by all of the Proposing Shareholders making such request, delivered, either in person or by certified mail, postage prepaid, and received by the Secretary (or, in the absence thereof by the Chief Executive Officer) of the Company. To be considered timely, a Proposal Request must be received within the time periods prescribed by applicable law. The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extend any time period) for the delivery of a Proposal Request as described above. In addition to any information required to be included in accordance with applicable law, a Proposal Request must include the following: (i) the name, address, telephone number, fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity; (ii) the number of shares held by the Proposing Shareholder(s), directly or indirectly (and, if any of such shares are held indirectly, an explanation of how they are held and by whom), which shall be in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Company of the record holding of such shares by the Proposing Shareholder(s) as of the date of the Proposal Request, and a representation that the Proposing Shareholder(s) intends to appear in person or by proxy at the meeting; (iii) the matter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matter is proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a position statement in support of the Proposal Request, a copy of such position statement that complies with the requirement of applicable law (if any), (iv) a description of all arrangements or understandings between the Proposing Shareholders and any other Person(s) (naming such Person or Persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by all Proposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detail of such personal interest; (v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (vi) a declaration that all of the information that is required under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Company in connection with such matter, if any, has been provided to the Company. The Board of Directors, may, in its discretion, to the extent it deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a matter in the agenda of a General Meeting, as the Board of Directors may reasonably require. |
A “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proposing Shareholder or any of its affiliates or associates, whether of record or beneficial: (1) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Company, (2) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Company, (3) the effect or intent of which is to mitigate loss, manage risk or benefit from security value or price changes, or (4) which provides the right to vote or increase or decrease the voting power of, such Proposing Shareholder, or any of its affiliates or associates, with respect to any shares or other securities of the Company, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proposing Shareholder in the securities of the Company held by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly, a general partner or managing member. |
56.2 | The information required pursuant to this Article shall be updated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting and (iii) three business days before the General Meeting, and any adjournment or postponement thereof. |
57. | No business shall be conducted at a General Meeting unless a quorum is present, and no resolution shall be passed unless a quorum is present at the time the resolution is voted on. Except in cases where it is otherwise stipulated, a quorum shall be constituted when there are personally present, or represented by proxy, at least 2 (two) shareholders who hold, in the aggregate, at least twenty-five percent (25%) of the voting rights in the Company. A proxy may be deemed to be 2 (two) or more shareholders pursuant to the number of shareholders he represents. |
58. | If within half an hour from the time appointed for the meeting, a quorum is not present, without there being an obligation to notify the shareholders to that effect, the meeting shall be adjourned to the same day, in the following week, at the same hour and at the same place or to a later time and date if so specified in the notice of the meeting, unless such day shall fall on a statutory holiday (either in Israel or in the U.S.), in which case the meeting will be adjourned to the first business day afterwards which is not a statutory holiday. |
59. | The Chairman of the Board of Directors, or any other Person appointed for this purpose by the Board of Directors, shall preside at every General Meeting. If within 15 (fifteen) minutes from the time appointed for the meeting, the designated chairman for the meeting shall not be present, the shareholders present at the meeting shall elect one of their number to serve as chairman of the meeting. |
60. | Resolutions at the General Meeting shall be passed in accordance with the definition of “Resolution” set forth in Article 1.1 above, unless otherwise required by Law or these Articles. Every vote at a General Meeting shall be conducted according to the number of votes to which each shareholder is entitled on the basis of the number of Ordinary Shares held by him which confer on him a right to vote at the General Meeting. |
61. | Where a poll has been demanded, the chairman of the meeting shall accede to the demand. Where the chairman of the meeting held a poll, such poll shall be held in such manner, at such time and at such place as the chairman of the meeting directs, either immediately or after an interval or postponement, or in any other way, and the results of the vote shall be deemed to be the resolution at the meeting at which the poll was demanded. A person demanding a poll may withdraw his demand prior to the poll being held. |
62. | A demand for the holding of a poll shall not prevent the continued business of the meeting on all other questions apart of the question in respect of which a poll was demanded. |
63. | The announcement by the chairman of the meeting that a Resolution has been passed unanimously or by a particular majority, or has been rejected, and a note recorded to that effect in the Company’s minute book, shall serve as prima facie proof of such fact. |
64. | The chairman of a General Meeting may adjourn the meeting from time to time and from place to place if approved by a consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment (and shall if so directed by the meeting), but at an adjourned meeting no other matters shall be considered or decided apart from the matters which were on the agenda of the meeting at which it was decided on the adjournment and in respect of which no Resolution was taken. The Company shall not deliver nor shall it be required to give notice in regard to the adjournment or in regard to the matters on the agenda of the adjourned meeting, unless the adjourned meeting is to be held more than 30 (thirty) days after the date of the original meeting, in which case a notice shall be published by the Company. |
65. | The voting rights of every shareholder entitled to vote at a General Meeting shall be as set forth in Article 7 of these Articles or to any other article herein governing voting rights. |
66. | In the case of joint shareholders, the vote of the senior joint holder, given personally or by proxy, shall be accepted, to the exclusion of the vote of the remaining joint shareholders, and for these purposes the senior of the joint shareholders shall be the Person amongst the joint holders whose name appears first in the Register. |
67. | A shareholder who is an Incapacitated Person may vote solely through his guardian or other person who fulfills the function of such guardian and who was appointed by a court, and any guardian or other person as aforesaid shall be entitled to vote by way of a proxy, or in such manner as the court directs. |
68. | Any corporation which is a shareholder of the Company shall be entitled, by way of resolution of its directors or another organ which manages said corporation, to appoint such person which it deems fit, whether or not he is a shareholder of the Company, to act as its representative at any General Meeting of the Company or at a meeting of a class of shares in the Company which such corporation is entitled to attend and to vote thereat, and the appointed as aforesaid shall be entitled, on behalf of the corporation whom he represents, to exercise all of the same powers and authorities which the corporation itself could have exercised had it been a natural person holding shares of the Company. |
69. | Every shareholder of the Company who is entitled to attend and vote at a General Meeting of the Company, shall be entitled to appoint a proxy. A proxy can be appointed by more than one shareholder, and he can vote in different ways on behalf of each principal. |
70. | The instrument appointing a proxy, or a copy thereof certified by an attorney, shall be lodged at the Office, or at such other place as the Board of Directors shall specify, not less than forty-eight (48) hours prior to the meeting at which the proxy intends to vote on the strength of such instrument of proxy. Notwithstanding the above, the chairman of the meeting shall have the right to waive the time requirement provided above with respect to all instruments of proxies and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the meeting to which the document relates. |
71. | Every instrument appointing a proxy, whether for a meeting specifically indicated, or otherwise, shall, as far as circumstances permit, be in the following form, or in any other form approved by the Board of Directors: |
72. | No shareholder shall be entitled to vote at a General Meeting unless he has paid all of the calls and all of the amounts due from him, for the time being, in respect of his shares. |
73. | A vote given in accordance with the instructions contained in an instrument appointing a proxy shall be valid notwithstanding the death or bankruptcy of the appointer, or the revocation of the proxy, or the transfer of the shares in respect of which the vote was given as aforesaid, unless notice in writing of the death, revocation or transfer is received at the Office of the Company, or by the chairman of the General Meeting, prior to such vote. |
74. | Subject to the Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the chairman of the meeting, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy, provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article 70 hereof, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairman of such meeting of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 74 at or prior to the time such vote was cast. |
75.1. | The number of directors of the Company (including External Directors to the extent appointed pursuant to Article 80A below) shall be between seven (7) and eleven (11), as determined from time to time by the Board of Directors. Any director shall be eligible for re-election upon termination of his or her term of office. |
75.2. | Prior to every annual General Meeting of the Company commencing as of the first annual General Meeting to be held after the first anniversary of the Effective Time, the Board of Directors of the Company shall resolve by a majority vote the names of the persons to be proposed to the shareholders of the Company for election as directors of the Company at such annual General Meeting, for a term that lasts until the next annual General Meeting (the “Nominees”). |
75.3 | Any Proposing Shareholder requesting to include on the agenda of a General Meeting a nomination of a Person to be proposed to the Shareholders for election as director (such person, an “Alternate Nominee”), may so request provided that it complies with this Article 75.3 and Article 56 and applicable law. Unless otherwise determined by the Board, a Proposal Request relating to Alternate Nominee is deemed to be a matter that is appropriate to be considered only at an annual General Meeting. In addition to any information required to be included in accordance with applicable law, such a Proposal Request shall include information required pursuant to Article 56, and shall also set forth: (i) the name, address, telephone number, fax number and email address of the Alternate Nominee and all citizenships and residencies of the Alternate Nominee; (ii) a description of all arrangements, relations or understandings between the Proposing Shareholder(s) or any of its affiliates and each Alternate Nominee; (iii) a declaration signed by the Alternate Nominee that he or she consents to be named in the Company’s notices and proxy materials relating to the General Meeting, if provided or published, and, if elected, to serve on the Board of Directors and to be named in the Company’s disclosures and filings, (iv) a declaration signed by each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations for the appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchange rules and regulations to be provided to the Company in connection with such an appointment has been provided (including, information in respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under Form 20-F, Form 10-K, Schedule 14A or any other applicable form or schedule prescribed by the U.S. Securities and Exchange Commission (the “SEC”); (v) a declaration made by the Alternate Nominee of whether he or she meets the criteria for an independent director under the rules of the stock exchange on which the Company’s ordinary shares are then listed for trading, the Companies Law and/or under any applicable law, regulation or stock exchange |
75.4 | One or more Nominees or Alternate Nominees shall be elected by a Resolution at every annual General Meeting, for a term of office that shall conclude at the end of the first annual General Meeting held after the date of his or her election and upon the election and qualification of his or her successor, unless his or her office is vacated in accordance with Articles 77 or Article 80 below. |
75.5. | If at the annual General Meeting no Nominee or Alternate Nominee is elected, the directors then in office shall continue to hold office until the convening of a General Meeting at which Nominees or Alternate Nominees are elected. |
76. | The directors in their capacity as such shall be entitled to receive remuneration as shall be determined in compliance with the Law and the regulations promulgated thereunder. The conditions (including remuneration) of the terms of office of members of the Board of Directors shall be decided by the Board of Directors, but the same shall be valid only if ratified in the manner required under the Law. The remuneration of directors may be fixed as an overall payment or other consideration and/or as a payment or other consideration in respect of attendance at meetings of the Board of Directors. In addition to his or her remuneration, each director shall be entitled to be reimbursed, retroactively or in advance, in respect of his or her reasonable expenses connected with performing his or her functions and services as a director. Such entitlement shall be determined in accordance with, and shall be subject to, a specific resolution or policy adopted by the Board of Directors regarding such matter. |
77.1. | Subject to the provisions of the Law and subject to Article 80 below, the office of a director shall be vacated in any one of the following events: |
77.1.1. | if he resigns his office by way of a letter signed by him, submitted to the Office of the Company; |
77.1.2. | if he is declared bankrupt; |
77.1.3. | if he becomes an Incapacitated Person; |
77.1.4. | upon his death; |
77.1.5. | if he is prevented by applicable law from serving as a director of the Company; |
77.1.6. | if the Board terminates his office according to Section 231 of the Law; |
77.1.7. | if a court order is given in accordance with Section 233 of the Law; |
77.1.8. | if he is removed from office by a Resolution at an annual General Meeting of the Company; or |
77.1.9. | if his period of office has terminated in accordance with the provisions of these Articles. |
77.2. | If the office of a member of the Board of Directors is vacated (except for an External Director, if applicable), or if the number of directors then serving is less than the maximum number of directors then authorized to serve as determined by the Board of Directors from time to time under Article 75.1 above, the remaining or incumbent members of the Board of Directors shall be entitled to appoint additional director(s) in place of the director(s) whose office(s) have been vacated, or to fill an unoccupied seat within the then-authorized size of the Board of Directors, as applicable, for a term of office equal to the remaining period of the term of office of the director(s) whose office(s) have been vacated or the full or partial term of the director seat(s) that is/are then unoccupied, and, in the case of the vacation of a seat, the remaining members of the Board of Directors shall be entitled to act for all purposes for a term of office equivalent to the remaining period of the term of office of the director whose office has been vacated, for as long as their number does not fall below the minimum authorized number of directors, |
78.1. | Subject to any mandatory provisions of applicable law, a director shall not be disqualified by virtue of his office from holding another office in the Company or in any other company in which the Company is a shareholder or in which it has any other form of interest, or of entering into a contract with the Company, either as seller or buyer or otherwise. Likewise, no contract made by the Company or on its behalf in which a director has any form of interest may be nullified and a director shall not be obliged to account to the Company for any profit deriving from such office, or resulting from such contract, merely by virtue of the fact that he serves as a director or by reason of the fiduciary relationship thereby created, but such director shall be obliged to disclose to the Board of Directors the nature of any such interest at the first opportunity. |
78.2. | Subject to the provisions of the Law and these Articles, the Company shall be entitled to enter into a transaction in which an Office Holder of the Company has a personal interest, directly or indirectly, and may enter into any contract or otherwise transact any business with any third party in which contract or business an Office Holder has a personal interest, directly or indirectly. |
79. | Subject to Article 86, the Board of Directors shall elect one (1) or more of its members to serve as Chairman of the Board of Directors, provided that, subject to the provisions of Section 121(c) of the Law, the Chief Executive Officer of the Company shall not serve as Chairman of the Board of Directors. Notwithstanding anything to the contrary herein, the office of Chairman of the Board of Directors shall be vacated in each of the cases mentioned in Articles 77.1 above and Article 80 below. The Board of Directors may also elect (i)(a) member(s) to serve as Vice Chairman, who shall have such duties and authorities as the Board of Directors may assign to him or her, and (ii) a member to serve as Lead Independent Director, who shall have such duties and authorities as the Board of Directors may assign to him or her. |
80. | Subject to the provisions of Articles 75 and 77, the Company may, in a General Meeting, by a Resolution, dismiss any director prior to the end of his or her term of office, and it shall be entitled, by a Resolution, to appoint another individual in his or her place as a director of the Company. The individual so appointed shall hold such office only for that period of time during which the director whom he or she replaces would have held office. |
80A. | If at any time, the Company shall be required to appoint independent or external directors such as a public director or directors of any other type as may be required by Law (“External Directors”) such directors shall serve on the Board according to the number required by law. External Directors will be appointed and removed pursuant to and shall be governed by the relevant provisions of the law which applies to External Directors. If permitted by Law, External Directors will be appointed by the Board. External Directors will be chosen and appointed, and term will expire, in accordance with the Law. |
81.1. | Subject to Article 86, the Board of Directors shall, from time to time, appoint a Chief Executive Officer and subject to the provisions of the Law delineate his or her powers and authorities and his or her remuneration. Subject to the provisions of any contract between the Chief Executive Officer and the Company, the Board of Directors may dismiss or replace him or her at any time they deem fit. |
81.2. | The Chief Executive Officer need not be a shareholder of the Company. |
81.3. | Subject to the provisions of any contract between the Chief Executive Officer and the Company, all of the provisions with regard to appointment, resignation and removal of directors from office shall apply to the Chief Executive Officer if he or she is also a director, as apply to all other directors. Upon the termination of his or her service as Chief Executive Officer, the Chief Executive Officer’s service on the Board of Directors shall automatically terminate. Subject to the provisions of the Companies Law, the Board of Directors shall be entitled from time to time to delegate to the Chief Executive Officer for the time being such of the powers they have pursuant to these Articles as they deem appropriate, and they shall be entitled to grant such powers for such period and for such purposes and on such conditions and with such restrictions as they deem expedient, and they shall be entitled to grant such powers without renouncing the powers and authorities of the Board of Directors in such regard, and they may, from time to time, revoke, annul and alter such delegated powers and authorities, in whole or in part. |
81.4. | Subject to the provisions of the Law, the remuneration of the Chief Executive Officer shall be fixed from time to time by the Board of Directors together with any committees of the Board of Directors (each, a “Committee of Directors”) as may be prescribed by the Law) and it may be in the form of a fixed salary or commissions or a participation in profits, or in any other manner which may be decided by the Board of Directors (and approved by any relevant Committee(s) of Directors and, to the extent required under applicable law, shareholders). |
82.1. | The Board of Directors shall convene for a meeting at least once every fiscal quarter. |
82.2. | The Board of Directors may meet in order to exercise its powers pursuant to Section 92 of the Law, including without limitation to supervise the Company’s affairs, and it may, subject to the provisions of the Law, adjourn its meetings and regulate its proceedings and operations as it deems fit. It may also prescribe the quorum required for the conduct of business. Until otherwise decided a quorum shall be constituted if a majority of the directors holding office for the time being are present. |
82.3. | Should a director or directors be barred from being present and voting at a meeting of the Board of Directors by virtue of the contents of Section 278 of the Law, the quorum shall be a majority of the directors entitled to be present and to vote at the meeting of the Board of Directors. |
83. | Any director or the Auditors, in the event stipulated in Section 169 of the Law, may, at any time, demand the convening of a meeting of the Board of Directors. The Chairman of the Board shall be obliged, on such demand, to call such meeting on the date requested by the director or Chief Executive Officer soliciting such a meeting, provided that proper notice pursuant to Article 84 is given. |
84. | Every director shall be entitled to receive notice of meetings of the Board of Directors, and such notice may be in writing or by facsimile, telegram or electronic mail, sent to the last address (whether physical or electronic) or facsimile number given by the director for purposes of receiving notices, provided that the notice shall be given at least a reasonable amount of time prior to the meeting and in no event less than 48 (forty eight) hours prior notice, unless the urgency of the matter(s) to be discussed at the meeting reasonably require(s) a shorter notice period. |
85. | Every meeting of the Board of Directors at which a quorum is present shall have all the powers and authorities vested for the time being in the Board of Directors. |
86. | Subject to the provisions of these Articles, a resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a simple majority of the members of the Board of Directors who are lawfully entitled to participate in the meeting and vote thereon and present when such resolution is put to a vote and voting thereon, provided that notwithstanding anything in these Articles to the contrary, during the period between the Effective Time and the end of the Initial Term, the following actions shall require a resolution of the Board of Directors approved by at least two-thirds of the directors then in office (excluding, in respect of clause (i), the Company’s Chief Executive Officer as of the Effective Time, and in respect of clause (ii), the Chairman of the Board of Directors as of the Effective Time ): (i) the dismissal or replacement of the Company’s Chief Executive Officer as of the Effective Time, (ii) the dismissal or replacement of the Chairman of the Board |
87. | The Board of Directors may adopt resolutions, without convening a meeting of the Board of Directors, in any manner permitted by the Law. |
88. | The Board of Directors may hold meetings by use of any means of communication, on condition that all participating directors can hear each other at the same time. In the case of a resolution passed by way of a telephone call or any such other means of communication, a copy of the text of the resolution shall be sent, as soon as possible thereafter, to the directors. |
89. | The supervision of the Company’s affairs shall be in the hands of the Board of Directors, which shall be entitled to exercise all of the powers and authorities and to perform any act and deed which the Company is entitled to exercise and to perform in accordance with its Memorandum of Association and these Articles or according to law, and in respect of which there is no provision or requirement in these Articles, or in the Law or/and in the U.S. Rules, that same be exercised or done by the shareholders in a General Meeting or by a Committee of Directors. |
90. | The Board of Directors may, as it deems fit and subject to any applicable law, delegate to a Committee of Directors certain of its powers and authorities, in whole or in part to the fullest extent provided by any applicable law. The curtailment or revocation of the powers and authorities of a Committee of Directors by the Board of Directors shall not invalidate a prior act of such Committee of Directors or an act taken in accordance with its instructions, which would have been valid had the powers and authorities of the Committee of Directors not been altered or revoked by the Board of Directors. Subject to applicable law, a Committee of Directors may be comprised of one (1) director or of several directors, and in the case of a Committee of Directors that is appointed to advise the Board of Directors only, persons who are not directors may be appointed to it. The powers of any chairman of a Committee of Directors with respect to the operation of such committee shall be the same as the Chairman of the Board of Directors hereunder and under the Law, mutatis mutandis. |
91. | The meetings and proceedings of every such Committee of Directors which is comprised of two (2) or more members shall be conducted in accordance with the provisions contained in these Articles in regard to the conduct of meetings and proceedings of the Board of Directors to the extent that the same are suitable for such committee, and so long as no provisions have been adopted in replacement thereof by the Board of Directors. |
92. | Reserved. |
93. | Subject to the Law, all acts taken in good faith by the Board of Directors and/or a Committee of Directors or by an individual acting as a member thereof shall be valid even if it is subsequently discovered that there was a defect in the appointment of the Board of Directors, the Committee of Directors or the member, as the case may be, or that the members, or one of them, was/were disqualified from being appointed as a director/s or to a Committee of Directors. |
94.1. | The Board of Directors or any Committee of Directors may ratify any act the performance of which at the time of the ratification was within the scope of the authority of the Board of Directors or the relevant Committee of Directors. |
94.2. | The General Meeting shall be entitled to ratify any act taken by the Board of Directors and/or any Committee of Directors without authority or which was tainted by some other defect. |
94.3. | From the time of the ratification, every act ratified as aforesaid, shall be treated as though lawfully performed from the outset. |
95. | The Board of Directors may, from time to time, in its absolute discretion, borrow or secure any amounts of money required by the Company for the conduct of its business. |
96. | The Board of Directors shall be entitled to raise or secure the repayment of an amount obtained by them, in such way and on such conditions and times as they deem fit. The Board of Directors shall be entitled to issue documents of undertaking, such as options, debentures or debenture stock, whether linked or redeemable, convertible debentures or debentures convertible into other securities, or debentures which carry a right to purchase shares or to purchase other securities, or any mortgage, pledge, collateral or other charge over the property of the Company and its undertaking, in whole or in part, whether present or future, including the uncalled share capital or the share capital which has been called but not yet paid. |
97. | Subject to any other resolution on the subject passed by the Board of Directors, the Company shall be bound only pursuant to a document in writing bearing its seal or its rubber stamp or its printed name, and the signature of whomever may be authorized by the Board of Directors, which shall be entitled to empower any person, either alone or jointly with another, even if he is not a shareholder of the Company or a director, to sign and act in the name and on behalf of the Company. |
98. | The Board of Directors shall be entitled to prescribe separate signing power in regard to different businesses of the Company and in respect of the limit of the amounts in respect of which various persons shall be authorized to sign. |
99. | The Board of Directors shall be entitled, from time to time, to appoint, or to delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to appoint Office Holders (other than directors), a Secretary for the Company, employees and agents to such permanent, temporary or special positions, and to specify and change their titles, authorities and duties, and may set, or delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to set salaries, bonuses and other compensation of any employee or agent who is not an Office Holder. Salaries, bonuses and compensation of Office Holders who are not directors shall be determined and approved by the Chief Executive Officer, and/or in such other manner as may be required from time to time under the Law. The Board of Directors, or the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors (in the case of any Office Holder, employee or agent appointed thereby), shall be entitled at any time, in its, his, her, or their (as applicable) sole and absolute discretion, to terminate the services of one of more of the foregoing persons (in the case of a director, however, subject to compliance with Article 77 above). |
100. | The Board of Directors and the Chief Executive Officer may from time to time and at any time empower any person to serve as representative of the Company for such purposes and with such powers and authorities, instructions and discretions for such period and subject to such conditions as the Board of Directors (or the Chief Executive Officer, as the case may be) shall deem appropriate. The Board of Directors may (or the Chief Executive Officer, as the case may be) grant such person, inter alia, the power to transfer the authority, powers and discretions vested in him, in whole or in part. The Board of Directors may (or the Chief Executive Officer, as the case may be), from time to time, revoke, annul, vary or change any such power or authority, or all such powers or authorities collectively. |
101. | The Board of Directors may, prior to recommending any dividend, set aside out of the profits of the Company such amounts as it deems fit for a reserve fund for extraordinary purposes or for the equalization of dividends or for special dividends, or for the repair, improvement, maintenance or replacement of the property of the Company, or for any other purpose, as the Board of Directors, in its sole and absolute discretion, shall deem expedient. |
102. | The Board of Directors shall be entitled to invest the amounts set aside as aforesaid in Article 101 above in any investments whatsoever, as it may deem fit, and from time to time deal with such investments and vary same, and make use thereof, as it deems fit, and it may divide the reserve fund into special funds in such manner as it deems fit, and may utilize a fund or part thereof for the business of the Company, without being obliged to keep same separate from the remaining assets of the Company. |
103. | Unless otherwise permitted by the Law, no dividends shall be paid other than out of the Profits of the Company as such term is defined in the Law. |
104. | The Board of Directors may decide on the payment of a dividend or on the distribution of bonus shares. |
105. | A dividend in cash or bonus shares shall be paid or distributed, as the case may be, equally to the holders of the Ordinary Shares registered in the Register, pro rata to the nominal amount of capital paid up or credited as paid up on the shares, without reference to any premium which may have been paid thereon. However an amount paid on account of a share prior to the payment thereof having been called, or prior to the due date for payment thereof, and on which the Company is paying interest, shall not be taken into account for purposes of this Article as an amount paid-up on account of the share. |
106. | Unless other instructions are given, it shall be permissible to pay any dividend by way of a check or payment order to be sent by post to the registered address of the shareholder or the Person entitled thereto, or in the case of joint shareholders being registered, to the shareholder whose name stands first in the Register in relation to the joint shareholding. Every such check shall be made in favor of the person to whom it is sent. A receipt by the person whose name, on the date of declaration of the dividend, was registered in the Register as the owner of the shares, or in the case of joint holders, by one of the joint holders, shall serve as a discharge with regard to all the payments made in connection with such share. |
107. | Unless otherwise specified in the terms of issue of shares or of securities convertible into, or which grant a right to purchase, shares, any shares that are fully paid-up or credited as paid-up shall at any time confer on their holders the right to participate in the full dividends and in any other distribution for which the determining date for the right to receive the same is the date at which the aforesaid shares were fully paid- up or credited as fully paid-up, as the case may be, or subsequent to such date. |
108. | A dividend or other beneficial rights in respect of shares shall not bear interest. |
109. | The Board of Directors shall be entitled to deduct from any dividend or other beneficial rights, all amounts of money which the holder of the share in respect of which the dividend is payable or in respect of which the other beneficial rights were given, may owe to the Company in respect of such share, whether or not the due date for payment thereof has arrived. |
110. | The Board of Directors shall be entitled to retain any dividend or bonus shares or other beneficial rights in respect of a share in relation to which the Company has a lien, and to utilize any such amount or the proceeds received from the sale of any bonus shares or other beneficial rights, for the discharge of the debts or liabilities in respect of which the Company has a lien. |
111. | The Board of Directors may decide that a dividend is to be paid in whole or in part, by way of a distribution of assets of the Company in kind, including by way of debentures or debenture stock of the Company, or shares or debentures or debenture stock of any other company, or in any other way. |
112.1. | The Board of Directors may, at any time and from time to time, decide that any portion of the amounts standing for the time being to the credit of any capital fund (including a fund created as a result of a revaluation of the assets of the Company), or which are held by the Company as Profits available for distribution, shall be capitalized for distribution subject to and in accordance with the provisions of the Law and of these Articles, amongst those shareholders who are entitled thereto and pro rata to their entitlement under these Articles, provided that the same shall not be paid in cash but shall serve for the |
112.2. | The Board of Directors shall be entitled to distribute bonus shares and to decide that the bonus shares shall be of the same class which confers on the shareholders or the Persons entitled thereto the right to participate in the distribution of bonus shares, or may decide that the bonus shares shall be of a uniform class to be distributed to each of the shareholders or Persons entitled to shares as aforesaid, without reference to the class of shares conferring the right to participate in the distribution on the holders of the shares or the Persons entitled thereto as aforesaid. |
113.1. | In every case that the Company issues bonus shares by way of a capitalization of profits or funds at a time at which securities issued by the Company are in circulation and confer on the holders thereof rights to convert the same into shares in the share capital of the Company, or options to purchase shares in the share capital of the Company (such rights of conversion or options shall henceforth be referred to as the “Rights”), the Board of Directors shall be entitled (in a case that the Rights or part thereof shall not be otherwise adjusted in accordance with the terms of their issue) to transfer to a special fund designated for the distribution of bonus shares in the future (to be called by any name that the Board of Directors may decide on and which shall henceforth be referred to as the “Special Fund”) an amount equivalent to the nominal amount of the share capital to which some or all of the Rights holders would have been entitled as a result of the issue of bonus shares, had they exercised their Rights prior to the determining date for the right to receive bonus shares, including rights to fractions of bonus shares, and in the case of a second or additional distribution of bonus shares in respect of which the Company acts pursuant to this Article, including entitlement stemming from a previous distribution of bonus shares. |
113.2. | In the case of the allotment of shares by the Company as a consequence of the exercise of entitlement by the owners of shares in those cases in which the Board of Directors has made a transfer to the Special Fund in respect of the Rights pursuant to Article 113.1 above, the Board of Directors shall allot to each such shareholder, in addition to the shares to which he is entitled by virtue of having exercised his rights, such number of fully paid-up shares the nominal value of which is equivalent to the amount transferred to the Special Fund in respect of his rights, by way of a capitalization to be effected by the Board of Directors of an appropriate amount out of the Special Fund. The Board of Directors shall be entitled to decide on the manner of dealing with rights to fractions of shares in its sole discretion. |
113.3. | If after any transfer to the Special Fund has been made the Rights should lapse, or the period should end for the exercise of Rights in respect of which the transfer was effected without such Rights being exercised, then any amount which was transferred to the Special Fund in respect of the aforesaid unexercised Rights shall be released from the Special Fund, and the Company may deal with the amount so released in any manner it would have been entitled to deal therewith had such amount not been transferred to the Special Fund. |
114. | For the implementation of any resolution regarding a distribution of shares or debentures by way of a capitalization of profits as aforesaid, the Board of Directors may: |
114.1. | Resolve any difficulty which arises or may arise in regard to the distribution in such manner as it deems fit and may take all of the steps that it deems expedient in order to overcome such difficulty. |
114.2. | Issue certificates in respect of fractions of shares, or decide that fractions of less than an amount to be decided by the Board of Directors shall not be taken into account for purposes of adjusting the rights of the shareholders or may sell the fractions of shares and pay the proceeds (net) to the Persons entitled thereto. |
114.3. | Sign, or appoint a Person to sign, on behalf of the shareholders on any contract or other document which may be required for purposes of giving effect to the distribution, and, in particular, shall be entitled to sign or appoint a Person who shall be entitled to appoint and submit a contract as referred to in Sections 291 and 292 of the Law. |
114.4. | Make any arrangement or other scheme which is required in the opinion of the Board of Directors in order to facilitate the distribution. |
115. | The Board of Directors shall be entitled, as it deems appropriate and expedient, to appoint trustees or nominees for those registered shareholders who have failed to notify the Company of a change of their address and who have not applied to the Company in order to receive dividends, shares or debentures out of capital, or other benefits during the aforesaid period. Such trustees or nominees shall be appointed for the use, collection or receipt of dividends, shares or debentures out of capital and rights to subscribe for shares which have not yet been issued and which are offered to the shareholders but they shall not be entitled to transfer the shares in respect of which they were appointed, or to vote on the basis of holding such shares. In all of the terms and conditions governing such trusts and the appointment of such nominees it shall be stipulated by the Company that upon the first demand by a beneficial holder of a share being held by the trustee or nominee, such trustee or nominee shall be obliged to return to such shareholder the share in question and/or all of those rights held by it on the shareholder’s behalf (all as the case may be). Any act or arrangement effected by any such nominees or trustee and any agreement between the Board of Directors and a nominee or trustee shall be valid and binding in all respects. |
116. | The Board of Directors may from time to time prescribe the manner for payment of dividends or the distribution of bonus shares and the arrangement connected therewith. Without derogating from the generality of the foregoing, the Board of Directors shall be entitled to pay any dividends or moneys in respect of shares by sending a check via the mails to the address of the holder of registered shares according to the address registered in the register of shareholders of the Company. Any dispatch of a check as aforesaid shall be done at the risk of the shareholder. |
117. | If two (2) or more Persons are registered as joint holders of a share, each of them shall be entitled to give a valid receipt in respect of any dividend, share or debenture out of capital, or other moneys, or benefits, paid or granted in respect of such share. |
118. | The Board of Directors shall comply with all the provisions of the Law in regard to the recording of charges and the keeping and maintaining of a register of directors, register of shareholders and register of charges. |
119. | Any book, register and record that the Company is obliged to keep in accordance with the Law or pursuant to these Articles shall be recorded in a regular book, or by technical, mechanical or other means, as the Board of Directors shall decide. |
120. | Subject to and in accordance with the provisions of Sections 138 to 139, inclusive, of the Law, the Company may cause supplementary registers to be kept in any place outside Israel as the Board of Directors may think fit, and, subject to all applicable requirements of law, the Board of Directors may from time to time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers. |
121. | The Board of Directors shall keep proper books of account in accordance with the provisions of the Law. The books of account shall be kept at the Office, or at such other place or places as the Board of Directors shall deem expedient, and shall at all times be open to the inspection of members of the Board of Directors. A shareholder of the Company who is not a member of the Board of Directors shall not have the right to inspect any books or accounts or documents of the Company, unless such right has been expressly granted to him by the Law, or if he has been permitted to do so by the Board of Directors or by the shareholders based on a Resolution adopted at a General Meeting. |
122. | The Board of Directors shall from time to time arrange and submit to the General Meeting a balance sheet and statement of income of the Company. |
123. | At least once each year the accounts of the Company and the correctness of the statement of income and the balance sheet shall be audited and confirmed by an independent auditor or auditors. |
124. | The Company shall, in an annual General Meeting, appoint an independent auditor or auditors who shall hold such position until the next annual General Meeting, and their appointment, remuneration and rights and duties shall be subject to the provisions of the Law, provided, however, that in exercising its authority to fix the remuneration of the Auditor(s), the shareholders in an annual General Meeting may, by a Resolution, act (and in the absence of any action in connection therewith shall be deemed to have so acted) to authorize the Board of Directors to fix such remuneration subject to such criteria or standards, if any, as may be provided in such Resolution, and if no such criteria or standards are so provided, such remuneration shall be fixed in an amount commensurate with both the volume and nature of the services rendered by the Auditor(s). By an act appointing such Auditors, the Company may appoint the auditor(s) to serve for a period of up to the end of completion of the audit of the yearly financial statements for the three (3) year period then ended. |
125. | The Auditors shall be entitled to receive notices of every General Meeting of the Company and to attend such meetings and to express their opinions on all matters pertaining to their function as the Auditors of the Company. |
126. | Subject to the provisions of the Law and the U.S. Rules, any act carried out by the Auditors of the Company shall be valid as against any person doing business in good faith with the Company, notwithstanding any defect in the appointment or qualification of the Auditors. |
127. | For as long as the Company is a Public Company, as defined in the Law, it shall appoint an internal auditor possessing the authorities set forth in the Law. The internal auditor of the Company shall present all of its proposed work plans to the Audit Committee of Directors, which shall have the authority to approve them, subject to any modifications in its discretion. |
128.1. | The Company may serve any written notice or other document on a shareholder by way of delivery by hand, by facsimile transmission or by dispatch by prepaid registered mail to his address as recorded in the Register, or if there is no such recorded address, to the address given by him, her or it to the Company for the sending of notices. |
128.2. | Any shareholder may serve any written notice or other document on the Company by way of delivery by hand at the Office, by facsimile transmission to the Company or by dispatch by prepaid registered mail to the Company at the Office. |
128.3. | Any notice or document which is delivered or sent to a shareholder in accordance with these Articles shall be deemed to have been duly delivered and sent in respect of the shares held by him (whether in respect of shares held by him alone or jointly with others), notwithstanding the fact that such shareholder has died or been declared bankrupt at such time (whether or not the Company knew of his death or bankruptcy), and shall be deemed to be sufficient delivery or dispatch to heirs, trustees, administrators or transferees and any other persons (if any) who have a right in the shares. |
128.4. | Any such notice or other document shall be deemed to have been served: |
128.4.1. | in the case of mailing, 48 hours after it has been posted, or when actually received by the addressee if sooner than 48 hours after it has been posted; |
128.4.2. | in the case of overnight air courier, on the next day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner; |
128.4.3. | in the case of personal delivery, when actually tendered in person to such shareholder; |
128.4.4. | in the case of facsimile or other electronic transmission (including email), the next day following the date on which the sender receives automatic electronic confirmation by the recipient’s facsimile machine or computer or other device that such notice was received by the addressee; or |
128.4.5. | in the case a notice is, in fact, received by the addressee, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 128. |
129. | Any shareholder whose address is not described in the Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company. In the case of joint holders of a share, the Company shall be entitled to deliver a notice by dispatch to the joint holder whose name stands first in the Register in respect of such share. |
130. | Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required by applicable law and these Articles to be set forth therein, that is published, within the time otherwise required for giving notice of such meeting, in a press release via an international wire service and furnished in a Report of Foreign Private Issuer on Form 6-K or Current Report on Form 8-K (or an equivalent form subsequently adopted by the SEC) to the SEC shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any Shareholder whose address as registered in the Register of Shareholders (or as designated in writing for the receipt of notices and other documents) is located either inside or outside the State of Israel, if the Company’s shares are then listed for trading on a national securities exchange in the United States or quoted in an over-the-counter market in the United States. |
131. | Whenever it is necessary to give notice of a particular number of days or a notice for another period, the day of delivery shall be counted in the number of calendar days or the period, unless otherwise specified. |
132. | Subject to the provisions of the Law, the Company shall be entitled to enter into a contract to insure all or part of the liability of an Office Holder of the Company, imposed on him in consequence of an act which he has performed by virtue of being an Office Holder, in respect of any of the following: |
132.1. | The breach of a duty of care to the Company or to any other Person; |
132.2. | The breach of a fiduciary duty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds for believing that the action would not adversely affect the best interests of the Company; |
132.3. | A pecuniary liability imposed on him in favor of any other person in respect of an act done in his capacity as an Office Holder. |
133. | Subject to the provisions of the Law, the Company shall be entitled to indemnify an Office Holder of the Company, to the fullest extent permitted by the Law. Subject to the provisions of the Law, including the receipt of all approvals as required therein or under any applicable law, the Company may resolve retroactively to indemnify an Office Holder with respect to the following liabilities and expenses, provided, in each of the below cases, that such liabilities or expenses were incurred by such Office Holder in such Office Holder’s capacity as an Office Holder of the Company: |
133.1. | a monetary liability imposed on him in favor of a third party in any judgment, including any settlement confirmed as judgment and an arbitrator’s award which has been confirmed by the court, in respect of an act performed by the Office Holder by virtue of the Office Holder being an Office Holder of the Company; provided, however, that: (a) any indemnification undertaking with respect to the foregoing shall be limited (i) to events which, in the opinion of the Board of Directors, are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking and (ii) to an amount or by criteria determined by the Board of Directors to be reasonable in the given circumstances; and (b) the events that in the opinion of the Board of Directors are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking are listed in the indemnification undertaking together with the amount or criteria determined by the Board of Directors to be reasonable in the given circumstances; |
133.2. | reasonable litigation expenses, including legal fees, paid for by the Office Holder, in an investigation or proceeding conducted against such Office Holder by an agency authorized to conduct such investigation or proceeding, and which investigation or proceeding: (i) concluded without the filing of an indictment against such Office Holder and without there having been a monetary liability imposed against such Office Holder in lieu of a criminal proceeding; (ii) concluded without the filing of an indictment against such Office Holder but with there having been a monetary liability imposed against such Office Holder in lieu of a criminal proceeding for an offense that does not require proof of criminal intent; or (iii) involves financial sanction; and |
133.3. | reasonable litigation expenses, including legal fees, paid for by the Office Holder, or which the Office Holder is obligated to pay under a court order, in a proceeding brought against the Office Holder by the Company, or on its behalf, or by a third party, or in a criminal proceeding in which the Office Holder is found innocent, or in a criminal proceeding in which the Office Holder was convicted of an offense that does not require proof of criminal intent. |
133.4. | For purposes of Article 133.2 above: |
133.4.1. | the “conclusion of a proceeding without the filing of an indictment” regarding a matter in which a criminal proceeding was initiated, means the closing of a file pursuant to Section 62 of the Israeli Criminal Procedure Law [Consolidated Version], 5742-1982 (the “Criminal Procedure Law”) or a stay of process by Israel’s Attorney General pursuant to Section 231 of the Criminal Procedure Law; and |
133.4.2. | a “monetary liability imposed…in lieu of a criminal proceeding” means a monetary obligation imposed by law as an alternative to a criminal proceeding, including, without limitation, an administrative fine pursuant to the Israeli Administrative Offenses Law, 5746-1982, a fine for committing an offense categorized as a finable offense pursuant to the provisions of the Criminal Procedure Law, or a penalty. |
133.5. | The Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that the undertaking is limited to categories of events which in the opinion of the Board of Directors can be foreseen when the undertaking to indemnify is given, and to an amount set by the Board of Directors as reasonable under the circumstances, and (ii) retroactively. |
134. | Subject to the provisions of the Companies Law including the receipt of all approvals as required therein or under any applicable law, the Company may, to the maximum extent permitted by law, exempt and release, in advance, any Office Holder from any liability for damages arising out of a breach of a duty of care towards the Company. |
135.1. | Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 132 to 134 and any amendments to Articles 132 to 134 shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law. |
135.2. | The provisions of Articles 132 to 134 are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or in respect of indemnification and/or exculpation, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any Office Holder to the extent that such insurance and/or indemnification is not specifically prohibited under law. |
136. | Should the Company be wound up and the assets of the Company made available for distribution among shareholders be insufficient to repay all of the Company’s paid-up capital, such assets shall be divided in a manner whereby the losses shall, as far as possible, be borne by the shareholders pro rata to the nominal value of the paid-up capital on the shares held by each of them, and, if at the time of the winding-up, the property of the Company available for distribution among the shareholders should exceed the amount sufficient for the repayment of the full nominal value of the paid-up capital at the time of commencement of the winding-up, the surplus shall be distributed to the |
137. | Upon the sale of the Company’s assets, the directors may, or in the case of a liquidation, the liquidators may, if authorized to do so by a Resolution of the Company, accept fully or partly paid-up shares, or securities of another company, Israeli or non-Israeli, whether in existence at such time or about to be formed, in order to purchase the property of the Company, or part thereof, and to the extent permitted under the Law, the directors may (or in the case of a liquidation, the liquidators may) distribute the aforesaid shares or securities or any other property of the Company among the shareholders without realizing the same, or may deposit the same in the hands of trustees for the shareholders, and the General Meeting by a Resolution may decide, subject to the provisions of the Law, on the distribution or allotment of cash, shares or other securities, or the property of the Company and on the valuation of the aforesaid securities or property at such price and in such manner as the shareholders at such General Meeting shall decide, and all of the shareholders shall be obliged to accept any valuation or distribution determined as aforesaid and to waive their rights in this regard, except, in a case in which the Company is about to be wound-up and is in the process of liquidation, for those legal rights (if any) which, according to the provisions of the Law, may not be changed or modified. |
138. | Subject to the Companies Law and these Articles, a transaction between the Company and an Office Holder, and a transaction between the Company and another entity in which an Office Holder of the Company has a personal interest, in each case, which is not an Extraordinary Transaction (as defined by the Companies Law), shall require only approval by the Board or a Committee. Such authorization, as well as the actual approval, may be for a particular transaction or more generally for specific type of transactions under a related party transactions policy approved by the Board or the applicable Committee. |
• | Determine all information sent to the Board of Directors, including the quality, quantity, appropriateness and timeliness of such information. |
• | Set meeting agendas for the Board of Directors. |
• | Set the frequency of Board of Directors meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items. |
• | Interview all Director candidates and make recommendations to the Nominating and Corporate Governance Committee. |
• | Be available, when appropriate, for consultation and direct communication with shareholders. |
• | Has the authority to retain outside advisors and consultants who report directly to the Board of Directors on Board-wide issues. |
• | To the extent requested by the Chairperson and where appropriate, the Company’s counsel shall provide advice and counsel to the Chairperson in fulfilling the Chairperson's duties. |
• | After the initial two-year term referred to above, the Chairperson shall review this Charter and recommend to the Board of Directors for approval any modifications or changes, on an annual basis. |
• | Preside at all meetings of the Board of Directors at which the Chairperson is not present, including executive sessions of the independent Directors. |
• | Has the authority to call meetings of the independent Directors. |
• | If and as needed, serve as the principal liaison between the Chairperson and the independent Directors. |
• | All information sent to the Board of Directors, including the quality, quantity, appropriateness and timeliness of such information. |
• | Meeting agendas for the Board of Directors. |
• | The frequency of Board of Directors meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items. |
• | Recommend to the Nominating and Corporate Governance Committee and to the Chairperson, selection for the membership and chairperson position for each Board committee, subject to any qualification requirements set forth in any applicable law (including the Israeli Companies Law). |
• | Interview all Director candidates and make recommendations to the Nominating and Corporate Governance Committee, subject to any qualification requirements set forth in any applicable law (including the Israeli Companies Law). |
• | Be available, when appropriate, for consultation and direct communication with shareholders. |
• | Has the authority to retain outside advisors and consultants who report directly to the Board of Directors on Board-wide issues. |
• | To the extent requested by the Lead Independent Director and where appropriate, the Company’s counsel shall provide advice and counsel to the Lead Independent Director in fulfilling the Lead Independent Director's duties. |
• | After the initial two-year term referred to above, the Lead Independent Director, in consultation with the independent Directors, shall review this Charter and recommend to the Board of Directors for approval any modifications or changes, on an annual basis. |
Term | | | Section |
Adjustment Shares | | | 11.1.2 |
Agreement | | | Preamble |
Board | | | Recitals |
Book Entry Shares | | | 3.1 |
common stock equivalent | | | 11.1.3 |
Company | | | Preamble |
current per share market price | | | 11.4.1 |
Current Value | | | 11.1.3 |
Distribution Date | | | 3.1 |
equivalent preferred stock | | | 11.2 |
Exchange Act | | | 1.2 |
Exchange Consideration | | | 27.1 |
Expiration Date | | | 7.1 |
Final Expiration Date | | | 7.1 |
Merger Agreement | | | Recitals |
Merger Sub | | | Recitals |
NYSE | | | 9 |
Original Rights | | | 1.3.2 |
Permitted Events | | | 1.1 |
Principal Party | | | 13.2 |
Purchase Price | | | 4 |
Record Date | | | Recitals |
Redemption Date | | | 7.1 |
Redemption Price | | | 23.1 |
Right | | | Recitals |
Right Certificate | | | 3.1 |
Rights Agent | | | Preamble |
Securities Act | | | 1.12 |
Security | | | 11.4.1 |
Series A Preferred | | | Recitals |
Term | | | Section |
Spread | | | 11.1.3 |
Substitution Period | | | 11.1.3 |
Summary of Rights | | | 3.2 |
Sun | | | Recitals |
Trading Day | | | 11.4.1 |
Trust | | | 27.1 |
Trust Agreement | | | 27.1 |
This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between Desktop Metal, Inc. (the “Company”) and Continental Stock Transfer & Trust Company, as Rights Agent, dated as of May [•], 2023, as the same may be amended from time to time (the “Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor. As described in the Agreement, Rights which are owned by, transferred to or have been owned by Acquiring Persons (as defined in the Agreement) or any Related Person (as defined in the Agreement) of any Acquiring Person shall become null and void and will no longer be transferable. |
| | Desktop Metal, Inc. 63 3rd Avenue Burlington, MA 01803 Attention: General Counsel |
| | Continental Stock Transfer & Trust Company 1 State Street, 30th Floor New York, NY 10004-1561 Attention: Legal Department Email: Compliance@continentalstock.com |
| | DESKTOP METAL, INC. | ||||
| | | | |||
| | By | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | | | |||
| | CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||||
| | | | |||
| | By | | | ||
| | | | Name: | ||
| | | | Title: |
Certificate No. R- | | | Rights |
Attest: | | | | | DESKTOP METAL, INC. | |||||||
| | | | | | | | |||||
By | | | | | | | By | | | |||
| | Title: | | | | | | | Title: | |||
| | | | | | | | |||||
Countersigned: | ||||||||||||
| | | | | | | | |||||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Rights Agent | ||||||||||||
| | | | | | | | |||||
By | | | | | | | | | ||||
| | Authorized Signature | | | | | | |
FOR VALUE RECEIVED | | | |
hereby sells, assigns and transfers unto | | | |
| | ||
| | Signature | |
| | ||
Signature Medallion Guaranteed: | | | |
| |
| | ||
| | Signature |
| | ||
(Please print name and address) | | | |
| | ||
| |
| | ||
(Please print name and address) | | | |
| | ||
| |
| | ||
| | Signature | |
Signature Medallion Guaranteed: | | | |
| | ||
| |
| | ||
| | Signature |
1. | Amendments. |
(a) | The following is added as a new definition in Section 1 of the Agreement: |
(b) | Paragraph (a) of Section 7 of the Agreement is amended in its entirety to read as follows: |
(c) | Exhibit A to the Agreement is amended as follows: |
i) | The following is added on page A-1 following the phrase “provisions and conditions of the Agreement, dated as of July 25, 2022” and prior to the parenthetical for the defined term, “Agreement”: |
ii) | The reference to “July 24, 2023” on page A-1 is removed and replaced with “the Final Expiration Date (as such term is defined in the Agreement)”. |
(d) | Exhibit B to the Agreement is amended as follows: |
i) | The first sentence of the second paragraph on page B-1 is to be removed and replaced with the following: |
ii) | The text following the heading “Expiration” on page B-2 is to be removed and replaced with: |
2. | Effect of this Amendment. It is the intent of the parties that this Amendment constitutes an amendment of the Agreement as contemplated by Section 28 thereof. This Amendment shall be deemed effective as of the date hereof as if executed by both parties hereto on such date. Except as expressly provided in this Amendment, the terms of the Agreement remain in full force and effect. |
3. | Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. |
4. | Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Israel and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state, other than with respect to the duties and rights of the Rights Agent under Sections 18-21 hereunder which shall be governed by and construed in accordance with the laws of the State of New York. |
5. | Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated. |
6. | Descriptive Headings. The captions herein are included for convenience of reference only, do not constitute a part of this Amendment and shall be ignored in the construction and interpretation hereof. |
7. | Further Assurances. Each of the parties to this Amendment will cooperate and take such action as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Amendment, the Agreement and any transactions contemplated hereunder and thereunder. |
| | STRATASYS LTD. | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: | ||
| | CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: |
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |
PART I | | | Identification and details of Shareholder (including Eligible Israeli Brokers) | |||
1. Name: | | | 2. Type of Shareholder (more than one box may be applicable): | |||
(please print full name) | | | ☐ Corporation (or Limited Liability Company) | | | ☐ Bank |
| ☐ Individual | | | ☐ Broker | ||
| ☐ Trust | | | ☐ Financial Institution | ||
| ☐ Partnership | | | |||
| ☐ Other: | | | |||
| | | ||||
3. For individuals only: | | | 4. For all other Shareholders | |||
Date of birth: / / | | | Country of incorporation or organization: | |||
month / day / year | | | | | ||
Country of residence: | | | Registration number of corporation (if applicable): | |||
Countries of citizenship (name all citizenships): | | |||||
Taxpayer Identification or Social Security No. (if applicable): | | | Country of residence: | |||
5. Permanent Address (state, city, zip or postal code, street, house number, apartment number): | ||||||
6. Mailing Address (if different from above): | | | 7. Contact Details: | |||
| Name: | |||||
| Capacity: | |||||
| Telephone Number | |||||
| (country code, area code and number): | |||||
8. I hold the Shares of the Company (mark X in the appropriate place): | ||||||
☐ directly, as a Registered Holder | ||||||
☐ Through a Broker. If you marked this box, please state the name of your Broker: |
PART II | | | Declaration by Non-Israeli Residents ► Eligible Israeli Brokers should not complete this Part II | |||
A. To be completed only by Individuals. I hereby declare that: (if the statement is correct, mark X in the following boxes) | ||||||
A.1 ☐ | | | I am NOT and at the date of purchase of my Shares was not a “resident of Israel” for tax purposes as defined under Israeli law, which means, among other things, that: | |||
| • | | | The State of Israel is not my permanent place of residence, | ||
| • | | | The State of Israel is neither my place of residence nor that of my family (for this purpose “family” shall mean spouse and children under the age of 18), | ||
| • | | | My ordinary or permanent place of activity is NOT in the State of Israel and I do NOT have a permanent establishment in the State of Israel, | ||
| • | | | I do NOT engage in an occupation in the State of Israel, | ||
| • | | | I do NOT own a business or part of a business in the State of Israel, |
| | • | | | I am NOT insured by the Israeli National Insurance Institution, | |
| • | | | I was NOT present (nor am I planning to be present) in Israel for 183 days or more during this tax year, | ||
| • | | | I was NOT present (nor am I planning to be present) in Israel for 30 days or more during this tax year, and the total period of my presence in Israel during this tax year and the two previous tax years is less than 425 days in total. | ||
A.2 ☐ | | | I acquired the Shares on or after 1.1.2009. | |||
| | | | |||
B. To be completed by Corporations (except Partnerships and Trusts). I hereby declare that: (if correct, mark X in the following boxes) | ||||||
| | | | |||
B.1 ☐ | | | The corporation is NOT and at the date of purchase of its Shares was not a “resident of Israel” for tax purposes as defined under Israeli law, which means, among other things, that: | |||
| • | | | The corporation is NOT registered with the Registrar of Companies in Israel, | ||
| • | | | The corporation is NOT registered with the Registrar of “Amutot” (non profit organizations) in Israel, | ||
| • | | | The control of the corporation is NOT located in Israel, | ||
| • | | | The management of the corporation is NOT located in Israel, | ||
| • | | | The corporation does NOT have a permanent establishment in Israel, and | ||
| • | | | No Israeli resident holds, directly or indirectly via shares or through a trust or in any other manner or with another who is an Israeli resident, 25% or more of any “means of control” in the corporation as specified below: | ||
| | | ○ The right to participate in profits; ○ The right to appoint a director; ○ The right to vote; ○ The right to share in the assets of the corporation at the time of its liquidation; and ○ The right to direct the manner of exercising one of the rights specified above. | |||
B.2 ☐ | | | The corporation acquired the Shares on or after 1.1.2009 | |||
| | | | |||
C. To be completed by Partnerships. I hereby declare that: (if correct, mark X in the following boxes) | ||||||
| | | | |||
C.1 ☐ | | | The partnership is NOT and at the date of purchase of its Shares was not a “resident of Israel” for tax purposes as defined under Israeli law, which means, among other things, that: | |||
| | • | | | The partnership is NOT registered with the Registrar of Partnerships in Israel, | |
| | • | | | The control of the partnership is NOT located in Israel, | |
| | • | | | The management of the partnership is NOT located in Israel, | |
| | • | | | The partnership does NOT have a permanent establishment in Israel, | |
| | • | | | NO Israeli resident holds, directly or indirectly via shares or through a trust or in any other manner or with another who is an Israeli resident, 25% or more of the rights in the partnership, and | |
| | • | | | NO direct partner in the partnership is an Israeli resident. | |
C.2 ☐ | | | The partnership acquired the Shares on or after on or after 1.1.2009 | |||
| | | | |||
D. To be completed by Trusts. I hereby declare that: (if correct, mark X in the following boxes) | ||||||
| | | | |||
D.1 ☐ | | | The trust is NOT and at the date of purchase of its Shares was not a “resident of Israel” for tax purposes as defined under Israeli law, which means, among other things, that: | |||
| | • | | | The trust is NOT registered in Israel, | |
| | • | | | The settlor of the trust is NOT an Israeli resident, | |
| | • | | | The beneficiaries of the trust are NOT Israeli residents, and | |
| | • | | | The trustee of the trust is NOT an Israeli resident. | |
D.2 ☐ | | | The trust acquired the Shares on or after 1.1.2009 |
PART III Declaration by Israeli Bank, Broker or Financial Institution ► Non-Israeli Residents should not complete this Part III | ||||||
| | | | |||
I hereby declare that: (if correct, mark X in the following box) | ||||||
☐ | | | I am a bank, broker or financial institution that is a “resident of Israel” within the meaning of that term in Section 1 of the Ordinance , I am holding the Shares solely on behalf of beneficial shareholder(s) and I am subject to the provisions of the Ordinance and the regulations promulgated thereunder relating to the withholding of Israeli tax, including with respect to the cash payment (if any) made by me to such beneficial shareholder(s) with respect to Shares in connection with the Intel Tender Offer. | |||
| | | |
PART IV Certification. By signing this form, I also declare that: | ||||||
| | | | |||
| | • | | | I understood this form and completed it correctly and pursuant to the instructions. | |
| | • | | | I provided accurate, full and complete details in this form. | |
| | • | | | I am aware that providing false details constitutes criminal offense. |
| | | | |||
Signature of Shareholder | | | Date | | | Capacity in which acting (or Individual authorized to sign On your behalf) |
1. | INTERPRETATION. |
1.1. | In these Articles, unless the context requires another meaning the words in the first column of the following table shall have the meanings set opposite them in the second column: |
“Articles” | | | these Articles of Association, as amended from time to time by a Resolution (as defined below); |
| | ||
“Auditors” | | | the auditors of the Company; |
| | ||
“Board of Directors” or the “Board” | | | all of the directors of the Company holding office pursuant to these Articles, including alternates, substitutes or proxies; |
| | ||
“Chief Executive Officer” | | | chief executive officer of the Company; |
| | ||
“Chairman of the Board of Directors” | | | as defined in Article 79; |
| | ||
“Companies Law” or the “Law” | | | the Companies Law, 5759-1999, of the State of Israel, as amended from time to time, or any other law which may come in its stead, including all amendments made thereto; |
| | ||
“Company” | | | Stratasys Ltd; |
| | ||
“Effective Time” | | | the closing of the Merger as defined in the Merger Agreement, at which time these Articles shall first become effective; |
| | ||
“General Meeting” | | | any annual or extraordinary meeting of the shareholders of the Company; |
| | ||
“Incapacitated Person” | | | according to the meaning thereof under the Legal Capacity and Guardianship Law, 5722-1962, of the State of Israel, as amended from time to time, including a minor who has not yet attained the age of 18 years, a person unsound of mind and a bankrupt in respect of whom no rehabilitation has been granted; |
| | ||
“Initial Term” | | | the period commencing at the Effective Time and ending on the second anniversary thereof; |
| | ||
“Ironman” | | | Ironman Corporation, a Delaware corporation; |
| |
“Merger” | | | the merger of Ironman with and into Ironman Merger Corp, a Delaware corporation and wholly owned indirect subsidiary of the Company (“Merger Sub”) pursuant to the General Corporation Law of the State of Delaware and pursuant to which Ironman will become a wholly owned indirect subsidiary of the Company; |
| | ||
“Merger Agreement” | | | the Agreement and Plan of Merger dated May 25, 2023, among the Company, Merger Sub and Ironman; |
| | ||
“Month” or “Year” | | | according to the Gregorian calendar; |
| | ||
“NIS” | | | New Israeli Shekels; |
| | ||
“Office” | | | the registered office of the Company at that time; |
| | ||
“Office Holder” | | | as defined in the Companies Law; |
| | ||
“Person” | | | includes an individual, corporation, company, cooperative society, partnership, trust of any kind or any other body of persons, whether incorporated or otherwise; |
| | ||
“Register” | | | the Register of Shareholders administered in accordance with Section 127 of the Law; |
| | ||
“Resolution” | | | a resolution of shareholders of the Company, including a resolution approving a merger, which, except as required under the Law or these Articles, shall be adopted by a majority of voting power present and voting at the applicable General Meeting, in person or by proxy; |
| | ||
“U.S. Rules” | | | the rules of the NASDAQ Stock Market (or other stock exchange on which the Company’s shares are then listed) and the U.S. securities rules and regulations applicable to the Company, as amended from time to time; |
| | ||
“writing” | | | handwriting, typewriting, photography, telex, email or any other legible form of writing. |
1.2. | Words and expressions defined in the Memorandum of Association of the Company shall have the meanings in these Articles as ascribed to them therein. |
1.3. | Subject to the provisions of this Article 1, in these Articles, unless the context necessitates another meaning, terms and expressions which have been defined in the Companies Law shall have the meanings ascribed to them therein. |
1.4. | Words in the singular shall also include the plural, and vice versa. Words in the masculine shall include the feminine and vice versa, and words which refer to persons shall also include corporations, and vice versa. |
1.5. | The captions to articles in these Articles are intended for the convenience of the reader only, and no use shall be made thereof in the interpretation of these Articles. |
2. | The Company is a limited liability company and each shareholder’s obligations for the Company’s obligations shall be limited to the payment of the nominal value of the shares held by such shareholder, subject to the provisions of the Companies Law. |
3. | The Company’s objectives are to conduct all types of business as are permitted by law. The Company may donate a reasonable amount of money for any purpose that the Board of Directors finds appropriate, even if the donation is not for business considerations or for the purpose of achieving profits for the Company. |
4. | Any branch or type of business that the Company is authorized to engage in, either expressly or implied, may be commenced or engaged in by the Board of Directors at all or any time as it deems fit. The Board of Directors, at its own discretion, shall be entitled to cease the conduct of any such branch or type of business, whether or not the actual conduct thereof has commenced. |
5. | The registered office shall be at such place as is decided from time to time by the Board of Directors. |
6. | The share capital of the Company consists of NIS 4,500,000 divided into 450,000,000 Ordinary Shares, of a nominal value of NIS 0.01 each (the “Ordinary Shares”). The powers, preferences, rights, restrictions, and other matters relating to the Ordinary Shares are as set forth in the Articles. |
7. | RIGHTS ATTACHING TO THE ORDINARY SHARES. |
7.1. | The Ordinary Shares in respect of which all calls have been fully paid shall confer on the holders thereof the right to attend and to vote at General Meetings of the Company, both ordinary as well as extraordinary meetings. At General Meetings of the Company every holder of an Ordinary Share in respect of which all of the calls on such share have been paid in full, who is personally present or represented by proxy, shall have one (1) vote in respect of such Ordinary Share held by him, without reference to the nominal value thereof. |
7.2. | The Ordinary Shares shall confer on a holder thereof the right to receive a dividend, to participate in a distribution of bonus shares and to participate in the distribution of the assets of the Company upon its winding-up, pro rata to the nominal amount paid up on the shares or credited as paid up in respect thereof, and without reference to any premium which may have been paid in respect thereof. |
7.3. | Except as may be expressly provided in these Articles, all Ordinary Shares shall rank pari passu in all respects. |
8. | INTENTIONALLY OMITTED |
9. | MODIFICATION OF CLASS RIGHTS. |
9.1. | Subject to applicable law, if at any time the share capital of the Company is divided into different classes of shares and unless the terms of issue of such class of shares otherwise stipulate, the rights attaching to any class of shares (including rights prescribed in the terms of issue of the shares) may be altered, modified or canceled, by a Resolution passed at a separate General Meeting of the shareholders of that class. |
9.2. | The provisions contained in these Articles with regard to General Meetings shall apply, mutatis mutandis as the case may be, to every such General Meeting of the holders of each class of the Company’s shares. |
9.3. | The special rights conferred on the holders of shares or any class of shares which have been issued, including without limitation shares issued with preferential rights or other special rights, shall not be deemed to have been altered by the creation or issue of additional shares ranking pari passu with them, unless otherwise stipulated in the conditions of issue of such shares. |
10. | ISSUANCE OF PREFERRED SHARES |
11. | UNISSUED SHARE CAPITAL |
12. | In every case of a rights offering the Board of Directors shall be entitled, in its discretion, to resolve any problems and difficulties arising or that are likely to arise in regard to fractions of rights, and without prejudice to the generality of the foregoing, the Board of Directors shall be entitled to specify that no shares shall be allotted in respect of fractions of rights, or that fractions of rights shall be sold and the (net) proceeds shall be paid to the persons entitled to the fractions of rights, or, in accordance with a decision by the Board of Directors, to the benefit of the Company. |
13. | The Company may, from time to time, by a Resolution, increase its share capital by way of the creation of new shares, whether or not all the existing shares have been issued up to the date of the Resolution, whether or not it has been decided to issue same, and whether or not calls have been made on all the issued shares. |
14. | The increase of capital shall be in such amount and divided into shares of such nominal value, and with such restrictions and conditions and with such rights and privileges as the Resolution dealing with the creation of the shares prescribes, subject to the special rights of an existing class of shares, and if no provisions are contained in the Resolution, then as the Board of Directors shall prescribe. |
15. | Unless otherwise stated in the Resolution approving the increase of the share capital, the new shares shall be subject to those provisions in regard to issue, allotment, alteration of rights, payment of calls, liens, forfeiture, transfer, transmission and other provisions which apply to the shares of the Company. |
16. | By Resolution, the Company may, subject to any applicable provisions of the Law: |
16.1. | consolidate its existing share capital, or any part thereof, into shares of a larger denomination than the existing shares: |
16.2. | sub-divide its share capital, in whole or in part, into shares of a smaller denomination than the nominal value of the existing shares and without prejudice to the foregoing, one or more of the shares so created may be granted any preferred or deferred rights or any special rights with regard to dividends, participation in assets upon winding-up, voting and so forth, subject to the provisions of these Articles; |
16.3. | reduce its share capital; or |
16.4. | cancel any shares which on the date of passing of the Resolution have not been issued and to reduce its share capital by the amount of such shares. |
17. | In the event that the Company shall adopt any of the Resolutions described in Article 16 above, the Board of Directors shall be entitled to prescribe arrangements necessary in order to resolve any difficulty arising or that is likely to arise in connection with such Resolutions, including in the event of a consolidation, in which it shall be entitled to prescribe which shares shall be consolidated into a particular class of shares, and may cause the transfer of fractional shares by certain shareholders of the Company to other shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees of such fractional shares to pay the transferors thereof the fair value thereof, and the Board of Directors is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractional shares, with full power of substitution, for the purposes of implementing the provisions of this Article 17. |
18. | To the extent shares are certificated, share certificates evidencing title to the shares of the Company shall be issued under the seal or rubber stamp of the Company, and together with the signatures of two members of the Board of Directors, or one director together with the Chief Executive Officer. The Board of Directors shall be entitled to decide that the signatures be effected in any mechanical or electronic form, provided that the signature shall be effected under the supervision of the Board of Directors in such manner as it prescribes. |
19. | Every shareholder shall be entitled, free of charge, to one certificate in respect of all the shares of a single class registered in his name in the Register. |
20. | The Board of Directors shall not refuse a request by a shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of the Board of Directors, unreasonable. Where a shareholder has sold or transferred some of his shares, he shall be entitled, free of charge, to receive a certificate in respect of his remaining shares, provided that the previous certificate is delivered to the Company before the issuance of a new certificate. |
21. | Every share certificate shall specify the number of the shares in respect of which such certificate is issued and also the amounts which have been paid up in respect of each share. |
22. | No person shall be recognized by the Company as having any right to a share unless he is the registered owner of the shares in the Register. The Company shall not be bound by and shall not recognize any right or privilege pursuant to the laws of equity, or a fiduciary relationship or a chose in action, future or partial, in any share, or a right or privilege to a fraction of a share, or (unless these Articles otherwise direct) any other right in respect of a share, except the absolute right to the share as a whole, where same is vested in the owner registered in the Register. |
23. | A share certificate registered in the names of two or more persons shall be delivered to one of the joint holders, and the Company shall not be obliged to issue more than one certificate to all the joint holders of shares and the delivery of such certificate to one of the joint holders shall be deemed to be delivery to all of them. |
24. | If a share certificate should be lost, destroyed or defaced, the Board of Directors shall be entitled to issue a new certificate in its place, provided that the certificate is delivered to it and destroyed by it, or it is proved to the satisfaction of the Board of Directors that the certificate was lost or destroyed and security has been received to its satisfaction in respect of any possible damages and after payment of such amount as the Board of Directors shall prescribe. |
25. | The Board of Directors may from time to time, in its discretion, make calls on shareholders in respect of amounts which are still unpaid in respect of the shares held by each of the shareholders (including premiums), and the terms of issue which do not prescribe that same be paid at fixed times, and every shareholder shall be obliged to pay the amount of the call made on him, at such time and at such place as stipulated by the Board of Directors. |
26. | In respect of any such call, prior notice of at least 14 (fourteen) business days shall be given, stating to whom the amount called is to be paid, the time for payment and the place thereof, provided that prior to the due date for payment of such call, the Board of Directors may, by written notice to the shareholders to which the call was made, cancel the call or extend the date of payment thereof. |
27. | If according to the terms of issue of any share, or otherwise, any amount is required to be paid at a fixed time or in installments at fixed times, whether the payment is made on account of the share capital in respect of the |
28. | Joint holders of a share shall be jointly and severally liable for the payment of all installments and calls due in respect of such share. |
29. | In the event that a call or installment due on account of a share is not paid on or before the date fixed for payment thereof, the holder of the share, or the person to whom the share has been allotted, shall be obliged to pay linkage differentials and interest on the amount of the call or the installment, at such rate as shall be determined by the Board of Directors, commencing from the date fixed for the payment thereof and until the date of actual payment. The Board of Directors may, however, waive the payment of the linkage differentials or the interest or part thereof. |
30. | A shareholder shall not be entitled (i) to receive a dividend or (ii) to exercise any right as a shareholder, including but not limited to, the right to attend and vote at a General Meeting of any type and to transfer the shares to another; unless he has paid all the calls payable from time to time and which apply to any of his shares, whether he holds same alone or jointly with another, plus linkage differentials, interest and expenses, if any. |
31. | The Board of Directors may, if it deems fit, accept payment from a shareholder wishing to advance the payment of all moneys which remain unpaid on account of his shares, or part thereof which are over and above the amounts which have actually been called, and the Board of Directors shall be entitled to pay such shareholder linkage differentials and interest in respect of the amounts paid in advance, or that portion thereof which exceeds the amount called for the time being on account of the shares in respect of which the advance payment is made, at such rate as is agreed upon between the Board of Directors and the shareholder, with this being in addition to dividends payable (if any) on the paid-up portion of the share in respect of which the advance payment is made. |
32. | If a shareholder fails to make payment of any call or other installment on or before the date fixed for the payment thereof, the Board of Directors may, at any time thereafter and for as long as the part of the call or installment remains unpaid, serve on him a notice demanding that he make payment thereof, together with the linkage differentials and interest at such rate as is specified by the Board of Directors and all the expenses incurred by the Company in consequence of such non-payment. |
33. | The notice shall specify a further date, which shall be at least 14 business days after the date of the delivery of the notice, and a place or places at which such call or installment is to be paid, together with linkage differentials and interest and expenses as aforesaid. The notice shall further state that, if the amount is not paid on or before the date specified, and at the place mentioned in such notice, the shares in respect of which the call was made, or the installment is due, shall be liable to forfeiture. |
34. | If the demands contained in such notice are not complied with the Board of Directors may treat the shares in respect of which the notice referred to in Articles 32 and 33 was given as forfeited. Such forfeiture shall include all dividends, bonus shares and other benefits which have been declared in respect of the forfeited shares which have not actually been paid prior to the forfeiture. |
35. | Any share so forfeited or waived shall be deemed to be the property of the Company and the Board of Directors shall be entitled, subject to the provisions of these Articles and the Law, to sell, re-allot or otherwise dispose thereof, as it deems fit, whether the amount paid previously in respect of that share is credited, in whole or in part. |
36. | The Board of Directors may, at any time before any share forfeited as aforesaid is sold or re-allotted or otherwise dispose of, cancel the forfeiture on such conditions as it deems fit. |
37. | Any person whose shares have been forfeited shall cease to be a shareholder in respect of the forfeited shares, but shall, nonetheless remain liable for the payment to the Company of all calls, installments, linkage differentials, interest and expenses due on account of or in respect of such shares on the date of forfeiture, in |
38. | The provisions of these Articles in regard to forfeiture shall also apply to cases of non-payment of any amount, which, according to the terms of issue of the share, or which under the conditions of allotment the due date for payment of which fell on a fixed date, whether this be on account of the nominal value of the share or in the form of a premium, as if such amount was payable pursuant to a call duly made and notified. |
39. | The Company shall have a first and paramount lien over all the shares which have not been fully paid up and which are registered in the name of any shareholder (whether individually or jointly with others) and also over the proceeds of the sale thereof, as security for the debts and obligations of such shareholder to the Company and his contractual engagements with it, either individually or together with others. This right of lien shall apply whether or not the due date for payment of such debts or the fulfillment or performance of such obligations has arrived, and no rights in equity shall be created in respect of any share, over which there is a lien as aforesaid. The aforesaid lien shall apply to all dividends or benefits which may be declared, from time to time, on such shares, unless the Board of Directors shall decide otherwise. |
40. | In order to foreclose on such lien, the Board of Directors may sell the shares under lien at such time and in such manner as, it shall deem fit, but no share may be sold unless the period referred to below has elapsed and written notice has been given to the shareholder, his trustee, liquidator, receiver, the executors of his estate, or anyone who acquires a right to shares in consequence of the bankruptcy of a shareholder, as the case may be, stating that the Company intends to sell the shares, if he or they should fail to pay the aforesaid debts, or fail to discharge or fulfill the aforesaid obligations within 14 business days from the date of the delivery of the notice. |
41. | The net proceeds of any such sale of shares, as contemplated by Article 40 above, after deduction of the expenses of the sale, shall serve for the discharge of the debts of such shareholder or for performance of such shareholder’s obligations (including debts, undertaking and contractual engagements, the due date for the payment or performance of which has arrived) and the surplus, if any, shall be paid to the shareholder, his trustee, liquidator, receiver, guardians, or the executors of his estate, or to his successors- in-title. |
42. | In every case of a sale following forfeiture or waiver, or for purposes of executing a lien by exercising all of the powers conferred above, the Board of Directors shall be entitled to appoint a person to sign an instrument of transfer of the shares sold, and to arrange for the registration of the name of the buyer in the Register in respect of the shares sold. |
43. | An affidavit signed by the Chairman of the Board of Directors that a particular share of the Company was forfeited, waived or sold by the Company by virtue of a lien, shall serve as conclusive evidence of the facts contained therein as against any person claiming a right in the share. The purchaser of a share who relies on such affidavit shall not be obliged to investigate whether the sale, re-allotment or transfer, or the amount of consideration and the manner of application of the proceeds of the sale, were lawfully effected, and after his name has been registered in the Register he shall have a full right of title to the share and such right shall not be adversely affected by a defect or invalidity which occurred in the forfeiture, waiver, sale, re-allotment or transfer of the share. |
44. | No transfer of shares shall be registered unless a proper instrument of transfer is delivered to the Company or to such other place specified for this purpose by the Board of Directors. Subject to the provisions of these Articles, an instrument of transfer of a share in the Company shall be signed by the transferor and the transferee. The transferor shall be deemed to remain the holder of the share up until the time the name of the transferee is registered in the Register in respect of the transferred share. |
45. | Insofar as the circumstances permit, the instrument of transfer of a share shall be drawn up in the form set out below, or in any other form that the Board of Directors may approve (the “Deed of Transfer”). |
46. | The Company may close the transfer registers and the Register for such period of time as the Board of Directors shall deem fit, provided that such period of time shall not in total exceed 30 (thirty) days each year. |
47. | Every instrument of transfer shall be submitted to the Office or to such other place as the Board of Directors shall prescribe, for purposes of registration, together with the share certificates to be transferred, or if no such certificate was issued, together with a letter of allotment of the shares to be transferred, and/or such other proof as the Board of Directors may demand in regard to the transferor’s right of title or his right to transfer the shares. The Board of Directors shall have the right to refuse to recognize an assignment of shares until appropriate security under the circumstances has been provided, as shall be determined by the Board of Directors in a specific case or from time to time in general. Instruments of transfer which serve as the basis for transfers that are registered shall remain with the Company. |
48. | The executors of the will or administrator of a deceased shareholder’s estate (such shareholder not being one of a joint owners of a share) or, in the absence of an administrator of the estate or executor of the will, shall be entitled to demand that the Company recognize them as owners of rights in the share. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
49. | In the case of a share registered in the names of two or more Persons, the Company shall recognize only the surviving owners as Persons having rights in the share. However, the aforementioned shall not be construed as releasing the estate of a deceased joint shareholder from any and all undertakings in respect of the shares. Any Person who shall become an owner of shares following the death of a shareholder shall be entitled to be registered as owner of such shares after having presented to an officer of the Company to be designated by the Chief Executive Officer an inheritance order or probation order or order of appointment of an administrator of estate and any other proof as required - if these are sufficient in the opinion of such officer - testifying to such Person’s right to appear as shareholder in accordance with these Articles, and which shall testify to his title to such shares. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
50. | The receiver or liquidator of a shareholder who is a company or the trustee in bankruptcy or the official receiver of a shareholder who is bankrupt, upon presenting appropriate proof to the satisfaction of an officer of the Company to be designated by the Chief Executive Officer that he has the right to appear in this capacity and which testifies to his title, may, with the consent of the Board of Directors (the Board of Directors shall not be obligated to give such consent) be registered as the owner of such shares. Furthermore, he may assign such shares in accordance with the rules prescribed in these Articles. The provisions of Article 47 above shall apply, mutatis mutandis, also in regard to this Article. |
51. | A Person entitled to be registered as a shareholder following assignment pursuant to this Article shall be entitled, if approved by the Board of Directors and to the extent and under the conditions prescribed by the Board of Directors, to dividends and any other monies paid in respect of the shares, and shall be entitled to give the Company confirmation of the payments; however, he shall not be entitled to be present or to vote at any General Meeting of the Company or, subject to the provisions of these Articles, to make use of any rights of shareholders, until he has been registered as owner of such shares in the Register. |
52. | An annual General Meeting shall be held once in every year, not later than 15 (fifteen) months after the last annual General Meeting, at such time and at such place as the Board of Directors shall determine. All other meetings of the Company’s shareholders shall be called extraordinary meetings. |
53. | The Board of Directors may call an extraordinary General Meeting whenever it sees fit to do so. |
54. | The Board of Directors shall be obliged to call an extraordinary General Meeting upon a request in writing in accordance with the Law. |
55. | The Company shall provide prior notice in regard to the holding of an annual meeting or an extraordinary meeting in accordance with the requirements of these Articles, the Law and the regulations promulgated thereunder. Subject to the provisions of the Law and the regulations promulgated thereunder, in counting the number of days of prior notice given, the day of publication of notice shall not be counted, but the day of the meeting shall be counted. The notice shall specify those items and contain such information as shall be required by the Companies Law, the regulations promulgated thereunder and any other applicable law and regulations. Subject to Article 64 below, in the event that the Company has established that an adjourned meeting shall be held on such date which is later than the date provided for in Section 78(b) of the Law, such later date shall be included in the notice. The Company may add additional places for shareholders to review the full text of the proposed resolutions, including an internet site. The notice shall be provided in the manner prescribed below under the heading “Notices” in Articles 128 to 131 below. |
56.1 | Any shareholder or shareholders of the Company holding at least one percent (1%) of the voting rights of the Company (the “Proposing Shareholder(s)”) may request, subject to the Companies Law, that the Board of Directors include a matter on the agenda of a General Meeting to be held in the future, provided that the Board determines that the matter is appropriate to be considered at a General Meeting (a “Proposal Request”). In order for the Board of Directors to consider a Proposal Request and whether to include the matter stated therein in the agenda of a General Meeting, notice of the Proposal Request must be timely delivered, and the Proposal Request must comply with the requirements of these Articles (including this Article 56) and any applicable law and stock exchange rules and regulations. The Proposal Request must be in writing, signed by all of the Proposing Shareholders making such request, delivered, either in person or by certified mail, postage prepaid, and received by the Secretary (or, in the absence thereof by the Chief Executive Officer) of the Company. To be considered timely, a Proposal Request must be received within the time periods prescribed by applicable law. The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extend any time period) for the delivery of a Proposal Request as described above. In addition to any information required to be included in accordance with applicable law, a Proposal Request must include the following: (i) the name, address, telephone number, fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity; (ii) the number of shares held by the Proposing Shareholder(s), directly or indirectly (and, if any of such shares are held indirectly, an explanation of how they are held and by whom), which shall be in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Company of the record holding of such shares by the Proposing Shareholder(s) as of the date of the Proposal Request, and a representation that the Proposing Shareholder(s) intends to appear in person or by proxy at the meeting; (iii) the matter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matter is proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a position statement in support of the Proposal Request, a copy of such position statement that complies with the requirement of applicable law (if any), (iv) a description of all arrangements or understandings between the Proposing Shareholders and any other Person(s) (naming such Person or Persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by all Proposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detail of such personal interest; (v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (vi) a declaration that all of the information that is required under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Company in connection with such matter, if any, has been provided to the Company. The Board of Directors, may, in its discretion, to the extent it deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a matter in the agenda of a General Meeting, as the Board of Directors may reasonably require. |
A “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proposing Shareholder or any of its affiliates or associates, whether of record or beneficial: (1) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Company, (2) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Company, (3) the effect or intent of which is to mitigate loss, manage risk or benefit from security value or price changes, or (4) which provides the right to vote or increase or decrease the voting power of, such Proposing Shareholder, or any of its affiliates or associates, with respect to any shares or other securities of the Company, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proposing Shareholder in the securities of the Company held by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly, a general partner or managing member. |
56.2 | The information required pursuant to this Article shall be updated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting and (iii) three business days before the General Meeting, and any adjournment or postponement thereof. |
57. | No business shall be conducted at a General Meeting unless a quorum is present, and no resolution shall be passed unless a quorum is present at the time the resolution is voted on. Except in cases where it is otherwise stipulated, a quorum shall be constituted when there are personally present, or represented by proxy, at least 2 (two) shareholders who hold, in the aggregate, at least twenty-five percent (25%) of the voting rights in the Company. A proxy may be deemed to be 2 (two) or more shareholders pursuant to the number of shareholders he represents. |
58. | If within half an hour from the time appointed for the meeting, a quorum is not present, without there being an obligation to notify the shareholders to that effect, the meeting shall be adjourned to the same day, in the following week, at the same hour and at the same place or to a later time and date if so specified in the notice of the meeting, unless such day shall fall on a statutory holiday (either in Israel or in the U.S.), in which case the meeting will be adjourned to the first business day afterwards which is not a statutory holiday. |
59. | The Chairman of the Board of Directors, or any other Person appointed for this purpose by the Board of Directors, shall preside at every General Meeting. If within 15 (fifteen) minutes from the time appointed for the meeting, the designated chairman for the meeting shall not be present, the shareholders present at the meeting shall elect one of their number to serve as chairman of the meeting. |
60. | Resolutions at the General Meeting shall be passed in accordance with the definition of “Resolution” set forth in Article 1.1 above, unless otherwise required by Law or these Articles. Every vote at a General Meeting shall be conducted according to the number of votes to which each shareholder is entitled on the basis of the number of Ordinary Shares held by him which confer on him a right to vote at the General Meeting. |
61. | Where a poll has been demanded, the chairman of the meeting shall accede to the demand. Where the chairman of the meeting held a poll, such poll shall be held in such manner, at such time and at such place as the chairman of the meeting directs, either immediately or after an interval or postponement, or in any other way, and the results of the vote shall be deemed to be the resolution at the meeting at which the poll was demanded. A person demanding a poll may withdraw his demand prior to the poll being held. |
62. | A demand for the holding of a poll shall not prevent the continued business of the meeting on all other questions apart of the question in respect of which a poll was demanded. |
63. | The announcement by the chairman of the meeting that a Resolution has been passed unanimously or by a particular majority, or has been rejected, and a note recorded to that effect in the Company’s minute book, shall serve as prima facie proof of such fact. |
64. | The chairman of a General Meeting may adjourn the meeting from time to time and from place to place if approved by a consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment (and shall if so directed by the meeting), but at an adjourned meeting no other matters shall be considered or decided apart from the matters which were on the agenda of the meeting at which it was decided on the adjournment and in respect of which no Resolution was taken. The Company shall not deliver nor shall it be required to give notice in regard to the adjournment or in regard to the matters on the agenda of the adjourned meeting, unless the adjourned meeting is to be held more than 30 (thirty) days after the date of the original meeting, in which case a notice shall be published by the Company. |
65. | The voting rights of every shareholder entitled to vote at a General Meeting shall be as set forth in Article 7 of these Articles or to any other article herein governing voting rights. |
66. | In the case of joint shareholders, the vote of the senior joint holder, given personally or by proxy, shall be accepted, to the exclusion of the vote of the remaining joint shareholders, and for these purposes the senior of the joint shareholders shall be the Person amongst the joint holders whose name appears first in the Register. |
67. | A shareholder who is an Incapacitated Person may vote solely through his guardian or other person who fulfills the function of such guardian and who was appointed by a court, and any guardian or other person as aforesaid shall be entitled to vote by way of a proxy, or in such manner as the court directs. |
68. | Any corporation which is a shareholder of the Company shall be entitled, by way of resolution of its directors or another organ which manages said corporation, to appoint such person which it deems fit, whether or not he is a shareholder of the Company, to act as its representative at any General Meeting of the Company or at a meeting of a class of shares in the Company which such corporation is entitled to attend and to vote thereat, and the appointed as aforesaid shall be entitled, on behalf of the corporation whom he represents, to exercise all of the same powers and authorities which the corporation itself could have exercised had it been a natural person holding shares of the Company. |
69. | Every shareholder of the Company who is entitled to attend and vote at a General Meeting of the Company, shall be entitled to appoint a proxy. A proxy can be appointed by more than one shareholder, and he can vote in different ways on behalf of each principal. |
70. | The instrument appointing a proxy, or a copy thereof certified by an attorney, shall be lodged at the Office, or at such other place as the Board of Directors shall specify, not less than forty-eight (48) hours prior to the meeting at which the proxy intends to vote on the strength of such instrument of proxy. Notwithstanding the above, the chairman of the meeting shall have the right to waive the time requirement provided above with respect to all instruments of proxies and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the meeting to which the document relates. |
71. | Every instrument appointing a proxy, whether for a meeting specifically indicated, or otherwise, shall, as far as circumstances permit, be in the following form, or in any other form approved by the Board of Directors: |
72. | No shareholder shall be entitled to vote at a General Meeting unless he has paid all of the calls and all of the amounts due from him, for the time being, in respect of his shares. |
73. | A vote given in accordance with the instructions contained in an instrument appointing a proxy shall be valid notwithstanding the death or bankruptcy of the appointer, or the revocation of the proxy, or the transfer of the shares in respect of which the vote was given as aforesaid, unless notice in writing of the death, revocation or transfer is received at the Office of the Company, or by the chairman of the General Meeting, prior to such vote. |
74. | Subject to the Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the chairman of the meeting, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy, provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article 70 hereof, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairman of such meeting of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 74 at or prior to the time such vote was cast. |
75.1. | The number of directors of the Company (including External Directors to the extent appointed pursuant to Article 80A below) shall be between seven (7) and eleven (11), as determined from time to time by the Board of Directors. Any director shall be eligible for re-election upon termination of his or her term of office. |
75.2. | Prior to every annual General Meeting of the Company commencing as of the first annual General Meeting to be held after the first anniversary of the Effective Time, the Board of Directors of the Company shall resolve by a majority vote the names of the persons to be proposed to the shareholders of the Company for election as directors of the Company at such annual General Meeting, for a term that lasts until the next annual General Meeting (the “Nominees”). |
75.3 | Any Proposing Shareholder requesting to include on the agenda of a General Meeting a nomination of a Person to be proposed to the Shareholders for election as director (such person, an “Alternate Nominee”), may so request provided that it complies with this Article 75.3 and Article 56 and applicable law. Unless otherwise determined by the Board, a Proposal Request relating to Alternate Nominee is deemed to be a matter that is appropriate to be considered only at an annual General Meeting. In addition to any information required to be included in accordance with applicable law, such a Proposal Request shall include information required pursuant to Article 56, and shall also set forth: (i) the name, address, telephone number, fax number and email address of the Alternate Nominee and all citizenships and residencies of the Alternate Nominee; (ii) a description of all arrangements, relations or understandings between the Proposing Shareholder(s) or any of its affiliates and each Alternate Nominee; (iii) a declaration signed by the Alternate Nominee that he or she consents to be named in the Company’s notices and proxy materials relating to the General Meeting, if provided or published, and, if elected, to serve on the Board of Directors and to be named in the Company’s disclosures and filings, (iv) a declaration signed by each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations for the appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchange rules and regulations to be provided to the Company in connection with such an appointment has been provided (including, information in respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under Form 20-F, Form 10-K, Schedule 14A or any other applicable form or schedule prescribed by the U.S. Securities and Exchange Commission (the “SEC”); (v) a declaration made by the Alternate Nominee of whether he or she meets the criteria for an independent director under the rules of the stock exchange on which the Company’s ordinary shares are then listed for trading, the Companies Law and/or under any applicable law, regulation or stock exchange |
75.4 | One or more Nominees or Alternate Nominees shall be elected by a Resolution at every annual General Meeting, for a term of office that shall conclude at the end of the first annual General Meeting held after the date of his or her election and upon the election and qualification of his or her successor, unless his or her office is vacated in accordance with Articles 77 or Article 80 below. |
75.5. | If at the annual General Meeting no Nominee or Alternate Nominee is elected, the directors then in office shall continue to hold office until the convening of a General Meeting at which Nominees or Alternate Nominees are elected. |
76. | The directors in their capacity as such shall be entitled to receive remuneration as shall be determined in compliance with the Law and the regulations promulgated thereunder. The conditions (including remuneration) of the terms of office of members of the Board of Directors shall be decided by the Board of Directors, but the same shall be valid only if ratified in the manner required under the Law. The remuneration of directors may be fixed as an overall payment or other consideration and/or as a payment or other consideration in respect of attendance at meetings of the Board of Directors. In addition to his or her remuneration, each director shall be entitled to be reimbursed, retroactively or in advance, in respect of his or her reasonable expenses connected with performing his or her functions and services as a director. Such entitlement shall be determined in accordance with, and shall be subject to, a specific resolution or policy adopted by the Board of Directors regarding such matter. |
77.1. | Subject to the provisions of the Law and subject to Article 80 below, the office of a director shall be vacated in any one of the following events: |
77.1.1. | if he resigns his office by way of a letter signed by him, submitted to the Office of the Company; |
77.1.2. | if he is declared bankrupt; |
77.1.3. | if he becomes an Incapacitated Person; |
77.1.4. | upon his death; |
77.1.5. | if he is prevented by applicable law from serving as a director of the Company; |
77.1.6. | if the Board terminates his office according to Section 231 of the Law; |
77.1.7. | if a court order is given in accordance with Section 233 of the Law; |
77.1.8. | if he is removed from office by a Resolution at an annual General Meeting of the Company; or |
77.1.9. | if his period of office has terminated in accordance with the provisions of these Articles. |
77.2. | If the office of a member of the Board of Directors is vacated (except for an External Director, if applicable), or if the number of directors then serving is less than the maximum number of directors then authorized to serve as determined by the Board of Directors from time to time under Article 75.1 above, the remaining or incumbent members of the Board of Directors shall be entitled to appoint additional director(s) in place of the director(s) whose office(s) have been vacated, or to fill an unoccupied seat within the then-authorized size of the Board of Directors, as applicable, for a term of office equal to the remaining period of the term of office of the director(s) whose office(s) have been vacated or the full or partial term of the director seat(s) that is/are then unoccupied, and, in the case of the vacation of a seat, the remaining members of the Board of Directors shall be entitled to act for all purposes for a term of office equivalent to the remaining period of the term of office of the director whose office has been vacated, for as long as their number does not fall below the minimum authorized number of directors, |
78.1. | Subject to any mandatory provisions of applicable law, a director shall not be disqualified by virtue of his office from holding another office in the Company or in any other company in which the Company is a shareholder or in which it has any other form of interest, or of entering into a contract with the Company, either as seller or buyer or otherwise. Likewise, no contract made by the Company or on its behalf in which a director has any form of interest may be nullified and a director shall not be obliged to account to the Company for any profit deriving from such office, or resulting from such contract, merely by virtue of the fact that he serves as a director or by reason of the fiduciary relationship thereby created, but such director shall be obliged to disclose to the Board of Directors the nature of any such interest at the first opportunity. |
78.2. | Subject to the provisions of the Law and these Articles, the Company shall be entitled to enter into a transaction in which an Office Holder of the Company has a personal interest, directly or indirectly, and may enter into any contract or otherwise transact any business with any third party in which contract or business an Office Holder has a personal interest, directly or indirectly. |
79. | Subject to Article 86, the Board of Directors shall elect one (1) or more of its members to serve as Chairman of the Board of Directors, provided that, subject to the provisions of Section 121(c) of the Law, the Chief Executive Officer of the Company shall not serve as Chairman of the Board of Directors. Notwithstanding anything to the contrary herein, the office of Chairman of the Board of Directors shall be vacated in each of the cases mentioned in Articles 77.1 above and Article 80 below. The Board of Directors may also elect (i)(a) member(s) to serve as Vice Chairman, who shall have such duties and authorities as the Board of Directors may assign to him or her, and (ii) a member to serve as Lead Independent Director, who shall have such duties and authorities as the Board of Directors may assign to him or her. |
80. | Subject to the provisions of Articles 75 and 77, the Company may, in a General Meeting, by a Resolution, dismiss any director prior to the end of his or her term of office, and it shall be entitled, by a Resolution, to appoint another individual in his or her place as a director of the Company. The individual so appointed shall hold such office only for that period of time during which the director whom he or she replaces would have held office. |
80A. | If at any time, the Company shall be required to appoint independent or external directors such as a public director or directors of any other type as may be required by Law (“External Directors”) such directors shall serve on the Board according to the number required by law. External Directors will be appointed and removed pursuant to and shall be governed by the relevant provisions of the law which applies to External Directors. If permitted by Law, External Directors will be appointed by the Board. External Directors will be chosen and appointed, and term will expire, in accordance with the Law. |
81.1. | Subject to Article 86, the Board of Directors shall, from time to time, appoint a Chief Executive Officer and subject to the provisions of the Law delineate his or her powers and authorities and his or her remuneration. Subject to the provisions of any contract between the Chief Executive Officer and the Company, the Board of Directors may dismiss or replace him or her at any time they deem fit. |
81.2. | The Chief Executive Officer need not be a shareholder of the Company. |
81.3. | Subject to the provisions of any contract between the Chief Executive Officer and the Company, all of the provisions with regard to appointment, resignation and removal of directors from office shall apply to the Chief Executive Officer if he or she is also a director, as apply to all other directors. Upon the termination of his or her service as Chief Executive Officer, the Chief Executive Officer’s service on the Board of Directors shall automatically terminate. Subject to the provisions of the Companies Law, the Board of Directors shall be entitled from time to time to delegate to the Chief Executive Officer for the time being such of the powers they have pursuant to these Articles as they deem appropriate, and they shall be entitled to grant such powers for such period and for such purposes and on such conditions and with such restrictions as they deem expedient, and they shall be entitled to grant such powers without renouncing the powers and authorities of the Board of Directors in such regard, and they may, from time to time, revoke, annul and alter such delegated powers and authorities, in whole or in part. |
81.4. | Subject to the provisions of the Law, the remuneration of the Chief Executive Officer shall be fixed from time to time by the Board of Directors together with any committees of the Board of Directors (each, a “Committee of Directors”) as may be prescribed by the Law) and it may be in the form of a fixed salary or commissions or a participation in profits, or in any other manner which may be decided by the Board of Directors (and approved by any relevant Committee(s) of Directors and, to the extent required under applicable law, shareholders). |
82.1. | The Board of Directors shall convene for a meeting at least once every fiscal quarter. |
82.2. | The Board of Directors may meet in order to exercise its powers pursuant to Section 92 of the Law, including without limitation to supervise the Company’s affairs, and it may, subject to the provisions of the Law, adjourn its meetings and regulate its proceedings and operations as it deems fit. It may also prescribe the quorum required for the conduct of business. Until otherwise decided a quorum shall be constituted if a majority of the directors holding office for the time being are present. |
82.3. | Should a director or directors be barred from being present and voting at a meeting of the Board of Directors by virtue of the contents of Section 278 of the Law, the quorum shall be a majority of the directors entitled to be present and to vote at the meeting of the Board of Directors. |
83. | Any director or the Auditors, in the event stipulated in Section 169 of the Law, may, at any time, demand the convening of a meeting of the Board of Directors. The Chairman of the Board shall be obliged, on such demand, to call such meeting on the date requested by the director or Chief Executive Officer soliciting such a meeting, provided that proper notice pursuant to Article 84 is given. |
84. | Every director shall be entitled to receive notice of meetings of the Board of Directors, and such notice may be in writing or by facsimile, telegram or electronic mail, sent to the last address (whether physical or electronic) or facsimile number given by the director for purposes of receiving notices, provided that the notice shall be given at least a reasonable amount of time prior to the meeting and in no event less than 48 (forty eight) hours prior notice, unless the urgency of the matter(s) to be discussed at the meeting reasonably require(s) a shorter notice period. |
85. | Every meeting of the Board of Directors at which a quorum is present shall have all the powers and authorities vested for the time being in the Board of Directors. |
86. | Subject to the provisions of these Articles, a resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a simple majority of the members of the Board of Directors who are lawfully entitled to participate in the meeting and vote thereon and present when such resolution is put to a vote and voting thereon, provided that notwithstanding anything in these Articles to the contrary, during the period between the Effective Time and the end of the Initial Term, the following actions shall require a resolution of the Board of Directors approved by at least two-thirds of the directors then in office (excluding, in respect of clause (i), the Company’s Chief Executive Officer as of the Effective Time, and in respect of clause (ii), the Chairman of the Board of Directors as of the Effective Time ): (i) the dismissal or replacement of the Company’s Chief Executive Officer as of the Effective Time, (ii) the dismissal or replacement of the Chairman of the Board |
87. | The Board of Directors may adopt resolutions, without convening a meeting of the Board of Directors, in any manner permitted by the Law. |
88. | The Board of Directors may hold meetings by use of any means of communication, on condition that all participating directors can hear each other at the same time. In the case of a resolution passed by way of a telephone call or any such other means of communication, a copy of the text of the resolution shall be sent, as soon as possible thereafter, to the directors. |
89. | The supervision of the Company’s affairs shall be in the hands of the Board of Directors, which shall be entitled to exercise all of the powers and authorities and to perform any act and deed which the Company is entitled to exercise and to perform in accordance with its Memorandum of Association and these Articles or according to law, and in respect of which there is no provision or requirement in these Articles, or in the Law or/and in the U.S. Rules, that same be exercised or done by the shareholders in a General Meeting or by a Committee of Directors. |
90. | The Board of Directors may, as it deems fit and subject to any applicable law, delegate to a Committee of Directors certain of its powers and authorities, in whole or in part to the fullest extent provided by any applicable law. The curtailment or revocation of the powers and authorities of a Committee of Directors by the Board of Directors shall not invalidate a prior act of such Committee of Directors or an act taken in accordance with its instructions, which would have been valid had the powers and authorities of the Committee of Directors not been altered or revoked by the Board of Directors. Subject to applicable law, a Committee of Directors may be comprised of one (1) director or of several directors, and in the case of a Committee of Directors that is appointed to advise the Board of Directors only, persons who are not directors may be appointed to it. The powers of any chairman of a Committee of Directors with respect to the operation of such committee shall be the same as the Chairman of the Board of Directors hereunder and under the Law, mutatis mutandis. |
91. | The meetings and proceedings of every such Committee of Directors which is comprised of two (2) or more members shall be conducted in accordance with the provisions contained in these Articles in regard to the conduct of meetings and proceedings of the Board of Directors to the extent that the same are suitable for such committee, and so long as no provisions have been adopted in replacement thereof by the Board of Directors. |
92. | Reserved. |
93. | Subject to the Law, all acts taken in good faith by the Board of Directors and/or a Committee of Directors or by an individual acting as a member thereof shall be valid even if it is subsequently discovered that there was a defect in the appointment of the Board of Directors, the Committee of Directors or the member, as the case may be, or that the members, or one of them, was/were disqualified from being appointed as a director/s or to a Committee of Directors. |
94.1. | The Board of Directors or any Committee of Directors may ratify any act the performance of which at the time of the ratification was within the scope of the authority of the Board of Directors or the relevant Committee of Directors. |
94.2. | The General Meeting shall be entitled to ratify any act taken by the Board of Directors and/or any Committee of Directors without authority or which was tainted by some other defect. |
94.3. | From the time of the ratification, every act ratified as aforesaid, shall be treated as though lawfully performed from the outset. |
95. | The Board of Directors may, from time to time, in its absolute discretion, borrow or secure any amounts of money required by the Company for the conduct of its business. |
96. | The Board of Directors shall be entitled to raise or secure the repayment of an amount obtained by them, in such way and on such conditions and times as they deem fit. The Board of Directors shall be entitled to issue documents of undertaking, such as options, debentures or debenture stock, whether linked or redeemable, convertible debentures or debentures convertible into other securities, or debentures which carry a right to purchase shares or to purchase other securities, or any mortgage, pledge, collateral or other charge over the property of the Company and its undertaking, in whole or in part, whether present or future, including the uncalled share capital or the share capital which has been called but not yet paid. |
97. | Subject to any other resolution on the subject passed by the Board of Directors, the Company shall be bound only pursuant to a document in writing bearing its seal or its rubber stamp or its printed name, and the signature of whomever may be authorized by the Board of Directors, which shall be entitled to empower any person, either alone or jointly with another, even if he is not a shareholder of the Company or a director, to sign and act in the name and on behalf of the Company. |
98. | The Board of Directors shall be entitled to prescribe separate signing power in regard to different businesses of the Company and in respect of the limit of the amounts in respect of which various persons shall be authorized to sign. |
99. | The Board of Directors shall be entitled, from time to time, to appoint, or to delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to appoint Office Holders (other than directors), a Secretary for the Company, employees and agents to such permanent, temporary or special positions, and to specify and change their titles, authorities and duties, and may set, or delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to set salaries, bonuses and other compensation of any employee or agent who is not an Office Holder. Salaries, bonuses and compensation of Office Holders who are not directors shall be determined and approved by the Chief Executive Officer, and/or in such other manner as may be required from time to time under the Law. The Board of Directors, or the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors (in the case of any Office Holder, employee or agent appointed thereby), shall be entitled at any time, in its, his, her, or their (as applicable) sole and absolute discretion, to terminate the services of one of more of the foregoing persons (in the case of a director, however, subject to compliance with Article 77 above). |
100. | The Board of Directors and the Chief Executive Officer may from time to time and at any time empower any person to serve as representative of the Company for such purposes and with such powers and authorities, instructions and discretions for such period and subject to such conditions as the Board of Directors (or the Chief Executive Officer, as the case may be) shall deem appropriate. The Board of Directors may (or the Chief Executive Officer, as the case may be) grant such person, inter alia, the power to transfer the authority, powers and discretions vested in him, in whole or in part. The Board of Directors may (or the Chief Executive Officer, as the case may be), from time to time, revoke, annul, vary or change any such power or authority, or all such powers or authorities collectively. |
101. | The Board of Directors may, prior to recommending any dividend, set aside out of the profits of the Company such amounts as it deems fit for a reserve fund for extraordinary purposes or for the equalization of dividends or for special dividends, or for the repair, improvement, maintenance or replacement of the property of the Company, or for any other purpose, as the Board of Directors, in its sole and absolute discretion, shall deem expedient. |
102. | The Board of Directors shall be entitled to invest the amounts set aside as aforesaid in Article 101 above in any investments whatsoever, as it may deem fit, and from time to time deal with such investments and vary same, and make use thereof, as it deems fit, and it may divide the reserve fund into special funds in such manner as it deems fit, and may utilize a fund or part thereof for the business of the Company, without being obliged to keep same separate from the remaining assets of the Company. |
103. | Unless otherwise permitted by the Law, no dividends shall be paid other than out of the Profits of the Company as such term is defined in the Law. |
104. | The Board of Directors may decide on the payment of a dividend or on the distribution of bonus shares. |
105. | A dividend in cash or bonus shares shall be paid or distributed, as the case may be, equally to the holders of the Ordinary Shares registered in the Register, pro rata to the nominal amount of capital paid up or credited as paid up on the shares, without reference to any premium which may have been paid thereon. However an amount paid on account of a share prior to the payment thereof having been called, or prior to the due date for payment thereof, and on which the Company is paying interest, shall not be taken into account for purposes of this Article as an amount paid-up on account of the share. |
106. | Unless other instructions are given, it shall be permissible to pay any dividend by way of a check or payment order to be sent by post to the registered address of the shareholder or the Person entitled thereto, or in the case of joint shareholders being registered, to the shareholder whose name stands first in the Register in relation to the joint shareholding. Every such check shall be made in favor of the person to whom it is sent. A receipt by the person whose name, on the date of declaration of the dividend, was registered in the Register as the owner of the shares, or in the case of joint holders, by one of the joint holders, shall serve as a discharge with regard to all the payments made in connection with such share. |
107. | Unless otherwise specified in the terms of issue of shares or of securities convertible into, or which grant a right to purchase, shares, any shares that are fully paid-up or credited as paid-up shall at any time confer on their holders the right to participate in the full dividends and in any other distribution for which the determining date for the right to receive the same is the date at which the aforesaid shares were fully paid- up or credited as fully paid-up, as the case may be, or subsequent to such date. |
108. | A dividend or other beneficial rights in respect of shares shall not bear interest. |
109. | The Board of Directors shall be entitled to deduct from any dividend or other beneficial rights, all amounts of money which the holder of the share in respect of which the dividend is payable or in respect of which the other beneficial rights were given, may owe to the Company in respect of such share, whether or not the due date for payment thereof has arrived. |
110. | The Board of Directors shall be entitled to retain any dividend or bonus shares or other beneficial rights in respect of a share in relation to which the Company has a lien, and to utilize any such amount or the proceeds received from the sale of any bonus shares or other beneficial rights, for the discharge of the debts or liabilities in respect of which the Company has a lien. |
111. | The Board of Directors may decide that a dividend is to be paid in whole or in part, by way of a distribution of assets of the Company in kind, including by way of debentures or debenture stock of the Company, or shares or debentures or debenture stock of any other company, or in any other way. |
112.1. | The Board of Directors may, at any time and from time to time, decide that any portion of the amounts standing for the time being to the credit of any capital fund (including a fund created as a result of a revaluation of the assets of the Company), or which are held by the Company as Profits available for distribution, shall be capitalized for distribution subject to and in accordance with the provisions of the Law and of these Articles, amongst those shareholders who are entitled thereto and pro rata to their entitlement under these Articles, provided that the same shall not be paid in cash but shall serve for the |
112.2. | The Board of Directors shall be entitled to distribute bonus shares and to decide that the bonus shares shall be of the same class which confers on the shareholders or the Persons entitled thereto the right to participate in the distribution of bonus shares, or may decide that the bonus shares shall be of a uniform class to be distributed to each of the shareholders or Persons entitled to shares as aforesaid, without reference to the class of shares conferring the right to participate in the distribution on the holders of the shares or the Persons entitled thereto as aforesaid. |
113.1. | In every case that the Company issues bonus shares by way of a capitalization of profits or funds at a time at which securities issued by the Company are in circulation and confer on the holders thereof rights to convert the same into shares in the share capital of the Company, or options to purchase shares in the share capital of the Company (such rights of conversion or options shall henceforth be referred to as the “Rights”), the Board of Directors shall be entitled (in a case that the Rights or part thereof shall not be otherwise adjusted in accordance with the terms of their issue) to transfer to a special fund designated for the distribution of bonus shares in the future (to be called by any name that the Board of Directors may decide on and which shall henceforth be referred to as the “Special Fund”) an amount equivalent to the nominal amount of the share capital to which some or all of the Rights holders would have been entitled as a result of the issue of bonus shares, had they exercised their Rights prior to the determining date for the right to receive bonus shares, including rights to fractions of bonus shares, and in the case of a second or additional distribution of bonus shares in respect of which the Company acts pursuant to this Article, including entitlement stemming from a previous distribution of bonus shares. |
113.2. | In the case of the allotment of shares by the Company as a consequence of the exercise of entitlement by the owners of shares in those cases in which the Board of Directors has made a transfer to the Special Fund in respect of the Rights pursuant to Article 113.1 above, the Board of Directors shall allot to each such shareholder, in addition to the shares to which he is entitled by virtue of having exercised his rights, such number of fully paid-up shares the nominal value of which is equivalent to the amount transferred to the Special Fund in respect of his rights, by way of a capitalization to be effected by the Board of Directors of an appropriate amount out of the Special Fund. The Board of Directors shall be entitled to decide on the manner of dealing with rights to fractions of shares in its sole discretion. |
113.3. | If after any transfer to the Special Fund has been made the Rights should lapse, or the period should end for the exercise of Rights in respect of which the transfer was effected without such Rights being exercised, then any amount which was transferred to the Special Fund in respect of the aforesaid unexercised Rights shall be released from the Special Fund, and the Company may deal with the amount so released in any manner it would have been entitled to deal therewith had such amount not been transferred to the Special Fund. |
114. | For the implementation of any resolution regarding a distribution of shares or debentures by way of a capitalization of profits as aforesaid, the Board of Directors may: |
114.1. | Resolve any difficulty which arises or may arise in regard to the distribution in such manner as it deems fit and may take all of the steps that it deems expedient in order to overcome such difficulty. |
114.2. | Issue certificates in respect of fractions of shares, or decide that fractions of less than an amount to be decided by the Board of Directors shall not be taken into account for purposes of adjusting the rights of the shareholders or may sell the fractions of shares and pay the proceeds (net) to the Persons entitled thereto. |
114.3. | Sign, or appoint a Person to sign, on behalf of the shareholders on any contract or other document which may be required for purposes of giving effect to the distribution, and, in particular, shall be entitled to sign or appoint a Person who shall be entitled to appoint and submit a contract as referred to in Sections 291 and 292 of the Law. |
114.4. | Make any arrangement or other scheme which is required in the opinion of the Board of Directors in order to facilitate the distribution. |
115. | The Board of Directors shall be entitled, as it deems appropriate and expedient, to appoint trustees or nominees for those registered shareholders who have failed to notify the Company of a change of their address and who have not applied to the Company in order to receive dividends, shares or debentures out of capital, or other benefits during the aforesaid period. Such trustees or nominees shall be appointed for the use, collection or receipt of dividends, shares or debentures out of capital and rights to subscribe for shares which have not yet been issued and which are offered to the shareholders but they shall not be entitled to transfer the shares in respect of which they were appointed, or to vote on the basis of holding such shares. In all of the terms and conditions governing such trusts and the appointment of such nominees it shall be stipulated by the Company that upon the first demand by a beneficial holder of a share being held by the trustee or nominee, such trustee or nominee shall be obliged to return to such shareholder the share in question and/or all of those rights held by it on the shareholder’s behalf (all as the case may be). Any act or arrangement effected by any such nominees or trustee and any agreement between the Board of Directors and a nominee or trustee shall be valid and binding in all respects. |
116. | The Board of Directors may from time to time prescribe the manner for payment of dividends or the distribution of bonus shares and the arrangement connected therewith. Without derogating from the generality of the foregoing, the Board of Directors shall be entitled to pay any dividends or moneys in respect of shares by sending a check via the mails to the address of the holder of registered shares according to the address registered in the register of shareholders of the Company. Any dispatch of a check as aforesaid shall be done at the risk of the shareholder. |
117. | If two (2) or more Persons are registered as joint holders of a share, each of them shall be entitled to give a valid receipt in respect of any dividend, share or debenture out of capital, or other moneys, or benefits, paid or granted in respect of such share. |
118. | The Board of Directors shall comply with all the provisions of the Law in regard to the recording of charges and the keeping and maintaining of a register of directors, register of shareholders and register of charges. |
119. | Any book, register and record that the Company is obliged to keep in accordance with the Law or pursuant to these Articles shall be recorded in a regular book, or by technical, mechanical or other means, as the Board of Directors shall decide. |
120. | Subject to and in accordance with the provisions of Sections 138 to 139, inclusive, of the Law, the Company may cause supplementary registers to be kept in any place outside Israel as the Board of Directors may think fit, and, subject to all applicable requirements of law, the Board of Directors may from time to time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers. |
121. | The Board of Directors shall keep proper books of account in accordance with the provisions of the Law. The books of account shall be kept at the Office, or at such other place or places as the Board of Directors shall deem expedient, and shall at all times be open to the inspection of members of the Board of Directors. A shareholder of the Company who is not a member of the Board of Directors shall not have the right to inspect any books or accounts or documents of the Company, unless such right has been expressly granted to him by the Law, or if he has been permitted to do so by the Board of Directors or by the shareholders based on a Resolution adopted at a General Meeting. |
122. | The Board of Directors shall from time to time arrange and submit to the General Meeting a balance sheet and statement of income of the Company. |
123. | At least once each year the accounts of the Company and the correctness of the statement of income and the balance sheet shall be audited and confirmed by an independent auditor or auditors. |
124. | The Company shall, in an annual General Meeting, appoint an independent auditor or auditors who shall hold such position until the next annual General Meeting, and their appointment, remuneration and rights and duties shall be subject to the provisions of the Law, provided, however, that in exercising its authority to fix the remuneration of the Auditor(s), the shareholders in an annual General Meeting may, by a Resolution, act (and in the absence of any action in connection therewith shall be deemed to have so acted) to authorize the Board of Directors to fix such remuneration subject to such criteria or standards, if any, as may be provided in such Resolution, and if no such criteria or standards are so provided, such remuneration shall be fixed in an amount commensurate with both the volume and nature of the services rendered by the Auditor(s). By an act appointing such Auditors, the Company may appoint the auditor(s) to serve for a period of up to the end of completion of the audit of the yearly financial statements for the three (3) year period then ended. |
125. | The Auditors shall be entitled to receive notices of every General Meeting of the Company and to attend such meetings and to express their opinions on all matters pertaining to their function as the Auditors of the Company. |
126. | Subject to the provisions of the Law and the U.S. Rules, any act carried out by the Auditors of the Company shall be valid as against any person doing business in good faith with the Company, notwithstanding any defect in the appointment or qualification of the Auditors. |
127. | For as long as the Company is a Public Company, as defined in the Law, it shall appoint an internal auditor possessing the authorities set forth in the Law. The internal auditor of the Company shall present all of its proposed work plans to the Audit Committee of Directors, which shall have the authority to approve them, subject to any modifications in its discretion. |
128.1. | The Company may serve any written notice or other document on a shareholder by way of delivery by hand, by facsimile transmission or by dispatch by prepaid registered mail to his address as recorded in the Register, or if there is no such recorded address, to the address given by him, her or it to the Company for the sending of notices. |
128.2. | Any shareholder may serve any written notice or other document on the Company by way of delivery by hand at the Office, by facsimile transmission to the Company or by dispatch by prepaid registered mail to the Company at the Office. |
128.3. | Any notice or document which is delivered or sent to a shareholder in accordance with these Articles shall be deemed to have been duly delivered and sent in respect of the shares held by him (whether in respect of shares held by him alone or jointly with others), notwithstanding the fact that such shareholder has died or been declared bankrupt at such time (whether or not the Company knew of his death or bankruptcy), and shall be deemed to be sufficient delivery or dispatch to heirs, trustees, administrators or transferees and any other persons (if any) who have a right in the shares. |
128.4. | Any such notice or other document shall be deemed to have been served: |
128.4.1. | in the case of mailing, 48 hours after it has been posted, or when actually received by the addressee if sooner than 48 hours after it has been posted; |
128.4.2. | in the case of overnight air courier, on the next day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner; |
128.4.3. | in the case of personal delivery, when actually tendered in person to such shareholder; |
128.4.4. | in the case of facsimile or other electronic transmission (including email), the next day following the date on which the sender receives automatic electronic confirmation by the recipient’s facsimile machine or computer or other device that such notice was received by the addressee; or |
128.4.5. | in the case a notice is, in fact, received by the addressee, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 128. |
129. | Any shareholder whose address is not described in the Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company. In the case of joint holders of a share, the Company shall be entitled to deliver a notice by dispatch to the joint holder whose name stands first in the Register in respect of such share. |
130. | Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required by applicable law and these Articles to be set forth therein, that is published, within the time otherwise required for giving notice of such meeting, in a press release via an international wire service and furnished in a Report of Foreign Private Issuer on Form 6-K or Current Report on Form 8-K (or an equivalent form subsequently adopted by the SEC) to the SEC shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any Shareholder whose address as registered in the Register of Shareholders (or as designated in writing for the receipt of notices and other documents) is located either inside or outside the State of Israel, if the Company’s shares are then listed for trading on a national securities exchange in the United States or quoted in an over-the-counter market in the United States. |
131. | Whenever it is necessary to give notice of a particular number of days or a notice for another period, the day of delivery shall be counted in the number of calendar days or the period, unless otherwise specified. |
132. | Subject to the provisions of the Law, the Company shall be entitled to enter into a contract to insure all or part of the liability of an Office Holder of the Company, imposed on him in consequence of an act which he has performed by virtue of being an Office Holder, in respect of any of the following: |
132.1. | The breach of a duty of care to the Company or to any other Person; |
132.2. | The breach of a fiduciary duty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds for believing that the action would not adversely affect the best interests of the Company; |
132.3. | A pecuniary liability imposed on him in favor of any other person in respect of an act done in his capacity as an Office Holder. |
133. | Subject to the provisions of the Law, the Company shall be entitled to indemnify an Office Holder of the Company, to the fullest extent permitted by the Law. Subject to the provisions of the Law, including the receipt of all approvals as required therein or under any applicable law, the Company may resolve retroactively to indemnify an Office Holder with respect to the following liabilities and expenses, provided, in each of the below cases, that such liabilities or expenses were incurred by such Office Holder in such Office Holder’s capacity as an Office Holder of the Company: |
133.1. | a monetary liability imposed on him in favor of a third party in any judgment, including any settlement confirmed as judgment and an arbitrator’s award which has been confirmed by the court, in respect of an act performed by the Office Holder by virtue of the Office Holder being an Office Holder of the Company; provided, however, that: (a) any indemnification undertaking with respect to the foregoing shall be limited (i) to events which, in the opinion of the Board of Directors, are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking and (ii) to an amount or by criteria determined by the Board of Directors to be reasonable in the given circumstances; and (b) the events that in the opinion of the Board of Directors are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking are listed in the indemnification undertaking together with the amount or criteria determined by the Board of Directors to be reasonable in the given circumstances; |
133.2. | reasonable litigation expenses, including legal fees, paid for by the Office Holder, in an investigation or proceeding conducted against such Office Holder by an agency authorized to conduct such investigation or proceeding, and which investigation or proceeding: (i) concluded without the filing of an indictment against such Office Holder and without there having been a monetary liability imposed against such Office Holder in lieu of a criminal proceeding; (ii) concluded without the filing of an indictment against such Office Holder but with there having been a monetary liability imposed against such Office Holder in lieu of a criminal proceeding for an offense that does not require proof of criminal intent; or (iii) involves financial sanction; and |
133.3. | reasonable litigation expenses, including legal fees, paid for by the Office Holder, or which the Office Holder is obligated to pay under a court order, in a proceeding brought against the Office Holder by the Company, or on its behalf, or by a third party, or in a criminal proceeding in which the Office Holder is found innocent, or in a criminal proceeding in which the Office Holder was convicted of an offense that does not require proof of criminal intent. |
133.4. | For purposes of Article 133.2 above: |
133.4.1. | the “conclusion of a proceeding without the filing of an indictment” regarding a matter in which a criminal proceeding was initiated, means the closing of a file pursuant to Section 62 of the Israeli Criminal Procedure Law [Consolidated Version], 5742-1982 (the “Criminal Procedure Law”) or a stay of process by Israel’s Attorney General pursuant to Section 231 of the Criminal Procedure Law; and |
133.4.2. | a “monetary liability imposed…in lieu of a criminal proceeding” means a monetary obligation imposed by law as an alternative to a criminal proceeding, including, without limitation, an administrative fine pursuant to the Israeli Administrative Offenses Law, 5746-1982, a fine for committing an offense categorized as a finable offense pursuant to the provisions of the Criminal Procedure Law, or a penalty. |
133.5. | The Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that the undertaking is limited to categories of events which in the opinion of the Board of Directors can be foreseen when the undertaking to indemnify is given, and to an amount set by the Board of Directors as reasonable under the circumstances, and (ii) retroactively. |
134. | Subject to the provisions of the Companies Law including the receipt of all approvals as required therein or under any applicable law, the Company may, to the maximum extent permitted by law, exempt and release, in advance, any Office Holder from any liability for damages arising out of a breach of a duty of care towards the Company. |
135.1. | Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 132 to 134 and any amendments to Articles 132 to 134 shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law. |
135.2. | The provisions of Articles 132 to 134 are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or in respect of indemnification and/or exculpation, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any Office Holder to the extent that such insurance and/or indemnification is not specifically prohibited under law. |
136. | Should the Company be wound up and the assets of the Company made available for distribution among shareholders be insufficient to repay all of the Company’s paid-up capital, such assets shall be divided in a manner whereby the losses shall, as far as possible, be borne by the shareholders pro rata to the nominal value of the paid-up capital on the shares held by each of them, and, if at the time of the winding-up, the property of the Company available for distribution among the shareholders should exceed the amount sufficient for the repayment of the full nominal value of the paid-up capital at the time of commencement of the winding-up, the surplus shall be distributed to the |
137. | Upon the sale of the Company’s assets, the directors may, or in the case of a liquidation, the liquidators may, if authorized to do so by a Resolution of the Company, accept fully or partly paid-up shares, or securities of another company, Israeli or non-Israeli, whether in existence at such time or about to be formed, in order to purchase the property of the Company, or part thereof, and to the extent permitted under the Law, the directors may (or in the case of a liquidation, the liquidators may) distribute the aforesaid shares or securities or any other property of the Company among the shareholders without realizing the same, or may deposit the same in the hands of trustees for the shareholders, and the General Meeting by a Resolution may decide, subject to the provisions of the Law, on the distribution or allotment of cash, shares or other securities, or the property of the Company and on the valuation of the aforesaid securities or property at such price and in such manner as the shareholders at such General Meeting shall decide, and all of the shareholders shall be obliged to accept any valuation or distribution determined as aforesaid and to waive their rights in this regard, except, in a case in which the Company is about to be wound-up and is in the process of liquidation, for those legal rights (if any) which, according to the provisions of the Law, may not be changed or modified. |
138. | Subject to the Companies Law and these Articles, a transaction between the Company and an Office Holder, and a transaction between the Company and another entity in which an Office Holder of the Company has a personal interest, in each case, which is not an Extraordinary Transaction (as defined by the Companies Law), shall require only approval by the Board or a Committee. Such authorization, as well as the actual approval, may be for a particular transaction or more generally for specific type of transactions under a related party transactions policy approved by the Board or the applicable Committee. |
(i) | discussed the Merger and related matters with the Company and Company’s counsel and reviewed a draft dated May 24, 2023 of the Merger Agreement; |
(ii) | reviewed the audited consolidated financial statements of the Company contained in its Annual Report on Form 10-K for the three years ended December 31, 2022 and unaudited consolidated financial statements of the Company contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023; |
(iii) | reviewed the audited consolidated financial statements of Parent contained in its Annual Report on Form 20-F for the three years ended December 31, 2022 and the unaudited consolidated financial statements of Parent contained in its Current Reports on Form 6-K relating to the financial results for the quarter ended March 31, 2023; |
(iv) | reviewed and discussed with the Company’s management and Parent’s management certain other publicly available information concerning the Company and Parent; |
(v) | held discussions with the Company’s senior management, including estimates of certain cost savings, revenue and operating synergies, merger charges and the pro forma financial impact of the Merger on Parent, utilized per instruction of the Company; |
(vi) | reviewed certain non-publicly available information concerning the Company, including internal financial analyses and forecasts prepared by and provided to us by the Company’s management and, based on assumptions approved by the Company’s management, certain extrapolations thereto approved by the Company’s management (collectively, the “Company Projections”) and utilized per instruction of the Company, and held discussion with the Company’s senior management regarding recent developments; |
(vii) | reviewed certain non-publicly available information concerning Parent, including internal financial analyses and forecasts prepared by and provided to us by the Company’s management and, based on assumptions approved by the Company’s management, certain extrapolations thereto approved by the Company’s management (collectively, the “Parent Projections” and, together with the Company Projections, the “Projections”) and utilized per instruction of the Company, and held discussion with Parent’s senior management regarding recent developments; |
(viii) | reviewed and analyzed certain publicly available information concerning the terms of selected merger and acquisition transactions that we considered relevant to our analysis; |
(ix) | reviewed and analyzed certain publicly available financial and stock market data relating to selected public companies that we deemed relevant to our analysis; |
(x) | participated in certain discussions and negotiations between representatives of the Company and Parent; |
(xi) | reviewed the reported prices and trading activity of the Company Common Stock and the Parent Ordinary Shares; |
(xii) | reviewed and analyzed, based on the Company Projections and the Parent Projections, the cash flows generated by the Company and Parent, as applicable, on a stand-alone basis to determine the present value of the Company’s and Parent’s respective discounted cash flows; |
(xiii) | reviewed the relative financial contributions of the Company and Parent to the future financial performance of Parent on a pro forma basis; |
(xiv) | considered the results of our efforts, at the direction of the Company, to solicit indications of interest from selected third parties with respect to a merger or other transaction with the Company; |
(xv) | conducted such other financial studies, analyses and investigations and considered such other information as we deemed necessary or appropriate for purposes of our opinion; and |
(xvi) | took into account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuations and our knowledge of the Company’s industry generally. |
1 | Note to Draft: To be omitted from KPCB voting agreement. |
(i) | If to Sun, to: |
Stratasys Ltd. |
with a copy (which shall not constitute notice) to: |
Meitar Law Offices |
and |
Wachtell, Lipton, Rosen & Katz |
(ii) | If to the Stockholder, to: |
[•] |
with a copy (which shall not constitute notice) to: |
[•] |
| | STRATASYS LTD. | ||||
| | | | |||
| | By: | | | ||
| | | | Name: | ||
| | | | Title: |
| | STOCKHOLDER: | ||||
| | |||||
| | |||||
| | |||||
| | |||||
| | Number of shares of Ironman Common Stock: | ||||
| | |||||
| | |||||
| | |||||
| | Address: | | | ||
| | |||||
| | | |
Item 20. | Indemnification of Officers and Directors of Stratasys |
• | a financial liability incurred by or imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above-mentioned foreseen events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party, or in connection with criminal proceedings in which the office holder was acquitted, or as a result of a conviction for an offense that does not require proof of criminal intent; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder in respect of certain administrative proceedings under the Israeli Securities Law. |
• | a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the best interest of the company; |
• | a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; and |
• | a financial liability imposed on the office holder in favor of a third party. |
• | a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company; |
• | a breach of duty of care committed intentionally or recklessly, excluding a breach arising solely out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine, civil fine, monetary sanction or forfeit levied against the office holder. |
Item 21. | Exhibits and Financial Statement Schedules |
Item 22. | Undertakings |
(a) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) 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. |
(b) | The undersigned registrant hereby undertakes (i) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form F-4, within one (1) business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means, and (ii) to arrange or provide for a facility in the United States for the purpose of responding to such requests. |
(c) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
Exhibit Number | | | Description |
| | Agreement and Plan of Merger, dated as of May 25, 2023, by and among Stratasys, Desktop Metal and Merger Sub (attached as Annex A to the joint proxy statement/prospectus included in this Registration Statement (certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Stratasys reserves the right to request confidential treatment for portions of any such documents.)) | |
| | Amended and Restated Articles of Association of Stratasys Ltd. to be effective upon the Merger (attached as Annex B to the joint proxy statement/prospectus included in this Registration Statement) | |
| | Current Articles of Association of Stratasys Ltd. (incorporated by reference to Appendix A to the Stratasys’ proxy statement for its February 3, 2015 extraordinary general meeting of shareholders, attached as Exhibit 99.1 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on January 6, 2015) | |
| | Memorandum of Association of Stratasys Ltd. (formerly known as Objet Ltd.) (incorporated by reference to Exhibit 3.2 to Stratasys’ registration statement on Form F-4, SEC File No. 333-182025, filed with the SEC on June 8, 2012 | |
| | Stratasys Ltd. Shareholder Rights Plan, dated as of July 25, 2022, between Stratasys Ltd. and Continental Stock Transfer & Trust Company, as rights agent, which includes the Form of Right Certificate (Exhibit A) and the Form of Summary of Rights (Exhibit B) (incorporated by reference to Exhibit 4.1 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on July 25, 2022) | |
| | First Amendment to Stratasys Ltd. Shareholder Rights Plan (incorporated by reference to Exhibit 4.1 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 25, 2023) | |
| | Form of Second Amendment to Stratasys Ltd. Shareholder Rights Plan* | |
| | Opinion of Meitar Law Offices as to the validity of the ordinary shares of Stratasys Ltd. being registered pursuant to this registration statement* | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Ric Fulop (incorporated by reference to Exhibit 10.1 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and KPCB Holdings, Inc., as nominee, Kleiner Perkins Caufield & Byers XVI, LLC, KPCB XVI Founders Fund, LLC, Kleiner Perkins Caufield & Byers XVII, LLC and KPCB XVII Founders Fund, LLC (incorporated by reference to Exhibit 10.2 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Khaki Campbell Trust (incorporated by reference to Exhibit 10.3 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Bluebird Trust (incorporated by reference to Exhibit 10.4 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Jonah Myerberg (incorporated by reference to Exhibit 10.5 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Audra Myerberg (incorporated by reference to Exhibit 10.6 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Wen Hsieh (incorporated by reference to Exhibit 10.7 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) | |
| | Voting and Support Agreement, dated as of May 25, 2023, by and between Stratasys Ltd. and Red Tailed Hawk Trust (incorporated by reference to Exhibit 10.8 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on May 26, 2023) |
Exhibit Number | | | Description |
| | Stratasys Ltd. 2022 Share Incentive Plan, as amended (incorporated by reference to Exhibit 99.1 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on August 26, 2022) | |
| | Form of Amendment to 2022 Share Incentive Plan* | |
| | Stratasys Ltd. 2012 Omnibus Equity Incentive Plan, as amended (incorporated by reference to Exhibit 4.2 to Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023) | |
| | Stratasys Ltd. 2021 Employee Share Purchase Plan (incorporated by reference to Appendix A to Stratasys’ proxy statement for its 2021 annual general meeting of shareholders, attached as Exhibit 99.2 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on October 13, 2021) | |
| | Form of Indemnification Agreement by and between Stratasys Ltd. (formerly known as Objet Ltd.) and each of its directors and executive officers (incorporated by reference to Exhibit 10.7 to Stratasys’ registration statement on Form F-4, SEC File No. 333- 182025, filed with the SEC on June 8, 2012) | |
| | OEM Purchase and License Agreement, effective as of May 5, 2011, by and between Stratasys Ltd. (formerly known as Objet Geometries Ltd.) and RicohPrinting Systems America, Inc. (incorporated by reference to Exhibit 10.10 to Stratasys’ registration statement on Form F-4, SEC File No. 333-182025, filed with the SEC on June 8, 2012) | |
10.14 | | | Assignment, dated June 1, 1994, from S. Scott Crump, James W. Comb, William R. Priedeman, Jr., and Robert Zinniel to Stratasys, Inc. (a subsidiary of Stratasys Ltd.) with respect to a patent application for a process and apparatus of support removal for three-dimensional modeling (incorporated by reference to Amendment No. 1 to Stratasys, Inc.’s registration statement on Form SB-2 (SEC File No. 333-99108) filed with the SEC on December 20, 1995) (P) |
| | Stratasys Ltd. Compensation Policy for Executive Officers and Directors (incorporated by reference to Appendix B to Stratasys’ proxy statement for its 2021 annual general meeting of shareholders, attached as Exhibit 99.2 to Stratasys’ Report of Foreign Private Issuer on Form 6-K furnished to the SEC on October 13, 2021) | |
| | Employment Agreement, effective as of February 18, 2020, by and between Stratasys Ltd. and Yoav Zeif (incorporated by reference to Exhibit 4.8 to Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on February 26, 2020) | |
| | List of Subsidiaries of Stratasys Ltd. (incorporated by reference to Exhibit 8.1 of Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023) | |
| | Consent of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, relating to the financial statements of Stratasys Ltd. | |
| | Consent of Deloitte & Touche LLP relating to the financial statements of Desktop Metal, Inc. | |
| | Consent of Meitar Law Offices (included in Exhibit 5.1)* | |
| | Power of Attorney of Officers and Directors (included on the signature page to the initial filing of this Registration Statement on Form F-4, filed with the SEC on June 20, 2023)* | |
| | Form of Proxy Voting Card of Stratasys Ltd.* | |
| | Form of Proxy Voting Card of Desktop Metal, Inc.* | |
| | Consent of Ric Fulop, director nominee of Stratasys Ltd.* | |
| | Consent of James Eisenstein, director nominee of Stratasys Ltd.* | |
| | Consent of Wen Hsieh, director nominee of Stratasys Ltd.* | |
| | Consent of Stephen Nigro, director nominee of Stratasys Ltd.* | |
| | Consent of Steve Papa, director nominee of Stratasys Ltd.* | |
| | Consent of J.P. Morgan Securities LLC | |
| | Consent of Stifel, Nicolaus & Company, Incorporated | |
| | Filing fee table* |
* | Previously filed. |
| | Stratasys Ltd. | ||||
| | | | |||
| | /s/ Eitan Zamir | ||||
| | Name: | | | Eitan Zamir | |
| | Title: | | | Chief Financial Officer |
Signature | | | Title | | | Date |
| | | | |||
* | | | Chairman of the Board | | | August 25, 2023 |
Dov Ofer | | | ||||
| | | | |||
* | | | Chief Executive Officer (Principal Executive Officer) | | | August 25, 2023 |
Dr. Yoav Zeif | | | ||||
| | | | |||
/s/ Eitan Zamir | | | Chief Financial Officer (Principal Financial Officer) | | | August 25, 2023 |
Eitan Zamir | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
S. Scott Crump | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
John J. McEleney | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
Ziva Patir | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
David Reis | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
Michael Schoellhorn | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
Yair Seroussi | | | ||||
| | | | |||
* | | | Director | | | August 25, 2023 |
Adina Shorr | | | ||||
| | | | |||
* By: /s/ Eitan Zamir | | | | | ||
Eitan Zamir, Attorney-in-Fact | | |
Very truly yours,
|
|
/s/ J.P. Morgan Securities LLC
|
|
J.P. MORGAN SECURITIES LLC
|
'0 0V]P>7)I9VAT($AE=VQE='0@
M4&%C:V%R9"P@,C P- !S9C,R !#$0 7?___S)@ !Y0 /V/___[
MH?___:( /; # =?_; $, 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! ?_; $,! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! ?_ !$( $@"/ ,!(@ "$0$#$0'_Q ? !!0$!
M 0$! 0 0(#! 4&!P@)"@O_Q "U$ " 0,# @0#!04$! 7T!
M @, !!$%$B$Q008346$'(G$4,H&1H0@C0K'!%5+1\"0S8G*""0H6%Q@9&B4F
M)R@I*C0U-C &IJ\ =>^%&B_9[?5O&/P=C
MD?5]+C\&6D\\$%]K_@;4OM[Z?X8LD6^UW3-=U"#31=ZG8:;IEY_6< % 50%5
M0 J@ # X X ' %+52VO+*\M9%EM[FVN(F62*:*15='1@01Z5
M_6U_P3,_X*5:7^T9I6F_!CXNW]MI?QKT;3UATK4[B2.WM/B+86,(5KBW+LJ)
MXC@A3S+ZR7YKU%>\ME.V=$^*\,O$GZY[#ASB#$7Q?NTLLS&M+_>EI&Q4Y/
M7$[1H5I/_:%:E-^WY)5_Z,^F+]$=\*5
J>^)H+^+%<\%[6*Y_]F?%;Z*V6^,_@KX;\3\)8?"99XEY
M/X;<'1PU11IX;"\4X*CPWE\HY/F=1*,(8RFKK*LRJ?PI-8/%R>#G3J8/^[ZB
MO'/@/\=OAW^T;\-=!^*/PSUF+5O#^M0 30EE74-%U.-%^W:+J]L#OM=1L)6,
M4T; *XVS1%HI$8^QU_4.&Q.'QN'HXO"5J>(PV(IPK4*U*2G3JTYI2C.,EHTT
M_5/1I--'^.N:97F.29CCLHS?!8G+
&+?3_ +?86>?*OYIWAFGM47S&_&7XY?\
M!ME\#/C;XITCQ1>_M#_$/1)=%\+:?X*L;'_A#M UJWL_"OA?4-6LOA]H5B]Y
MJ\$EKI_@GX=MX3^'UFK&>YU2'PDOB/5+F;6=0=K:?X/-O
M+R..94<\<<\5]SPSA:LN&N/,:D_8T
MG5Q&
'0 0V]P>7)I9VAT($AE=VQE='0@
M4&%C:V%R9"P@,C P- !S9C,R !#$0 7?___S)@ !Y0 /V/___[
MH?___:( /; # =?_; $, 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! ?_; $,! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! ?_ !$( #P!( ,!(@ "$0$#$0'_Q ? !!0$!
M 0$! 0 0(#! 4&!P@)"@O_Q "U$ " 0,# @0#!04$! 7T!
M @, !!$%$B$Q008346$'(G$4,H&1H0@C0K'!%5+1\"0S8G*""0H6%Q@9&B4F
M)R@I*C0U-CI_M:V:>!?^%._&GQQ\/_ (MR^,OW
M5KX*\0^(O"GC7X9-XIUR\G(BCTSPQXD\2V/BJ3Q 7>S33[!==BFELPDS_P"C
ME\;O^"D?[#/[/WP8C^/OQ"_:=^$,OPTU$7\7A75O!7C30OB'>^/]2TXK'=:+
M\/=(\$WVN:AXRU2">2&&^BT2"ZM]'647FN76F:=%<7D/S5^WK_P1(_82_P""
MAWC2+XH_PKXR\"?%QK&STO6?BG\%O$.E>#_%GBS3=+LCI^D0>,+;7/#?B[
MPGXDN]'LUMK+3M>U/PQ-XEATK3M)T%]:D\/Z3IVE6W(_L<_\$#/^" 0!YJ'I0>OA[I
M'Q,?/A]I'Y0?OQ_J(!4@02!L()@@Q"#P(1PA2"%U(:$ASB'[(B