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EXHIBIT 10
 
 
CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”) is made and entered into by and
between MTS Systems Corporation (the “Company”) and Kathleen M. Staby
(“Consultant”) effective as January 9, 2012 (the “Effective Date”).

WHEREAS, the Company is in the business of the design, engineering, manufacture,
marketing, sales, service and distribution of test systems and industrial
position sensors;

WHEREAS, Consultant has experience and skills useful to the Company, including
but not limited human resources management experience and skills;

WHEREAS, Consultant is a former executive employee of the Company who has agreed
to provide certain consulting services for a limited period of time pursuant to
the terms and conditions contained in this Agreement for the term specified
herein; and

WHEREAS, the Company and Consultant wish to set forth the terms of the
consulting arrangements in writing.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, the Company
and Consultant agree as follows:

1.           Term.  Except as otherwise expressly provided herein, the term of
this Agreement shall commence on the Effective Date and shall continue through
the earlier of (a) March 31, 2012, or (b) the date this Agreement is terminated
pursuant to Section 7 herein (the “Term”).  This Agreement may be renewed or
extended only by the mutual written agreement of both parties.

2.           Services.  The Company hereby engages Consultant to perform the
business consulting services described in Exhibit A attached hereto (the
“Services”) during the Term.  Exhibit A is incorporated into, and made part of,
this Agreement.  Consultant may determine, in Consultant’s discretion, the means
and manner of performing the Services, except as expressly limited by this
Agreement.  The Company retains the right to require that Consultant
satisfactorily perform the Services.   Consultant agrees perform the Services in
accordance with the customary standards of the Human Resources Department of the
Company.  Consultant shall conform to all applicable laws, ethical requirements
and regulations in performing the Services.

3.           Fees and Expenses. The Company shall pay to Consultant, as
compensation for the Services performed hereunder, the amount or amounts stated
in Exhibit A.  Expenses and costs incurred by Consultant in the performance of
Services shall be paid and borne solely by the Consultant without reimbursement
from the Company, unless reimbursement is approved in advance by the
Company.  The Company agrees to reimburse Consultant for ordinary and necessary
travel or other expenses incurred by Consultant in performing
Services.  Commuting mileage will not be reimbursed.  Consultant will provide
all equipment and other materials necessary to perform the Services at
Consultant’s own expense.  Consultant agrees not to incur any expenses in the
Company’s name without the prior written authorization of the Company.  The
Company will neither withhold FICA or income tax payments nor withhold any
amounts for, or make any contributions on account of, unemployment compensation,
worker’s compensation, employee benefit plans or otherwise pursuant to any
federal, state, or local law or regulation with respect to the compensation it
pays Consultant.
 
 
 

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4.           Taxes.  Consultant shall have sole responsibility for withholding
and payment of all federal, state and local taxes or contributions imposed or
required under unemployment insurance, social security and income tax laws and
for filing all required tax forms with respect to any amounts paid by the
Company to Consultant hereunder.  Consultant shall indemnify and hold the
Company harmless against any claim or liability (including penalties) resulting
from failure of Consultant to pay such taxes or contributions, or failure of
Consultant to file any such tax forms.

5.           Independent Contractor Status. Consultant’s relationship to the
Company shall be that of an independent contractor.   Consultant understands and
agrees that Consultant is not an employee of the Company.  Consultant agrees
that Consultant is not entitled to any Company employee benefits or benefit
plans of any kind, including but not limited to, workers’ compensation
insurance, unemployment insurance, health insurance, life insurance, pension
plan or any other benefit or insurance that the Company provides to its
employees.  Consultant understands and Company agrees that the Consultant has no
authority to obligate or bind the Company in any manner whatsoever and that the
Consultant has been engaged to provide information, advice and assistance only,
with all final decisions or actions to be solely the Company’s
responsibility.  Subject to the provisions of Section 6 hereof, Consultant
further understands and agrees that Consultant is solely and entirely
responsible for Consultant’s acts or omissions in performing the Services.

6.           Indemnification.  Consultant hereby agrees to indemnify and hold
harmless the Company and its affiliates, and their officers, agents and
employees, from and against any and all liability, loss, damage, cost and
expense (including attorneys fees) on account of any claim, suit or action made
or brought against the Company, or their officers, agents or employees, arising
from the Services performed by Consultant hereunder, including any act of gross
negligence of Consultant in connection with such Services, or arising from any
accident, injury or damage caused by Consultant’s gross negligence (i) to any
person or to the property of any person during the performance of such Services,
or (ii) to Consultant or damage to or loss of Consultant’s property while on the
premises of the Company in connection with performing the Services under this
Agreement.

7.           Termination.  This Agreement shall terminate automatically as of
March 31, 2012, unless extended by mutual written agreement of the parties.  In
addition, either the Company or Consultant may terminate this Agreement upon ten
(10) days advance written notice to the other party.
 
 
 

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8.           Confidentiality.
 
a.           Definition of Confidential Information.  For purposes of this
Agreement, Confidential Information means any information, not generally known,
which is proprietary to the Company, and includes, without limitation, trade
secrets, inventions, know-how and information pertaining to research, new
product development, product design, purchasing, marketing, sales, accounting
and all customer information.  The information shall be treated as Confidential
Information irrespective of its source, and all information which is identified
as being “Confidential” or “trade secret” shall be presumed to be Confidential
Information.”

b.           Nondisclosure.  During the Term of this Agreement and following its
termination, Consultant agrees to hold all Confidential Information of the
Company in strict confidence and to never, without prior written authorization
of the Company, disclose, furnish, transfer, convey, communicate, make
accessible to any person or use in any way Confidential Information for its or
another’s benefit or permit the same to be used in competition with the Company,
except as may be necessary in the performance of the Services.

9.           Return of Property.  Consultant shall immediately upon termination
of this Agreement for any reason, or upon the Company’s request at any time,
deliver to the Company all property, documents, correspondence, emails, reports,
materials and other items, whether in hard copy, on computer disc or tape or
otherwise, including all copies, (a) belonging to the Company or any customer,
or to any third party to which/whom the Company has confidentiality obligations;
(b) or in any way related to the business of, or the Services performed for, the
Company, any customer, or any third party to which/whom the Company, has
confidentiality obligations; including but not limited to any property,
documents, correspondence, emails, reports, materials and other items containing
trade secret, proprietary, or Confidential Information.  Consultant will not
retain any copies or summaries of any kind of property, documents,
correspondence, emails, reports, materials and other items Consultant returns in
accordance with this Section 9.
 
10.         General Provisions.

a.           Nonassignment.  Consultant shall not have the right to assign or
delegate, by operation of law or otherwise, any of her rights or obligations
under this Agreement.  This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company without any further
consent by Consultant.

b.           Modification or Waiver.  No purported amendment, modification or
waiver of any provision of this Agreement shall be binding unless set forth in a
separate written document signed by Consultant and an authorized representative
of the Company.  Any waiver shall be limited to the circumstance or event
specifically referenced in the written waiver document and shall not be deemed
to be a waiver of any other term of this Agreement or of the same circumstance
or event upon any recurrence thereof.

c.           Notices.  Any notice required or permitted to be given under this
Agreement shall be in writing and be deemed duly given (i) when received if hand
delivered, (ii) one (1) business day after deposit if placed in the mails for
delivery with a reputable express carrier for immediate delivery on a business
day, or (iii) five (5) business days after deposit if placed in the mails for
delivery by registered or certified mail, return receipt request, postage
pre-paid and addressed to the appropriate party at the addresses set forth on
the first page hereof.  If either party changes its address for notice purposes,
it shall provide the other party with written notice of such change in
accordance with the above provisions, however such change shall not be effective
until actually received by the addressee.
 
 
 

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d.           Survival of Provisions.  Consultant acknowledges and agrees that
the restrictions and obligations set forth in Sections 4, 6, 8 and 9 of this
Agreement are reasonable, and shall survive the termination of this Agreement by
either party, for any reason, whether voluntary or involuntary, and, to the
extent any of such restrictions and obligations extend beyond the term of this
Agreement, the Term shall be deemed to continue until such restrictions and/or
obligations expire by their terms.

e.           Applicable Law and Jurisdiction.  The provisions of this Agreement
shall be construed and interpreted in accordance with the laws of the State of
Minnesota (without giving effect to the choice of law principles thereof).  The
Company and Consultant hereby consent and submit to the exclusive jurisdiction
of any of the federal or state courts located in the State of Minnesota with
respect to the enforcement of any rights or remedies hereunder, and waive any
objection to lack of jurisdiction or inconvenient forum.

f.            Entire Agreement.  This Agreement contains the entire contract
between the parties and supersedes any prior and contemporaneous written or oral
agreement between the parties with respect to the subject matter hereof.

 
 

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The parties hereto have executed this Agreement in a manner as appropriate to
each to be effective as of the Effective Date set forth on the first page
hereof.

 
MTS SYSTEMS CORPORATION
          Date: January 6, 2012
By:
/s/  William V. Murray       Its Chief Executive Officer  

 

              Date: January 6, 2012 /s/ Kathleen M. Staby­­­     KATHLEEN M.
STABY                  

 
 

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EXHIBIT A
Description of Services
 
Consultant shall perform the following services during the Term of this
Agreement:

assisting in
 
(i)
the Company’s succession planning process and related meetings,

 
(ii)
coordination and administration of training in ethics and compliance in
accordance with the Administrative Agreement,

 
(iii)
onboarding and orientation of the Company’s new Vice President of Human
Resources, and

 
(iv)
at the request of the interim Chief Executive Officer, activity otherwise
related to the functioning of the Company’s Human Resources Department.

Description of Fees
 
As compensation for the Services performed hereunder, the Company shall pay
Consultant the following amounts during the Term of this Agreement:  $250 per
hour.
 
 

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