Item 3.03. Material Modification to Rights of Security Holders
On May 26, 2023, Desktop Metal, Inc. (the “Company”)
entered into a Rights Agreement between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (as amended from
time to time, the “Rights Agreement”) that was approved by the Board of Directors of the Company. The Rights Agreement
was adopted as contemplated by that certain Agreement and Plan of Merger (as it may be amended from time to time, the “Merger
Agreement”), dated as of May 25, 2023, among the Company, Stratasys Ltd., an Israeli company (“Stratasys”),
and Tetris Sub Inc., a Delaware corporation (“Merger Sub”) and a direct wholly owned subsidiary of Stratasys, pursuant
to which the Company and Stratasys will combine the businesses of the Company and Stratasys.
In connection with the Rights Agreement, a dividend
was declared of one preferred stock purchase right (individually, a “Right” and collectively, the “Rights”)
for each share of Class A Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company outstanding
at the close of business on June 9, 2023 (the “Record Date”). Each Right will entitle the registered holder thereof,
after the Rights become exercisable and until the earlier of (i) July 24, 2024 and (ii) the Effective Time (as defined in the Merger Agreement)
(or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series
A Junior Participating Preferred Stock, par value $0.0001 per share (the “Series A Preferred”), of the Company at a
price of $9.00 per one one-thousandth of a share of Series A Preferred (the “Purchase Price”). Until the earlier to
occur of (i) the close of business on the tenth business day following a public announcement that a person or group of affiliated or associated
persons has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the Common Stock (an “Acquiring
Person”) or (ii) the close of business on the tenth business day (or such later date as may be determined by action of the Board
of Directors prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange offer the consummation of which would result in a person
or group becoming an Acquiring Person (the earlier of (i) and (ii) being called the “Distribution Date”), the Rights
will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificates,
or, with respect to any uncertificated Common Stock registered in book entry form, by notation in book entry, in either case together
with a copy of the Summary of Rights attached as Exhibit C to the Rights Agreement.
The Rights Agreement provides that any person who
beneficially owned 15% or more of the Common Stock immediately prior to the first public announcement of the adoption of the Rights Agreement,
together with any affiliates and associates of that person (each an “Existing Holder”), shall not be deemed to be an
“Acquiring Person” for purposes of the Rights Agreement unless an Existing Holder becomes the beneficial owner of one or more
additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common
Stock in Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and upon acquiring such additional shares,
the Existing Holder beneficially owns 15% or more of the Common Stock then outstanding.
The Rights Agreement provides that neither Stratasys
nor Merger Sub, nor any of their respective affiliates or associates, either individually or collectively, shall be deemed to be an “Acquiring
Person” as a result of (i) the approval, adoption, execution, delivery and, if applicable, any amendment, of the Merger Agreement
or the voting agreements contemplated thereby, (ii) the acquisition or the right to acquire beneficial ownership of the common stock of
the Company as a result of execution of the Merger Agreement, (iii) the execution of and entry into the voting agreements contemplated
by the Merger Agreement by the parties thereto or (iv) the public announcement and consummation of the Merger (as defined in the Merger
Agreement) or the other transactions contemplated by the Merger Agreement or the voting agreements contemplated thereby. Further, the
Rights Agreement provides that none of the execution, delivery or performance of the Merger Agreement or the voting agreements contemplated
thereby, or the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement or the voting agreements
contemplated thereby, will result in a Stock Acquisition Date (as defined in the Rights Agreement) or Distribution Date (as defined in
the Rights Agreement) or permit any Rights to be exercised or exchanged pursuant to the Rights Agreement.
The Rights will be transferred only with the Common
Stock until the Distribution Date (or earlier redemption, exchange, termination or expiration of the Rights). As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders
of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on the earlier of (i) July 24, 2024 and (ii) the Effective Time (as defined in the Merger Agreement), subject
to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or terminated. The Rights will at
no time have any voting rights.
Each share of Series A Preferred purchasable upon
exercise of the Rights will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of $1.00 per share
or, if greater, an aggregate dividend of 1,000 times the dividend, if any, declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Series A Preferred will be entitled to a minimum preferential liquidation
payment of $1,000 per share (plus any accrued but unpaid dividends), provided that such holders of the Series A Preferred will be entitled
to an aggregate payment of 1,000 times the payment made per share of Common Stock. Each share of Series A Preferred will have 1,000 votes
and will vote together with the Common Stock. Finally, in the event of any merger, consolidation or other transaction in which shares
of the Common Stock are exchanged, each share of Series A Preferred will be entitled to receive 1,000 times the amount received per share
of Common Stock. The Series A Preferred will not be redeemable. The Rights are protected by customary anti-dilution provisions. Because
of the nature of the Series A Preferred’s dividend and liquidation rights, the value of one one-thousandth of a share of Series
A Preferred purchasable upon exercise of each Right should approximate the value of one share of Common Stock.
The Purchase Price payable, and the number of one
one-thousandths of a share of Series A Preferred or other securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification
of, the Series A Preferred, (ii) upon the grant to holders of the Series A Preferred of certain rights or warrants to subscribe for or
purchase Series A Preferred or convertible securities at less than the current market price of the Series A Preferred or (iii) upon the
distribution to holders of the Series A Preferred of evidences of indebtedness, cash, securities or assets (excluding regular periodic
cash dividends at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share of the Company
for the four quarters ended immediately prior to the payment of such dividend, or dividends payable in shares of Series A Preferred (which
dividends will be subject to the adjustment described in clause (i) above)) or of subscription rights or warrants (other than those referred
to above).
In the event that a person becomes an Acquiring
Person or if the Company were the surviving corporation in a merger with an Acquiring Person or any affiliate or associate of an Acquiring
Person and shares of the Common Stock were not changed or exchanged in such merger, each holder of a Right, other than Rights that are
or were acquired or beneficially owned by the Acquiring Person (which Rights will thereafter be void), will thereafter have the right
to receive upon exercise that number of shares of Common Stock having a market value of two times the then current Purchase Price of one
Right. In the event that, after a person has become an Acquiring Person, the Company were acquired in a merger or other business combination
transaction or more than 50% of its assets or earning power were sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price of the Right, that number of shares
of common stock of the acquiring company which at the time of such transaction would have a market value of two times the then current
Purchase Price of one Right.
At any time after a person becomes an Acquiring
Person and prior to the earlier of one of the events described in the last sentence of the previous paragraph or the acquisition by such
Acquiring Person of 50% or more of the then outstanding Common Stock, the Board of Directors may cause the Company to exchange the Rights
(other than Rights owned by an Acquiring Person which have become void), in whole or in part, for shares of Common Stock at an exchange
rate of one share of Common Stock per Right (subject to adjustment).
The Rights may be redeemed in whole, but not in
part, at a price of $0.0001 per Right (the “Redemption Price”) by the Board of Directors at any time prior to the time
that an Acquiring Person has become such. The redemption of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company beyond those as an existing stockholder, including, without limitation, the
right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company, or a duly authorized committee thereof, for so long as the Rights are then redeemable,
and after the Rights are no longer redeemable, the Company may amend or supplement the Rights Agreement in any manner that does not adversely
affect the interests of the holders of the Rights (other than an Acquiring Person or any affiliate or associate of an Acquiring Person).
One Right will be distributed to stockholders of
the Company for each share of Common Stock owned of record by them on June 9, 2023. As long as the Rights are attached to the Common Stock,
the Company will issue one Right with each new share of Common Stock so that all such shares will have attached Rights. The Company has
agreed that, from and after the Distribution Date, the Company will reserve 500,000 shares of Series A Preferred initially for issuance
upon exercise of the Rights.
The Rights are designed to assure that all of the
Company’s stockholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against
partial tender offers, open market accumulations and other abusive or coercive tactics to gain control of the Company without paying all
stockholders a control premium. The Rights will cause substantial dilution to a person or group that acquires 15% or more of the Common
Stock on terms not approved by the Company’s Board of Directors. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors at any time prior to the first date that a person or group has become an Acquiring Person.
The Rights Agreement specifying the terms of the
Rights and the text of the press release announcing the declaration of the Rights are incorporated herein by reference as exhibits to
this current report. The foregoing summary of the Rights Agreement is qualified in its entirety by reference to such exhibits.