---

---

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549


FORM 10-K/AAMENDMENT NO. 1

(Mark One) [ü] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December
31, 2011OR


[
  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______
to _______


Commission file number 1-13400

STRATASYS, INC.(Exact name of registrant as specified in its charter)

|Delaware                                                          |  | 36-3658792                               
|----------------------------------------------------------------- |  | -----------------------------------------
|State or other jurisdiction of                                    |  | (I.R.S. Employer                         
|incorporation or organization                                     |  | Identification No.)                      
|                                                                 
|7665 Commerce Way, Eden Prairie,
      Minnesota                  |  | 55344                                    
|(Address of Principal Executive Offices)                          |  | (Zip Code)                               
|                                                                 
|Registrants telephone number, including area
    code            |  | (952) 937-3000                           
|                                                                 
|Securities registered pursuant to Section 12(b) of the
      Act: |  |                                          
|Title of each class                                               |  | Name of each exchange on which registered
|Common stock, $.01 par value                                      |  | NASDAQ Global Select
  Market            

Securities registered pursuant section
12(g) of the Act:None

Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes [   ] No [ü]

Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.Yes [   ] No [ü]

Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
past 90 days. Yes [ü] No [   ]

Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period than the registrant was required to submit and post such files). Yes
[ü] No [   ]

Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [   ]

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check one):


|Large accelerated filer
      [   ]                 |  | Accelerated filer
      [ü]          
|--------------------------------------------------- |  | -------------------------------------
|Non-accelerated filer [  
      ]                   |  | Smaller reporting company
      [   ]
|(Do not check
      if a smaller reporting company)

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ] No [ü]

The
aggregate market value of the registrants Common Stock held by non-affiliates
of the registrant as of June 30, 2011, the last business day of the registrants
most recently completed second quarter, was approximately $682,000,000. On such
date, the closing price of the Registrants Common Stock, as quoted on the
Nasdaq Global Select Market was $33.70.

The registrant had 21,287,065 shares
of common stock outstanding as of March 1, 2012.

---



TABLE OF CONTENTS

|PART
      III                                             |                                                                                                           
|---------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------
|Item
      10.                                             | Directors, Executive
      Officers and Corporate Governance.                                             
|                                                           |                                                                                                           
|Item 11.                                                   | Executive
      Compensation.                                                                             
|                                                          
|Item 12.                                                   | Security Ownership of
      Certain Beneficial Owners and Management andRelated Stockholder
      Matters.
|                                                          
|Item 13.                                                   | Certain Relationships and
      Related Transactions, and Director Independence.                          
|                                                           |                                                                                                           
|Item 14.                                                   | Principal Accountant Fees
      and Services.                                                             
|                                                          
|PART IV                                                    |                                                                                                           
|                                                           |                                                                                                           
|Item 15. Exhibits and Financial Statement
      Schedules. | 18                                                                                                        
|SIGNATURES                                                 | 19                                                                                                        
|INDEX TO EXHIBITS                                          | 20                                                                                                        
|                                                           |                                                                                                           
|EX-31.1 (EX-31.1)                                          | 21                                                                                                        
|EX-31.2
      (EX-31.2)                                    | 22                                                                                                        
|EX-32.1 (EX-32.1)                                          | 23                                                                                                        
|EX-32.2
      (EX-32.2)                                    | 24                                                                                                        

---



EXPLANATORY NOTE

We filed
our Annual Report on Form 10-K for the year ended December 31, 2011 (the "Form
10-K") on March 12, 2012, pursuant to which we incorporated by reference into
Part III thereof portions of our definitive proxy statement (the "Proxy
Statement") to be subsequently filed with the Securities and Exchange Commission
("SEC"). We hereby amend the Form 10-K to file Part III information in this Form
10-K/A (the "Form 10-K/A") rather than incorporating it into the Form 10-K by
reference to the Proxy Statement. Accordingly, Part III of the Form 10-K is
hereby amended and restated in its entirety as set forth below. In addition, in
connection with the filing of this Form 10-K/A and pursuant to the rules of the
SEC, we are including in this amendment currently dated certifications.
Accordingly, Item 15 of Part IV has also been amended to reflect the filing of
these currently dated certifications.

This Form 10-K/A makes reference to
the date of the Form 10-K, and we have not updated or amended the disclosures
contained herein to reflect events that have occurred since the filing of the
Form 10-K, or modified or updated the disclosures contained in the Form 10-K in
any way other than as specifically set forth in this Form 10-K/A. Accordingly,
this Form 10-K/A should be read in conjunction with the Form 10-K and other
filings made by our company with the SEC subsequent thereto.

PART III

Item 10. Directors, Executive
Officers and Corporate Governance.

Directors

Our Board of Directors currently has
six members. The following directors will serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified. The
following information provides the age and business experience of the directors
as of April 27, 2012.

S. Scott Crump, age 59, has served as our Chief Executive Officer,
President, Treasurer and a director since our inception in 1988 and as Chief
Financial Officer from February 1990 to May 1997. Mr. Crump is, with Lisa H.
Crump, his wife, a co-founder of Stratasys, and he is the inventor of Stratasys
FDM® technology. During the period from 1982 to 1988, Mr. Crump was a
co-founder and Vice President of Sales of IDEA, Inc., which later changed its
name to SI Technologies, Inc., a leading manufacturer of force, load and
pressure transducers. Mr. Crump continued to be a director and shareholder of
that company until its sale to Vishay Intertechnologies, Inc. (NYSE: VSH) in
April 2005. Mr. Crump, a registered professional engineer, is the son of Ralph
E. Crump, a director of Stratasys. Scott Crump is one of the founders of our
company and as the inventor of our FDM technology, he is intimately familiar
with our products and our business. In addition, Mr. Crump has extensive
knowledge of the rapid prototyping and direct digital manufacturing markets as
well as our competitors and their products.

Ralph E. Crump, age 88, has been a director of Stratasys since 1990. Mr.
Crump is President of Crump Industrial Group, an investment firm located in
Trumbull, Connecticut. He was a founder and director of Osmonics, Inc., now GE
Osmonics, a manufacturer of reverse osmosis water filtration devices, until it
merged with General Electric Company (NYSE:GE) in February 2003. Mr. Crump was
chairman of SI Technologies, Inc. until April 1, 2005, when it was sold to
Vishay Intertechnologies, Inc. (NYSE: VSH). In 1962, Mr. Crump co-founded
Frigitronics, Inc., a manufacturer of ophthalmic goods and medical instruments,
and was its President and Chairman of the Board until it was acquired by
Revlon/Johnson & Johnson in 1986. Mr. Crump was also a director of Mity
Enterprises, Inc. (Nasdaq: MITY), a manufacturer of institutional furniture,
until July 17, 2007, when it was acquired by a wholly owned subsidiary of MITY
Holdings, Inc., an affiliate of Sorenson Capital Partners, L.P., and Peterson
Partners LP. He is a Trustee of the Alumni Foundation of UCLA and a member of
the Board of Overseers for the Thayer Engineering School at Dartmouth College.
Mr. Crump is the father of S. Scott Crump. In his decades in business, Mr. Crump
has developed extensive experience in manufacturing and operations as well as
sales and marketing, which we believe are invaluable
contributions to our Board.

1

---



John J. McEleney, age 49, has been a director of Stratasys since 2007. He is
the Chief Executive Officer of Cloud Switch, which was recently acquired by Verizon.
He served as a director of SolidWorks Corporation, a wholly owned subsidiary of
Dassault Systemes S.A. (Nasdaq: DASTY), from June 2000 to May 2008, and also
served as its Chief Executive Officer from 2001 until June 2007. Mr. McEleney
joined SolidWorks in 1996, serving in several capacities, including Chief
Operating Officer and Vice President, Americas Sales. Prior to joining
SolidWorks, Mr. McEleney held several key management positions at CAD software
pioneer Computervision and at defense contractor Raytheon. Mr. McEleney also
serves as a director of Newforma, a privately held software company. We believe
that Mr. McEleneys experience as both a chief operating officer and a chief
executive officer of a CAD software company affords him a unique insight into an
important element of our business, which helps our Board understand the
requirements of those who use our products and services.

Edward J. Fierko, age 71, has been a director of Stratasys since February
2002. Since May 2003, Mr. Fierko has been President of EJF Associates, a
consulting firm. From March 2003 to May 2003, Mr. Fierko was Vice President of
GE Osmonics, Inc., a manufacturer of reverse osmosis water filtration devices.
From November 1999 through February 2003, he served as President and Chief
Operating Officer of Osmonics, and from November 1998 to September 1999 he
served as Executive Vice President of Osmonics. From September 1987 to August
1998, Mr. Fierko was President and CEO of Ecowater International, a holding
company with operating companies in the water, waste and special process
treatment industry. Prior to that, Mr. Fierko held several management positions
over a 23-year career at General Electric Company. Mr. Fierko has developed
extensive expertise in all phases of manufacturing operations, which has helped
to guide both the Board and management in developing and our implementing
manufacturing plans. In addition, as the CFO of a division of a public company
and the Chairman of our Audit Committee, Mr. Fierko is intimately familiar with
our finances and works closely with our CFO on developing financial strategies
for our company.

Clifford H.
Schwieter, age 64, has been a director of
Stratasys since 1994. Since 2009, Mr. Schwieter has been the President and a
Managing Director of C.H. Schwieter and Associates, LLC, a management and
financial consulting firm; he also served in that capacity from 1994 to 2002.
From 2002 to 2009, Mr. Schwieter was the President and Chief Executive Officer
of Concise Logic, Inc., a software development company focused on semiconductor
design tools. From July 1992 to March 1994, he served as President, Chief
Executive Officer and a director of Centric Engineering Systems, Inc., which was
engaged in the development of mechanical design and analysis software for
computing systems ranging from workstations to mainframes and massively parallel
networked computing environments. Mr. Schwieter was Vice President and General
Manager of the Electronic Imaging Systems Division of the DuPont Company from
1986 to 1991. From 1971 to 1986, Mr. Schwieter was with the General Electric
Company, where he served as Vice President of GEs Calma Company from 1985 to
1986 and was responsible for that subsidiarys worldwide business in the
mechanical design and factory automation arena. He was President and
Representative Director of GE Industrial Automation, Ltd., a joint venture
between GE and C. Itoh & Company located in Tokyo, from 1982 to 1985. Mr.
Schwieter has developed extensive skills in technology development and emerging
markets over his 30-year business career.

Gregory L. Wilson, age 64, has been a director of Stratasys since 1994. Mr.
Wilson has been Chairman of the Board of SimTek Fence, a manufacturer of polymer
rock products, since 2007. He was, with his wife Kathy R. Wilson, a co-founder
of Mity Enterprises, Inc., a manufacturer of innovative institutional furniture,
and served as Chairman of the Board of that company from its inception in 1987
to July 17, 2007 when it was acquired by MITY Holdings, LLC, a subsidiary of
Sorenson Capital Partners, L.P., and Peterson Partners L.P. From its inception
until May 2002, he also served as President of Mity. From 1982 until 1987, Mr.
Wilson was President of Church Furnishings, Inc., in Provo, Utah. Mr. Wilson
served as a Financial Analyst at the Ford Motor Company and as General Manager
of the Stereo Optical Company in Chicago, Illinois. Mr. Wilson also serves on
the board of directors of Design Imaging, Inc., a
manufacturer of imaged composite panel systems in Orem, Utah.

2

---



SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

Section 16(a) of the Exchange Act
requires our executive officers and directors, and persons who own more than 10%
of a registered class of our equity securities to file reports of ownership and
changes in ownership with the SEC. SEC regulations also require us to identify
in this annual report any person subject to this requirement who failed to file
any such report on a timely basis.

Based on our review of the reports we
have received and written representations that no other reports were required
for 2011, we believe that all Section 16(a) reporting requirements applicable to
our executive officers and directors and persons who own more than 10% of a
registered class of our equity securities in 2011 were satisfied in a timely
fashion, except that Ralph E. Crump filed one report on Form 4 late.

Availability of Information and
Communications with the Board

We have established a Corporate
Governance section on our website, at www.stratasys.com, which is accessible by
clicking Investors and then clicking Corporate Governance. The charters of
our Nominating and Corporate Governance Committee, Compensation Committee and
Audit Committee are posted there. Additional materials may be added in the
future.

Code of Ethics

In addition, our Board has adopted our
Code of Business Conduct and Ethics, which applies to all of our directors,
officers and employees. The Code of Business Conduct and Ethics is filed as
Exhibit 14.1 to our 2008 Annual Report on Form 10-K and can be accessed at the
SECs website www.sec.gov. This Form 10-K/A annual report and our 2011 Annual
Report on Form 10-K are also available on our website, www.stratasys.com.

Stockholders may also obtain free
printed copies of these materials by contacting Investor Relations as follows:

Stratasys, Inc.7665 Commerce
WayEden Prairie, Minnesota 55344Attention: Shane Glenn  Director of Investor RelationsEmail:
shane.glenn@stratasys.com

You may address written communications
to our non-management directors or, if requested, the full Board of Directors,
by mail or courier to Stratasys, Inc., Attention: Secretary, 7665 Commerce Way,
Eden Prairie, Minnesota 55344, or by email to Shane Glenn,
shane.glenn@stratasys.com.

Board Committees

Audit
Committee.The Audit Committee is composed of three independent directors. The
current members are Edward J. Fierko (Chairman), Clifford H. Schwieter, and John
J. McEleney, each of whom served on the Committee throughout 2011. Each member
of the Audit Committee qualifies as independent for purposes of membership on
the Audit Committee pursuant to Nasdaq listing requirements and SEC rules and is
financially literate as required by Nasdaq listing requirements. In addition,
our Board has determined that Mr. Fierko qualifies as an audit committee
financial expert as defined by SEC rules and meets the qualifications of
financial sophistication under the Nasdaq listing requirements as a result of
his experience as an officer of a public company. Other members of the Audit
Committee who have served as chief executive officers or chief financial
officers of public companies or have similar experience or understanding with
respect to certain accounting and auditing matters may also be considered audit committee financial experts. You should understand that
these designations relate to our Audit Committee members experience and
understanding with respect to certain accounting and auditing matters do not
impose upon any of them any duties, obligations or liabilities that are greater
than those generally imposed on a member of the Audit Committee or of our Board.

3

---



The Audit Committee held four meetings
in 2011. The Audit Committee is directly responsible for the appointment,
compensation, retention and oversight of our independent auditors, who report
directly to the Audit Committee. In addition, the Audit Committee is responsible
for addressing complaints received by Stratasys regarding any accounting,
internal accounting controls or auditing matters, as well as employees concerns
regarding any questionable accounting or auditing matters. The duties of the
Audit Committee also include reviewing and considering actions of management in
matters relating to audit functions, reviewing reports from various regulatory
authorities, reviewing our system of internal controls and procedures, and
reviewing the effectiveness of procedures intended to prevent violations of laws
and regulations. The Committees authority and responsibilities are set forth in
its Charter, which is available on our website www.stratasys.com.

Compensation
Committee.The Compensation Committee is composed of three independent directors.
The current members are Clifford H. Schwieter (Chairman), Edward J. Fierko, and
John J. McEleney, all of whom served on the Committee throughout 2011. The
Board of Directors has determined that under applicable SEC regulations, Nasdaq
listing standards, and Internal Revenue Code rules, all of the members of the
Compensation Committee are independent, non-employee, outside directors. A
current copy of the Compensation Committees Charter is available on our website
at www.stratasys.com.

The Compensation Committee held seven
meetings in 2011, four of which were conducted by telephone conference call. The
Compensation Committee recommends to the Board policies for executive
compensation and approves the remuneration of all our officers, including our
Chief Executive Officer (CEO). It also administers our stock option and
incentive compensation plans and recommends the establishment of and monitors
the compensation and incentive program for all Stratasys executives.

The Compensation Committee acts on
elements of executive officer compensation at specified times during the year.
Shortly before the end of each year, the Compensation Committee comprehensively
reviews the total compensation of each executive officer and relevant peer group
comparisons with the Compensation Committees independent, external compensation
consultant. Decisions on executive officer salaries for the following year are
made at the same meeting.

In the first quarter of each year, the
Compensation Committee determines the amount of the payments to be made to
officers under the annual incentive compensation plan based on performance
achieved during the preceding year. In the same quarter, the Compensation
Committee sets the performance metrics for the current years incentive
compensation plan.

The Compensation Committee generally
considers stock option grants for executive officers and other employees at or
about the same time as it establishes the compensation plan for the year. This
may occur during the last quarter of the year preceding the implementation of
the compensation plan or the first quarter of the ensuing year. Depending on the
status of the plan at the time and other factors, such as the amount of the
charge against earnings resulting from a grant, the Compensation Committee may
make grants at other times of the year or defer making grants in a particular
year. The Compensation Committee generally delegates authority to the CEO to
recommend grants of options to employees other than executive officers. However,
our Board approves all such grants at the meeting at which stock options are
granted to the executive officers.

The Compensation Committee retained
Keystone Compensation Group LLC, Minneapolis, Minnesota,as its compensation
consultant in connection with executive compensation for 2011.

Our senior management works closely
with the Compensation Committee to evaluate and recommend compensation for our
other officers and employees. In addition, the CEO makes recommendations to the
Compensation Committee regarding compensation for our Chief Operating Officer
and Chief Financial Officer.

4

---



The report of the Compensation
Committee appears in Item 11 of this Form 10-K/A.

Nominating and Corporate
Governance Committee.The Nominating and Corporate Governance Committee is composed
of three independent directors. The current members are Gregory L. Wilson
(Chairman), Edward J. Fierko and Clifford H. Schweiter, all of whom served on
the Committee throughout 2011. The Board of Directors has determined that under
applicable Nasdaq listing standards, all of the members of the Nominating and
Corporate Governance Committee are independent. A current copy of the Nominating
and Corporate Governance Committees charter is available on our website atwww.stratasys.com.

The Nominating and Corporate Governance
Committee held two meetings in 2011. In connection with its nominating function,
the Committee evaluates and recommends to the Board director nominees to fill
vacancies that may occur on the Board of Directors and its standing committees.
In connection with its corporate governance function, the Committee reviews and
recommends to the Board corporate governance principles applicable to Stratasys,
including the evaluation and recommendation of criteria for membership on the
Board and the composition and structure of the Board and its committees.

Executive Officers

In addition to S. Scott Crump, our
Chairman, President, Chief Executive Officer, and Treasurer, the following
individuals serve as our executive officers:

Thomas W. Stenoien, age 61, was appointed as our Chief Operating Officer in
March 2005. Mr. Stenoien served as our Chief Financial Officer from May 1997 to
March 2005. Mr. Stenoien also served as our Executive Vice President from 2001
to March 2005 and as our Secretary from 1999 to May 2006. Mr. Stenoien joined
Stratasys in February 1993 as Controller and has also served as Director of
Finance.

Robert F. Gallagher, age 57, was appointed as our Chief Financial Officer in
March 2005 and was appointed as our Secretary in May 2006. Before joining
Stratasys, Mr. Gallagher was the Chief Financial Officer of Selas Corporation of
America, a manufacturer of micro-miniature components for the electronics
industry, which is now known as Intricon Corporation. From October 2000 until
June 2002, he was Chief Financial Officer for Visionics Corporation, a provider
of biometric technologies and information systems. From October 1989 until June
2000, Mr. Gallagher was employed by TSI Incorporated, a diversified precision
instrument company, last holding the position of Chief Financial Officer. Since
June 2005, Mr. Gallagher has served on the Board of MOCON, Inc. (Nasdaq: MOCO),
a manufacturer of measurement and analytic devices, where he is also a member of
the audit committee.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

Our Compensation Committee is
principally responsible for developing our company-wide compensation program.
This program is designed to enable all of our employees to receive an annual
cash bonus if Stratasys achieves or exceeds the annual performance goals that
the Committee establishes. In addition, our compensation program rewards our
executives for long-term company performance. The objectives of our compensation
program are:

- To attract, retain, motivate and incentivize our
  employees to help us achieve our business objectives.
- To encourage and reward superior individual
  performance.
- To encourage teamwork and reward group performance
  within our company.
- To align the interests of our executives with
  those of our stockholders by incentivizing increases in the long-term value of
  our Company.

Development of Our Compensation
Program

In connection with the development of
their annual business and financial plan each November, our management team
establishes annual company and individual goals for the ensuing year. Consistent
with those goals, management makes recommendations for compensation for our
executives for that year. Under the plan, executive compensation consists of base salary, annual incentive compensation and
long-term incentive compensation. The Committee reviews and evaluates
managements recommendations and reaches consensus with management on a final
proposal. The Committee then presents the final proposal to the full Board of
Directors, which adopts a final compensation program to be implemented for the
next year.

5

---



For 2011, the Committee compared our
executives compensation with compensation paid to executives at other similar
publicly traded manufacturing companies of comparable size. Keystone
Compensation Group LLC, an executive compensation consulting firm headquartered
in Minneapolis, Minnesota, assisted the Committee in making this evaluation. The
Committee generally has targeted our executive compensation within the third
quartile of executive compensation for comparable companies. The companies
included in the peer group for 2011 were:

|Compellent Technologies, Inc. | Rimage Corporation    
|----------------------------- | ----------------------
|Digi International, Inc.      | Sur Medics, Inc.      
|Intervac, Inc.                | 3D Systems Corporation
|MTS Systems Corporation       | Ultratech, Inc.       
|Nordson Corporation           |                       

Based on the survey conducted by our
compensation consultant and other information that it provided to us, we
determined that the compensation that we paid to most senior executive officers
was significantly below the third quartile of our peer group companies.
Accordingly, we instituted a plan to increase their base compensation over a
period of two years to bring their compensation into the third quartile target
range.

The Components of Our Compensation Program

Base Salary.Prior to 2011, we based executives annual base salaries on
their individual performance in the prior year, job responsibilities, expected
future contributions and salaries paid to executives with similar
responsibilities at comparable companies. As we seek to weigh total compensation
more heavily toward incentives, base salaries for our executives tend to range
below the median salary for executives at comparable companies. As indicated
above, since their base compensation has been substantially below the median for
our peer group companies, we decided to increase their base compensation for
2011 while maintaining short-term and long-term incentive plans that would bring
total compensation into the third quartile target range.

In accordance with managements
recommendation, we increased the salaries of all of our employees, including our
executive officers, for 2011. Accordingly, the Committee increased Mr. Crumps
annual base salary for 2011 to $215,200, which was a 3% increase over his 2010
salary of $208,930.

Our CEO proposes the base salaries for
Thomas W. Stenoien, our Chief Operating Officer, and Robert F. Gallagher, our
Executive Vice President and Chief Financial Officer. Based on this
recommendation, the Committee set Mr. Stenoiens base salary at $182,230 and Mr.
Gallaghers base salary at $221,248 for 2011. The Committee has determined that
Mr. Gallaghers duties and responsibilities have a less direct impact on
achievement of our performance goals than Mr. Crumps or Mr. Stenoiens and that
as Executive Vice President as well as Chief Financial Officer, Mr. Gallagher
has more expansive responsibilities than those of a CFO alone. Therefore, it has
recommended that Mr. Gallaghers total cash compensation be more heavily
weighted to his base salary than Messrs. Crump and Stenoien, whose total cash
compensation is more significantly weighted to their annual incentive
compensation plans.

Annual Incentive Compensation.We employ a management by objectives
philosophy at Stratasys and align annual incentive compensation for our
executives with their achievement of the objectives that we establish for them.
Executives responsible for internal operating or management groups, such as
research and development, manufacturing, system sales and human resources, have
different management objectives. These objectives may include:

- The number of new products or product enhancements
  introduced.
- Development of specific training programs.
- Implementation of new manufacturing procedures.

6

---



- Development of new or improved inventory ordering
  and control procedures.
- Sales of a specific number of systems.

We base annual incentive compensation
for our CEO, COO and CFO on achieving corporate financial objectives, including,
from time to time, revenue, operating profit, backlog, net income, earnings per
share and other such financial metrics.

For 2011, the Committee established a
target bonus for each executive, which would be paid if specified objectives
were met. An executive could earn from 0% to 130% of the target bonus depending
upon achievement of the objectives. If Stratasys failed to achieve 85% of a
specified objective, no bonus would be paid with respect to that objective. If
Stratasys achieves 115% of a specified objective, the maximum bonus equal to
130% of the target bonus would be paid with respect to that objective. Our
annual plan established both quarterly and annual performance objectives for our
executives. Consistent with our desire to have our executives achieve the
interim plan objectives, we pay bonuses quarterly based upon achievement of the
interim plan goals.

If Stratasys does not achieve the
performance goals that would result in payment under the plan, the Board will
consider payment of a bonus based on actual company performance. Conversely, if
we surpass the performance goals that would result in a payment of the maximum
amount payable under the plan, the Board may award an additional bonus. In these
circumstances the amount of the bonus varies at the discretion of the Board. In
2011, we awarded Mr. Gallagher an additional bonus of $8,000 on this basis for
his performance in connection with Stratasys acquisition of Solidscape, Inc. in
May 2011.

From time to time, circumstances arise
in which an executive achieves some interim plan objectives, but fails to
achieve annual plan objectives, resulting in an overpayment of the bonus for the
year. In that instance, we may negotiate a repayment plan with the executive. We
also have circumstances in which an executive is unable to achieve his or her
management objectives due to circumstances beyond his or her control. In those
instances, our Board of Directors may grant a bonus to the executive based upon
the individuals performance and the performance of the executives group in
light of the adverse circumstances.

In 2011, the Committee based 50% of
annual incentive compensation for Messrs. Crump, Stenoien and Gallagher on
achievement of the 2011 corporate revenue objective of $138.8 million and 50% on
achievement of the 2011 corporate operating income objective of $21.9 million.
As these objectives were established before our acquisition of Solidscape, Inc.
in May 2011, we did not include revenue or operating income from Solidscape in
our determination of achievement of the stated goals. We had actual revenue for
2011 of $147.7 million, or approximately 106.4% of the target amount, and actual
operating income for 2011 of $29.0 million, or approximately 132.3% of the
target amount. Accordingly, under the plan, Mr. Crump earned $63,448, Mr.
Stenoien earned $57,377, and Mr. Gallagher earned $37,888 of incentive
compensation in connection with achievement of 106.4% of the revenue target; and
Mr. Crump earned $73,151, Mr. Stenoien earned $66,152, and Mr. Gallagher earned
$43,683 of incentive compensation in connection with achievement of 132.3% of
the operating income target.

Stock Option Awards.Since the inception of Stratasys, we have
granted stock options as the principal long-term equity incentive for our
executives and employees. Stock options enable recipients to derive a financial
gain from the appreciation in our stock price from the date that the option is
granted to the date of exercise, which we believe aligns the interests of our
executives and employees with the long-term interests of our stockholders.

The Committee recommends all stock
option awards to the full Board of Directors, which makes all awards. We set the
exercise price of our stock options at the closing price of our common stock on
Nasdaq on the date of grant. Options generally vest in equal annual installments
over a minimum of four years and generally have a term of between five and ten
years. The Board generally awards stock options when it approves the annual
compensation plan, which may range between October and February, depending on
when the final plan is approved. The Board has delegated authority to our CEO to
make interim awards of stock options to new hires as those employees join our
company. Awards to new executive hires above the CEOs delegated authority
require Board approval. The Committee has determined the number of options to be
granted on the basis of, among other things, the overall annual compensation
plan for executives, the number of options granted to executives at peer group
companies, and the Black-Scholes estimate of the value
of the options granted.

7

---



The Board made stock option awards to
our executives, including the Named Executive Officers, on July 29, 2011. It
granted 18,000 options to Mr. Crump and 16,000 options each to Mr. Stenoien and
Mr. Gallagher as part of their basic compensation package for 2011. All of the
foregoing options were granted at an exercise price of $25.50 per share, which
was the closing price of the Companys common stock on July 29, 2011. The
options vest in five equal annual installments commencing on the first
anniversary of the date of grant and expire six years and one month after the
date of grant. The Committee and the Board have determined that the vesting and
term of these options will serve as a long-term incentive and retention vehicle.

Benefits.Our executives, including the Named Executive Officers,
receive the same benefits as all of our other employees. This includes health
insurance, paid vacation and matching contributions to our 401(k) plan of up to
$3,000 per year. Our executives do not receive any additional benefits, nor are
they entitled to any specific perquisites as a part of our compensation program.
We believe that our benefits are competitive with comparable peer group
companies.

2012 Compensation Program.In keeping with our goal to increase the base
compensation of our Named Executive Officers into the third quartile target
range based on survey results, we increased their base compensation for 2012,
effective April 1, 2012. We increased Mr. Crumps base compensation to $255,198,
which was a 19% increase over his 2011 base compensation of $215, 200. We also
increased Mr. Stenoiens base compensation to $222,229 from $182,230 in 2011, a
22% increase, and Mr. Gallaghers base compensation to $247,285 from $221,248 in
2011, a 12% increase.

We also established the incentive
compensation plan that sets forth performance goals and targets for bonuses for
our Named Executive Officers for calendar year 2012, which weighs their overall
compensation for 2012 more heavily on incentive compensation rather than base
compensation. Partial payments of bonuses under the plan may be awarded
quarterly based upon achieving interim targets.

The performance goals and weight
factors applicable to the foregoing Named Executive Officers under the plan are
achievement of the revenue goal, 50% weighting, and achievement of operating
profit goal, 50% weighting. Each Named Executive Officer is assigned an
individual target opportunity for payments under the plan, ranging from 0% to
130% of his 2012 target. The target amount under the plan for each Named
Executive Officer is as follows:

| |                         | Target as a % 
| | ----------------------- | --------------
| |                         | of Actual 2012
| | Named Executive Officer |               
| | S.
      Scott Crump    | 67.6%         
| | Thomas W.
    Stenoien  | 72.8%         
| | Robert F. Gallagher     | 42.9%         

We will not make any payment under the
plan with respect to either performance target unless we achieve at least 85% of
that target in 2012.

Report of the Compensation Committee
of the Board of Directors on Executive Compensation

The Compensation Committee establishes
and oversees the design and functioning of the Companys executive compensation
program. We have reviewed and discussed the foregoing Compensation Discussion
and Analysis with the management of the Company. Based on this review and
discussion, we recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in the Companys Annual Report on Form
10-K/A for the year ended December 31, 2012.

8

---



Compensation Committee:

Clifford H. Schwieter,
ChairmanEdward J. FierkoGregory L. Wilson

Summary Compensation Table

The following table summarizes the
compensation of our Chief Executive Officer, Chief Operating Officer, and Chief
Financial Officer for the last three completed fiscal years (the Named
Executive Officers). We did not have any other executive officers during 2011.

|                             |  |      |  |         |  |          |  |           |  | Non-Equity      |  |                 |  |        
|---------------------------- |  | ---- |  | ------- |  | -------- |  | --------- |  | --------------- |  | --------------- |  | -------
|                             |  |      |  |         |  |          |  | Option    |  | Incentive Plan  |  | All Other       |  |        
|**Name
    and**             |  |      |  | Salary  |  | Bonus(1) |  | Awards(2) |  | Compensation(3) |  | Compensation(4) |  | Total  
|**Principal
      Position** |  | Year |  | ($)     |  | ($)      |  | ($)       |  | ($)             |  | ($)             |  | ($)    
|S. Scott Crump               |  | 2011 |  | 215,200 |  | -        |  | 88,228    |  | 136,599         |  | 3,000           |  | 443,027
|                             |  | 2010 |  | 208,930 |  | -        |  | 70,662    |  | 142,041         |  | -               |  | 421,633
|Chairman,                    |  | 2009 |  | 203,252 |  | 29,870   |  | 49,736    |  | -               |  | 946             |  | 283,804
|President                    |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|and
    Chief                |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|Executive                    |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|Officer                      |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|                            
|Thomas W. Stenoien           |  | 2011 |  | 182,230 |  | -        |  | 83,895    |  | 123,529         |  | 3,000           |  | 392,654
|                             |  | 2010 |  | 176,921 |  | -        |  | 68,289    |  | 128,450         |  | 2,022           |  | 375,682
|Chief                        |  | 2009 |  | 174,056 |  | 49,052   |  | 26,974    |  | -               |  | 801             |  | 250,883
|Operating                    |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|Officer                      |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|                            
|Robert F. Gallagher          |  | 2011 |  | 221,248 |  | 8,000    |  | 96,164    |  | 81,571          |  | 3,000           |  | 409,983
|                             |  | 2010 |  | 201,248 |  | -        |  | 80,154    |  | 61,365          |  | 231             |  | 342,998
|Executive                    |  | 2009 |  | 196,948 |  | 48,367   |  | 32,905    |  | -               |  | 906             |  | 279,126
|Vice President
      and     |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|Chief
      Financial        |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        
|Officer                      |  |      |  |         |  |          |  |           |  |                 |  |                 |  |        

|(1) |  | The amounts in this column
      reflect discretionary bonuses awarded to the Named Executive Officers for
      2009 and paid in the subsequent year and a bonus awarded in 2011 to Mr.
      Gallagher for the successful acquisition of Solidscape.                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The amounts in this column
      reflect the expense recognized for financial statement reporting purposes
      for the years ended December 31, 2011, December 31, 2010, and December 31,
      2009, in accordance with FASB ASC Topic 718. These amounts include options
      granted in 2007, 2008, 2009, 2010 and 2011 for stock option awards as
      described in footnote 17 to the Notes to Consolidated Financial Statements
      included in our Annual Report on Form 10-K for the year ended December 31,
      2011, filed on March 12, 2012. The assumptions made in the valuation of
      such options are set forth in footnote 17.
|   
|(3) |  | The amounts in this column are
      payments of annual incentive awards for 2011 and 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(4) |  | The amounts in this column
      reflect matching contributions of $3,000 paid in 2011 in connection with
      each Named Executive Officers 401(k) plan, $231 paid in 2010 in
      connection with Mr. Gallaghers 401(k) plan, $946 paid in 2009 in
      connection with Mr. Crumps 401(k) plan, $801 paid in 2009 in connection
      with Mr. Stenoiens 401(k) plan, and $906 paid in 2009 in connection with
      Mr. Gallaghers 401(k) plan.                                                                                                                                                                                               

9

---



Grants of Plan-Based Awards

The following table provides
information regarding 2011 grants of annual awards for the Named Executive
Officers, including the range of estimated possible payouts under our annual
management incentive compensation plan and the exercise price and grant date
fair value of stock options. These award opportunities align executives
interests with stockholders by providing an incentive to increase stock price
and improve our long-term financial performance.

|                              |  |         |  |                            |  | All Other  |  |            |  |           |  | Grant
  Date
|----------------------------- |  | ------- |  | -------------------------- |  | ---------- |  | ---------- |  | --------- |  | ------------
|                              |  |         |  | Estimated
      Possible   |  | Option     |  | Exercise   |  |           |  | Fair        
|                              |  |         |  | Payout
      Under         |  | Awards:    |  | or Base    |  | Closing   |  | Value
of    
|                              |  |         |  | Non-Equity
      Incentive |  | Number of  |  | Price of   |  | Price     |  | Stock
  and 
|                              |  |         |  | Plan Awards(1)             |  | Securities |  | Option     |  | on Grant  |  | Option      
|                              |  | Grant   |  | Target                     |  | Maximum    |  | Underlying |  | Awards(2) |  | Date        
|Name                          |  | Date    |  | ($)                        |  | ($)        |  | Options    |  | ($/Sh)    |  | ($/Sh)      
|S. Scott Crump                |  |         |  |                            |  |            |  |            |  |           |  |             
|                             
|Annual Incentive
      Option |  | 7/29/11 |  | 112,540                    |  | 146,302    |  | 18,000     |  | 25.50     |  | 25.50       
|                             
|Thomas W.
    Stenoien        |  |         |  |                            |  |            |  |            |  |           |  |             
|                             
|Annual Incentive
      Option |  | 7/29/11 |  | 101,772                    |  | 132,304    |  | 16,000     |  | 25.50     |  | 25.50       
|                             
|Robert F.
    Gallagher       |  |         |  |                            |  |            |  |            |  |           |  |             
|                             
|Annual Incentive
      Option |  | 7/29/11 |  | 67,204                     |  | 87,365     |  | 16,000     |  | 25.50     |  | 25.50       

|(1) |  | Represents the target and maximum
      potential payouts pursuant to the management incentive compensation plan,
      which is a cash incentive plan. The Compensation Committee established a
      target payment for each Named Executive Officer based on achievement of
      revenue and operating profit goals. Because the lowest payout under the
      plan is zero, we have not included a column for threshold payments. The
      annual incentive plan is described under Compensation Discussion and
      AnalysisThe Components of our Compensation Program, Annual Incentive
      Compensation, above.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The stock option program is
      described in Compensation Discussion and AnalysisThe Components of our
      Compensation Program, Stock Option Awards, above. Our equity compensation
      plans provide that the exercise price will be not less than the Fair
      Market Value on the date of grant, and define Fair Market Value as the
      closing price of our common stock on Nasdaq on the date of
  grant.                                                                                                                                                                                               
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(3) |  | Refer to note 17, Stock options
      and warrants, in the Notes to Consolidated Financial Statements included
      in the Annual Report on Form 10-K for the year ended December 31, 2011,
      filed on March 12, 2012, for the relevant assumptions used to determine
      the FASB ASC Topic 718 grant date fair value of our stock option
      awards.                                                                                                                                                                                                                                                             

10

---



Outstanding Equity Awards at Fiscal
Year-End

The following table provides
information concerning shares of our common stock covered by exercisable and
unexercisable options and unvested or unearned stock awards held by the Named
Executive Officers on December 31, 2011.

|                        |  | Option
      Awards |  |                 |     |         
|----------------------- |  | ------------------- |  | --------------- | --- | --------
|                        |  | Number of           |  | Number
      of |     |         
|                        |  | Securities          |  | Securities      |     |         
|                        |  | Underlying          |  | Underlying      |     |         
|                        |  | Unexercised         |  | Unexercised     |     | Option  
|                        |  | Options             |  | Options         |     | Exercise
|                        |  | (#)                 |  | (#)             |     | Price   
|Name                    |  | Exercisable         |  | Unexercisable   |     | ($)     
|                        |  |                     |  | (1)             |     |         
|S. Scott Crump          |  | 11,200              |  | 2,800           | (2) |         
|                        |  | 8,400               |  | 5,600           | (2) |         
|                        |  | 5,600               |  | 8,400           | (2) |         
|                        |  | 3,200               |  | 12,800          | (2) |         
|                        |  |                    |  | 18,000          | (2) |         
|                       
|Thomas W.
    Stenoien  |  | 2,800               |  | 2,800           | (3) |         
|                        |  | 2,800               |  | 5,600           | (3) |         
|                        |  | 5,600               |  | 8,400           | (3) |         
|                        |  | 2,800               |  | 11,200          | (3) |         
|                        |  |                    |  | 16,000          | (3) |         
|                       
|Robert F.
    Gallagher |  | 11,200              |  | 2,800           | (4) |         
|                        |  | 8,400               |  | 5,600           | (4) |         
|                        |  | 5,600               |  | 8,400           | (4) |         
|                        |  | 4,800               |  | 19,200          | (4) |         
|                        |  |                    |  | 16,000          | (4) |         

|(1) |  | Options granted in 2007, 2008,
      2009, 2010 and 2011 vest in five equal annual installments commencing on
      the first anniversary of the date of grant; options granted in 2007 expire
      six years after the date of grant; options granted in 2008, 2009, 2010 and
      2011 expire six years and one month after the date of grant. The amount
      that vests in any one year is further divided between incentive stock
      options and non-qualified stock options, to the extent permissible in
      accordance with federal income tax regulations.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

---



|(2) |  | The vesting dates of Mr. Crumps
      unvested options awards are further detailed in the following
    table.
|--- |  | ---------------------------------------------------------------------------------------------------------------

|Grant Date |       | 2012 |       | 2013 |       | 2014 |       | 2015 |       | 2016
|---------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ----
|11/08/2007 | 2,800 |      |      |      |      |      |      |      |     
|10/23/2008 | 2,800 |      | 2,800 |      |      |      |      |      |     
|05/04/2009 | 2,800 |      | 2,800 |      | 2,800 |      |      |      |     
|01/12/2010 | 3,200 |      | 3,200 |      | 3,200 |      | 3,200 |      |     
|           | 3,600 |      | 3,600 |      | 3,600 |      | 3,600 |      | 3,600

|(3) |  | The vesting dates of Mr.
      Stenoiens unvested options awards are further detailed in the following
      table.
|--- |  | --------------------------------------------------------------------------------------------------------------------

|Grant Date |       | 2012 |       | 2013 |       | 2014 |       | 2015 |       | 2016
|---------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ----
|11/08/2007 | 2,800 |      |      |      |      |      |      |      |     
|10/23/2008 | 2,800 |      | 2,800 |      |      |      |      |      |     
|05/04/2009 | 2,800 |      | 2,800 |      | 2,800 |      |      |      |     
|01/12/2010 | 2,800 |      | 2,800 |      | 2,800 |      | 2,800 |      |     
|07/29/2011 | 3,200 |      | 3,200 |      | 3,200 |      | 3,200 |      | 3,200

|(4) |  | The vesting dates of Mr.
      Gallaghers unvested options awards are further detailed in the following
      table.
|--- |  | ---------------------------------------------------------------------------------------------------------------------

|Grant Date |       | 2012 |       | 2013 |       | 2014 |       | 2015 |       | 2016
|---------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | ----
|11/08/2007 | 2,800 |      |      |      |      |      |      |      |     
|10/23/2008 | 2,800 |      | 2,800 |      |      |      |      |      |     
|05/04/2009 | 2,800 |      | 2,800 |      | 2,800 |      |      |      |     
|01/12/2010 | 4,800 |      | 4,800 |      | 4,800 |      | 4,800 |      |     
|07/29/2011 | 3,200 |      | 3,200 |      | 3,200 |      | 3,200 |      | 3,200

Option Exercises and Stock Vested

Set forth below for each of our Named
Executive Officers is the number of shares of common stock for which options
were exercised during the year ended December 31, 2011, and the aggregate dollar
value realized upon exercise of such options. We have not granted any equity
awards other than stock options to our Named Executive Officers or other
employees.

|                        |  | Option
      Awards
|----------------------- |  | -------------------
|                        |  | Number of          
|                        |  | Shares             
|                        |  | Acquired           
|                        |  | on
Exercise        
|Name                    |  | (#)                
|S. Scott Crump          |  | -                  
|Thomas W. Stenoien      |  | 9,800              
|Robert F.
    Gallagher |  | 30,000             

12

---



Equity Compensation Plan Information

The following table sets forth the
number of securities to be issued upon the exercise of, and the weighted average
exercise price of, outstanding options, warrants and rights, and the number of
securities remaining available for future issuance, under our equity
compensation plans as of December 31, 2011:

|                                            |                   |  |             |  | Number
  of      
|------------------------------------------- | ----------------- |  | ----------- |  | -----------------
|                                            |                   |  |             |  | securities       
|                                            |                   |  |             |  | remaining        
|                                            |                   |  |             |  | available
    for
|                                            | Number of         |  |             |  | future           
|                                            | securities
    to |  |             |  | issuance         
|                                            | be issued         |  | Weighted    |  | under
    equity 
|                                            | upon              |  | exercise    |  | compensation     
|                                            | exercise
of       |  | price of    |  | plans            
|                                            | outstanding       |  | outstanding |  | (excluding       
|                                            | options,          |  | options,    |  | securities       
|                                            | warrants          |  | warrants    |  | reflected
    in 
|                                            | and rights        |  | and rights  |  | column (a))      
|                                            | (a)               |  | (b)         |  | (c)              
|Equity compensation plans
      approved by |                   |  |             |  |                  
|security
holders*                           | 1,037,267         |  | 18.59       |  | 482,366          

|* |  | We do not have any equity
      compensation plans that have not been approved by security
    holders.
|- |  | -------------------------------------------------------------------------------------------------------

Director Compensation

As more fully described below, the
following table summarizes the compensation during 2011 for each of our
non-employee directors:

|                      | Fees             |  |           |  |        
|--------------------- | ---------------- |  | --------- |  | -------
|                      | Earned or        |  |           |  |        
|                      | Paid
      in(1) |  | Option    |  |        
|                      | Cash             |  | Awards(2) |  | Total  
|Name                  | ($)              |  | ($)       |  | ($)    
|Ralph E. Crump        | 20,250           |  | 88,228    |  | 108,478
|Edward J. Fierko      | 32,750           |  | 88,228    |  | 120,978
|John J. McEleney      | 22,125           |  | 88,228    |  | 110,353
|Clifford H. Schwieter | 27,750           |  | 88,228    |  | 115,978
|Gregory L.
Wilson     | 25,250           |  | 88,228    |  | 113,478

|(1) |  | Represents the total amount of
      annual fees and meeting fees paid for 2011, which are denominated and
      payable in cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Represents the compensation
      expense that we recognized during the year ended December 31, 2011, in
      accordance with the provisions of FASB ASC Topic 718 with respect to stock
      options granted in 2011. The exercise price of each option is the fair
      market value on the date of grant, which is the closing price per share of
      common stock as reported on the Nasdaq Global Select Market on that date.
      The options granted in 2008, 2009, and 2010 vest in five equal annual
      installments commencing on the first anniversary of the date of grant. The
      options granted in 2008, 2009 and 2010 expire six years and one month
      after the date of grant. Each director received a grant of 18,000 options
      on July 29, 2011. The exercise price of the options granted in 2011 is
      $25.20 per share, which is the same as the underlying stock price on the
      date of the grant. The grant date fair value of options is $11.07 per
      share. Refer to note 17 Stock options and warrants, in the Notes to
      Consolidated Financial Statements included in the Annual Report on Form
      10-K filed on March 12, 2012, for the relevant assumptions used to
      determine the FASB ASC Topic 718 grant date fair value of our stock option
      awards.

13

---



The following table sets forth for each
director the aggregate number of stock options outstanding as of December 31,
2011.

|Name                  | Number of
      Options
|--------------------- | -----------------------
|Ralph E. Crump        | 76,000                 
|Edward J Fierko       | 70,400                 
|John J. McEleney      | 56,000                 
|Clifford H. Schwieter | 47,600                 
|Gregory L.
Wilson     | 47,600                 

Director Compensation Policies

S. Scott Crump, the Chairman of the
Board, President, Chief Executive Officer and Treasurer, is the only director
who is also an employee of Stratasys. He is not paid any fee or additional
remuneration for service as a member of the Board, and he is not a member of any
Board committee.

Directors who are not employees of
Stratasys (non-management directors) received an annual fee for Board service
of $12,000 as compensation as well as attendance fees of $1,500 for each meeting
of the Board attended in person and $250 for each meeting attended by telephone.
Each independent director will receive $2,500 per year for committee service and
$250 for attendance at each committee meeting not held in conjunction with a
regularly scheduled meeting of the Board. The Chairman of the Audit Committee
receives an additional $5,000 per year. Directors are reimbursed for travel and
other reasonable expenses incurred for the purpose of attending meetings of the
Board and its committees.

Employee Compensation Policies and Practices as They Relate to Risk
Management

Our compensation policies for all
employees are designed to provide them with a reasonable base cash compensation
along with both short-term and long-term incentive compensation, with a view to
reducing the risk that any single employee or group of employees will take risks
that will result in a material adverse effect on our financial condition. Cash
compensation consists of a salary and an annual incentive bonus. We set
employees salaries at a level that we believe will provide them with a steady
income regardless of our performance so that executives do not have to focus on
short-term Company performance criteria to the detriment of other important
business metrics.

For executives and most other
employees, we have generally set the target cash incentive bonus at between 15%
and 50% of the executives or employees annual salary, with a cap of up to
approximately 75% of annual salary. We believe that capping the annual incentive
compensation in this way mitigates short-term risk taking, as bonus payouts are
limited even if we dramatically exceed the targets. Furthermore, the performance
measures are Company measures, rather than individual measures. Thus, we believe
that this encourages our executives and other employees to take a balanced
approach that focuses on overall corporate performance. Certain sales positions
have the majority of their targeted compensation as incentive compensation tied
to the sales they can generate. As all sales orders are approved at the
corporate level, we do not believe this encourages taking risks that may have a
material adverse effect on the Company.

For our long-term performance
incentive, we grant stock options, which generally vest over five years and
expire six years and one month after the grant date. Accordingly, these options
are valuable only if our stock price increases over the long term. We believe
that the short-term and long-term variable components of our compensation
program motivates our executives and other employees to produce superior short-
and long-term corporate results, without excessive risk.

Compensation Committee Interlocks
and Insider Participation

Directors who were members of our
Compensation Committee in 2011 are Mr. Schwieter, Mr. Fierko, and Mr. Wilson.
During 2011, there were no compensation committee interlocks or other
relationships to be reported under this item.

14

---



Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.

The following table sets forth the
number of shares of our common stock beneficially owned, directly or indirectly,
by (i) each person known by us to be the owner of more than 5% of the
outstanding shares of our common stock, (ii) each director, (iii) each executive
officer named in the Summary Compensation Table (the Named Executive Officers)
and (iv) all of our directors and executive officers as a group, as of April 13,
2012, unless otherwise noted.

The number and percentage of shares
beneficially owned is determined in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, and is not necessarily indicative of beneficial ownership
for any other purpose. Shares of our common stock that a person has a right to
acquire within 60 days are deemed outstanding for purposes of computing the
percentage ownership of that person, but are not deemed outstanding for purposes
of computing the percentage ownership of any other person, except with respect
to the percentage ownership of all directors and executive officers as a group.
We based our calculations of the percentage owned on 21,291,065 shares
outstanding on April 13, 2012.

Except as otherwise indicated, each
director and Named Executive Officer (1) has sole investment and voting power
with respect to the securities indicated or (2) shares investment and/or voting
power with that individuals spouse.

The address of each director and Named
Executive Officer listed in the table below is c/o Stratasys, Inc., 7665
Commerce Way, Eden Prairie, Minnesota 55344

|                                                       | Amount and
      Nature of |      |                        |      
|------------------------------------------------------ | -------------------------- | ---- | ---------------------- | -----
|Name of Beneficial
      Owner                         | Beneficial
      Ownership |      | Percent of
      Class
|Directors and Officers                                 |                            |      |                        |      
|S. Scott Crump                                         | 332,040                    | (1)  |                        | 1.56 
|Thomas W.
    Stenoien                                 | 16,800                     | (2)  |                        | *    
|Robert F. Gallagher                                    | 64,800                     | (3)  |                        | *    
|Ralph E. Crump                                         | 463,960                    | (4)  |                        | 2.18 
|Edward J. Fierko                                       | 96,700                     | (5)  |                        | *    
|John J. McEleney                                       | 11,100                     | (6)  |                        | *    
|Clifford H. Schwieter                                  | 21,200                     | (7)  |                        | *    
|Gregory L.
Wilson                                      | 102,300                    | (8)  |                        | *    
|All directors and executive officers (8
      persons) | 1,108,900                  | (9)  |                        | 5.17 
|Beneficial Owners of More Than 5%                      |                            |      |                        |      
|Waddell & Reed Financial, Inc.                         | 1,169,927                  | (10) |                        | 5.50 
|BlackRock, Inc.                                        | 1,544,489                  | (11) |                        | 7.29 
|PRIMECAP Management Company                            | 2,606,200                  | (12) |                        | 12.29
|The Vanguard Group,
      Inc.                         | 1,099,227                  | (13) |                        | 5.18 
|Kornitzer Capital Management, Inc.                     | 1,512,650                  | (14) |                        | 7.14 

|*   |  | Represents less than 1% of our
      outstanding common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(1) |  | Includes 31,600 shares issuable
      upon the exercise of stock options that are presently exercisable or
      exercisable within 60 days after April 13, 2012. Does not include 44,400
      shares issuable upon the exercise of stock options that are not presently
      exercisable and will not be exercisable within 60 days after April 13,
      2012. Also includes 169,703 shares owned of record by Mr. Crumps wife.
      Mr. Crump disclaims beneficial ownership of the shares owned by his wife.
      In addition, Mr. Crump disclaims beneficial ownership of 216,180 shares
      owned of record and 31,600 shares issuable upon the exercise of stock
      options presently exercisable or exercisable within 60 days after April
      13, 2012 held by Ralph E. Crump, Mr. Crumps father, and 216,180 shares
      owned of record by Mr. Crumps mother.

15

---



|(2)  |  | Represents 16,800
      shares issuable upon the exercise of stock options that are presently
      exercisable or exercisable within 60 days after April 13, 2012. Does not
      include 41,200 shares issuable upon the exercise of stock options that are
      not presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(3)  |  | Includes 34,800 shares
      issuable upon the exercise of stock options that are presently exercisable
      or exercisable within 60 days after April 13, 2012. Does not include
      47,200 shares issuable upon the exercise of stock options that are not
      presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|(4)  |  | Includes 31,600 shares
      issuable upon the exercise of stock options that are presently exercisable
      or exercisable within 60 days after April 13, 2012. Does not include
      44,400 shares issuable upon the exercise of stock options that are not
      presently exercisable and will not be exercisable within 60 days after
      April 13, 2012. Also includes 216,180 shares owned of record by Mr.
      Crumps wife. Mr. Crump disclaims beneficial ownership of all shares owned
      by his wife. In addition, Mr. Crump disclaims beneficial ownership of
      130,737 shares owned of record and 31,600 shares issuable upon the
      exercise of stock options presently exercisable or exercisable within 60
      days after April 13, 2012 held by S. Scott Crump, and 169,703 shares owned
      of record by Mr. Crumps daughter-in-law.                                                  
|    
|(5)  |  | Includes 14,800 shares
      issuable upon the exercise of stock options that are presently exercisable
      or exercisable within 60 days after April 13, 2012. Does not include
      44,400 shares issuable upon the exercise of stock options that are not
      presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|(6)  |  | Represents 11,100
      shares issuable upon the exercise of stock options that are presently
      exercisable or exercisable within 60 days after April 13, 2012. Does not
      include 44,400 shares issuable upon the exercise of stock options that are
      not presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|(7)  |  | Includes 3,200 shares
      issuable upon the exercise of stock options that are presently exercisable
      or exercisable within 60 days after April 13, 2012. Does not include
      44,400 shares issuable upon the exercise of stock options that are not
      presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|(8)  |  | Includes 3,200 shares
      issuable upon the exercise of stock options that are presently exercisable
      or exercisable within 60 days after April 13, 2012. Does not include
      44,400 shares issuable upon the exercise of stock options that are not
      presently exercisable and will not be exercisable within 60 days after
      April 13, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     | 
|(9)  |  | Includes 147,100 shares
      issuable upon the exercise of stock options that are presentably
      exercisable or exercisable within 60 days after April 13,
  2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|(10) |  | Represents stock
      beneficially owned as of December 31, 2011, as indicated on the Report on
      Schedule 13G/A filed by Waddell & Reed Financial, Inc., Waddell &
      Reed Financial Services, Inc., Waddell & Reed, Inc., Waddell &
      Reed Investment Management Company and Ivy Investment Management Company,
      6300 Lamar Avenue, Overland Park, Kansas 66202. Waddell & Reed
      Investment Management Company exercises sole direct voting and dispositive
      power with respect to 1,099,764 shares and Ivy Investment Management
      Company exercises sole direct voting and dispositive power with respect to
      70,163 shares. The percentage of shares is based on the number of shares
      outstanding on December 31, 2011 and assumes no acquisition or disposition
      by Waddell & Reed Investment Management Company or Ivy Investment
      Company since December 31, 2011.
|    
|(11) |  | Represents stock
      beneficially owned as of December 31, 2011, as indicated on the Report on
      Schedule 13G/A filed by BlackRock, Inc., BlackRock Japan Co. Ltd.,
      BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors,
      BlackRock Investment Management, LLC, BlackRock Asset Management Australia
      Limited, BlackRock Investment Management, LLC., Black Rock (Luxemborg)
      S.A., and Blackrock Asset Management Ireland Limited, 40 East 52nd Street,
      New York, New York 10022. BlackRock, Inc. exercises sole voting and
      dispositive power with respect to 1,544,489 shares. The percentage of
      shares is based on the number of shares outstanding on December 31, 2011
      and assumes no acquisition or disposition by BlackRock, Inc. since
      December 31, 2011.                                                                                   
|    
|(12) |  | Represents stock
      beneficially owned as of December 31, 2011, as indicated on the Report on
      Schedule 13G/A filed by PRIMECAP Management Company, 225 South Lake
      Avenue, #400, Pasadena, California 91101. PRIMECAP Management Company
      exercises sole voting power with respect to 2,076,200 shares and sole
      dispositive power with respect to 2,606,200 shares. The percentage of
      shares is based on the number of shares outstanding on December 31, 2011
      and assumes no acquisition or disposition by PRIMECAP Management Company
      since December 31, 2011.                                                                                                                                                                                                                                                                                                                   
|    
|(13) |  | Represents stock
      beneficially owned as of December 31, 2011, as indicated on the Report on
      Schedule 13G filed by The Vanguard Group, Inc., 100 Vanguard Boulevard,
      Malvern, Pennsylvania 19355. The Vanguard Group, Inc. exercises sole
      voting power with respect to 29,451 shares, shared dispositive power with
      respect to 1,069,776 shares, and sole dispositive power with respect to
      29,451 shares. The percentage of shares is based on the number of shares
      outstanding on December 31, 2011 and assumes no acquisition or disposition
      by The Vanguard Group, Inc. since December 31,
2011.                                                                                                                                                                                                                                                                            

16

---



|(14) |  | Represents stock beneficially
      owned as of December 31, 2011, as indicated on the Report on Schedule 13G
      filed by Kornitzer Capital Management, Inc., 5420 West 61st Place, Shawnee
      Mission, Kansas 66205. Kornitzer Capital Management, Inc. exercises sole
      voting power with respect to 1,512,650 shares, shared dispositive power
      with respect to 1,485,150 shares, and sole dispositive power with respect
      to 27,500 shares. The percentage of shares is based on the number of
      shares outstanding on December 31, 2011 and assumes no acquisition or
      disposition by Kornitzer Capital Management, Inc. since December 31,
      2011.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 13. Certain Relationships and
Related Transactions, and Director Independence.

There were no related party
transactions during the two-year period ended December 31, 2011, based on the
definition of related person provided in the SEC rules. In addition, during
our last two fiscal years, each security holder identified in the Beneficial
Ownership Table (other than directors and officers) was a financial institution
and, accordingly, had no immediate family members that could be related persons.
Finally, our Chief Financial Officer monitors reports filed with the SEC on
Schedule 13D or Schedule 13G to determine the owners of more than 5% of our
common stock from time to time. In connection with his monitoring of such
holders as well as our payables, receivables and other third-party transactions,
he would become aware of any transaction with such holders that would be
required to be reported hereunder. There were no such transactions during the
applicable period.

In light of their experience as
long-time directors or executive officers of our Company and other public
companies, we believe that all of our directors and executive officers are fully
aware of the rules relating to the reporting of related party transactions and
highly sensitive to the possibility that our Company might engage in a related
party transaction. Accordingly, we expect each of our directors and executive
officers to report the existence of any potential related party transaction to
our Board of Directors as soon as he becomes aware of such a transaction. Upon
disclosure of any such potential transaction, our Board will review such
transaction and determine whether it is a related party transaction required to
be disclosed in this annual report. If our Board determines that it is a related
party transaction, then it will evaluate whether the terms and conditions of the
transaction are the same as those that would pertain to an arms-length
transaction between unrelated parties or is otherwise in the best interests of
our Company. Based on those criteria and our Boards evaluation, our Board will
vote on whether to approve the transaction.

We believe that our Board of Directors
and our Company is small enough at this time that our directors and executive
officers will be able to identify all potential related party transactions and
bring them to the attention of the Board. However, as we grow, our Board is
considering adopting a formal policy with respect to related party transactions.

Board Independence

Our Board of Directors has determined
that none of our directors, except S. Scott Crump, the Chairman of the Board,
President and Chief Executive Officer, and Ralph E. Crump, S. Scott Crumps
father, have a relationship with Stratasys, either as an officer or employee of
Stratasys or its subsidiaries or any other relationship that, in the opinion of
our Board of Directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. Therefore, each
non-management director, other than Ralph E. Crump, is independent within the
meaning of SEC regulations and the Nasdaq Stock Market, Inc. (Nasdaq) listing
standards for director independence. The Board has three standing committees,
the Audit Committee, the Compensation Committee, and the Nominating and
Corporate Governance Committee. Only independent directors serve on the standing
committees of the Board, and accordingly, all members of those committees are
also independent.

17

---



Item 14. Principal Accountant Fees
and Services.

The aggregate fees we paid to Grant
Thornton, LLP, our independent registered public accounting firm, for the years
ended December 31, 2011 and December 31, 2010 were as
follows:

|                                         |  | 2011 |         | 2010
|---------------------------------------- |  | ---- | ------- | ----
|Audit Fees                               |  | $    | 219,925 |     
|Audit-Related Fees(a)                    |  |      | 38,975  |     
|Total Audit and
      Audit-Related Fees |  | $    | 258,900 |     
|Tax Fees                                 |  |      | 14,348  |     
|All Other Fees                           |  |      | -0-     |     

|(a) |  | Audit-Related Fees consisted of
      fees paid for the audit of our 401(k) plan and use of an electronic
      accounting research site. Also includes fees related to the Solidscape
      acquisition.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Audit Committees policy is that
all audit and non-audit services to be performed by our independent registered
public accounting firm must be approved in advance. The policy permits the Audit
Committee to delegate pre-approval authority to one or more of its members and
requires any member who pre-approves such services pursuant to that authority to
report his decision to the Committee. The Audit Committee has delegated such
authority to its Chair, Edward J. Fierko.

PART IV

Item 15. Exhibits and Financial
Statement Schedules.

(a)(3) Exhibits.

The
exhibits filed as part of the Annual Report on Form 10-K, as amended, are listed
on the Exhibit Index immediately preceding such exhibits, which Exhibit Index is
incorporated by reference to this Item 15.

(b) Exhibits.

See Exhibit Index.

18

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

STRATASYS, INC.By:
    /s/
      S.
    SCOTT CRUMPS. Scott
CrumpPresident and Chief Executive OfficerDated:
    April 27,
  2012


19

---



Exhibits

|EXHIBIT              |  |                                                                                                                                                                                        
|-------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NO.                  |  | DESCRIPTION                                                                                                                                                                            
|31.1                 |  | Certification pursuant to Rules 13a-14(a) and 15d-14(a) under
      the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.(1)
|                    
|31.2                 |  | Certification pursuant to Rules 13a-14(a) and 15d-14(a) under
      the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.(1)
|                    
|32.1                 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.(1)                                                 
|                    
|32.2                 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.(1)                                                 
|____________________
|(1)Filed herewith.  

20

---