Exhibit 10.1


 


		
        MTS Systems Corporation

        14000 Technology Drive

        Eden Prairie, MN 55344-2290

        Telephone 952-937-4000

        Fax 952-937-4515

         

	 	 


 


January 22, 2014


 


Michael B. Jost

12200 US 71

Sauk Center, MN 56378


 


Dear Mike:


 


This letter supersedes our offer letter dated January 19, 2014. I
am pleased to offer you a position with MTS Systems Corporation as the Senior Vice President, Test Division reporting to Jeff Graves.
Due to the nature of this role, this position is considered an Executive Officer and will be required to file 16-b reports with
the SEC.


 


Cash Compensation:


Your starting salary will be $330,000 annually,
less applicable withholding, and paid bi-weekly in accordance with the Company’s payroll procedures. You will also be eligible
for the MTS Executive Variable Compensation (EVC) program for Fiscal Year 2014 (October through September). Your target bonus under
this plan will be 50% of your base salary and will be pro-rated for Fiscal Year 2014. Your bonus will be guaranteed at 50% of the
pro-rated target amount for Fiscal Year 2014. EVC program payments are made in December of each year.


 


The goals assigned to you under this program will consist of the following:


	30%    	Earnings Per Share (EPS)
	30%	Test EBIT
	25%	Test Revenue
	15%	Test Orders


 


Each goal has a maximum payout opportunity of 200%. The total payout
is capped at 100% in the event we do not achieve our EPS target.


 


Signing Bonus:


If you begin employment with MTS on or before March 3, 2014, you will
receive a signing bonus of $60,000 less applicable withholding, payable on the first payroll after your date of hire. If you voluntarily
terminate your employment with MTS prior to completing one year of service, you will be required to reimburse MTS for the full
amount of your signing bonus.


 


Equity Compensation:


You will receive an equity grant equal in valued at $255,000. The
date of grant will be the 15th of the month after the calendar month in which your start date falls, or, if the 15th
is a day on which the market is closed, the date used shall be the first prior business day in which the market was open. The value
of the grant will be divided the following way:


 


Stock Options:


You will receive a stock option grant of 12,814 options based on the
closing price of the company’s Common Stock on the date of grant. They will vest and be exercisable in three equal installments
on each annual anniversary of the grant date, provided you remain employed, and will be subject to the terms of the Plan and a
written Option agreement to be entered into at the time of grant.


Restricted Stock Units:


You will receive a Restricted Stock Unit (RSU) grant equal to $127,500
divided by the closing price of the company’s Common Stock on the date of grant. The restricted stock units will vest
in three equal installments on each of the first three anniversary dates of the grant date, provided you remain employed, and will
be subject to the terms of the MTS Systems


 




    	 



    	 



    


Michael B. Jost


January 22, 2014


 


 


Corporation 2011 Stock Incentive Plan (the “Plan”) and
a written RSU agreement to be entered into at the time of grant. In the future, you will be eligible for an annual equity grant
under a program approved by the MTS Board of Directors.


 


Stock Ownership Guideline:


To align the interests of our executives with shareholders we have
put in place an Executive Stock Ownership Guideline Policy. Your position as Sr. Vice President, Test Division would require that
over time you acquire a multiple of your base salary in MTS stock. A copy of the policy is enclosed for your review.


 


Benefits:


You will be eligible for company-sponsored health and life insurance
benefits on your hire date. You will also be eligible for our executive physical program which reimburses up to $3,000 on amounts
not covered by your health plan. You will be eligible for a car allowance in the amount of $670 per month, less applicable withholding.


 


Agreements and Executive Plans:


As a condition of your employment, you will be asked to sign the MTS
Code of Conduct and MTS’ Standard Employee Agreement. You will also receive our Executive Change in Control Severance Plan
and Executive Severance Plan. These documents are provided for your review.


 


This offer of employment is contingent on successful completion of
your background check and on your ability to provide documentary proof of your identity and your eligibility to work in the United
States.


 


The Federal Acquisition Regulation (FAR) and the International Traffic
in Arms Registration (ITAR) require you, as a future principal of the Company, to review the questions in the attached forms and
sign the responsibility matters acknowledgement from a personal perspective.


 


By accepting this offer, you confirm that you are able to accept this
job and carry out the work that it would involve without breaching any legal restrictions on your activities, such as restrictions
imposed by a current or former employer. You also confirm that you will inform MTS about any such restrictions and provide MTS
with as much information about them as possible, including any agreements between you and your current or former employer describing
such restrictions on your activities. You further confirm that you will not remove or take any documents or proprietary data or
materials of any kind, electronic or otherwise, with you from your current or former employer to MTS without written authorization
from your current or former employer. If you have any questions about the ownership of particular documents or other information,
discuss such questions with your former employer before removing or copying the documents or information.


 


All executive programs are regularly reviewed by the Compensation Committee
of the Board of Directors and subject to change.


 


We are excited about the prospect of you joining our team. Please indicate
by your signature below, your acceptance of this offer. Please sign and return this offer by Friday, January 24, 2014.


 


Sincerely,


 


 


 


Dr. Jeffrey A. Graves


President and Chief Executive Officer


 


	Agreed and Accepted:	 	 	 	 
	/s/ Michael B. Jost	 	January 23, 2014	 	 
	Michael B. Jost          	 	Date Signed	 	Start Date