2009 Exchange Program for

Stock Options and Stock

Appreciation Rights

Exhibit (a)(1)(iv)

2

Agenda –

2009 Exchange Program for Stock Options

and Stock Appreciation Rights

•

Reason for Offering

•

Program Materials

•

Program Highlights

•

Eligibility

•

Option Valuation Basics

•

Replacement Awards Vesting Details

•

Election Process

3

Why This Program Is Being Offered

•

Approximately 84% of employees’

stock options and SAR’s

currently

“underwater”

•

Opportunity

to

exchange

current

“out

of

the

money”

options

currently

held

by

active

employees

for

“at

the

money”

options

•

Restore the long-term incentive and retention value that stock

options and SAR’s

were originally intended to provide

4

Program Materials

All information in today’s meetings can be found in one of the following:

•

Initial e-mail sent August 17, 2009

•

Offering Memorandum

•

Program Highlights

•

Individual Grant Election Forms

5

Program Highlights

•

Approved by Shareholders at annual meeting in June

•

Participation is VOLUNTARY

•

Exchange Eligible Options/SAR Awards for Replacement

Options/SAR Awards

•

Replacement Awards will cover fewer shares at a lower exercise

price per share than the Eligible Awards for which they are

exchanged

•

Exchange ratio and pricing of Replacement Awards will be

determined

on

the

closing

day

of

the

exchange

offer

–

September

14, 2009

•

Choose

on

a

“grant-by-grant”

basis

6

Program Highlights (continued)

•

Exchange will be “value for value”

–

The company will calculate the value of an individual option as

currently structured and compare it to the value of a newly

issued option, with an exercise price equal to the closing price

on the date of offer expiration.

–

The ratio of the value of a new option to the value of an old

option

will

be

the

exchange

ratio

–

the

ratio

of

old

options

to

be

surrendered in exchange for the smaller number of new options.

•

Vesting schedule and expiration date of Replacement Awards may

change, but all other terms of the Awards will remain the same

•

Exchange intended to be a non-taxable exchange

–

Tax consequences for employees subject to taxation outside of

the US may differ

–

We advise all employee to consult their own tax advisors with

respect to the federal, state, local, and non-US tax

consequences of participating in this exchange offer.

–

NOTE: Stereotaxis will not advise individuals on best course of

action. 

7

Eligibility

•

Eligible Participants:

–

Active employees with options eligible for exchange on

Exchange Date

–

Board members, CEO, and CFO are not eligible to participate

•

Eligible Options:

–

Fair value of old option must be less than 67% of the value of a

new option, or the exchange ratio must be at least 1.5 old

options turned in for 1 new option.

–

No option with strike price less than $6.50 will be eligible

–

Must have been outstanding for more than one year at Exchange

Date

8

Option Valuation Basics

•

Value of an option is dependent on several factors:

–

Share price at date of valuation compared to exercise price of

option

–

Remaining term to expiration of the option

–

Two items which are more or less constant –

•

The “risk free interest rate”, and

•

The volatility of the underlying common stock

9

Option Valuation Basics

•

Impact of variables on valuation

–

Term to expiration

•

The longer the time from date of issuance (or for an

outstanding

option

–

the

valuation

date)

to

expiration

date,

the more valuable the option will be.

–

Whether the exercise price is “in the money”, “at the money”, or

“out of the money”

•

The lower the exercise price compared to the share price at

issuance or valuation date, the more valuable the option will

be.

–

Volatility will be virtually the same for all calculations, because

this is inherent in the historical performance of the company’s

stock in the marketplace

–

Risk free interest rate, although not identical for all option

valuations, has very little to no impact on the calculation of value

of individual options.

10

Option Valuation Basics

•

Impact of variables on valuation

1 year

1 year

5 years

Time to Expiration

$0.39

$12.00

$6.00

$1.54

$6.00

$6.00

$3.25

$6.00

$6.00

Value of Option

Exercise Price

Share Price

At Issuance/Valuation

Date

11

Option Valuation Basics

Option Value as a Function of Time to Expiration and % of Share Price at Grant

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

100%

120%

140%

160%

180%

200%

220%

240%

Strike Price as % of Share Price

1 Year

2 Year

3 Year

4 Year

5 Year

12

Option Exchange Program

3.60

Exchange Ratio

2.6

2.6

Term to Expiration

$4.00

$8.00

Exercise Price

278

1,000

Number of Options

$1.37

$0.38

Black-Scholes

Value

$4.00

$4.00

Current Market Price

Replacement Option

Current Option

13

Replacement Award Vesting Details

•

Replacement Awards will have a term equal to the greater of

the remaining term of the surrendered Eligible Awards or one

year and two weeks

•

Replacement Awards will be subject to an extended vesting

schedule:

–

Exercisable on the first anniversary of the Exchange Date with

respect to the same percentage of your exchanged Eligible

Awards that would have vested on or prior to such date

–

Replacement Awards will vest on the same schedule and with

respect to the same percentage amounts as the as the

exchanged Eligible Awards they are replacing.

–

Vesting is conditioned upon continued employment with STXS

through each applicable vesting date

14

Vesting Example

Example 1:  Jane Smith holds a grant of 2,000 Eligible Options granted on September

1, 2007.  1,000 Eligible Options have vested prior to the Exchange Date of September

14, 2009.  The remaining 1,000 Eligible Options vest in equal monthly installments and

will be fully vested on September 1, 2011.  Jane elects to exchange her grant of

Eligible Options for 1,000 Replacement Options (assuming a 2:1 exchange ratio). 

None of her Replacement Options will be vested on September 14, 2009.  750

replacement options will vest on September 14, 2010.  The remaining 250

Replacement Options will vest in equal monthly installments thereafter so that Jane’s

Replacement Options are fully vested on September 1, 2011. The Replacement

Options will expire on August 31, 2017, consistent with the expiration of the Eligible

Options.

8/31/2017

As stated in original

agreement

Options Expiration Date

750 fully vested 9/14/2010,

remaining 250 vest monthly,

fully vested 9/1/2011

Monthly, fully vested

by 6/1/2011

Vesting Schedule on remaining

options

1000

1000

Remaining Options

0

1000

# Options Vested by 9/14/09

9/14/2009

7/1/2007

Grant Date

1000

2000

# Options

Replacement Award

Eligible Award

15

Vesting Example

John

Smith

holds

a

grant

of

2,000

Eligible

SARS,

granted

on

July

1,

2005,

all

of

which

are

vested prior to the Exchange Date, September 14, 2009.  John elects to exchange his

grant of Eligible SARS for 1,000 Replacement SARS.  None of his Replacement SARS

will be vested on the Exchange Date.  All 1,000 of his Replacement SARS will vest on

September 14, 2010.  The Replacement SARS will expire on September 28, 2010, which

is one year and two weeks after the Exchange Date.

9/28/2010

As stated in original

agreement

SARs

Expiration Date

1000 fully vested 9/14/2010

N/A

Vesting Schedule on remaining SARs

1000

0

Remaining SARs

0

2000

# SARs

Vested by 9/14/09

9/14/2009

7/1/2005

Grant Date

1000

2000

# SARs

Replacement Award

Eligible Award

16

Election Process

•

Individual election forms include a table reflecting exchange ratios and

replacement options at a variety of closing market prices.  These are

estimates only and actual exchange ratios will be determined on

September

14

th

.

•

Complete

and

submit

election

forms

to

Sarah

Kamp

by

11:59

pm

CDT

on

September

14,

2009

(unless

extended

by

the

Company):

–

hand delivered to Sarah Kamp at 4320 Forest Park Avenue, Suite

100, St. Louis, Missouri 63108;

–

faxed to: (314) 678-6119, Attention:  Sarah Kamp; or

–

scanned

and

e-mailed

to:

sarah.kamp@stereotaxis.com

–

Interoffice and US Mail not acceptable

•

Can select grant by grant, however, you may not select partial grants

•

Eligible awards not exchanged will retain existing terms

•

If election form is not received by stated deadline, all awards currently

held by you will remain unchanged and retain existing terms.

3

3

18

Withdraw/Change Election

•

Withdraw or change election at any time prior to the

deadline

•

Must submit a replacement Election Form in the

same manner (check the box at the bottom to

indicate replacement)

•

Same deadline applies

19

Questions?