<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
[ ] Confidential for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
STRATASYS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
STRATASYS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 11, 2000
To the Stockholders of Stratasys, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
Stratasys Inc., a Delaware corporation (the "Company"), will be held on May 11,
2000, at the Fifth Seasons Room, Minneapolis Marriott City Center Hotel, 30
South Seventh Street, Minneapolis, Minnesota 55402, at the hour of 3:30 p.m.,
for the following purposes:
1. To elect six Directors of the Company to serve until the next
Annual Meeting of Stockholders and until their successors are duly elected and
qualified.
2. To approve the adoption of the Company's 2000 Incentive Stock
Option Plan.
3. To transact such other business as may properly come before the
Annual Meeting or adjournments thereof.
Only stockholders of record at the close of business on April 6, 2000
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
Eden Prairie, Minnesota By Order of the Board of Directors
April 7, 2000 Thomas W. Stenoien
Secretary
IMPORTANT:
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND RETURN IT TO THE COMPANY. THE PROXY MAY BE REVOKED
AT ANY TIME BEFORE IT IS VOTED, AND STOCKHOLDERS EXECUTING PROXIES MAY ATTEND
THE MEETING AND VOTE IN PERSON SHOULD THEY SO DESIRE.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING.............................................................. 2
PROPOSAL 1. ELECTION OF DIRECTORS...................................................................... 2
Biographical Information about Nominees....................................................... 2
INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD, AND EXECUTIVE OFFICERS.............. 3
Meetings of the Board of Directors and Information Regarding Committees....................... 3
Changes in Number and Composition of the Board of Directors................................... 3
Executive Officers............................................................................ 4
Compliance with Section 16(a) of the Exchange Act............................................. 4
EXECUTIVE COMPENSATION................................................................................. 4
Summary Compensation.......................................................................... 4
Summary Compensation Table.................................................................... 4
Option Grants in Last Fiscal Year............................................................. 5
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values...................... 6
Directors' Fees............................................................................... 6
Employment Agreements......................................................................... 7
Compensation Committee Interlocks and Insider Participation .................................. 7
Report of the Compensation Committee of the Board of Directors on Executive Compensation...... 7
Executive Compensation Programs............................................................... 7
Chief Executive Officer Compensation.......................................................... 8
Stock Option Plans............................................................................ 8
PERFORMANCE GRAPH...................................................................................... 9
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..................................... 10
CERTAIN TRANSACTIONS................................................................................... 12
PROPOSAL 2. APPROVAL BY STOCKHOLDERS OF THE COMPANY'S 2000 INCENTIVE STOCK OPTION PLAN................. 13
General....................................................................................... 13
Eligibility for Participation................................................................. 13
Administration................................................................................ 13
Terms of Options.............................................................................. 14
Termination, Modification and Amendment of the Plan........................................... 14
Adjustments Upon Changes in Capitalization.................................................... 15
Federal Income Tax Consequences............................................................... 15
New Plan Benefits............................................................................. 16
INDEPENDENT ACCOUNTANTS................................................................................ 17
OTHER MATTERS.......................................................................................... 17
EXPENSES............................................................................................... 17
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS.......................................................... 18
AVAILABLE INFORMATION.................................................................................. 18
</TABLE>
<PAGE> 4
STRATASYS, INC.
14950 MARTIN DRIVE
EDEN PRAIRIE, MINNESOTA 55344-2020
(612) 937-3000
WWW.STRATASYS.COM
----------------
PROXY STATEMENT
---------------
The Board of Directors of Stratasys, Inc. (the "Company") presents this
Proxy Statement and the enclosed proxy card to all stockholders and solicits
their proxies for the Annual Meeting of Stockholders to be held on May 11, 2000.
The record date of this proxy solicitation is April 6, 2000. All proxies duly
executed and received will be voted on all matters presented at the Annual
Meeting in accordance with the instructions given by such proxies. In the
absence of specific instructions, proxies so received will be voted for the
named nominees for election to the Company's Board of Directors and for the
approval of the adoption of the Company's 2000 Incentive Stock Option Plan. The
Board of Directors anticipates that all of its nominees for election to the
Company's Board of Directors will be available for election and does not know of
any matters that may be brought before the Annual Meeting other than those
listed on the Notice of the Annual Meeting.
In the event that any other matter should come before the Annual
Meeting or that any nominee is not available for election, the persons named in
the enclosed proxy will have discretionary authority to vote all proxies not
marked to the contrary with respect to such matter in accordance with their best
judgment. A proxy may be revoked at any time before being voted by sending a new
proxy bearing a later date or a revocation notice to the Company at the above
address, attn: Secretary, or by notifying the Secretary of the Company at the
Annual Meeting. The Company is soliciting these proxies and will pay the entire
expense of solicitation, which will be made by use of the mails. This Proxy
Statement is being mailed on or about April 10, 2000.
The total number of shares of common stock, $.01 par value ("Common
Stock"), of the Company outstanding as of April 6, 2000, was 6,109,061 shares.
The Common Stock is the only outstanding class of securities of the Company
entitled to vote. Each share of Common Stock has one vote. Only stockholders of
record as of the close of business on April 6, 2000 will be entitled to vote at
the Annual Meeting or any adjournments thereof.
The affirmative vote by holders of a plurality of the votes represented
at the Annual Meeting is required for the election of Directors, and the
affirmative vote of holders of a majority of shares entitled to vote is required
to approve the 2000 Incentive Stock Option Plan. All proxies will be counted for
determining the presence of a quorum. Votes withheld in connection with the
election of one or more nominees for Director will not be counted as votes cast
for such individuals. In addition, where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not provided voting
instructions (commonly referred to as "broker non-votes"), those shares will not
be included in the vote totals.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's principal office, 14950 Martin Drive, Eden Prairie,
Minnesota, during business hours, for a period of ten (10) days prior to the
Annual Meeting for examination by any stockholder. Such list will also be
available at the Annual Meeting.
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<PAGE> 5
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Directors to be elected at the Annual Meeting will serve until the
next Annual Meeting of Stockholders and until their successors are duly elected
and qualified. Proxies not marked to the contrary will be voted "FOR" the
election to the Board of Directors of the following six persons, all of whom are
incumbent Directors.
The following table sets forth information concerning the nominees:
<TABLE>
<CAPTION>
NAME Age Position
- ---- --- --------
<S> <C> <C>
S. Scott Crump 46 Chairman of the Board of Directors, Chief Executive Officer,
President and Treasurer
Ralph E. Crump 76 Director
Clifford H. Schwieter 52 Director
Arnold J. Wasserman 62 Director
Gregory L. Wilson 52 Director
Cameron Truesdell 42 Director
</TABLE>
BIOGRAPHICAL INFORMATION ABOUT NOMINEES
S. SCOTT CRUMP has served as Chief Executive Officer, President,
Treasurer and a director of the Company since its inception in 1988 and as Chief
Financial Officer from February 1990 to May 1997. During the period from 1982 to
1988, Mr. Crump was a co-founder and Vice President of Sales of IDEA, Inc.,
which is now called SI Technologies, Inc., a public company, and a leading
manufacturer of force, load and pressure transducers. Mr. Crump remains on its
board of directors and is a significant shareholder of that company. Mr. Crump,
a registered professional engineer, is the son of Ralph E. Crump, a director of
the Company.
RALPH E. CRUMP has been a director of the Company since 1990. Mr. Crump
is President of Crump Industrial Group, an investment firm located in Trumbull,
Connecticut. He is also a founder and director of Osmonics, Inc., a manufacturer
of reverse osmosis water filtration devices having sales of $200 million and
listed on the New York Stock Exchange; Chairman of IMTEC, Inc., which
manufactures bar code labeling equipment; and Chairman of SI Technologies, Inc.
In 1962, Mr. Crump founded Frigitronics, Inc., a manufacturer of ophthalmic
goods and medical instruments, and was its President and Chairman of the Board
until December 1986. Mr. Crump is also a director and co-founder of Mity-Lite,
Inc., a public company that manufactures institutional tables. 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 Scott
Crump.
CLIFFORD H. SCHWIETER has been a director of the Company since July
1994. Since April 1994, Mr. Schwieter has been the President and a Managing
Director of C.H. Schwieter and Associates, a financial consulting firm. 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
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<PAGE> 6
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.
ARNOLD J. WASSERMAN has been a director of the Company since 1994, as
the designee of the M.H. Meyerson & Co., Inc., the underwriter of the Company's
initial public offering. Mr. Wasserman has, for the past 30 years, been a
principal of P & A Associates, a leasing/consulting firm. Prior to that, he held
positions with IBM and Litton Industries. Mr. Wasserman has consulted with major
corporations in the areas of marketing, advertising and sales. He is a director
and chairman of the audit committee of Micros-to-Mainframes, Inc., a publicly
traded company.
GREGORY L. WILSON has been a director of the Company since 1994. He is
the co-founder of Mity-Lite, Inc. (Nasdaq: MITY) and has served as President and
Chairman of the Board of that company since its inception in 1987. From 1982
until 1987, Mr. Wilson was President of Church Furnishings, Inc. in Provo, Utah.
Mr. Wilson is an active investor in small, privately held manufacturing
concerns.
CAMERON TRUESDELL has been a director of the Company since February
1999. He was the founder of LTC, Incorporated, an insurance marketing firm sold
to General Electric Capital Assurance and served as LTC's Chairman from 1985
to1997. Mr. Truesdell also served as Chairman of the Board of Directors of
Global Kinetics until September 1999 and Adelide Inc. from 1997 to January,
2000. Mr. Truesdell is on the Board of Earthstone International LLC, a privately
held company.
INFORMATION ABOUT THE BOARD OF DIRECTORS,
COMMITTEES OF THE BOARD, AND EXECUTIVE OFFICERS
MEETINGS OF THE BOARD OF DIRECTORS AND INFORMATION REGARDING COMMITTEES
The Board of Directors has two standing committees, an Audit Committee
and a Compensation Committee. The Board does not have a standing Nominating
Committee.
The Audit Committee is composed of Arnold J. Wasserman (Chairman),
Gregory Wilson and Clifford H. Schwieter. The duties of the Audit Committee
include recommending the engagement of independent auditors, reviewing and
considering actions of management in matters relating to audit functions,
reviewing with independent auditors the scope and results of its audit
engagement, reviewing reports from various regulatory authorities, reviewing the
system of internal controls and procedures of the Company, and reviewing the
effectiveness of procedures intended to prevent violations of law and
regulations. The Audit Committee held four (4) meetings in 1999.
The Company's Compensation Committee is composed of Clifford H.
Schwieter (Chairman), Cameron E. Truesdell, Arnold J. Wasserman and Gregory L.
Wilson. The duties of this Committee are to recommend to the Board remuneration
for officers of the Company, to determine the number and issuance of options
pursuant to the Company's stock option plans and to recommend the establishment
of and to monitor a compensation and incentive program for all executives of the
Company. The Compensation Committee held four (4) meetings in 1999.
The Board of Directors held seven (7) meetings in 1999. All Directors
attended at least 75% of the total number of Board meetings and of the meetings
of committees on which they served.
CHANGES IN NUMBER AND COMPOSITION OF THE BOARD OF DIRECTORS
Pursuant to the power granted to the Board of Directors under the
Company's certificate of incorporation and by-laws, on February 10, 1999, the
Board amended the Company's by-laws to increase the number of directors
constituting the Board from five to six. The Board also appointed Cameron
Truesdell to the vacancy created by the
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<PAGE> 7
increase in the number of Directors. Mr. Truesdell was elected as a director at
the 1999 Annual Meeting and has been nominated for election to the Board at the
Annual Meeting.
EXECUTIVE OFFICERS
In addition to Scott Crump, the Company's Chairman, President, Chief
Executive Officer, and Treasurer, the following individual serves as an
executive officer of the Company:
THOMAS W. STENOIEN, 49, has served as Chief Financial Officer of the
Company since May 1997 and as Corporate Secretary since January 1999. Mr.
Stenoien joined the Company in February 1993 as Controller and has also served
as Director of Finance. Before joining the Company, Mr. Stenoien served as
Controller of Anderberg Lund Printing Co. and as Accounting Manager for Braemar
Corporation.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Pursuant to Section 16 of the Securities Exchange Act of 1934, the
Company's Directors and executive officers and beneficial owners of more than
10% of the Company's Common Stock are required to file certain reports, within
specified time periods, indicating their holdings of and transactions in the
Common Stock and derivative securities. Based solely on a review of such reports
provided to the Company and written representations from such persons regarding
the necessity to file such reports, the Company is not aware of any failures to
file reports or report transactions in a timely manner during the Company's
fiscal year ended December 31, 1999, except that each director and executive
officer filed a late Form 5 reporting grants of options during 1999.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth the cash and non-cash compensation paid
by the Company for services rendered during the fiscal years ended December 31,
1997, December 31, 1998 and December 31, 1999 to the Company's Chief Executive
Officer and each other executive officer whose compensation exceeded $100,000
during such year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- -------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION(1) YEAR SALARY BONUS COMPENSATION OPTIONS/SAR's
--------------------- ---- ------ ----- ------------ -------------
<S> <C> <C> <C> <C> <C>
S. Scott Crump 1999 $136,500(3) $25,000(4) -- 25,000
Chairman, President, CEO 1998 $130,000(3) $ 0 -- 10,000
and Treasurer(2) 1997 $121,115(3) $35,000 -- 25,750
Thomas Stenoien 1999 $ 94,431 $32,500(5) -- 10,000
Chief Financial Officer and 1998 $ 90,000 $13,000(6) $ 1,730(7) 6,000
Corporate Secretary
</TABLE>
- ----------
(1) James P. Foley resigned as Vice President of Engineering on November
26, 1999. In 1999, the Company paid Mr. Foley $113,604 in salary and
$25,000 as a bonus and granted him options to purchase 7,000 shares of
common stock.
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<PAGE> 8
(2) Mr. Crump also served as Chief Financial Officer until May 1997.
(3) Mr. Crump was paid at the rate of $95,000 per year through March 1997.
Commencing April 1997, upon approval of the Board of Directors, Mr.
Crump was paid at the rate of $130,000 per year for the remainder of
1997 and through December 1999. In February 1999, the Board of
Directors increased Mr. Crump's annual compensation retroactively to
$136,500.
(4) $17,500 of this bonus was earned in 1999 and paid in 2000.
(5) $21,500 of this bonus was earned in 1999 and paid in 2000.
(6) This bonus was earned in 1998 and paid in 1999.
(7) Payment for unused vacation pay earned in 1998.
The table below includes the number of stock options granted to the
executive officers named in the Summary Compensation Table during the year ended
December 31, 1999 and exercise information.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Annual Rates of
Number of Percent of Stock Price
Securities Total Options Appreciation For
Underlying Granted to Option Term(4)
Options Employees in Exercise Expiration --------------
NAME(1) Granted(#) (2) Fiscal Year (3) Price($/sh) Date 5% 10%
------- -------------- --------------- ----------- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
S. Scott Crump 15,000 3.6% $5.50 02/11/04 $7,880 $31,500
10,000 2.4% $5.00 10/20/02 -0- $ 400
Thomas W. Stenoien 4,000 1.0% $5.00 2/11/05 $5,280 $13,440
6,000 1.4% $5.00 10/20/02 -0- $ 240
</TABLE>
- ----------
(1) James P. Foley resigned as Vice President of Engineering on November
26, 1999. In 1999, the Company granted Mr. Foley options to purchase
6,000 shares of common stock at $5.00 per share expiring on February
11, 2005, which constituted 1.4% of all options granted to employees,
and options to purchase 1,000 shares of common stock at $5.00 per share
expiring on October 20, 2002, which constituted .2% of all options
granted to employees. The 6,000 options would have a potential
realizable value of $7,920 at 5% appreciation and $20,160 at 10%
appreciation. The 1,000 options would have no value at either 5% or 10%
appreciation.
(2) Stock options granted under the Company's stock option plans are
intended to qualify as incentive stock options ("ISO's") under Section
422 of the Internal Revenue Code of 1986, as amended. Under the terms
of these plans, ISO's may be granted to officers and other key
employees of the Company for a maximum term of 10 years. The price per
share of an ISO may not be less than the fair market value of the
Company's shares on the date the ISO is granted. However, ISO's granted
to persons owning more than 10% of the Company's Common Stock may not
have a term in excess of five years and may not have an option price of
less than 110% of the fair market value per share of the Company's
shares on the date the ISO is granted. The maximum
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<PAGE> 9
number of ISO's is limited to such number so that the aggregate fair
market value, determined as of the date the ISO's are granted, of the
shares of Common Stock with respect to which ISO's are exercisable for
the first time during any calendar year shall not exceed $100,000. Any
options granted in excess of the $100,000 limitation would not qualify
as ISO's under the Internal Revenue Code.
(3) The Company granted a total of 416,100 option to employees in the
fiscal year ended December 31, 1999.
(4) The fair market value of the Company's common stock on February 12,
1999, the date of grant of options expiring in 2004 or 2005, was $4.72
per share. The fair market value of the Company's common stock on
October 21, 1999, the date of grant of options expiring in 2002, was
$3.79. The potential realizable value of the options expiring in 2002
would be less than $5.00 at compounded appreciation of 5%.
The table below includes information regarding the value realized on
option exercises and the market value of unexercised options held by the
executive officers named in the Summary Compensation Table during the year ended
December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
SHARES
ACQUIRED NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
ON VALUE UNDERLYING UNEXERCISED MONEY OPTIONS/SARS AT
NAME (1) EXERCISE REALIZED OPTIONS/SARS AT FY-END (#) FY-END ($)(2)
-------- -------- -------- -------------------------- -------------
(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--- --- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
S. Scott Crump -0- -0- 22,950 39,800 11,250 67,500
Thomas W. Stenoien -0- -0- 11,450 16,200 8,988 31,500
</TABLE>
- -----------
(1) James P. Foley resigned as Vice President of Engineering on November
26, 1999. Mr. Foley did not exercise any options in 1999 and had
options to purchase 5,000 shares at the end of the fiscal year. The
value of Mr. Foley's exercisable in-the-money options at the end of the
fiscal year was $2,250. Certain of Mr. Foley's unexercisble options
expired upon termination of his employment.
(2) Based upon a closing price of $7.250 on the Nasdaq National Market on
December 31, 1999.
DIRECTORS' FEES
Directors currently receive no cash compensation for serving on the
Board of Directors other than reimbursement of reasonable expenses incurred in
attending meetings. Three Directors received a non-qualified stock option to
purchase 30,000 shares of the Company's Common Stock upon commencement of their
service on the Board of Directors. One of such directors was granted options
before the Company's August 1994 stock split, and his options currently entitle
him to purchase 43,118 shares of Common Stock. In July 1997, and in November
1998, respectively, each of the four Directors who is not an employee of the
Company also received a non-qualified stock option to purchase 15,000 and 6,000
shares of the Company's Common Stock, respectively, for their continued service
on the Company's Board of Directors. In February 1999, a newly appointed
Director received a non-qualified stock option to purchase 7,000 shares of the
Company's Common Stock in connection with his service on the Board. In October
1999, one independent Director received a non-qualified option to purchase
20,000 shares of the Company's Common Stock
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<PAGE> 10
in connection with his service on the Board. Three other Directors each received
15,000 non-qualified options for their service on the Board. In January 2000,
four independent Directors received non-qualified options to purchase 5,000
shares of the Company's common stock in connection with their service on the
Board.
EMPLOYMENT AGREEMENTS
The Company entered into an Employment Agreement with S. Scott Crump,
its President, on September 1, 1994, which became effective on October 20, 1994.
The Employment Agreement expired in October 1997, and the Company and Mr. Crump
have not entered into a new agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee have never served as officers or
employees of the Company or officers or employees of any of the Company's
subsidiaries. During the last fiscal year, no executive officers served on the
Board of Directors or Compensation Committee of any other entity whose officers
served either on the Company's Board of Directors or Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is composed of
Messrs. Schwieter, Wasserman, Truesdell, and Wilson. It has the authority to
administer the Company's executive compensation programs and the Company's stock
incentive plans. The intent of the executive compensation program is to provide
competitive levels of compensation in order to attract, retain, and motivate its
executives. The goal is to align the interests of the Company's executives with
those of the stockholders, and link total compensation to the individual
performance and success of the Company.
EXECUTIVE COMPENSATION PROGRAMS
The Company's executive compensation program consists of three
principal components: base compensation, cash bonus, and stock options. In
determining base compensation, the Compensation Committee considers prevailing
industry salaries, historical compensation levels as compared with past
performance, and expected future contributions of the executives. The
Compensation Committee then recommends appropriate base compensation to the full
Board of Directors.
The Company also offers incentive plans under which executive officers
may be paid cash bonuses. The compensation under these plans is dependent upon
the achievement of certain financial, growth, and performance targets
established by the Board of Directors prior to the start of each fiscal year.
The Company also offers stock options as a component of its long-term
incentive and retention program. Stock options are granted at the date of hire
and periodically thereafter. These options align the interest of the executive
officer with those of the stockholders, since it is only through stock
appreciation linked to Company performance that the executive will benefit from
these plans. In determining the amount of such grants, the Compensation
Committee considers the executive's contribution to the Company's performance in
the past, and the expected contribution of the executive to the Company's long
term growth. The Company's policy is to fix the price of the options at or above
the fair market value on the date of grant, thereby linking the executive's
value realized directly to the gains realized by the Company's stockholders.
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<PAGE> 11
CHIEF EXECUTIVE OFFICER COMPENSATION
In determining Mr. Crump's total compensation, the Compensation
Committee considered the Company's performance as measured by revenue, revenue
growth, profitability, earnings per share, share valuation, and personal
objectives. After considering Mr. Crump's performance in 1999, the Compensation
Committee elected to grant Mr. Crump bonuses totaling $25,000. Base
compensation, determined early in 1999, amounted to $136,500, reflecting a 5%
increase from a base of $130,000 in 1998. The Compensation Committee granted Mr.
Crump a total of 25,000 options in 1999 to reward Mr. Crump for his significant
contributions to the Company and to increase his equity stake in the Company,
further aligning his interests with those of the Company's stockholders.
Submitted March 31, 2000 by the members of the Compensation Committee.
Clifford H. Schwieter, Chairman
Cameron E. Truesdell
Arnold J. Wasserman
Gregory L. Wilson
STOCK OPTION PLANS
The Company has established five employee stock option plans. The five
plans provide for the grant of options to qualified employees (including
officers and directors) of the Company, independent contractors, consultants and
other persons to purchase an aggregate of 2,050,000 shares of Common Stock. The
Compensation Committee of the Board of Directors administers the plans.
Options to purchase 100,608 shares, which constitute the total number
of shares authorized under the Stratasys, Inc. Employee Stock Option Plan #1,
adopted in October 1990 ("Plan 1"), have all been granted. As of March 10, 2000,
Options to purchase 96,587 shares under Plan 1 have been exercised, and 574
options have terminated. Plan 1 expires on April 19, 2001.
Options to purchase 204,392 shares of Common Stock, which constitute
the total number of shares authorized under the Amended and Restated Stratasys,
Inc. 1994 Stock Plan ("Plan 2"), adopted in August 1994, have been granted,
35,950 of which have terminated or expired and are again available for grant. As
of March 10, 2000, options to purchase 144,534 shares under Plan 2 have been
exercised.
The Stratasys, Inc. 1994-2 Stock Plan, as amended ("Plan 3"), adopted
by the Board of Directors on December 13, 1994, originally authorized the
purchase of 500,000 shares of Common Stock. On March 1, 1996, the Board of
Directors authorized, and on May 23, 1996, the stockholders approved, amending
Plan 3 to increase the number of shares authorized to 1,000,000 shares. Since
its adoption, through March 10, 2000, options to purchase an aggregate of
1,439,252 shares have been granted under Plan 3, options to purchase 212,358
shares have been exercised, and 451,564 options have terminated, expired, or
been canceled and are again available for grant.
On February 13, 1998, the Board of Directors authorized, and on May 14,
1998, the stockholders approved the Company's 1998 Incentive Option Plan ("Plan
4"). Plan 4 authorized the grant of options to purchase an aggregate of 500,000
shares of Common Stock. Through March 10, 2000, options to purchase an aggregate
of 544,800 shares have been granted under Plan 4, and 47,920 options have
terminated and are again available for grant.
On October 21, 1999, the Board of Directors authorized, subject to
stockholders' approval, the Company's 2000 Incentive Stock Option Plan ("Plan
5"). Plan 5 authorized the grant of options to purchase an aggregate of 250,000
shares of Common Stock. Through March 10, 2000, options to purchase an aggregate
of 132,200 have been granted under Plan 5.
-8-
<PAGE> 12
PERFORMANCE GRAPH
The following graph compares on a cumulative basis the yearly
percentage change, assuming dividend reinvestment, over the last five fiscal
years in (a) the total shareholder return on the Company's common stock with (b)
the total return on the Nasdaq (US) Composite Index, and (c) the total return on
a peer group index. The peer group is an index weighted by the relative market
capitalization of the following three companies, which are in the rapid
prototyping industry: 3-D Systems Corp., DTM Corp. and Helisys, Inc.
The following graph assumes that $100 had been invested in each of
Stratasys, the Nasdaq (US) Composite Index, and the three-member 2000 Peer Group
on December 31, 1994. For purposes of the peer group investment, DTM Corp. and
Helisys, Inc. are included only for the periods 1997 through 1999.
[SHAREHOLDER RETURNS GRAPH]
<TABLE>
<CAPTION>
TOTAL SHAREHOLDER RETURNS
BASE YEARS ENDING
PERIOD
COMPANY NAME / INDEX DEC94 DEC95 DEC96 DEC97 DEC98 DEC99
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
STRATASYS INC 100 340.91 361.36 209.09 87.49 131.82
NASDAQ US INDEX 100 141.33 173.89 213.07 300.25 542.43
PEER GROUP 100 234.54 125.91 58.96 67.06 77.90
</TABLE>
The immediately preceding sections entitled "Executive Compensation"
and "Performance Graph" do not constitute soliciting material for purposes of
SEC Rule 14a-9, will not be deemed to have been filed with the SEC for purposes
of Section 18 of the Securities Exchange Act of 1934, and are not to be
incorporated by reference into any other filing that the Company makes with the
SEC.
-9-
<PAGE> 13
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000, certain
information concerning the beneficial ownership of Common Stock by (i) each
person known by the Company to be the owner of more than 5% of the outstanding
Common Stock, (ii) each Director, (iii) each executive officer named in the
Summary Compensation Table above, and (iv) all Directors and executive officers
as a group. The number of shares beneficially owned by each director or
executive officer is determined by the rules of the Securities and Exchange
Commission, and the information is not necessarily indicative of beneficial
ownership for any other purpose.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE OF
OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP(2) OUTSTANDING SHARES OWNED(3)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
S. Scott Crump (4) 751,867 (5) 12.24%
Thomas Stenoien (4) 14,749 (6) *
Ralph E. Crump (4) 336,830 (7) 5.05%
Arnold J. Wasserman (4) 77,500 (8) *
Clifford H. Schwieter (4) 50,687 (9) *
Gregory L. Wilson (4) 58,500 (10) *
Cameron Truesdell (4) 547,050 (11) 8.96%
All directors and executive 1,837,183 (12) 28.87%
officers as a group (7 persons)
</TABLE>
- ------------
* Represents less than 1%.
(1) Does not include shares beneficially owned by James P. Foley, who
resigned as Vice President of Engineering on November 26, 1999. As of
the date of his resignation, Mr. Foley beneficially owned 5,000 shares
of common stock, all of which constituted exercisable options.
(2) Under Securities and Exchange Commission rules, beneficial ownership
includes any shares as to which an individual has sole or shared voting
power or investment power. Unless otherwise indicated, the Company
believes that all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock
beneficially owned by them. A person is also deemed to be the
beneficial owner of securities that can be acquired by such person
within 60 days from the date hereof upon the exercise of warrants or
options. Each beneficial owner's percentage ownership is determined by
assuming that options or warrants that are held by such person (but not
those held by any other person) and which are exercisable within 60
days from the date hereof have been exercised.
(3) Based on 6,109,061 shares of Common Stock outstanding as of March 31,
2000.
(4) The address of this person is c/o Stratasys, Inc. 14950 Martin Drive,
Eden Prairie, Minnesota 55344.
-10-
<PAGE> 14
(5) Includes presently-exercisable options to purchase 22,950 shares of
common stock and presently-exercisable warrants to purchase 8,000
shares of common stock. Does not include options to purchase 39,800
shares of common stock that are not presently exercisable. Also
includes 358,787 shares of common stock directly owned by Lisa H.
Crump, S. Scott Crump's wife, and presently-exercisable options to
purchase 2,950 shares of common stock held by Ms. Crump. Does not
include options held by Ms. Crump to purchase 10,000 shares of common
stock that are not presently exercisable. Mr. Crump disclaims
beneficial ownership of all such shares. In addition, Mr. Crump
disclaims beneficial ownership of 154,165 shares of common stock owned
directly and presently-exercisable options to acquire 23,500 shares of
common stock held by Ralph E. Crump, Mr. Crump's father, and 154,165
shares owned directly by Marjorie Crump, Mr. Crump's mother.
(6) Includes presently-exercisable options to purchase 11,450 shares of
common stock. Does not include options to purchase 16,200 shares of
common stock that are not presently exercisable.
(7) Includes presently-exercisable options to purchase 28,500 shares of
common stock. Does not include options to purchase 12,500 shares of
common stock that are not presently exercisable. Also includes 154,165
shares of common stock directly owned by Marjorie Crump, Ralph Crump's
wife. Mr. Crump disclaims beneficial ownership of all such shares. In
addition, Mr. Crump disclaims beneficial ownership of 359,180 shares of
common stock owned directly by, presently-exercisable options to
acquire 22,950 shares of common stock held by, and
presently-exercisable warrants to purchase 8,000 shares of common stock
held by S. Scott Crump, Mr. Crump's son, and 358,787 shares owned
directly by and presently-exercisable options to purchase 2,950 shares
of common stock held by Lisa H. Crump, Mr. Crump's daughter-in-law.
(8) Represents presently-exercisable options to purchase 69,500 shares of
common stock and presently-exercisable warrants to purchase 8,000
shares of common stock. Does not include options to purchase 12,500
shares of common stock that are not presently exercisable.
(9) Represents presently-exercisable options to purchase 50,687 shares of
common stock. Does not include options to purchase 12,500 shares of
common stock that are not presently exercisable.
(10) Represents presently-exercisable options to purchase 58,500 shares of
common stock. Does not include options to purchase 12,500 shares of
common stock that are not presently exercisable.
(11) Includes presently-exercisable options to purchase 12,000 shares of
common stock and presently-exercisable warrants to purchase 32,000
shares of common stock. Does not include options to purchase 10,000
shares of common stock that are not presently exercisable.
(12) Includes presently-exercisable options to purchase 256,537 shares of
common stock.
-11-
<PAGE> 15
CERTAIN TRANSACTIONS
Under a Technology Sale and Assignment Agreement, dated as of December
21, 1998, the Company agreed to purchase from a company that is in the business
of developing, manufacturing and selling rapid prototyping devices (the "RP
Company"), and the RP Company agreed to sell to the Company, in-process rapid
prototyping technology (the "RP Technology"). The RP Technology was the subject
of certain agreements to develop a rapid prototyping product that the Company
and the RP Company had entered into in September 1997. The Company agreed to pay
the RP Company $5,945,709.04 in cash and to issue warrants to purchase 128,000
shares of the Company's common stock at an exercise price of $13.875 per share
exercisable until January 4, 2003. The parties also agreed to amend or terminate
the agreements that they had entered into in 1997 as necessary to conform the
two transactions. In a separate transaction, the Company submitted a purchase
order to the RP Company for $519,000 of ongoing development work with respect to
the RP Technology. S. Scott Crump, the Company's Chairman, President, Chief
Executive officer and Treasurer, and Arnold Wasserman, a company director, each
owned one Investment Unit in the RP Company; and Cameron Truesdell, a Company
director, owned two Investment Units in the RP Company; and Constance Crump,
Scott Crump's sister, and her husband jointly owned one Investment Unit in the
RP Company. The purchase price for each Investment Unit was $250,000. The RP
Company transferred the RP Technology to the Company before the end of 1998, and
the Company paid the full consideration for the RP Technology in early 1999. In
connection with the transaction, S. Scott Crump received a cash distribution of
$375,137 from the RP Company; Arnold Wasserman received a cash distribution of
$359,521 from the RP Company; Constance Crump and her husband received a cash
distribution of $346,986 from the RP Company; and Cameron Truesdell received a
cash distribution of $693,973 from the RP Company. Each of the foregoing
investors also received warrants to purchase 8,000 shares of common stock per
Investment Unit exercisable on the terms described above. The disinterested
Directors of the Company approved the terms of the Technology Sale and
Assignment Agreement. The Company deemed the consideration paid by it for the RP
Technology fair and reasonable.
On February 10, 1999, the Company entered into a stock option agreement
with Cameron Truesdell. In consideration for his services as a director of the
Company, Mr. Truesdell received a non-qualified option to purchase 7,000 shares
of Common Stock at an exercise price of $5.00. All of the options are
immediately exercisable and expire on February 10, 2004.
On October 21, 1999, all independent Directors received non-qualified
options in connection with their service on Board. Mr. Schwieter received a
non-qualified option to purchase 20,000 shares of common stock at an exercise
price of $5.00, 10,000 of which are immediately exercisable and 5,000 of which
are exercisable each year for the next two years. Messrs. Ralph Crump, Wilson,
Truesdell, and Wasserman each received non-qualified options to purchase 15,000
shares of common stock at an exercise price of $5.00, 5,000 which are
immediately exercisable and 5,000 of which are exercisable each year for the
next two years. All of these options terminate on October 20, 2004.
On January 7, 2000, the Company issued Messrs. Ralph Crump, Wilson,
Wasserman, and Schwieter 5,000 non-qualified options in connection with their
service on the Board. These options are immediately exercisable at an exercise
price of $7.55 per share. These options expire on January 6, 2005.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
NOMINEES LISTED IN PROPOSAL 1.
-12-
<PAGE> 16
PROPOSAL 2. APPROVAL BY STOCKHOLDERS OF THE COMPANY'S 2000 INCENTIVE STOCK
OPTION PLAN
The Board of Directors has adopted, subject to the approval of
stockholders, the Company's 2000 Incentive Stock Option Plan, which authorizes
the grant of options to purchase 250,000 shares of common stock.
GENERAL
The Board of Directors has deemed it in the best interest of the
Company to establish the 2000 Plan to provide employees and other persons
involved in the continuing development and success of the Company an opportunity
to acquire a proprietary interest in the Company by means of grants of options
to purchase common stock. Persons eligible to receive grants of options under
the 2000 Plan are referred to below as "Participants." The Plan supplements the
Company's existing stock option plans. It is the opinion of the Board of
Directors that by rewarding the Company's employees and other individuals
contributing to the Company with the opportunity to acquire an equity investment
in the Company, the stock option plans will maintain and strengthen their desire
to remain with the Company, stimulate their efforts on the Company's behalf, and
also attract other qualified personnel to provide services on behalf of the
Company.
The following description summarizes some of the provisions of the 2000
Plan. Interested persons should refer to the full text of the 2000 Plan for more
detail. Copies of the 2000 Plan are available for examination on the SEC's web
site at www.sec.gov and at the Company's principal office, 14950 Martin Drive,
Eden Prairie, Minnesota 55344- 2020.
The 2000 Plan allows the Company to grant incentive stock options, as
defined in Section 422(b) of the Internal Revenue Code of 1986, Non-Qualified
Stock Options not intended to qualify under Section 422(b) of the Code, and
Stock Appreciation Rights. ISO's, NQSO's, and SAR's are collectively referred to
below as "Options". The 2000 Plan is not subject to ERISA.
ELIGIBILITY FOR PARTICIPATION
The Company may grant ISO's separately or in tandem with SAR's to
employees of the Company, including officers, but excluding directors who are
not employees of the Company. The Company may grant NQSO's separately or in
tandem with SAR's to employees of the Company, officers, directors, independent
contractors, consultants and other individuals who are not employees, but are
involved in the continuing development and success of the Company. In general,
the total exercise price of all ISO's granted to an employee who is not a 10%
owner under all of the Company's Stock Option Plans may not exceed $100,000 in
the year in which they vest. Any Options granted in excess of the $100,000
limitation would be NQSO's. Furthermore, the Company may not grant more than
50,000 Options to a Participant in any calendar year. The Company presently has
approximately 190 employees (including one director-employee), and five outside
directors who are eligible for grants of one or more types of Options under the
2000 Plan. The Company cannot presently determine the number of non-employees
who may be entitled to NQSO's under the Plan.
ADMINISTRATION
The 2000 Plan may be administered by the Board of Directors, by the
Board's Compensation Committee, or by another Board Committee of composed solely
of at least two "outside directors" (as defined under Section 162(m) of the
Code). The Compensation Committee administers the existing Stock Option Plans
and is expected to administer the 2000 Plan as well. The administrator of the
2000 Plan is referred to below as the "Committee." The Committee has the
authority to make the following determinations:
-13-
<PAGE> 17
- the persons who will receive Option grants;
- whether the Options are ISO's or NQSO's and whether they are
granted in tandem with SAR's;
- how participants may exercise their Options;
- how participants may pay the exercise price;
- the number of Options granted.
TERMS OF OPTIONS
The Committee will determine the terms of Options granted under the
2000 Plan as long as the terms are not inconsistent with the limitations of the
2000 Plan. The terms will be subject to the conditions described below.
Term of Option. No Option may have a term of more than ten years from
the date of grant. In the case of ISO's granted to employees who also directly
or indirectly own more than 10% of the Company's common stock ("10% Owners"), an
Option may not have a term of more than five years.
Vesting. In general, Options must vest over a period of not longer than
five years and at a rate of not less than 20% per year. The Committee may also
grant Options that vest on the Participant's or the Company's attainment of
specified performance goals.
Exercise Price. The exercise price of NQSO's may not be less than 85%
of the fair market value of the Company's common stock on the date of grant. The
exercise price of ISO's may not be less than the fair market value of the
Company's common stock on the date of grant. In the case of 10% Owners, the
exercise price must be at least 110% of the fair market value on the date of
grant.
Payment of Exercise Price. Participants may pay the exercise price in
cash or by check. The Committee also has the discretion to permit full or
partial payment of the exercise price by delivery of an interest-bearing
promissory note or shares of the Company's common stock having a fair market
value equal to the exercise price. The Committee may also permit the Participant
to have the Company withhold from the common stock to be issued on exercise that
number of shares having a fair market value equal to the exercise price and/or
the tax withholding due.
Termination of Employment. Unless a Participant's option agreement
provides otherwise, a Participant may exercise his vested Options within three
months after termination of his employment or consulting agreement. All Options
will immediately terminate on a Participant's termination for cause.
Death or Disability. Unless a Participant's option agreement provides
otherwise, if a Participant dies while employed or within three months after
termination of his employment without cause, his personal representatives can
exercise his Options for six months after his death. If a Participant becomes
disabled while employed, he or his personal representatives may exercise his
Options at any time within six months after the termination of his employment
due to the disability.
Transferability of Options. A Participant may not transfer or grant any
interest in ISO's, except by will or under the laws of intestacy. The Committee
has the discretion to permit Participants to transfer or otherwise grant
interests in NQSO's.
TERMINATION, MODIFICATION AND AMENDMENT OF THE PLAN
The 2000 Plan will terminate ten years after the date of its adoption
by the Board of Directors. No Option will be granted after termination of the
2000 Plan. The terms of Options, however, may extend beyond the expiration of
the 2000 Plan.
-14-
<PAGE> 18
The Board of Directors of the Company may terminate the 2000 Plan at
any time prior to its expiration date. It may also make such modifications or
amendments of the 2000 Plan as it deems advisable. However, the Board may not,
without stockholder approval, increase the maximum number of shares as to which
Options may be granted under the 2000 Plan or materially change the standards of
eligibility under the 2000 Plan.
No termination, modification or amendment of the 2000 Plan may
adversely affect the terms of any outstanding options without the consent of the
holders of those Options. In the event of the proposed dissolution or
liquidation of substantially all of the assets of the Company, all outstanding
Options will automatically terminate, unless otherwise provided by the Board of
Directors.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
If the number of outstanding shares of the Company's Common Stock
changed by reason of recapitalization, reclassification, stock split, stock
dividend, combination, exchange of shares, or similar transaction, the Board of
Directors of the Company will make an appropriate adjustment in the total number
of shares of common stock available under the 2000 Plan, the number of shares
reserved for issuance upon the exercise of outstanding Options, and the exercise
prices of outstanding Options.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the federal income tax consequences
of the grant and exercise of Options granted under the 2000 Plan. The law is
subject to change, including retroactive change. In addition, the tax
consequences may vary depending on the particular circumstances of a
Participant. A Participant may also be subject to state or local income tax
consequences that differ from those described below.
ISO's. The grant and exercise of ISO's and the subsequent sale of
shares will have the following federal income tax treatment.
- A Participant will not realize taxable income on either the
grant or the exercise of an ISO.
- The difference between fair market value of the common stock
on the date of exercise and the exercise price will be
included in alternative minimum taxable income.
- If the Participant sells the shares issued on exercise of his
Option more than two years after the date of grant and more
than one year after the exercise of the Option, the difference
between the net proceeds of the sale of shares issued on
exercise and the exercise price will be capital gain or loss.
- If the Participant sells the shares issued on exercise of his
Option less than two years after the date of grant or less
than one year after the exercise of the Option, the sale will
be a disqualifying disposition. The Participant will recognize
ordinary income equal to the difference between the fair
market value of the shares issued on the date of exercise and
the exercise price and capital gains on any balance.
- The Company may not deduct any amounts in connection with the
exercise of an Option or the sale of shares issued on
exercise, unless the sale is a disqualifying disposition. In
that case, the Company will be able to deduct the amount that
the Participant recognizes as ordinary income.
-15-
<PAGE> 19
NQSO's. The grant and exercise of NQSO's and the subsequent sale of
shares will have the following federal income tax treatment.
- The Participant will not recognize income on the grant of an
NQSO.
- The Participant will recognize ordinary income on the exercise
of an NQSO equal to the difference between the fair market
value of the common stock on the date of grant and the
exercise price.
- The ordinary income recognized on exercise may be compensation
income subject to withholding under federal and state law.
- The Company would be entitled to deduct as a compensation
expense the amount of compensation income recognized by the
Participant.
- The Participant will have a tax basis in the shares issued on
exercise equal to the fair market value of the common stock on
the date of exercise.
- On sale of the shares issued, the Participant will recognize
capital gain or loss equal to the difference between the net
proceeds of the sale and the fair market value of the common
stock on the date of exercise. The Participant's capital gains
holding period begins on the exercise date.
The Company's deduction of income recognized by a Participant on
exercise of his Option may be subject to Section 162(m) of the Code, which
limits to $1 million the amount a publicly held corporation may deduct with
respect to remuneration paid to an executive officer of the corporation.
Generally, the income that an executive officer recognizes on exercise of an
NQSO will be treated as remuneration and included in the $1 million limitation.
The rule does not apply, however, if the option plan limits the number of
options that the corporation may grant during any year. The 2000 Plan limits the
number of Options that the Company may grant in any year to 50,000 Options.
Therefore, the Company believes that it will not be subject to the $1 million
limitation under Section 162(m) of the Code.
SAR's. The grant of an SAR is generally not a taxable event for the
Participant. Upon the exercise of an SAR, the Participant will recognize
ordinary income equal to the amount of cash and the fair market value of any
common stock received upon exercise, and the Company will be entitled to a
deduction equal to the same amount, subject to the $1 million limitation under
Section 162(m) of the Code.
NEW PLAN BENEFITS
The Company has granted, subject to stockholder approval,
Options to purchase 132,200 shares of common stock under the 2000 Plan through
March 10, 2000, 50,000 of which have vested. The weighted average exercise price
of such Options is approximately $5.75. The following table sets forth the
number of Options granted through March 10, 2000, to
- the Company's executive officers named above in the Executive
Compensation Table
- all current executive officers as a group
- all current directors as a group
- all employees, including all current officers who are not
executive officers, as a group
The 117,800 options available for grant under the 2000 Plan will be awarded at
the discretion of the Company's Compensation Committee or Board of Directors.
-16-
<PAGE> 20
NEW PLAN BENEFITS
STRATASYS, INC. 2000 INCENTIVE STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS GRANTED
----------------- -------------------------
<S> <C>
S. Scott Crump 10,000
Chairman, President, Treasurer
and Director
Thomas W. Stenoien 6,000
Chief Financial Officer and
Secretary
All executive officers as a group 16,000
All directors who are not executive officers 100,000
All employees other than executive officers 16,200
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
PROPOSAL 2.
INDEPENDENT ACCOUNTANTS
Rothstein, Kass & Company, P.C. ("RK&Co.") audited the Company's
financial statements for the fiscal years ended December 31, 1999, December 31,
1998, and December 31, 1997, and has been the independent public accountants of
the Company since December 20, 1994. RK&Co. has no financial interest, either
direct or indirect, in the Company. The Board of Directors has not yet selected
independent accountants to audit the Company's financial statements for the
fiscal year ending December 31, 2000. It was the determination of the Board of
Directors that the Company should not be obligated at this time to retain a
specific firm of independent accountants.
No representative of RK&Co. is expected to attend the Annual Meeting or
to make a statement or respond to questions from stockholders.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at
the Annual Meeting except the matters set forth in the Notice and described in
this Proxy Statement. Unless otherwise directed, all shares represented by Board
of Directors' Proxies will be voted in favor of the proposals of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this
Proxy Statement, the enclosed Proxy and other materials, and the cost of
soliciting Proxies with respect to the Annual Meeting, will be borne by the
Company. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such individuals.
-17-
<PAGE> 21
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be
presented at the Company's next Annual Meeting of Stockholders must be received
by the Company no later than December 11, 2000, in order for them to be included
in the proxy statement and form of proxy relating to that meeting. If the date
of such meeting is changed by more than 30 calendar days from the date such
meeting is scheduled to be held under the Company's By-Laws, or if the proposal
is to be presented at any meeting other than the next Annual Meeting of
Stockholders, the proposal must be received at the Company's principal executive
office at a reasonable time before the solicitation of proxies for such meeting
is made.
AVAILABLE INFORMATION
Copies of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 as filed with the Securities and Exchange Commission,
including the financial statements, can be obtained without charge by
stockholders (including beneficial owners of the Company's Common Stock) upon
written request to Thomas W. Stenoien, the Company's Corporate Secretary, 14950
Martin Drive, Eden Prairie, Minnesota 55344-2020, or on the Commission's Web
Site at www.sec.gov.
By Order of the Board of Directors
Thomas W. Stenoien, Secretary
Eden Prairie, Minnesota
April 7, 2000
-18-
<PAGE> 22
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of STRATASYS, INC., a Delaware corporation (the
"Company"), hereby appoints S. SCOTT CRUMP and THOMAS W. STENOIEN, and each of
them, the proxies of the undersigned, each with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of STRATASYS,
INC., to be held on May 11, 2000 at 3:30 p.m., at the Fifth Seasons Room,
Minneapolis Marriott City Center Hotel, 30 South Seventh Street, Minneapolis,
Minnesota 55402, and any adjournment or adjournments thereof, and to vote all
shares of Common Stock that the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below.
1. The election of six members to the Board of Directors to hold office
until the next Annual Meeting of Stockholders and until their
successors are duly elected and qualified, as provided in the Company's
Proxy Statement:
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(Instructions: To withhold authority to vote for any
individual nominee, strike a line through or otherwise strike
out his name below.)
S. Scott Crump, Ralph E. Crump, Clifford H. Schwieter, Cameron
Truesdell, Arnold J. Wasserman, and Gregory L. Wilson.
2. To approve the adoption of the Company's 2000 Incentive Stock Option
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote in accordance
with their best judgment upon such other matters as may properly come
before the meeting or any adjournments thereof.
The undersigned hereby revokes any other proxy to vote at such Annual
Meeting and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
-19-
<PAGE> 23
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS HEREON. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF DIRECTORS, FOR THE ADOPTION OF PROPOSAL 2, AND AS SAID PROXIES SHALL
DEEM ADVISABLE ON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
The undersigned acknowledges receipt of a copy of the Notice of Annual Meeting
and accompanying Proxy Statement dated April 7, 2000 relating to the Annual
Meeting and the Annual Report to Stockholders for the year ended December 31,
1999.
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Signature(s) of Stockholder(s)
The signature(s) hereon should correspond
exactly with the name(s) of the
Stockholder(s) appearing on the Stock
Certificate. If stock is jointly held, all
joint owners should sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as
such. If signer is a corporation or
partnership, please sign the full corporate
or partnership name, and give the title of
signing officer or general partner.
Date 2000
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PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. IT IS IMPORTANT THAT YOU VOTE.
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