Exhibit
10.17 


 


	Performance
    Restricted Stock Unit

    Agreement – Employee	MTS
                                         SYSTEMS CORPORATION

        ID:
        41-0908057 

        14000
        Technology Drive 

        Eden
        Prairie, MN 55344 

	«First»
                                         «MI» «Last»

        «Address»

        «M_2nd_Line»

        «City»
        «Rg» «Postal_code»
	Award
                                         Number:         «Number»

        Plan:                          2011

        ID:                             «ID»



 


Effective
«Grant_date», you have been granted «TargetShares» Target Shares of Performance Restricted Stock Units
representing the right to receive shares of MTS SYSTEMS CORPORATION (the “Company”) stock pursuant to the Company’s
2011 Stock Incentive Plan
(the “Plan”). Under this Grant, you will earn a percentage of the Target Shares (rounded to the nearest whole share)
only at the time and upon achievement of the Performance Goal (“Goal”) of the specified Performance Measure (“Measure”),
determined by Goal achievement at, below or above Target as set forth below.


  


	PERFORMANCE
    PERIOD:	<<StartDate>>
    - <<EndDate>>
	PERFORMANCE
    MEASURE:	Average
    Annual Return on Invested Capital (“ROIC”)
	TARGET
    SHARES:	<<TargetUnits>>
	PAYOUT
    DATE:	<<PayoutDate>>
	 
	 	PERFORMANCE
    GOAL	PERCENTAGE
    OF UNITS 

    EARNED	NUMBER
    OF UNITS
	THRESHOLD:	=
    or < than «ThreshPerf%»	75%	«ThreshShares»
	TARGET:	«TargetPerf%»	100%	«TargetShares»
	MAXIMUM:	=
    or > than «MaxPerf%»	125%	«MaxShares»


 


The
percentage of Units earned will be interpolated from 75% to 100% of the Target Units for performance between Threshold and Target
and will be interpolated from 100% to 125% for performance between Target and Maximum. 


  


You
must remain actively employed by the Company as of the Payout Date to vest in the Shares earned. On or shortly after the Payout
Date, the Company will issue that number of unrestricted whole Shares based upon achievement of the Performance Goal set forth
above; provided, that, if you are a Named Executive Officer, the vesting and issuance of such Shares will also be subject to compliance
with requirements for Performance Based Awards under the Plan, including the certification of the achievement of the Performance
Goals by the Compensation Committee.


  


By
accepting this grant via your signature below, you and the Company agree that the Performance Restricted Stock Units evidenced
by this Agreement are subject to the following:


  


		A.	This
                                         Agreement, the Units, and the Shares issuable upon the vesting of the Units are governed
                                         by all the terms, provisions and conditions set forth in the Company’s 2011
                                         Stock Incentive Plan
                                         and by Uniform Terms and Conditions Applicable to Performance Restricted Stock Unit
                                         Agreements (Employee) adopted by the Board of Directors of the Company, which are
                                         incorporated herein.



  


		B.	Neither
                                         the Plan nor this Agreement confers any right with respect to continuance of your services
                                         to the Company or any of its subsidiaries nor restricts your right to terminate services
                                         to the Company at any time.



  


		C.	Vesting
                                         of the Units shall occur earlier than set forth above in accordance with the conditions
                                         set forth in the Uniform Terms and Conditions Applicable to Performance Restricted Stock
                                         Unit Agreements (Employee).



  


		D.	The
                                         Company may amend or terminate the Plan and this Agreement at any time, provided that
                                         no such action shall impair any rights that have accrued at the time of amendment or
                                         termination without your consent.



 


	 	 	 
	MTS
    SYSTEMS CORPORATION	 	Date
	 
	 	 
	 	 	 
	EMPLOYEE	 	Date