Exhibit 10.g to MTS Systems Corporation Form 10-K dated October 1, 2005









Exhibit 10.g  




	MTS Systems Corporation  	CHANGE IN CONTROL AGREEMENT
	14000 Technology Drive
	Eden Prairie, MN 55344-2290
	Telephone 952-937-4000
	Fax 952-937-4515






     









        THIS
CHANGE IN CONTROL AGREEMENT is made and entered into by and between MTS Systems
 Corporation,  a Minnesota  corporation with its principal  offices at 14000 Technology
 Drive,  Eden Prairie,  MN 55344 (the “Company”) and ________________ (the “Executive”),
residing at __________, and shall be effective as of this ____ day of _______________,
_____. 



        WHEREAS,
the Company considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and its
shareholders; and 



        WHEREAS,
the Executive has made and is expected to continue to make, due to the Executive’s
intimate knowledge of the business and affairs of the Company, its policies, methods,
personnel, and problems, a significant contribution to the profitability, growth, and
financial strength of the Company; and 



        WHEREAS,
the Company, as a publicly held corporation, recognizes that the possibility of a Change
in Control may exist, and that such possibility and the uncertainty and questions which it
may raise among management may result in the departure or distraction of the Executive in
the performance of the Executive’s duties, to the detriment of the Company and its
shareholders; and 



        WHEREAS,
it is in the best interests of the Company and its stockholders to reinforce and encourage
the continued attention and dedication of management personnel, including the Executive,
to their assigned duties without distraction and to ensure the continued availability to
the Company of the Executive in the event of a Change in Control; and 



        WHEREAS,
the Company and the Executive previously signed a Change in Control Agreement and now
desire to amend and restate that agreement in its entirety. 



        THEREFORE,
in consideration of the foregoing and other respective covenants and agreements of the
parties herein contained, the parties hereto agree as follows: 






  







Change in Control Agreement   









        1.      Term
of Agreement. This Agreement shall be effective from and after the date
hereof and shall continue in effect through December 31, 2006, and shall
automatically be extended for successive one-year periods thereafter unless the
Board of Directors of the Company (the “Board”) shall have approved,
and the Executive is notified in writing, prior to January 1, 2007 and each
January 1 thereafter, that the term of this Agreement shall not be extended or
further extended; provided, however, that if a Change in Control
shall have occurred during the original or any extended term of this Agreement,
this Agreement shall continue in effect for a period of 24 months from the date
of the occurrence of a Change in Control or, if an event triggering the
Company’s severance payment obligations to the Executive under Section 4(d)
has occurred during such 24-month period, this Agreement shall continue in
effect until the benefits payable to the Executive hereunder have been paid in
full. In the event that more than one Change in Control shall occur during the
original or any extended term of this Agreement, the 24-month period shall
follow the last Change in Control. This Agreement shall neither impose nor
confer any further rights or obligations on the Company or the Executive on the
day after the end of the term of this Agreement. Expiration of the term of this
Agreement of itself and without subsequent action by the Company or the
Executive shall not end the employment relationship between the Company and the
Executive.



        2.      Change
in Control. No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a “Change in
Control” of the Company shall mean a change in control which would be
required to be reported in response to Item 6(e) on Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the Company is then subject to such
reporting requirement, including, without limitation, if: 



	  	        (a)                      Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any subsidiary of the Company,
becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company’s then outstanding
securities; or 







	  	        (b)                      During
any period of two consecutive years (not including any period ending prior to
the effective date of this Agreement), the Incumbent Directors cease for any
reason to constitute at least a majority of the Board of Directors. The term
“Incumbent Directors” shall mean those individuals who are members of
the Board of Directors on the effective date of this Agreement and any
individual who subsequently becomes a member of the Board of Directors (other
than a director designated by a person who has entered into agreement with the
Company to effect a transaction contemplated by Section 2(c)) whose election or
nomination for election by the Company’s shareholders was approved by a
vote of at least a majority of the then Incumbent Directors; or 











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Change in Control Agreement   








	  	        (c)                      (i)
The Company consummates a merger, consolidation, share exchange, division or
other reorganization of the Company with any corporation or entity, other than
an entity owned at least 80% by the Company, unless immediately after such
transaction, the shareholders of the Company immediately prior to such
transaction beneficially own, directly or indirectly 51% or more of the combined
voting power of resulting entity’s outstanding voting securities as well as
51% or more of the Total Market Value of the resulting entity, or in the case of
a division, 51% or more of the combined voting power of the outstanding voting
securities of each entity resulting from the division as well as 51% or more of
the Total Market Value of each such entity, in each case in substantially the
same proportion as such shareholders owned shares of the Company prior to such
transaction; (ii) the shareholders of the Company approve an agreement for the
sale or disposition (in one transaction or a series of transactions) of assets
of the Company, the total consideration of which is greater than 51% of the
Total Market Value of the Company, or (iii) the Company adopts a plan of
complete liquidation or winding-up of the Company. Total Market Value”
shall mean the aggregate market value of the Company’s or the resulting
entity’s outstanding common stock (on a fully diluted basis) plus the
aggregate market value of the Company’s or the resulting entity’s
other outstanding equity securities as measured by the exchange rate of the
transaction or by such other method as the Board determines where there is not a
readily ascertainable exchange rate. 







        3.      Termination
Following Change in Control. If a Change in Control shall have occurred
during the term of this Agreement, the Executive shall be entitled to the
benefits provided in subsection 4(d) unless such termination is (A) because of
the Executive’s death or Retirement, (B) by the Company for Cause or
Disability, or (C) by the Executive other than for Good Reason. 



	  	        (a)       Disability.
Termination by the Company or the Executive of the Executive’s employment
based on “Disability” may occur in the event the Executive has
incurred or is afflicted with any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, and as a result, has become
eligible for and begun receiving income replacement benefits under the terms of
the Company’s long-term disability plan or policy as may be in effect from
time to time. 







	  	        (b)       Retirement.
Termination by the Company or the Executive of the Executive’s employment
based on “Retirement” shall mean termination on or after attaining age
sixty-five (65). 







	  	        (c)       Cause.
For purposes of this Agreement, “Cause” shall mean:  









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Change in Control Agreement   









	  	        (i)    
the willful and continued failure by the Executive (other than any such failure
resulting from (1) the Executive’s incapacity due to physical or mental
illness, (2) any such actual or anticipated failure after the issuance of a
Notice of Termination by the Executive for Good Reason or (3) the Company’s
active or passive obstruction of the performance of the Executive’s duties
and responsibilities) to perform substantially the duties and responsibilities
of the Executive’s position with the Company after a written demand for
substantial performance is delivered to the Executive by the Board, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the duties or responsibilities;








	  	        (ii)    
the conviction of the Executive by a court of competent jurisdiction for felony
criminal conduct which, in the good faith opinion of the Company, would impair
the Executive’s ability to perform his or her duties or impair the business
reputation of the Company; or 







	  	        (iii)    
the willful engaging by the Executive in fraud or dishonesty that is
demonstrably and materially injurious to the Company, monetarily or otherwise.










	  	        No
act, or failure to act, on the Executive’s part shall be deemed “willful” unless
committed, or omitted by the Executive in bad faith and without reasonable belief that
the Executive’s act or failure to act was in the best interest of the Company and
the Executive shall have either failed to correct, or failed to take all reasonable steps
to correct, such act or failure to act within sixty (60) days from the Executive’s
receipt of written notice from the Company demanding that the Executive take such action.
The Executive shall not be terminated for Cause unless and until the Company shall have
delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive’s counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, the Executive’s
conduct was Cause and specifying the particulars thereof in detail.  







	  	        (d)       Good
Reason. The Executive shall be entitled to terminate his or her employment
for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean, without the Executive’s express written consent, any of the
following: 







	  	        (i)    
The authority, powers, functions, responsibilities or duties assigned to the
Executive, as compared to those in effect immediately prior to the Change in
Control, are materially and adversely diminished without the Executive’s
written consent (except for any diminution that occurs solely as a result of the
fact that the Company ceases to be a public company); 











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Change in Control Agreement   








	  	        (ii)    
A reduction by the Company                in the Executive’s annual compensation
including, but not limited to, base                pay or short and/long term incentive
pay in effect immediately prior to a Change                in Control; 







	  	        (iii)    
The Company requiring the                Executive to relocate his or her office, or to
be based in an office, more than                50 miles from his or her office
immediately prior to the Change in Control                (except for required travel on
the Company’s business to an extent                substantially consistent with the
Executive’s business travel obligations                immediately prior to the
Change in Control); 







	  	        (iv)    
The failure by the Company to continue to provide the Executive with benefits at
least as favorable to those enjoyed by the Executive under any of the
Company’s pension, life insurance, medical, health and accident,
disability, deferred compensation, incentive awards, incentive stock options, or
savings plans in which the Executive was participating immediately prior to the
Change in Control, the taking of any action by the Company which would directly
or indirectly materially reduce any of such benefits or deprive the Executive of
any material fringe benefit enjoyed immediately prior to the Change in Control,
or the failure by the Company to provide the Executive with the number of paid
vacation or sick days to which Executive is entitled immediately prior to the
Change in Control, provided, however, that the Company may amend any such plan
or programs as long as such amendments do not reduce any benefits to which the
Executive would be entitled upon termination; 










	  	        (v)    
The failure of the Company                to obtain a satisfactory agreement from any
successor to assume and agree to                perform this Agreement, as contemplated
in Section 8; 







	  	        (vi)    
any material violation of                this Agreement by the Company; 







	  	        (vii)    
the Company requests the                Executive’s resignation from employment; or 







	  	        (viii)    
any purported                termination of the Executive’s employment that is not
made pursuant to a                Notice of Termination satisfying the requirements of
this Agreement; for                purposes of this Agreement, no such purported
termination shall be effective. 










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Change in Control Agreement   








	  	        (e)       Notice
of Termination. Any purported termination of the Executive’s employment
by the Company or by the Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 9. For purposes
of this Agreement, a “Notice of Termination” shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment. 







	  	        (f)       Date
of Termination. For purposes of this Agreement, “Date of           Termination” shall
mean:  







	  	        (i)    
If the Executive’s employment is terminated for Disability, 30 days after
Notice of Termination is given (provided that the Executive shall have been
absent from full-time performance of duties for at least three (3) months and
shall not have returned to the full-time performance of the Executive’s
duties during such 30 day period, in accordance with Section 3(a) hereof); and








	  	        (ii)    
If the Executive’s                employment is terminated pursuant to subsections
(b) or (c) aboveor for any other reason (other than Disability), the
date                specified in the Notice of Termination (which, in the case of a
termination                pursuant to subsection (b) above shall not be less than 10
days, and in the case                of a termination pursuant to subsection (c) above
shall not be less than 10 nor                more than 30 days, respectively, from the
date such Notice of Termination is                given). 










	  	        (g)       Dispute
of Termination. If, within 10 days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or the time for appeal therefrom
having expired and no appeal having been perfected); provided, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company shall continue to pay the Executive full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, base salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this subsection. Amounts paid
under this subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts under this
Agreement. 









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Change in Control Agreement   










        4.      Compensation
Upon Termination or During Disability. Following a Change in Control of the
Company, as defined in subsection 2(a), upon termination of the Executive’s
employment or during a period of Disability, the Executive shall be entitled to
the following benefits: 



	  	        (a)                      During
any period that the Executive fails to perform full-time duties with the Company
as a result of a Disability, the Company shall pay the Executive, the
Executive’s base salary as in effect at the commencement of any such period
and the amount of any other form or type of compensation otherwise payable for
such period if the Executive were not so disabled, until such time as the
Executive is determined to be eligible for long term disability benefits in
accordance with the Company’s insurance programs then in effect or the
Executive is terminated for “Disability.” 







	  	        (b)                      If
the Executive’s employment shall be terminated by the Company for Cause or
by the Executive other than for Good Reason or Disability, the Company shall pay
to the Executive his or her full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and the Company
shall have no further obligation to the Executive under this Agreement, except
with respect to any benefits to which the Executive is entitled under any
Company pension or welfare benefit plan, insurance program or as otherwise
required by law. 







	  	        (c)                      If
the Executive’s employment shall be terminated by the Company or by the
Executive for Disability or Retirement, or by reason of death, the Company shall
immediately commence payment to the Executive (or the Executive’s
designated beneficiaries or estate, if no beneficiary is designated) of any and
all benefits to which the Executive is entitled under the Company’s
retirement and insurance programs then in effect. 







	  	        (d)                      If
the Executive’s employment shall be terminated (A) by the Company other
               than for Cause, Retirement, Disability or the Executive’s death or
(B) by                the Executive for Good Reason, then the Executive shall be entitled
to the                benefits provided below:  







	  	        (i)    
The Company shall pay the                Executive, through the Date of Termination, the
Executive’s base salary as                in effect at the time the Notice of
Termination is given and any other form or                type of compensation otherwise
payable for such period; 










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Change in Control Agreement   








	  	        (ii)    
In lieu of any further salary payments for periods subsequent to the Date of
Termination, the Company shall pay a severance payment (the “Severance
Payment”) equal to two times the Executive’s Annual Compensation as
defined below. For purposes of this Section 4, “Annual Compensation” shall mean
the Executive’s annual salary (regardless of whether all or any portion of
such salary has been contributed to a deferred compensation plan), the average
annual Management Variable Compensation (“MVC”) earned by the
Executive during the three (3) fiscal years immediately preceding the Date of
Termination or, if less, the actual number of fiscal years the Executive has
participated in the MVC plan, and any other type or form of compensation paid to
the Executive by the Company (or any corporation (an “Affiliate”) affiliated with
the Company within the meaning of Section 1504 of the Internal Revenue Code of
1986 as it may be amended from time to time (the “Code”)) and included in the
Executive’s gross income for federal tax purposes during the 12-month
period ending immediately prior to the Date of Termination, but excluding: a)
any amount actually paid to the Executive as a cash payment of the target bonus
(regardless of whether all or any portion of such Company bonus was contributed
to a deferred compensation plan); b) compensation income recognized as a result
of the exercise of stock options or sale of the stock so acquired; and c) any
payments actually or constructively received from a plan or arrangement of
deferred compensation between Company and the Executive. All of the items
included in Annual Compensation shall be those in effect on the Date of
Termination and shall be calculated without giving effect to any reduction in
such compensation that would constitute a breach of this Agreement. The
Severance Payment shall be made in a single lump sum within 30 days after
the Date of Termination; 







	  	        (iii)    
For the 24-month period after the Date of Termination, the Company shall arrange
to provide, at its sole expense, the Executive with life, disability, accident
and health insurance benefits substantially similar to those that the Executive
is receiving or entitled to receive immediately prior to the Notice of
Termination. The Executive shall be responsible for the payment of his or her
portion of the premiums for such benefits, (recognizing that the Executive shall
remain responsible for payment of the same relative percentage of total premiums
as the Executive paid prior to the Date of Termination). The cost of providing
such benefits shall be in addition to (and shall not reduce) the Severance
Payment. Benefits otherwise receivable by the Executive pursuant to this
paragraph (iii) shall be reduced to the extent comparable benefits are actually
received by the Executive during such period, and any such benefits actually
received by Executive shall be reported to the Company; and 







	  	        (iv)    
The Company shall also pay                to the Executive all legal fees and expenses
incurred by the Executive as a                result of such termination (including all
such fees and expenses, if any,                incurred in contesting or disputing any
such termination or in seeking to obtain                or enforce any right or benefit
provided by this Agreement). 









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Change in Control Agreement   








	  	        (e)                      The
Executive shall not be required to mitigate the amount of any payment provided
for in this Section 4 by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for in this Section 4 (except as
expressly provided in Section 4(d)(iii)) be reduced by any compensation earned
by the Executive as the result of employment by another employer or by
retirement benefits after the Date of Termination, or otherwise. 










	  	        (f)                      The
Executive shall be entitled to receive all benefits payable to the Executive
               under the Company pension and welfare benefit plans or any successor of
such                plan and any other plan or agreement relating to retirement benefits
which shall                be in addition to, and not reduced by, any other amounts
payable to the                Executive under this Section 4.  







	  	        (g)                      The
Executive shall be entitled to exercise all rights and to receive all
               benefits accruing to the Executive under any and all Company stock
purchase and                stock option plans or programs, or any successor to any such
plans or programs,                which shall be in addition to, and not reduced by, any
other amounts payable to                the Executive under this Section 4.  







	  	        (h)                      The
Company will indemnify the Executive (and the Executive’s legal
representative or other successors) to the fullest extent permitted (including
payment of expenses in advance of final disposition of the proceeding) by the
laws of the State of Minnesota, as in effect at the time of the subject act or
omission, or the Articles of Incorporation and By-Laws of the Company as in
effect at such time or on the date of this Agreement, whichever affords or
afforded greater protection to the Executive; and the Executive shall be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers, against all
costs, charges and expenses whatsoever incurred or sustained by the Executive or
the Executive’s legal representatives in connection with any action, suit
or proceeding to which the Executive (or the Executive’s legal
representative or other successors) may be made a party by reason of the
Executive’s being or having been a director, officer or employee of the
Company or any of its subsidiaries or his or her serving or having served any
other enterprise as a director, officer or employee at the request of the
Company, provided that the Company shall cause to be maintained in effect for
not less than six years from the date of a Change in Control (to the extent
available) policies of directors’ and officers’ liability insurance of
at least the same coverage as those maintained by the Company on the date of
this Agreement and containing terms and conditions which are no less
advantageous than such policies. 









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Change in Control Agreement   








        Notwithstanding
anything herein to the contrary, if the Executive’s employment is governed by a
separate written employment agreement that provides benefits upon a termination of
employment, the aggregate of any payments or benefits payable under such employment
agreement shall offset and reduce the aggregate of payments and benefits under this
Agreement. 



        5.   Non-Compete
and Confidentiality.  



	  	        (a)       Noncompetition.
Except as provided in subsection (c) below, the Executive agrees that, as a
condition of receiving benefits under this Agreement, the Executive will not
render services directly or indirectly to any competing organization, wherever
located, for a period of one year following the Date of Termination, in
connection with the design, implementation, development, manufacture, marketing,
sale, merchandising, leasing, servicing or promotion of any “Conflicting
Product” which as used herein means any product, process, system or service
of any person, firm, corporation, organization other than the Company, in
existence or under development, which is the same as or similar to or competes
with, or has a usage allied to, a product, process, system, or service produced,
developed, or used by the Company. The Executive agrees that violation of this
covenant not to compete with the Company shall result in immediate cessation of
all benefits hereunder, other than insurance benefits, which the Executive may
continue where permitted under federal and state law at his or her own expense.








	  	        (b)       Confidentiality.
The Executive further agrees and acknowledges the Executive’s existing
obligation that at all times during and subsequent to his or her employment with
MTS, the Executive will not divulge or appropriate to the Executive’s own
use or the uses of others any secret or confidential information or knowledge
pertaining to the business of MTS, or any of its subsidiaries, obtained during
his or her employment by MTS or any of its subsidiaries. 







	  	        (c)       Waiver
– Unfriendly Change in Control. Notwithstanding anything herein to the
contrary: the restriction on competition under subsection (a) shall not apply if
the Executive’s employment terminates following a Change in Control which
has not been approved by a majority of the Incumbent Directors in office
immediately prior to the Change in Control (an “Unfriendly Change in
Control”). Furthermore, in such event, the Company waives any other
restriction on the Executive’s employment and consents unconditionally to
any employment the Executive may subsequently obtain. 









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Change in Control Agreement   









        6.      Limits
on Payments and Benefits. In the event that the vesting,           acceleration and
payment of any equity awards or other compensation or benefits,           together with
all other payments and the value of any benefit received or to be           received by
the Executive would result in all or a portion of such payment being           subject to
excise tax under Section 4999 of the Code, then the amounts due under           Section 4
that the Company shall pay to the Executive shall be either (A) the           full
payment or (B) such lesser amount determined by the Company in accordance           with
this Section 6 that would result in no portion of the payment being subject           to
excise tax under Section 4999 of the Code (the “Excise Tax”),
          whichever of the foregoing amounts, taking into account the applicable Federal,
          state, and local employment taxes, income taxes, and the Excise Tax, results in
          the receipt by the Executive, on an after-tax basis, of the greatest amount of
          the payment notwithstanding that all or some portion of the payment may be
          taxable under Section 4999 of the Code. The Company shall determine the order
          and amounts by which the amounts due under Section 4 are reduced. All
          determinations required to be made under this Section 14 shall be made by a
          nationally recognized accounting firm that is the Company’s outside
auditor           immediately prior to the event triggering the payments that are subject
to the           Excise Tax (the “Accounting Firm”). The Company shall cause
the           Accounting Firm to provide detailed supporting calculations of its
          determinations to the Company and Executive. Notice must be given to the
          Accounting Firm within fifteen (15) business days after an event entitling
          Executive to an amount due under this Agreement. All fees and expenses of the
          Accounting Firm shall be borne solely by the Company. The Accounting Firm’s
          determinations must be made with substantial authority (within the meaning of
          Section 6662 of the Code). For the purposes of all calculations under Section
          280G of the Code and the application of this Section 6, all determination as to
          present value shall use 120 percent of the applicable Federal rate (determined
          under Section 1274(d) of the Code) compounded based on the nature of the
          payment, as in effect on the date of this Agreement, but if not otherwise
          specified, the Company and Executive agree to compound such rate on a
semiannual           basis. The determination by the Accounting Firm shall be final and
binding on           the Company and the Executive.  



        7.      Funding
of Payments. In order to assure the performance of the Company or           its
successor of its obligations under this Agreement, the Company may deposit           in a
so-called “rabbi” trust an amount equal to the maximum payment           that
will be due the Executive under the terms hereof; provided, however, that           the
Company shall deposit in trust the amount equal to the maximum payment due
          Executive immediately upon an Unfriendly Change in Control. Under such written
          trust instrument, the trustee shall be instructed to pay to the Executive (or
          the Executive’s legal representative, as the case may be) the amount to
          which the Executive shall be entitled under the terms hereof, and the balance,
          if any, of the trust not so paid or reserved for payment shall be repaid to the
          Company. If the Company deposits funds in trust, payment shall be made no later
          than the occurrence of the Change in Control. The written instrument governing
          the trust shall be irrevocable from and after such Change in Control and shall
          contain such provisions protective of the Executive as are contained in similar
          trust agreements approved by the Internal Revenue Service in published private
          letter rulings (provided that the assets of the trust shall be reachable by
          creditors of the Company as required by such rulings). The trustee shall be a
          national bank selected by the Company with the consent of the Executive, with
          trust powers and whose principal officers are located in the Minneapolis/St.
          Paul metropolitan area. The trustee shall invest the assets of the trust in any
          readily marketable securities of U.S. corporations (other than the Company, its
          successor, or any affiliate of the Company or its successor). If and to the
          extent there are not amounts in trust sufficient to pay Executive under this
          Agreement, the Company shall remain liable for any and all payments due to
          Executive.  






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Change in Control Agreement   








        8.       Successors;
Binding Agreement.  



        (a)               The
Company will require any successor (whether direct or indirect, by purchase,
          merger, consolidation or otherwise) to 51% or more of the business and/or
assets           of the Company to expressly assume and agree to perform this Agreement
in the           same manner and to the same extent that the Company would be required to
perform           it if no such succession had taken place. Failure of the Company to
obtain such           assumption and agreement prior to the effectiveness of any such
succession shall           be a breach of this Agreement and shall entitle the Executive
to the           compensation and benefits from the Company in the same amount and on the
same           terms as the Executive would be entitled hereunder if the Executive
terminated           his or her employment for Good Reason following a Change in Control,
except that           for purposes of implementing the foregoing, the date on which any
such           succession becomes effective shall be deemed the Date of Termination.  



        (b)               This
Agreement shall inure to the benefit of and be enforceable by the           Executive’s
personal or legal representatives, successors, heirs, and           designated
beneficiaries. If the Executive should die while any amount would           still be
payable to the Executive hereunder if the Executive had continued to           live, all
such amounts, unless otherwise provided herein, shall be paid in           accordance
with the terms of this Agreement to the Executive’s designated
          beneficiaries, or, if there is no such designated beneficiary, to the
          Executive’s estate.  



        9.       Notice.
For the purpose of this Agreement, notices and all other           communications
provided for in the Agreement shall be in writing and shall be           deemed to have
been duly given when delivered or mailed by United States           registered or
certified mail, return receipt requested, postage prepaid,           addressed to the
last known residence address of the Executive or in the case of           the Company, to
its principal office to the attention of each of the then           directors of the
Company with a copy to its Secretary, or to such other address           as either party
may have furnished to the other in writing in accordance           herewith, except that
notice of change of address shall be effective only upon           receipt.  






        10.      Compliance
with Code 409A. If and to the extent that any provision of           this Agreement
is required to comply with Code Section 409A, the Company shall           have the
authority, without the consent of the Executive to interpret and/or           amend such
provision to maintain to maximum extent practicable the original           intent of the
applicable provision without violating the provisions of Code           Section 409A.  






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Change in Control Agreement   








        11.      Miscellaneous.
No provision of this Agreement may be modified, waived or           discharged unless
such waiver, modification or discharge is agreed to in writing           and signed by
the parties. No waiver by either party hereto at any time of any           breach by the
other party to this Agreement of, or compliance with, any           condition or
provision of this Agreement to be performed by such other-party           shall be deemed
a waiver of similar or dissimilar provisions or conditions at           the same or at
any prior or similar time. No agreements or representations, oral           or otherwise,
express or implied, with respect to the subject matter hereof have           been made by
either party which are not expressly set forth in this Agreement.           The validity,
interpretation, construction and performance of this Agreement           shall be
governed by the laws of the State of Minnesota.  



        12.      Validity.
The invalidity or unenforceability or any provision of this           Agreement shall not
affect the validity or enforceability of any other provision           of this Agreement,
which shall remain in full force and effect.  



        IN
WITNESS WHEREOF, the undersigned officer, on behalf of MTS Systems Corporation, and the
Executive have hereunto set their hands as of the date first above written. 






	 	MTS SYSTEMS CORPORATION



	 	By ________________________________________
	 	      Its  Chairman and CEO



	 	EXECUTIVE:



___________________________________________















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