Exhibit
10.16


 





	 	UNIFORM
    TERMS AND CONDITIONS APPLICABLE TO

    EMPLOYEE PERFORMANCE RESTRICTED STOCK UNIT AGREEMENTS UNDER

    THE MTS SYSTEMS CORPORATION 2011 STOCK INCENTIVE PLAN	 



  


Pursuant
to the authority set forth in Section 5 of the MTS Systems Corporation 2011 Stock Incentive Plan (the “Plan”) the
Compensation Committee (the “Committee”) of the Board of Directors adopts the following terms and conditions to apply
to any and all awards of Performance Restricted Stock Units granted under the Plan to employees (the “Participant”)
in addition to the terms set forth in the Plan (Section references are to Sections of the Plan): 


 


		1.	The
                                         terms and conditions set forth below govern the issuance to the Participant of the number
                                         of units (“Units”), which represent the right to receive shares of MTS Common
                                         Stock, $.25 par value per share (the “Shares”) in accordance with the terms
                                         of a Performance Restricted Stock Unit Agreement (“Agreement”), and the issuance
                                         of Shares upon the vesting of the Units. The Uniform Terms and Conditions set forth herein
                                         are incorporated and made a part of the Agreement and capitalized words used herein not
                                         otherwise defined in the Plan shall be as defined in the Agreement.



  


		2.	The
                                         Units will be earned and vest in accordance with the date or dates set forth in the Agreement,
                                         or upon an earlier date as set forth herein or as otherwise determined by the Committee;
                                         provided that the Participant is serving as an employee, director or consultant of MTS
                                         or its subsidiaries on the date on which occurs the event giving rise to the vesting.
                                         In the event that the Participant ceases to serve as an employee, director or consultant
                                         due to death or disability during the Performance Period, all restrictions on the Target
                                         Shares will immediately lapse (Section 7.1(f)). If the Participant ceases to serve as
                                         an employee, director or consultant during the Performance Period for any reason other
                                         than death or disability, all Units that are not vested shall be forfeited to MTS, without
                                         payment.



  


		3.	Notwithstanding
                                         Paragraph 2 above, all Units that have not vested in accordance with the Agreement 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 (Section 11.2).



  


		4.	MTS
                                         shall, no later than the Payout Date, make a book entry of the issuance of such Shares
                                         to the Participant on MTS’s stock records. Upon the request of the Participant,
                                         MTS shall deliver to the Participant certificated Shares representing the number of vested
                                         Shares in certificated form as requested.



  


		5.	Until
                                         the Payout Date, the Participant will not be deemed for any purpose to be, or have rights
                                         as, a shareholder of MTS, or to exercise, directly or by proxy, voting rights or to receive
                                         dividends with respect to the Shares. In addition, the Participant will not be entitled
                                         to any dividend equivalents, in the form of cash, additional Units or Shares, with respect
                                         to the Units for the period prior to the Payout Date. From and after the Payout Date,
                                         the Participant shall have all rights and privileges of any other shareholder with respect
                                         to the Shares issued in settlement of the vested Units.



  


		6.	MTS
                                         may make an equitable adjustment in the number of Units that have not been earned and
                                         vested in the event of any change in the capital structure of MTS, including but not
                                         limited to such changes as stock dividends or stock splits (Section 3.4). Any additional
                                         Units issued to the Participant 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.



 






    	 



    	 



    

 


		7.	Nothing
                                         in this Agreement shall modify or reduce the rights or discretions of the Committee set
                                         forth in the Plan, including but not limited to:






		a.	Modifying
                                         the Award to comply with tax laws or upon dissolution or liquidation of MTS (Section
                                         12.3);






		b.	Requiring
                                         Shares to be held in escrow (Section 13.6); or






		c.	Amending
                                         the terms and conditions of any Award consistent with Section 12.3.



 


		8.	As
                                         a condition to MTS’s obligation to issue Shares on the Payout Date, the Participant
                                         shall pay or make arrangements for the payment of any required tax withholding applicable
                                         to the issuance of the Shares. The Participant may elect by written notice to MTS to
                                         satisfy part or all of any withholding tax requirements associated with the issuance
                                         of Shares by (a) authorizing MTS to retain from the number of Shares that would otherwise
                                         be issued to the Participant or (b) delivering to MTS from Shares already owned by the
                                         Participant that number of Shares having an aggregate Fair Market Value equal to part
                                         or all of the tax payable by the Participant under this Paragraph, 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.



 


		9.	The
                                         Units shall represent an unfunded promise to issue Shares in the future and Participant
                                         shall have no rights other than as a general creditor of MTS with respect to the issuance
                                         of Shares. Except as otherwise provided in Section 7.1(h), a Participant shall 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 MTS, and no purported transferee shall
                                         acquire any right or interest with respect to the Shares as a result.



 


		10.	If
                                         any Participant who is an employee is on: (a) a qualified military leave; (b) an MTS-approved
                                         leave of absence of less than 90 days; or (c) an MTS-approved leave of greater than 90
                                         days and MTS is obligated by statute or written contract to re-employ the Participant
                                         at the end of the approved leave, and in any event, does not return to employment with
                                         MTS within 30 days of the end of the approved leave, the Participant will incur a termination
                                         of employment for purposes of the Plan as of the last day of the approved leave. The
                                         Vice President of Human Resources of MTS has been delegated the authority to approve
                                         all leaves of absence and to enter into such contracts to provide for re-employment for
                                         purposes of the Plan (Section 5.3).



  


		11.	MTS
                                         shall cancel any Units, recover all or any portion of Shares issued under the Plan (or
                                         the proceeds thereof), and shall take such other action, including recovery out of other
                                         amounts paid or owing to the Participant, in an amount and under such conditions as required
                                         by law (Section 13.8).



  


		12.	MTS
                                         may, in its sole discretion, reduce, cancel, forfeit or recoup any rights, payments or
                                         benefits paid or otherwise due to the Participant, including any Units and any Shares
                                         issued under the Plan for Cause (including termination of employment as a result), breach
                                         of any noncompetition, confidentiality, nonsolicitation, noninterference, corporate property
                                         protection or any other agreement between MTS and Participant or any other action of
                                         the Participant that the Committee deems detrimental to the business or reputation of
                                         MTS or any of its subsidiaries (Section 13.8). The Committee hereby delegates to the
                                         Chief Executive Officer the authority and discretion to exercise the rights under Section
                                         13.8 with respect to Shares held by and Units and other payments paid or due to persons
                                         other than the executive officers of MTS.



  


		13.	Nothing
                                         in this Agreement shall be construed as constituting a commitment, guaranty, agreement
                                         or understanding of any kind or nature that MTS or its subsidiaries will retain the services
                                         of the Participant as an employee, director or consultant, and this Agreement shall not
                                         affect in any way the right of MTS or its subsidiaries or the Participant to terminate
                                         the relationship as an employee, director or consultant at any time or for any reason
                                         in accordance with the procedures governing such termination, without any liability or
                                         claim under the Plan.



 






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		14.	The
                                         Committee shall exercise any authority and discretion in the interpretation 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 award 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 Committee, either in the form of a modification of these terms and conditions or
by a written term or condition set forth in any individual award approved by the Committee subsequent to the date of adoption
of these terms and conditions, provided that no change shall adversely affect any accrued right of the Participant without the
Participant’s written consent.


 








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