Document:

Exhibit 10.6

STRATASYS, INC. 2008 LONG-TERM
PERFORMANCE AND INCENTIVE PLAN

AS AMENDED FEBRUARY 12,
2009 

1. Objectives. 

The Stratasys, Inc. 2008 Long-Term
Performance and Incentive Plan (the “Plan”) is designed to attract,
motivate and retain selected employees of, and other individuals providing
services to, Stratasys, Inc. (“Stratasys” or the “Company”). These
objectives are accomplished by making long-term incentive and other awards under
the Plan, thereby providing Participants with a proprietary interest in the
growth and performance of the Company. 

2. Definitions. 

“Awards” — The grant of any form of stock option, stock appreciation right, stock
or cash award, whether granted singly, in combination or in tandem, to a
Participant pursuant to such terms, conditions, performance requirements,
limitations and restrictions as the Committee may establish in order to fulfill
the objectives of the Plan. 

“Award Agreement” — An agreement between the Company and a Participant that
sets forth the terms, conditions, performance requirements, limitations and
restrictions applicable to an Award. 

“Board” — The Board of Directors of Stratasys, Inc. 

“Common Stock” or “stock” — The common stock, $0.01 par value, of the Company.

“Code” — The Internal Revenue Code of 1986, as amended from time to time.

“Committee” — The Compensation Committee of the Board or, in the absence
of such a committee, the Board. 

“Company” — Stratasys, Inc., and its affiliates and subsidiaries, including
subsidiaries of subsidiaries and partnerships and other business ventures in
which Stratasys has an equity interest. 

“Covered Employee”—A “covered employee” as that term is defined for purposes of
Section 162(m)(3) of the Code. 

“Effective Date”—The date on which the Plan is approved by the stockholders of
the Company. 

“Fair Market Value” —The closing price of the Common Stock on the Nasdaq Global
Select Market for the date in question, or if not trading on that date, such
price on the last preceding date on which the Common Stock was traded, unless
determined otherwise by the Committee using such methods or procedures as it may
establish. In the absence of an established market for the Common Stock, Fair
Market Value shall be determined in good faith by the Committee. 

“Participant” — An individual to whom an Award has been made under the
Plan. Awards may be made to any employee of, or any other individual providing
services to, the Company. However, incentive stock options may be granted only
to individuals who are employed by Stratasys or by a subsidiary corporation
(within the meaning of section 424(f) of the Code) of Stratasys, including a
subsidiary that becomes such after the adoption of the Plan. 

“Performance Period” — A multi-year period of no more than five consecutive
calendar years over which one or more of the performance criteria listed in
Section 6 shall be measured pursuant to the grant of Long-Term Performance
Incentive Awards (whether such Awards take the form of stock, stock units or
equivalents or cash). Performance Periods may overlap one another, but no two
Performance Periods may consist solely of the same calendar years. 

1

3. Common Stock Available for
Awards. 

The number of shares that may be issued
under the Plan for Awards granted wholly or partly in stock during the term of
the Plan is 1,000,000. Shares of Common Stock may be made available from the
authorized but unissued shares of the Company or from shares held in the
Company’s treasury and not reserved for some other purpose. For purposes of
determining the number of shares of Common Stock issued under the Plan, no
shares shall be deemed issued until they are actually delivered to a Participant
or such other person as authorized in accordance with Section 10. Shares covered
by Awards that either wholly or in part are not earned, or that expire or are
forfeited, terminated, canceled, settled in cash, payable solely in cash or
exchanged for other awards, shall be available for future issuance under Awards.
Further, shares tendered to or withheld by the Company in connection with the
exercise of stock options, or the payment of tax withholding on any Award, shall
also be available for future issuance under Awards. 

4. Administration. 

     (a) The
Plan shall be administered by the Committee. Except for the terms and conditions
explicitly set forth in the Plan and to the extent permitted by applicable law,
the Committee shall have full power to select Participants, to interpret the
Plan, to grant waivers of Award restrictions, to continue, accelerate or suspend
exercisability, vesting or payment of an Award and to adopt such rules,
regulations and guidelines for carrying out the Plan as it may deem necessary or
proper. These powers include, but are not limited to, the adoption of
modifications, amendments, procedures, subplans and the like as necessary to
comply with provisions of the laws and regulations of the countries in which the
Company operates in order to assure the viability of Awards granted under the
Plan and to enable Participants regardless of where employed to receive
advantages and benefits under the Plan and such laws and regulations.

     (b)
Anything in Section 4(a) to the contrary notwithstanding, in no event, however,
shall the Board or the Committee have the right, without stockholder approval,
to (i) cancel or amend outstanding Options or SARs for the purpose of repricing,
replacing or regranting such Options or SARs with Options or SARs that have a
purchase or grant price that is less than the purchase or grant price for the
original Options or SARs except in connection with adjustments provided in
Section 14, or (ii) issue an Option or amend an outstanding Option to provide
for the grant or issuance of a new Option on exercise of the original Option.

5. Delegation of Authority.

The Committee may delegate to officers
of the Company its duties, power and authority under the Plan pursuant to such
conditions or limitations as the Committee may establish, except that only the
Committee or the Board may select, and grant Awards to, Participants who are
subject to Section 16 of the Securities Exchange Act of 1934 or to officers who
are or may become Covered Employees. All references in the Plan to the
“Committee” shall be, as applicable, to the Compensation Committee, the Board or
any other committee or officer to whom the Board or the Compensation Committee
has delegated authority to administer the Plan. 

6. Awards. 

The Committee shall determine the type
or types of Award(s) to be made to each Participant and shall set forth in the
related Award Agreement the terms, conditions, performance requirements, and
limitations applicable to each Award. Awards may include but are not limited to
those listed in this Section 6. Awards may be granted singly, in combination or
in tandem. Awards may also be made in combination or in tandem with, in
replacement or payment of, or as alternatives to, grants, rights or compensation
earned under any other plan of the Company, including the plan of any acquired
entity. During any five-year period, no Participant may receive, under the Plan,
stock options or stock appreciation rights with respect to an aggregate of more
than 150,000 shares. With regard to any Covered Employee, the maximum number of
shares of Common Stock or share equivalents of Common Stock (stock units) that
can be earned by any Participant for any Performance Period is 15,000 shares,
subject to adjustment for changes in corporate capitalization, such as a stock
split, and if an Award is denominated in cash rather than in shares of Common
Stock or stock units, the share equivalent for purposes of the maximum will be
determined by dividing the highest amount that the Award could be under the
formula for such Performance Period by the closing price of a share of Common
Stock on the first trading day of the Performance Period. Subject to adjustment
as provided in Section 14, the aggregate number of shares that may be issued
pursuant to Awards granted under the Plan (other than Awards of Options or Stock
Appreciation Rights) that contain no restrictions or restrictions based solely
on continuous employment or services over fewer than three years (except in the
event of a termination of employment) shall not exceed 10% of the aggregate
maximum number of shares specified in Section 3.

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     (a)
“Stock Option”— A grant of a right to purchase a specified number of shares of Common
Stock the exercise price of which shall be not less than 100% of Fair Market
Value on the date of grant of such right, as determined by the Committee,
provided that, in the case of a stock option granted retroactively in tandem
with or as substitution for another award granted under any plan of the Company,
the exercise price may be the same as the purchase or designated price of such
other award. A stock option may be in the form of an incentive stock option
(“ISO”)
that, in addition to being subject to applicable terms, conditions and
limitations established by the Committee, complies with section 422 of the Code.
All of the shares that may be issued under the Plan are available for issuance
under ISOs granted under the Plan. If any Participant shall make any disposition
of shares of Common Stock issued pursuant to the exercise of an ISO under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) days thereof. 

     (b)
“Stock Appreciation Right” — A right to receive a payment, in cash and/or Common Stock,
equal in value to the excess of the Fair Market Value of a specified number of
shares of Common Stock on the date the stock appreciation right (“SAR”) is exercised over
the grant price of the SAR, which shall not be less than 100% of the Fair Market
Value on the date of grant of such SAR, as determined by the Committee, provided
that, in the case of a SAR granted retroactively in tandem with or as
substitution for another award granted under any plan of the Company, the grant
price may be the same as the exercise or designated price of such other award.

     (c)
“Stock Award” — An Award made in stock and denominated in units of stock. The maximum
number of shares of Common Stock that may be issued under Stock Awards shall not
exceed 20% of the aggregate number of shares available for issuance under
Awards. All or part of any stock award may be subject to conditions established
by the Committee, and set forth in the Award Agreement, which may include, but
are not limited to, continuous service with Company, achievement of specific
business objectives, increases in specified indices, attaining growth rates, and
other comparable measurements of Company performance. An Award made in stock or
denominated in units of stock that is subject to restrictions on transfer and/or
forfeiture provisions may be referred to as an Award of “Restricted Stock,” “Restricted Stock
Units” or “Long-Term Performance Incentive
Units”.

     (d)
“Cash Award” — An Award denominated in cash with the eventual payment amount subject
to future service and such other restrictions and conditions as may be
established by the Committee, and as set forth in the Award Agreement,
including, but not limited to, continuous service with the Company, achievement
of specific business objectives, increases in specified indices, attaining
growth rates, and other comparable measurements of Company performance.

     (e)
“Performance Criteria under Section 162(m) of
the Code for Long-Term Performance Incentive Awards” — The performance criteria for Long-Term Performance Incentive Awards
(whether such Awards take the form of stock, stock units or equivalents or cash)
made to any Covered Employee shall consist of objective tests based on one or
more of the following: earnings, cash flow, customer satisfaction, revenues,
financial return ratios, market performance, shareholder return and/or value,
operating profits (including EBITDA), net profits, earnings per share, profit
returns and margins, stock price and working capital. Performance criteria may
be measured solely on a corporate, subsidiary or business unit basis, or a
combination thereof. Further, performance criteria may reflect absolute entity
performance or a relative comparison of entity performance to the performance of
a peer group of entities or other external measure of the selected performance
criteria. The formula for any Award may include or exclude items to measure
specific objectives, such as losses from discontinued operations, extraordinary
gains or losses, the cumulative effect of accounting changes, acquisitions or
divestitures, foreign exchange impacts and any unusual, nonrecurring gain or
loss. Nothing herein shall preclude the Committee from making any payments or
granting any Awards whether or not such payments or Awards qualify for tax
deductibility under Section 162(m) of the Code. 

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7. Payment of Awards.

Payment of Awards may be made in the
form of cash, stock or combinations thereof and may include such restrictions as
the Committee shall determine. Further, with Committee approval, payments may be
deferred, either in the form of installments or as a future lump-sum payment, in
accordance with such procedures as may be established from time to time by the
Committee; provided, however, that the terms of any such deferrals shall comply
with all applicable law, rules and regulations, including Section 409A of the
Code. Any deferred payment, whether elected by the Participant or specified by
the Award Agreement or the Committee, may require the payment to be forfeited in
accordance with the provisions of Section 13. Dividends or dividend equivalent
rights may be extended to and made part of any Award denominated in stock or
units of stock, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and dividend equivalents
for deferred payments denominated in stock or units of stock. Notwithstanding
the foregoing, the right to any dividends or dividend equivalents declared and
paid on the number of shares underlying a Stock Option or SAR may not be
contingent, directly or indirectly, on the exercise of the Stock Option or SAR,
and any Award providing a right to dividends or dividend equivalents declared
and paid on the number of shares underlying a Stock Option or a SAR, the payment
of which is not contingent upon, or otherwise payable on, the exercise of the
Option or Stock Appreciation Right, must comply with or qualify for an exemption
under Section 409A of the Code. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another Award
or Awards of the same or different type. 

8. Exercise of Stock Option or other
Stock Award. 

The price at which shares of Common
Stock may be purchased under a Stock Option or other Stock Award shall be paid
in full in cash at the time of the exercise as set forth in the related Award
Agreement or, if permitted by the Committee, by means of tendering Common Stock
or surrendering another Award or any combination thereof. The Committee shall
determine acceptable methods of tendering Common Stock or other Awards and may
impose such conditions on the use of Common Stock or other Awards to exercise a
Stock Option as it deems appropriate. 

9. Tax Withholding. 

Prior to the payment or settlement of
any Award, the Participant must pay, or make arrangements acceptable to the
Company for the payment of, any and all federal, state and local tax withholding
and employment taxes that in the opinion of the Company is required by law. The
Company shall have the right to deduct applicable taxes from any Award payment
and withhold, at the time of delivery or vesting of shares under the Plan, an
appropriate number of shares for payment of taxes required by law or to take
such other action as may be necessary in the opinion of the Company to satisfy
all obligations for withholding of such taxes or for payment of employment
taxes. 

10. Transferability. 

No Award shall be transferable or
assignable, or payable to or exercisable by, anyone other than the Participant
to whom it was granted, except (i) by law, will or the laws of descent and
distribution, (ii) as a result of the disability of a Participant or (iii) that
the Committee (in the form of an Award Agreement or otherwise) may permit
transfers of Awards by gift or otherwise to a member of a Participant’s
immediate family and/or trusts whose beneficiaries are members of the
Participant’s immediate family, or to such other persons or entities as may be
approved by the Committee. Notwithstanding the foregoing, in no event shall ISOs
be transferable or assignable other than by will or by the laws of descent and
distribution. 

11. Amendment, Modification,
Suspension or Termination of the Plan. 

     (a) The
Board or the Committee may amend, modify, suspend or terminate the Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law; provided, however, that if required by
applicable law, regulation or stock exchange rule, the Board shall obtain
stockholder approval for any such amendment to the Plan; and provided, further,
that the Board shall also approve any amendment to the Plan that requires
stockholder approval.

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     (b)
Unless sooner terminated as provided herein, the Plan shall terminate ten years
from the Effective Date. After the Plan is terminated, no future Awards may be
granted, but Awards previously granted shall remain outstanding in accordance
with their applicable terms and conditions and the Plan’s terms and conditions.
Notwithstanding the foregoing, no ISOs may be granted more than ten years after
the earlier of (x) the adoption of the Plan by the Board and (y) the Effective
Date 

12. Termination of Employment.

If the employment of a Participant
terminates, other than as a result of the death or disability of a Participant,
all unexercised, deferred and unpaid Awards shall be canceled immediately,
unless the Award Agreement provides otherwise. In the event of the death of a
Participant or in the event a Participant is deemed by the Company to be
disabled and eligible for benefits under the terms of any long-term disability
plan or policy maintained by the Company, the Participant’s estate,
beneficiaries or representative, as the case may be, shall have the rights and
duties of the Participant under the applicable Award Agreement. 

13. Cancellation and Rescission of
Awards. 

     (a)
Unless the Award Agreement specifies otherwise, the Committee may cancel,
rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid,
or deferred Awards at any time if the Participant is not in compliance with all
applicable provisions of the Award Agreement and the Plan, or if the Participant
engages in any Detrimental Activity. For purposes of this Section 13,
“Detrimental Activity” shall include: (i) the rendering of services for any
organization or engaging directly or indirectly in any business which is or
becomes competitive with the Company, or which organization or business, or the
rendering of services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the Company; (ii) the
disclosure to anyone outside the Company, or the use in other than the Company’s
business, without prior written authorization from the Company, of any
confidential information or material relating to the business of the Company,
acquired by the Participant either during or after employment with the Company;
(iii) the failure or refusal to disclose promptly and to assign to the Company
all right, title and interest in any invention or idea, patentable or not, made
or conceived by the Participant during employment by the Company, relating in
any manner to the actual or anticipated business, research or development work
of the Company or the failure or refusal to do anything reasonably necessary to
enable the Company to secure a patent where appropriate in the United States and
in other countries; (iv) activity that results in termination of the
Participant’s employment for cause; (v) a violation of any rules, policies,
procedures or guidelines of the Company; (vi) any attempt directly or indirectly
to induce any employee of the Company to be employed or perform services
elsewhere or any attempt directly or indirectly to solicit the trade or business
of any current or prospective customer, supplier or partner of the Company;
(vii) the Participant being convicted of, or entering a guilty plea with respect
to, a crime, whether or not connected with the Company; or (viii) any other
conduct or act determined to be injurious, detrimental or prejudicial to any
interest of the Company. 

     (b) Upon
exercise, payment or delivery pursuant to an Award, the Participant shall
certify in a manner acceptable to the Company that he or she is in compliance
with the terms and conditions of the Plan. In the event a Participant fails to
comply with the provisions of paragraphs (a)(i)-(viii) of this Section 13 prior
to, or during the six months after, any exercise, payment or delivery pursuant
to an Award, such exercise, payment or delivery may be rescinded within two
years thereafter. In the event of any such rescission, the Participant shall pay
to the Company the amount of any gain realized or payment received as a result
of the rescinded exercise, payment or delivery, in such manner and on such terms
and conditions as may be required, and the Company shall be entitled to set-off
against the amount of any such gain any amount owed to the Participant by the
Company. 

14. Adjustments. 

     (a) In the event of any change in
the outstanding Common Stock of the Company by reason of a stock split, stock
dividend, combination or reclassification of shares, recapitalization, merger,
or similar event, the Committee shall adjust proportionately: (a) the number of
shares of Common Stock (i) available for issuance under the Plan, (ii) available
for issuance under ISOs, (iii) for which Awards may be granted to an individual
Participant set forth in Section 6, and (iv) covered by outstanding Awards
denominated in stock or units of stock; (b) the exercise and grant prices
related to outstanding Awards; and (c) the appropriate Fair Market Value and
other price determinations for such Awards. In the event of any other change
affecting the Common Stock or any distribution (other than normal cash
dividends) to holders of Common Stock, such adjustments in the number and kind
of shares and the exercise, grant and conversion prices of the affected Awards
as may be deemed equitable by the Committee, including adjustments to avoid
fractional shares, shall be made to give proper effect to such event. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Company or its successor shall
issue or assume Stock Options, whether or not in a transaction to which section
424(a) of the Code applies, by means of substitution of new Stock Options for
previously issued stock options or an assumption of previously issued Stock
Options. In such event, the aggregate number of shares of Common Stock available
for issuance under Awards under Section 3, including the individual Participant
maximums set forth in Section 6 will be increased to reflect such substitution
or assumption. 

5

     (b)
Notwithstanding anything in this Plan to the contrary, (a) any adjustments made
pursuant to this Section 14 to Awards that are considered “deferred
compensation” within the meaning of Section 409A of the Code and (ii) any
adjustments made pursuant to this Section 14 to Awards that are not considered
“deferred compensation” subject to Section 409A of the Code shall be made in
such a manner as to ensure that after such adjustment, the Awards either (x)
continue not to be subject to Section 409A of the Code or (y) comply with the
requirements of Section 409A of the Code. 

15. Miscellaneous. 

     (a) Any
notice to the Company required by any of the provisions of the Plan shall be
addressed to the chief financial officer of the Company in writing, and shall
become effective when it is received. 

     (b) The
Plan shall be unfunded and the Company shall not be required to establish any
special account or fund or to otherwise segregate or encumber assets to ensure
payment of any Award. 

     (c)
Nothing contained in the Plan shall prevent the Company from adopting other or
additional compensation arrangements or plans, subject to stockholder approval
if such approval is required, and such arrangements or plans may be either
generally applicable or applicable only in specific cases. 

     (d) No
Participant shall have any claim or right to be granted an Award under the Plan
and nothing contained in the Plan shall be deemed or be construed to give any
Participant the right to be retained in the employ of the Company or to
interfere with the right of the Company to discharge any Participant at any time
without regard to the effect such discharge may have upon the Participant under
the Plan. Except to the extent otherwise provided in any plan or in an Award
Agreement, no Award under the Plan shall be deemed compensation for purposes of
computing benefits or contributions under any other plan of the Company.

     (e)
Except as may otherwise be required by federal law, the Plan and each Award
Agreement shall be governed by the law of the State of Minnesota, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of the Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an
Award under the Plan are deemed to submit to the exclusive jurisdiction and
venue of the federal or state courts of Hennepin County, Minnesota, to resolve
any and all issues that may arise out of or relate to the Plan or any related
Award Agreement. 

     (f) In
the event that a Participant or the Company brings an action to enforce the
terms of the Plan or any Award Agreement and the Company prevails, the
Participant shall pay all costs and expenses incurred by the Company in
connection with that action, including reasonable attorneys’ fees, and all
further costs and fees, including reasonable attorneys’ fees incurred by the
Company in connection with collection. 

     (g) The
Committee and any officers to whom it may delegate authority under Section 5
shall have full power and authority to interpret the Plan and to make any
determinations thereunder, including determinations under Section 13, and the
Committee’s or such officer’s determinations shall be binding and conclusive.
Determinations made by the Committee or any such officer under the Plan need not
be uniform and may be made selectively among individuals, whether or not such
individuals are similarly situated. 

     (h) If
any provision of the Plan is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended or limited in scope to conform to applicable laws
or, in the discretion of the Committee, it shall be stricken and the remainder
of the Plan shall remain in full force and effect. 

     (i) The Plan shall become effective
on the Effective Date. 

6Exhibit 10.7 

Stratasys, Inc. Stock Option Grant

Under The

Stratasys, Inc. _____ Long Term
Performance and 
Incentive Plan (the “_____ Plan”) 

 

As adopted by the Shareholders on
__________ 

 

 

 

 

This Option is a grant of an Incentive
Stock Option 

as defined under Section 422 

of the Internal Revenue Code of 1986, as
amended, to 

 

«EMPNAME» 

STOCK OPTION AGREEMENT

     STOCK OPTION AGREEMENT made as of
the ___ day of _____, ____ by and between Stratasys, Inc., a Delaware
corporation having its principal place of business at 7665 Commerce Way, Eden
Prairie, Minnesota 55344 ("Grantor"), and «EMPNAME» (“Optionee”) residing at
«HOMEADDRESS», «CITYSTATEZIP». 

WITNESSETH 

     WHEREAS, Optionee is an employee of
the Grantor; and 

     WHEREAS,
the Grantor is desirous of increasing the incentive of the Optionee to exert his
or her utmost efforts to improve the business and increase the assets of the
Grantor; and 

     WHEREAS,
the option granted hereunder is not intended to be a substitute for ordinary
income, bonus for specific performance, or as a year-end bonus. 

     NOW,
THEREFORE, in consideration of the mutual covenants set forth in this Agreement
and for other good and valuable consideration, the Grantor hereby grants the
Optionee options to purchase Common Stock of the Grantor on the following terms
and conditions: 

     1. Option. 

     Pursuant
to the Stratasys, Inc. _____ Plan, the Grantor hereby grants to the Optionee,
subject to subparagraph (c) of Paragraph 3 hereof, an Incentive Stock Option, as
such term is defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), to purchase, subject to Section 4 hereof, at any time
commencing on the date set forth in Section 3(b) hereof and terminating as of
5:00 p.m. Central Time on «MONTH» «DAY», «YEAR» (the "Term"), up to
«OptAmt»(«Opt») fully paid and non-assessable shares (the “Shares”) of the
Common Stock of the Grantor, par value $.0l per share (the “Common Stock”).

     2. Purchase Price. 

     The
purchase price ("Option Price") shall be $_____per share. The Grantor shall pay
all original issue or transfer taxes on the exercise of this option and all
other fees and expenses necessarily incurred by the Grantor in connection
therewith. 

     3. Exercise of Option. 

          (a) The Optionee shall notify the Grantor by hand delivery or by
registered or certified mail, return receipt requested, addressed to its
principal office (Attn: Chief Financial Officer), as to the number of shares of
Common Stock that the Optionee desires to purchase pursuant to the exercise of
options herein granted, which notice shall be accompanied by (i) cash or a
certified or bank check payable to the order of the Grantor in an amount equal
to the Option Price multiplied by the number of Shares for which this Option is
being exercised or (ii) the delivery of shares of the Grantor's Common Stock
having a fair market value equal to the Option Price multiplied by the number of
Shares for which this option is being exercised, provided that the Optionee has
held such shares of Common Stock so delivered for at least six (6) months prior
to such delivery, or (iii) by a combination of (i) and (ii) above. For purposes
of this Agreement, the fair market value of the Grantor’s Common Stock shall be
equal to the closing price of the Common Stock on the Nasdaq Global Market or
such other principal market on which the Common Stock is then traded on the
trading date immediately preceding the date of exercise. To the extent allowed
by applicable federal and state securities laws, the Option Price may also be
paid in full by a broker-dealer to whom the Optionee has submitted an exercise
notice consisting of a fully-endorsed Exercise of Option in form satisfactory to
the Grantor ("Cashless Exercise"). As soon as practicable thereafter, the
Grantor shall either (i) cause to be delivered to the Optionee (or broker-dealer
in the event of a Cashless Exercise) certificates issued in the Optionee's name
(or name designated by the broker-dealer in the event of a Cashless Exercise)
evidencing the Shares purchased by the Optionee or (ii) cause such number of
Shares to be credited to the account of the Optionee or such broker-dealer at
the Grantor’s transfer agent. 

          (b) If the aggregate fair market value of all shares of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year and all Incentive Stock
Option plans of the Grantor, any predecessor of the Grantor, its parent or
subsidiaries, exceeds $100,000.00, the grant of the Incentive Stock Options
hereunder shall not, to the extent of such excess, be deemed a grant of
Incentive Stock Options but will instead be deemed the grant of Non-Qualified
Stock Options ("NQSOs") under the _____ Plan. For purposes of this paragraph,
the fair market value of the stock with respect to which an Incentive Stock
Option is exercisable shall be the value of such stock at the time that specific
option is granted as provided for in Section 422(c)(7) of the Code. 

          (c) The option granted hereunder shall vest and become exercisable
by Optionee in accordance with the following schedule: 

	For options
      corresponding  	On «MONTH»
      «DAY», «YEAR»  
	to «AnnualAmt»
      shares  	  
	  
	For options
      corresponding  	On «MONTH»
      «DAY», «YEAR»  
	to «AnnualAmt»
      shares  	  
	  
	For options
      corresponding  	On «MONTH»
      «DAY», «YEAR»  
	to «AnnualAmt»
      shares  	  
	  
	For options
      corresponding  	On «MONTH»
      «DAY», «YEAR»  
	to «AnnualAmt»
      shares  	  
	  
	For options
      corresponding  	On «MONTH»
      «DAY», «YEAR»  
	to «AnnualAmt»
      shares  	  

     All options terminate at 5:00 p.m.
Central Time on «MONTH» «DAY», «YEAR» or such earlier time as provided in
Paragraph 4 hereof.

          (c)
Anything in this Agreement to the contrary notwithstanding, all outstanding
options that have not vested and are not exercisable by the Optionee as of the
date of a Change in Control (as hereinafter defined) shall be automatically
deemed vested and shall be exercisable on the date of such Change in Control and
shall continue to be exercisable until the end of the Term. 

          (d)
For the purpose of this Agreement, the term "Change in Control"
means:

               (i)
An acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the
then outstanding shares of common stock of the Grantor (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however, the
following acquisitions of Outstanding Company Common Stock and Outstanding
Company Voting Securities: (A) any acquisition directly from the Grantor, other
than an acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the Grantor;
(B) any acquisition by the Grantor; (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Grantor; or (D) any
acquisition by any Person pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii) of this subparagraph (d); or

               (ii)
Individuals who, as of the date of this Agreement (the “Effective Date”),
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual who
becomes a member of the Board subsequent to the Effective Date whose election,
or nomination for election by the Grantor's shareholders, was approved by a vote
of at least a majority of directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; but,
provided further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a member
of the Incumbent Board; or

               (iii)
The consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Grantor (“Business
Combination”); excluding, however, such a Business Combination pursuant to which
(A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 60 percent
of, respectively, the outstanding shares of common stock, and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Grantor or all or
substantially all of the Grantor's assets) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Grantor or any entity controlled by the
Grantor or such corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 30 percent or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed with respect to the
Grantor prior to the Business Combination, and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination will have been members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or 

               (iv)
The consummation of a complete liquidation or dissolution of the Grantor.

     4. Option Conditioned on Continued Employment. 

          (a)
Except as otherwise provided in subparagraph (f) of this Paragraph 4, if the
employment of the Optionee is terminated for any reason, any option granted to
the Optionee hereunder which has not become exercisable shall immediately
expire.

          (b)
Upon termination of the Optionee’s employment other than as a result of the
Optionee’s death or disability, the Optionee may exercise all exercisable
options for a period of ninety (90) days from the date of termination of
employment. After ninety (90) days, unexercised vested options will
expire.

          (c) If
the Optionee dies (i) while employed by the Grantor or a subsidiary or parent
corporation, or (ii) within ninety (90) days after the termination of
employment, such option, subject to the provision of subparagraph (e) of this
Paragraph 4, may be exercised by a legatee or legatees of such option under the
Optionee’s last will or by personal representatives or distributes at any time
within one hundred eighty (180) days after death. 

          (d) If
the Optionee becomes disabled within the definition of Section 22(e)(3) of the
Code while employed by the Grantor or a subsidiary or parent corporation, such
option, subject to the provision of subparagraph (e) of this Paragraph 4, may be
exercised at any time within six (6) months after his termination of employment
due to disability. 

          (e)
Subject to subparagraph (f) of this Paragraph 4, an option may not be exercised
pursuant to this Paragraph 4 except to the extent that the Optionee was entitled
to exercise the option or any part thereof, at the time of termination of
employment or death, and in any event may not be exercised after the original
expiration date of the option. 

          (f) In
addition, and notwithstanding anything contained herein to the contrary, in the
event the Optionee dies during such time as the Optionee is employed by the
Company, then fifty percent (50%) of any outstanding options which have not
vested and are not exercisable by the Optionee as of the date of death shall be
automatically deemed vested and exercisable by the Optionee’s estate and/or his
legatees in accordance with subparagraph (c) of this Paragraph 4. 

     5. Divisibility and Non-Assignability of the Options. 

          (a) The Optionee may exercise the options herein granted from
time to time during the periods of their respective effectiveness with respect
to any whole number of Shares included therein, but in no event may an option be
exercised as to less than one hundred (100) Shares at any one time, except for
the remaining Shares covered by the option if less than one hundred (100).

          (b) The Optionee may not give, grant, sell, exchange, transfer
legal title, pledge, assign or otherwise encumber or dispose of the options
herein granted or any interest therein. 

     6. Stock as Investment. 

          (a) By accepting this option, the Optionee agrees for himself
and his successors and assigns that, unless the Shares are issued pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) any and all Shares purchased hereunder shall be acquired
for investment purposes only and not for sale or distribution, and upon the
issuance of any or all of the Shares issuable upon exercise of the option
granted hereunder, the Optionee, or his or her successors and assigns receiving
such Shares, shall deliver to the Grantor a representation in writing, that such
Shares are being acquired in good faith for investment purposes only and not for
sale or distribution. Grantor may to the extent required by applicable
securities law, place a “stop transfer” order with respect to such Shares with
its transfer agent and place an appropriate restrictive legend on the stock
certificate(s) evidencing such Shares. 

          (b) Unless a registration statement is filed with the Securities
and Exchange Commission covering the Shares issuable upon the exercise of the
option, such Shares will be restricted securities. Sales of such restricted
securities may be made only in compliance with an available exemption from such
registration or pursuant to an effective registration statement under the
Securities Act. 

     7. Restriction on Issuance of Shares.

     The
Grantor shall not be required to issue or deliver any certificate for shares of
its Common Stock purchased upon the exercise of any option unless (a) the
issuance of such shares has been registered with the Securities and Exchange
Commission under the Securities Act, or counsel to the Grantor shall have given
an opinion that such registration is not required; (b) approval, to the extent
required, shall have been obtained from any state regulatory body having
jurisdiction thereof; and (c) permission for the listing of such shares shall
have been given by any national securities exchange on which the Common Stock of
the Grantor is at the time of issuance listed. 

     8. Notification of Transfer for Tax Purposes; Withholding of
Taxes. 

          (a) In
the event that the Optionee disposes (whether by sale, exchange, gift or any
other transfer) of any shares of Common Stock acquired pursuant to the exercise
of the Options granted hereunder, either within two years after the effective
date of the grant of the options to the Optionee hereunder or within one year of
the purchase of the Shares by the Optionee upon the exercise of the options, the
Optionee will notify the Grantor in writing, within thirty (30) days after such
disposition.

           (b) The Optionee agrees to cooperate with the Grantor to take
all steps necessary or appropriate for any required withholding of taxes by the
Grantor under law or regulation in connection with the exercise of the Option or
any disqualifying disposition as defined in Section 421(b) of the Code.

     9. Adjustment on Changes in Capitalization. 

     In the
event that the outstanding shares of Common Stock are changed after the date
hereof by reason of recapitalization, reclassification, stock split-up,
combination or exchange of shares of Common Stock or the like, or by the
issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors, as determined by the Board
of Directors and/or the Committee, in the aggregate number of shares of Common
Stock issuable upon exercise of the outstanding Options, and the Option Price
per share. In the event of any Business Combination other than a Business
Combination that complies with clauses (A), (B), and (C) of subsection (iii) of
subparagraph (c) of Paragraph 4, each then outstanding option shall upon
exercise thereafter entitle the holder thereof to such number of shares of
Common Stock or other securities or property to which a holder of shares of
Common Stock of the Grantor would have been entitled to upon such Business
Combination; and in any such case appropriate adjustment, as determined by the
Board of Directors of the Grantor (or successor entity), shall be made as set
forth above with respect to any future changes in the capitalization of the
Grantor or its successor entity. In the event of the proposed dissolution or
liquidation of the Grantor, all outstanding options under the _____ Plan will
automatically terminate, unless otherwise provided by the Board of Directors of
the Grantor or any authorized committee thereof. Anything to the contrary
contained herein notwithstanding, the Board of Directors of the Grantor shall
have the discretionary power to take any action necessary or appropriate to
prevent these options from being disqualified as "Incentive Stock Options" under
the United States Income Tax laws then in effect. 

     10. No Rights in Option Stock. 

     Optionee
shall have no rights as a shareholder in respect of shares as to which the
option granted hereunder shall not have been exercised and payment made as
herein provided. 

     11. Effect Upon Employment. 

     This Agreement does not give the
Optionee any right to continued employment by the Grantor. 

     12. Binding Effect. 

      Except
as herein otherwise expressly provided, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors, legal
representatives and assigns. 

     13. Agreement Subject to _____ Plan.

     
Notwithstanding anything contained herein to the contrary, this Agreement is
subject to, and shall be construed in accordance with, the terms of the _____
Plan, and in the event of any inconsistency between the terms hereof and the
terms of the _____ Plan, the terms of the _____ Plan shall govern. 

     14. Miscellaneous. 

     This
Agreement shall be construed under the laws of the State of Delaware. Headings
have been included herein for convenience of reference only, and shall not be
deemed a part of the Agreement. 

     IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written. 

	ACCEPTED AND AGREED
      TO:                  		STRATASYS,
      INC.  
	 			 
	 	     	By:    	  
	«EMPNAME»  		  	«COMPANY
      OFFICER»

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