Exhibit 10.2

 

UNIFORM TERMS AND CONDITIONS APPLICABLE TO

RESTRICTED STOCK UNIT GRANT (EMPLOYEE) UNDER

THE MTS SYSTEMS CORPORATION 2006 STOCK INCENTIVE PLAN

 

Pursuant to the authority set forth in Section 5 of the MTS Systems Corporation
2006 Stock Incentive Plan (the “Plan”) the Board of Directors adopts the
following terms and conditions, in accordance with the terms of the Plan, to
apply to any and all awards of Restricted Stock Units granted under the Plan to
employees (the “Recipient”):

 

 

1.

The terms and conditions set forth below govern the issuance to the respective
Recipient of the number of units (“Units”), which represent the right to receive
shares of the Company’s Common Stock, $.25 par value per share (the “Shares”)
set forth in a separate Notice of Grant of Restricted Stock Units (the
“Notice”), and the issuance of Shares upon the vesting of the Units. This
document and the Notice constitute the Restricted Stock Unit Agreement.

 

 

2.

The Units will vest in accordance with the date or dates set forth in the
Notice, or upon an earlier date as set forth herein and as otherwise determined
by the Committee; provided that the Recipient is employed by the Company or its
subsidiaries on the date on which occurs the event giving rise to the vesting.
Except as provided in the Notice or as set forth herein, all Units that are not
vested shall be forfeited to the Company, without payment therefor, if the
Recipient ceases to be employed for any reason. Notwithstanding the schedule set
forth in the Notice, all Units that have not vested in accordance with the
Notice shall immediately fully (100%) vest upon the occurrence of a Change in
Control (as defined in the Plan) provided that the terms of the agreements
effectuating the Change in Control do not provide for the assumption or
substitution of the Units.

 

 

3.

The Company shall, no later than 30 days from the date of vesting as to any
Units issue to the Recipient the certificate or certificates for the number of
unrestricted and fully paid Shares equal to the number of Units that vested,
subject to the right to withhold Share in accordance with Section 6. If the
Shares are maintained in uncertificated form, the Company shall issue such
Shares as part of the book entry of the Shares on the Company’s stock records.
Thereafter, the Company shall promptly cause the certificate or certificates for
the Shares to be delivered to the Recipient, or shall mark its records that the
Recipient is the owner of Shares.

 

 

4.

Until Shares are issued in settlement of the Units in accordance with Section 3,
the Recipient will not be deemed for any purpose to be, or have rights as, a
shareholder of the Company, or to exercise, directly or by proxy, voting rights
or receive dividends with respect to the Shares issuable upon the vesting of the
Units. In addition, the Recipient will not be entitled to any dividend
equivalents, in the form of cash, or additional Units or Shares, with respect to
the Units for the period prior to the settlement of the Units. From and after
the date of settlement, the Recipient shall have all rights and privileges of
any other shareholder with respect to the Shares issued in settlement of the
vested Units.

 

 

5.

The Company may make an equitable adjustment in the number of Units that have
not vested in the event of any change in the capital structure of the Company,
including but not limited to reorganization or stock splits, but excluding any
change resulting from a dividend payment. Any additional Units issued to the
Recipient as a result of any of the foregoing events shall continue to be
subject to the terms set forth herein to the same extent as the Units giving
rise to the right to receive such additional Units.

 

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6.

As a condition to the Company’s obligation to issue Shares in settlement of the
Units, the Recipient shall pay or make arrangements for the payment of any
required tax withholding applicable to the vesting of the Units and issuance of
the Shares in settlement therefore. The Recipient may elect by written notice to
the Company to satisfy part or all of any withholding tax requirements
associated with the vesting of the Units and issuance of the Shares by
authorizing the Company to retain from the number of Shares that would otherwise
be issued to the Recipient that number of Shares having an aggregate Fair Market
Value equal to part or all of the tax payable by the Recipient under this
Section 6, and in the event Shares are withheld or delivered, the amount
withheld shall not exceed the statutory minimum required federal, state FICA and
other payroll taxes.

 

 

7.

Any “affiliate” (as defined in Rule 144 under the Securities Exchange Act) shall
resell any Shares issued in settlement of the Units (including as set forth in
Sections 12 and 13 below) only in accordance with the applicable requirements of
the Company’s Insider Trading Policy, as amended from time to time, Rule 144 and
any other applicable requirements of the Securities Exchange Act.

 

 

8.

If any Recipient is on a Company-approved leave of absence for any reason, other
than a leave that qualifies as a military leave, and does not return to
employment with the Company within 30 days of the 6-month anniversary of the
start of the leave of absence, the Recipient will incur a termination of
employment for purposes of the Plan as of the 6-month anniversary of the start
of the leave of absence, or with respect to a military leave, the last date that
the Recipient is entitled to reinstatement to employment. The Human Resources
department of the Company is hereby delegated the authority to approve all such
leaves of absence and to enter into such agreements for purposes of the Plan.

 

 

9.

Nothing in this Agreement shall be construed as constituting a commitment,
guaranty, agreement or understanding of any kind or nature that the Company or
its subsidiaries to retain the services of the Recipient, and this Agreement
shall not affect in any way the right of the Company, its subsidiaries or the
Recipient to terminate the employee at any time or for any reason in accordance
with the procedures governing such termination, without any liability or claim
under the Plan or this Agreement. The grant of Units hereunder shall not be
considered to be part of the Recipient’s wages or salary for purposes of any
severance or similar pay or be part of any claim for damages arising out of any
action for wrongful termination or otherwise.

 

 

10.

The Units shall represent an unfunded promise to issue Shares in the future and
Recipient shall have no rights other than as a general creditor of the Company
with respect to the issuance of Shares. Except as otherwise provided in Section
11, Recipient not sell, transfer, pledge, assign or otherwise encumber any of
the Units, whether voluntarily, involuntarily or by operation of law. Any
purported transfer, pledge or encumbrance of such Units shall be void and
unenforceable against the Company, and no purported transferee shall acquire any
right or interest with respect to the Shares as a result.

 

 

11.

This Agreement shall be binding upon, and inure to the benefit of, the Company
and its successors and assigns, and upon any person acquiring, whether by
merger, consolidation, purchase of assets or otherwise, all or substantially all
of the Company’s assets and business. Any Shares issuable under this Agreement
as a result of the vesting of Units on or after the Recipient’s death shall be
issued to the beneficiary or beneficiaries (“Designated Beneficiary”) designated
by the Recipient in a writing filed with the Company in such form and at such
time as the Company shall require. If the Recipient fails to designate a
beneficiary, or if the Designated Beneficiary does not survive the Recipient,
any Shares issuable shall be issued to the legal representative of the
Recipient’s estate. If the Designated Beneficiary survives, but dies before all
Shares are issued to the Designated Beneficiary under this Agreement, then any
Shares issuable to the Designated Beneficiary shall be issued to the legal
representative of the estate of the Designated Beneficiary.

 

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12.

If Recipient is terminated by the Company for Cause (as defined in any written
employment agreement between the Company and the Recipient or in the absence of
such agreement, as defined in the Plan), or in the event of any breach of any
noncompetition, confidentiality, nonsolicitation, noninterference, corporate
property protection or any other agreement between the Company and Recipient or
any other action of the Participant that the Committee deems detrimental to the
business or reputation of the Company, the Company may reduce, cancel or forfeit
any Units that have not vested, and upon demand and without any payment or other
consideration from the Company, the Recipient shall disgorge and return to the
Company any Shares issued in settlement of the number of Units, less the net
effect of any taxes paid by the Recipient (taking into account the initial taxes
paid and the tax effect of the disgorgement), or if the Recipient does not then
own that number of Shares, the amount of the cash proceeds received by the
Recipient from the Recipient’s most recent sale of a like number of the shares
of common stock of the Company, less the net tax effect as stated above.
Recipient understands and agrees that the return of Shares and the disgorgement
of any proceeds received by the Recipient is in addition to and separate from
any other relief available to the Company, including but not limited to,
injunctive relief. Recipient agrees that the Company may recover any
disgorgement required under this Section 12 by right of offset against any
amounts due and owing by the Company to the Recipient, to the maximum extent
permitted by law.

 

 

13.

The Company may, in its sole discretion, repurchase for cash or other
immediately available funds all or any portion of any Shares issued under the
Plan, provided, however, that this right to repurchase shall not be exercised
with respect to any Shares until such Shares have been held by the Recipient for
a period of six months and one day after the date of exercise and such
repurchase otherwise complies with Section 7 above. The repurchase price shall
be the then Fair Market Value of the Shares, provided, however, that no payment
shall be required with respect to any Shares to which Section 12 above applies.
The Committee hereby delegates to the Chief Executive Officer the authority and
discretion to exercise this right of repurchase with respect to Shares held by
persons other than the executive officers of the Company.

 

 

14.

The Compensation Committee of the Board (the “Committee”) shall exercise any
authority and discretion in the administration of this Agreement in accordance
with the terms of the Plan. This Agreement is intended to be exempt from the
requirements of Section 409A of the Code and shall be construed and interpreted
in accordance with such intent. Except as provided herein or as provided in the
Plan, no payment shall be subject to further deferral except as otherwise
permitted or required pursuant to regulations and other guidance issued pursuant
to Section 409A of the Code. Any provision of this Agreement that would fail to
satisfy the exemption for a short-term deferral for purposes of Section 409A of
the Code shall be amended to so comply on a timely basis.

 

Except to the extent specifically provided in this Agreement, this grant shall
be subject to and governed by the terms and conditions of the Plan, which shall
be incorporated as though fully set forth herein. The foregoing terms and
conditions shall remain in effect until further modified by action of the Board
of Directors or the Compensation Committee thereof, either in the form of a
modification of these terms and conditions or by a written term or condition set
forth in any individual grant approved by the Board or the Compensation
Committee subsequent to the date of adoption of these terms and conditions,
provided that no change shall adversely affect any accrued right of the
Recipient without the Recipient’s written consent.

 

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