Document:

EXHIBIT 10.z

[LOGO] MTS(R)

MTS SYSTEMS CORPORATION
14000 Technology Drive
Eden Prairie, MN 55344-2290
Telephone 612-937-4000
Fax 612-937-4515                                     CHANGE IN CONTROL AGREEMENT

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         AGREEMENT made as of this 22nd day of October, 2001 by and between MTS
Systems Corporation, a Minnesota corporation ("MTS") and SUSAN E. KNIGHT (the
"Executive").

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

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

         WHEREAS, MTS, 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 MTS and its shareholders; and

         WHEREAS, Executive is becoming employed by MTS upon the understanding
that MTS will provide income security if the Executive's employment is
terminated under certain terms and conditions; and

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

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

         1. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect until the earlier of (A) the date that any and all
benefits due to Executive under this Agreement upon the happening of the events
set forth herein have been paid and satisfied and all obligations of MTS to the
Executive have been performed or (B) the date the Executive and MTS agree in
writing to terminate this Agreement. Notwithstanding the preceding sentence, if
a Change in Control occurs, this Agreement shall remain in effect for a period
of 36 months from the date of the occurrence of a Change in Control.

         2. Change in Control. If a Change in Control shall have occurred during
the term of this Agreement, the provisions of this Agreement shall become
operative and MTS agrees to employ the Executive and to provide the benefits
stated in this Agreement.

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Change in Control Agreement
Page 2

                  (a) Change in Control, shall, for purposes of this Agreement,
         means a change in control of MTS which would be required to be reported
         in response to Item 1 of Form 8-K promulgated under the Securities
         Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
         MTS is then subject to such reporting requirement, including, without
         limitation, if:
                           (i) any "person" (as such term is used in Sections
                  13(d) and 14(d) of the Exchange Act, including any affiliate
                  or associate as defined in Rule 12(b)-2 under the Exchange Act
                  of such person, other than MTS, any trustee or other fiduciary
                  holding securities under an employee benefit plan of MTS, or
                  any corporation owned, directly or indirectly, by the
                  stockholders of MTS in substantially the same proportions as
                  their ownership of stock of MTS) becomes a "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of MTS representing 35% or more of
                  the combined voting power of MTS' then outstanding securities;
                  or

                           (ii) the Board of Directors is comprised of fewer
                  than 65% of the individuals described in subsection (b) below;
                  or

                           (iii) the stockholders of MTS approve a definitive
                  agreement to merge or consolidate MTS with or into another
                  corporation or other enterprise in which the holders of
                  outstanding stock of MTS entitled to vote in elections of
                  directors immediately before such merger or consolidation hold
                  less than 80% of the voting power of the survivor of such
                  merger or consolidation or its parent, or approve a plan of
                  liquidation; or

                           (iv) at least 60% of MTS' assets are sold or
                  transferred (other than as security for a loan) to any person
                  (as defined above) in one or a series of related transactions;
                  or

                           (v) the Board of Directors of MTS determines, by a
                  vote of a majority of its entire membership, that a tender
                  offer statement by any person (as defined above) indicates an
                  intention on the part of such person to acquire control of
                  MTS.

                  (b) Board of Directors shall, for purposes of subsection (a),
         mean:

                           (i) individuals who on the date hereof constituted
                  the Board of MTS, and

                           (ii) any new director who subsequently was elected or
                  nominated for election by a majority of the directors who held
                  such office immediately prior to a Change in Control.

                  (c) Friendly Change in Control shall mean a Change in Control
         which arises from a transaction or series of transactions authorized,
         recommended or approved at the time by formal action of the Board of
         Directors.

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Change in Control Agreement
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                  (d) Unfriendly Change in Control shall mean a Change in
         Control that is not a "Friendly Change in Control" as defined above. An
         Unfriendly Change in Control shall not thereafter become a Friendly
         Change in Control.

         3. Termination by Reason of Death or Disability. If Executive's
employment shall be terminated by MTS by reason of death or disability, MTS
shall immediately commence payment to the Executive (or Executive's designated
beneficiaries or estate, if no beneficiary is designated) of any and all
benefits to which the Executive is entitled under MTS retirement and insurance
programs them in effect. Except for such benefits, MTS shall have no further
obligations to Executive under this Agreement.

         4. Termination for Cause.

                  (a) If Executive's employment with MTS shall be terminated by
         MTS for Cause as defined below, MTS shall pay to Executive his full
         base salary through the Date of Termination at the rate in effect at
         the time Notice of Termination is given and MTS shall have no further
         obligation to Executive under this Agreement.

                  (b) Termination by MTS of Executive's employment for "Cause"
         shall mean termination as a result of:

                           (i) the conviction of the Executive by a court of
                  competent jurisdiction for felony criminal conduct; or

                           (ii) willful gross misconduct or gross negligence in
                  the performance of his duties by the Executive; or

                           (iii) material violation by the Executive of any
                  employment agreement applicable to the Executive.

         5. Termination Following Friendly Change in Control.

                  (a) If, after a Friendly Change in Control, Executive's
         employment with MTS shall be terminated (1) by MTS other than for
         cause, death or disability or (2) by Executive for Good Reason, then
         Executive shall be entitled to the following benefits:

                           (i) Severance. MTS shall pay the Executive as a
                  severance payment (the "Severance Payment") an amount equal to
                  the product of 18 multiplied by the Executive's Monthly Gross
                  Income as defined below. The Severance Payment shall be made
                  in a single lump sum within 30 days after the Date of
                  Termination, subject to all applicable federal and state
                  withholding.

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Change in Control Agreement
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                  For purposes of this Agreement, Monthly Gross Income shall
                  mean the sum of the following amounts:

                                    (A) 1/12 of the highest average base salary
                           for any 12-consecutive month period during the 36
                           calendar month period ending immediately prior to the
                           Date of Termination (without taking into account any
                           reduction in such base salary that would constitute
                           Good Reason); plus

                                    (B) the monthly average of the total
                           Management Variable Compensation (MVC) earned during
                           the lesser of the 3 most recent or the actual number
                           of fiscal years participating in the MVC plan ending
                           immediately prior to the Date of Termination; plus

                                    (C) the product of the average percentage of
                           MTS profit sharing contributions to the MTS Systems
                           Corporation Profit Sharing Retirement Plan and Trust
                           (as a percent of Compensation as defined in the Plan
                           up to the federal limit) for the lesser of the 3 most
                           recent or the actual number of participating Plan
                           Years ending immediately prior to the Date of
                           Termination multiplied by the sum of (A) and (B)
                           above.

                           (ii) Benefits. For an 18-month period after the Date
                  of Termination, MTS shall continue to pay its portion of
                  Executive's life and health insurance benefits which the
                  Executive is receiving immediately prior to the Notice of
                  Termination. Executive shall be responsible for payment of his
                  portion of the premiums for such benefits. The MTS portion and
                  the Executive's portion shall be the respective percentages of
                  such premiums paid immediately prior to the Date of
                  Termination. Benefits otherwise receivable by Executive
                  pursuant to this paragraph shall be reduced to the extent
                  comparable benefits are actually received by Executive during
                  this period, and any such benefits actually received by
                  Executive shall be reported to MTS. At the expiration of said
                  18-month period, Executive shall be entitled to continue any
                  of said benefits which qualify as group insurance benefits for
                  continuation coverage under the Comprehensive Omnibus
                  Reconciliation Act ("COBRA") or applicable state law.

                  (b) Good Reason. Executive shall be entitled to terminate his
         employment for Good Reason. For purposes of this Agreement, "Good
         Reason" shall mean, without Executive's express written consent, any of
         the following:

                           (i) the assignment to Executive of any duties
                  inconsistent with Executive's status or position with MTS, or
                  a substantial alteration in the nature or status of
                  Executive's responsibilities; or

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Change in Control Agreement
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                           (ii) a reduction by MTS in Executive's annual base
                  salary other than a reduction comparable to other senior
                  Executives of MTS in connection with a company-wide cost
                  reduction program; or

                           (iii) the relocation of MTS' principal executive
                  offices to a location more than fifty miles from Eden Prairie,
                  Minnesota or MTS requiring Executive to be based anywhere
                  other than MTS' principal executive offices except for
                  required travel on MTS' business to an extent substantially
                  consistent with Executive's prior business travel obligations;
                  or

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

                           (v) the failure of MTS to obtain a satisfactory
                  agreement from any successor to assume and agree to perform
                  this Agreement, as contemplated in Section 12; or

                           (vi) MTS requests Executive's resignation from
                  employment; or

                           (vii) any purported termination of Executive's
                  employment which 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; or

                           (viii) any material violation by MTS of this
                  Agreement.

                  (c) Voluntary Termination Deemed Good Reason. Notwithstanding
         anything herein to the contrary, during the period commencing on the
         30th day following a Change in Control (whether Friendly or Unfriendly)
         and ending on the 180th day following a Change in Control, Executive
         may voluntarily terminate his employment for any reason, and such
         termination shall be deemed "Good Reason" for all purposes of this
         Agreement.

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Change in Control Agreement
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         6. Termination - Unfriendly Change in Control.

                  (a) If, after an Unfriendly Change in Control, Executive's
         employment with MTS is terminated (1) by MTS other than for Cause,
         death or disability, or (2) by Executive for Good Reason, the Executive
         shall be entitled to the following benefits:

                            (i) Severance. MTS shall pay the Executive as a
                  severance payment (the "Severance Payment") an amount equal to
                  the product of 36 multiplied by the Executive's Monthly Gross
                  Income as defined in Section 5(a)(i) above. The Severance
                  Payment shall be made in a single lump sum within 30 days
                  after the Date of Termination, subject to all applicable
                  federal and state withholding.

                           (ii) Benefits. For a 36-month period after the Date
                  of Termination, MTS shall continue to pay its portion of
                  Executive's life and health insurance benefits which the
                  Executive is receiving immediately prior to the Notice of
                  Termination. Executive shall be responsible for payment of his
                  portion of the premiums for such benefits. The MTS portion and
                  the Executive's portion shall be the responsive percentages of
                  such premiums paid immediately prior to the Date of
                  Termination. Benefits otherwise receivable by Executive
                  pursuant to this paragraph shall be reduced to the extent
                  comparable benefits are actually received by Executive shall
                  be reported to MTS. At the expiration of said 36-month period,
                  Executive shall be entitled to continue any of said benefits
                  which qualify as group insurance benefits for continuation
                  coverage under the Comprehensive Omnibus Budget Reconciliation
                  Act ("COBRA") or applicable state law.

                  (b) If the Executive voluntarily terminates his employment
         other than for Good Reason but more than 180 days after an Unfriendly
         Change in Control, Executive shall be entitled to the following
         benefits:

                           (i) Severance. MTS shall pay to Executive as a
                  severance payment (the "Severance Payment") an amount equal to
                  the product of 18 multiplied by the Executive's monthly Gross
                  Income as defined in Section 5(a)(i) above. The Severance
                  Payment shall be made in a single lump sum within 30 days
                  after the Date of Termination, subject to all applicable
                  federal and state withholding.

                           (ii) Benefits. For 18-month period after the Date of
                  Termination, MTS shall continue to pay its portion of
                  Executive's life and health insurance benefits which the
                  Executive is receiving immediately prior to the Notice of
                  Termination. Executive shall be responsible for payment of his
                  portion of the premiums for such benefits. The MTS portion and
                  the Executive's portion shall be the respective percentages of
                  such premiums paid immediately prior to the Date of
                  Termination. Benefits otherwise receivable by Executive
                  pursuant to this paragraph shall be reduced to the extent
                  comparable benefits are actually received by Executive during
                  such period, and any such benefits actually received by
                  Executive shall be reported to

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Change in Control Agreement
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                  MTS. At the expiration of said 18-month period, Executive
                  shall be entitled to continue any of said benefits which
                  qualify as group insurance benefits for continuation coverage
                  under the Comprehensive Omnibus Budget Reconciliation Act
                  ("COBRA") or applicable state law.

         7. Additional Benefits. In addition to all other amounts payable and
benefits receivable to Executive upon termination of employment covered under
this Agreement, Executive shall be entitled to the following benefits:

                  (a) Legal Fees. In the event of any termination of employment
         under this Agreement, other than termination for Cause, MTS shall pay
         to Executive all legal fees and expenses reasonably incurred by
         Executive in contesting or disputing any such termination or in seeking
         to obtain or enforce any right or benefit provided by this Agreement.

                  (b) Retirement Plan. Executive shall, upon termination of
         employment, be entitled to receive all benefits payable to the
         Executive under the MTS Systems Corporation Profit Sharing Retirement
         Plan and any other plan or agreement relating to retirement benefits.

                  (c) Employee Stock Option Certificate. The Executive's rights
         under any existing Employee Stock Option Agreement and any future such
         agreements, including particularly his right to exercise his option
         rights following his termination of employment, shall continue to be
         fully effective hereunder.

         8. No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for in
this Agreement be reduced by any compensation earned by Executive as the result
of employment by another employer or by retirement benefits after the Date of
Termination, or except as otherwise provided in this Agreement.

         9. Potential Excise Tax; Indemnification

                  (a) Excise Tax. Should any payments hereunder or contemplated
         hereby be subject to excise tax pursuant to Section 4999 of the
         Internal Revenue Code of 1986, as may be amended, or any successor or
         similar provision thereto, or comparable state or local tax laws, MTS
         shall pay to the Executive such additional compensation as is necessary
         (after taking into account all federal, state and local income taxes
         payable by the Executive as a result of the receipt of such
         compensation) to place the Executive in the same after-tax position he
         would have been in had no such excise tax (or any interest or penalties
         thereon) been paid or incurred. MTS shall pay such additional
         compensation upon the earlier of:

                           (i) the time at which MTS withholds such excise tax
                  from any payments to the Executive; or

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Change in Control Agreement
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                           (ii) 30 days after the Executive notifies MTS that
                  the Executive has paid such excise tax pursuant to a tax
                  return filed by the Executive which takes the position that
                  such excise tax is due and payable in reliance on a written
                  opinion of the Executive's tax counsel that it is more likely
                  than not that such excise tax is due and payable, or, if
                  later, the date the IRS notifies Executive that such amount is
                  due and payable.

         Without limiting the obligation of MTS hereunder, the Executive agrees,
         in the event the Executive makes any payment pursuant to the preceding
         sentence, to negotiate with MTS in good faith with respect to
         procedures reasonably requested by MTS which would afford MTS the
         ability to contest the imposition of such excise tax; provided,
         however, that the Executive will not be required to afford MTS any
         right to contest the applicability of any such excise tax to the extent
         that the Executive reasonably determines that such contest is
         inconsistent with the overall tax interests of the Executive.

         MTS agrees to hold in confidence and not to disclose, without the
         Executive's prior written consent, any information with regard to the
         Executive's tax position which MTS obtains pursuant to this subsection.

                  (b) Indemnification. MTS will indemnify the Executive (and his
         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 MTS 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 MTS may elect to maintain
         generally for the benefit of its directors and officers, against all
         costs, charges and expenses whatsoever incurred or sustained by him or
         his legal representatives in connection with any action, suit or
         proceeding to which he (or his legal representative or other
         successors) may be made a party by reason of his being or having been a
         director, officer or employee of MTS or any of its subsidiaries or his
         serving or having served any other enterprise as a director, officer or
         employee at the request of MTS, provided that MTS 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 MTS on the date of this Agreement and containing terms
         and conditions which are no less advantageous than such policies.

         10. Non-Competition and Confidentiality.

                  (a) Noncompetition. Except as provided in subsection (c)
         below, Executive agrees that, as a condition of receiving benefits
         under this Agreement, he 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,

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Change in Control Agreement
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         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 MTS, 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 MTS. Executive agrees that violation of this
         covenant not to compete with MTS shall result in immediate cessation of
         all benefits hereunder, other than insurance benefits, which Executive
         may continue where permitted under federal and state law at his own
         expense.

                   (b) Confidentiality. Executive further agrees and
         acknowledges his existing obligation that at all times during and
         subsequent to his employment with MTS, he will not divulge or
         appropriate to his 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 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 an Unfriendly Change in Control. Furthermore, in such event,
         MTS waives any other restriction on Executive's employment and consents
         unconditionally to any employment Executive may subsequently obtain.

         11. Funding of Payments. In order to assure the performance of MTS or
its successor of its obligations under this Agreement, MTS 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 MTS 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 MTS. If MTS deposits funds in
trust, payment shall be made no later than the occurrence of a 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 MTS as required by such
rulings). The trustee shall be a national bank selected by MTS 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 MTS, its successor, or any affiliate of MTS or its successor). If and to
the extent there are not amounts in trust sufficient to pay Executive under this
Agreement, MTS shall remain liable for any and all payments due to Executive.

         12. Successors; Binding Agreement.

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                  (a) Successors. MTS will require any successor (whether direct
         or indirect, by purchase, merger, consolidation or otherwise) to all or
         substantially all of the business and/or assets of MTS to expressly
         assume and agree to perform this Agreement in the same manner and to
         the same extent that MTS would be required to perform it if no such
         succession had taken place. Failure of MTS to obtain such assumption
         and agreement prior to the effectiveness of any such succession shall
         be a breach of this Agreement and shall entitle Executive to
         compensation from MTS in the same amount and on the same terms as he
         would be entitled hereunder if he terminated his 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) Binding Agreement. This Agreement shall inure to the
         benefit of and be enforceable by Executive's personal or legal
         representatives, successors, heirs, and designated beneficiaries. If
         Executive should die while any amount would still be payable to
         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.

         13. Notice.

                  (a) Form and Delivery. All notices and 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 MTS, to its principal office to the attention of each
         of the then directors of MTS 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.

                  (b) Notice of Termination. Any purported termination of
         Executive's employment by MTS or by Executive shall be communicated by
         written Notice of Termination to the other party hereto, which 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 Executive's employment.

                  (c) Date of Termination. For purposes of this Agreement, "Date
         of Termination" shall mean the date specified in the Notice of
         Termination which shall not be less than 10 nor more than 30 days,
         respectively, from the date such Notice of Termination is given.

                  (d) 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

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         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 in accordance
         with Section 14 below. Notwithstanding the pendency of any such
         dispute, MTS shall continue to pay Executive full compensation in
         effect when the notice giving rise to the dispute was given (including,
         but not limited to, base salary) and continue 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 or at the end of a period of 180 days, whichever
         first occurs. 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.

         14. Arbitration. Any dispute arising under or in connection with this
Agreement (including without limitation, the making of this Agreement or the
Executive's termination of employment) shall be resolved by final and binding
arbitration to be held in Minneapolis, Minnesota in accordance with the rules
and procedures of the American Arbitration Association. The parties shall select
a mutually acceptable single arbitrator to resolve the dispute or if they fail
or are unable to do so, each side shall within the following ten business days
select a single arbitrator and the two so selected shall select a third
arbitrator within the following ten business days. The arbitrator shall have no
power to award any punitive or exemplary damages. The arbitrator may construe or
interpret, but shall not ignore or vary the terms of this Agreement, and shall
be bound by controlling law. The arbitration award or other resolution may be
entered as a judgment at the request of the prevailing party by any court of
competent jurisdiction in Minnesota or elsewhere.

         15. Miscellaneous.

                  (a) Modification and Waiver. Except as otherwise specifically
         provided in this Agreement, 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 other party shall be deemed
         a waiver of similar or dissimilar provisions or conditions at the same
         or at any prior or similar time.

                  (b) Entire Agreement. 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.

                  (c) Governing Law. The validity, interpretation, construction
         and performance of this Agreement shall be governed by the laws of the
         State of Minnesota.

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                  (d) Severability. 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, MTS, through its authorized officer, and the
Executive have executed this Agreement as of the day and date first above
written.

EXECUTIVE:                               MTS SYSTEMS CORPORATION

/s/ Susan Knight                         By /s/ Sidney W. Emery Jr.
---------------------------------          ---------------------------------

                                         Its  Chairman and CEO
                                              ----------------EXHIBIT 10(i)

October 1, 1999

Mr. Philippe Lemaitre

Dear Philippe:

                  Woodhead Industries, Inc. (the "Company") considers it
essential to the best interests of its stockholders to foster the continuous
employment of key management personnel. In this connection, the Board of
Directors of the Company (the "Board") recognizes that, as is the case with many
publicly held corporations, 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 management
personnel to the detriment of the Company and its stockholders.

                  The Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including yourself, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Company, although no
such change is now contemplated.

                  In order to induce you to remain in the employ of the Company
and in consideration of your agreement set forth in Subsection 2(ii) hereof, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement ("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.

                  1. Term of Agreement. This Agreement shall commence on the
date hereof and shall continue in effect through September 30, 2002; provided,
however, that commencing on October 1, 2000 and each October 1 thereafter, the
term of this Agreement shall automatically be extended for one additional year
unless, not later than the June 30 preceding each such October 1, the Company
shall have given notice that it does not wish to extend

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 2

this Agreement; provided further, if a change in control of the Company shall
have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for the later of (i) the original or extended
term or (ii) a period of twenty-four (24) months beyond the month in which such
change in control occurred. Notwithstanding the foregoing, in no event shall the
term of this Agreement extend beyond the date that you attain sixty-five years
of age.

                  2. Change in Control. (i) No benefits shall be payable
hereunder unless there shall have been a change in control of the Company, as
set forth below. For purposes of this Agreement, a "change in control of the
Company" shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% 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 prior to
the execution of this Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (A) or (C) of this Subsection) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.

                  (ii) For purposes of this Agreement, a "potential change in
control of the Company" shall be deemed to have occurred if (A) the Company
enters into an agreement, the consummation of which would result in the
occurrence of a change in control of the Company, (B) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a change in control of the Company; (C)
any person, other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company,

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 3

who is or becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 10% or more of the combined voting power of the
Company's then outstanding securities, increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by such person on the
date hereof; or (D) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential change in control of the Company has
occurred. You agree that, subject to the terms and conditions of this Agreement,
in the event of a potential change in control of the Company, you will remain in
the employ of the Company until the earliest of (i) a date which is six (6)
months from the occurrence of such potential change in control of the Company,
(ii) the termination by you of your employment by reason of Disability or
Retirement as defined in Subsection 3(i), or (iii) the occurrence of a change in
control of the Company.

                  3. Termination Following Change in Control. If any of the
events described in Subsection 2(i) hereof constituting a change in control of
the Company shall have occurred, you shall be entitled to the benefits provided
in Subsection 4(iii) hereof upon the subsequent termination of your employment
during the term of this Agreement unless such termination is (A) because of your
death, Disability or Retirement, (B) by the Company for Cause, or (C) by you
other than for Good Reason.

                  (i) Disability; Retirement. If, as a result of your incapacity
due to physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is given you shall
not have returned to the full-time performance of your duties, your employment
may be terminated for "Disability". Termination by the Company or you of your
employment based on "Retirement" shall mean termination in accordance with the
Company's retirement policy, including early retirement, generally applicable to
its salaried employees or in accordance with any retirement arrangement
established with your consent with respect to you.

                  (ii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination upon (A) the willful and continued failure by you
to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of
Termination, by you for Good Reason as defined in Subsections 3(iv) and 3(iii),
respectively) after a written demand for substantial performance is delivered to
you by the Board, which demand specifically identifies the manner in which the
Board believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purposes of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 4

entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set forth above in
clauses (A) or (B) of the first sentence of this Subsection and specifying the
particulars thereof in detail.

                  (iii) Good Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence after a change in
control of the Company of any of the following circumstances unless, in the case
of paragraphs (A), (E), (F), (G) or (H), such circumstances are fully corrected
prior to the Date of Termination specified in the Notice of Termination, as
defined in Subsections 3(v) and 3(iv), respectively, given in respect thereof:

                  (A) the assignment to you of any duties inconsistent with your
         present status as President and Chief Operating Officer of the Company
         (or such other title or titles as you may be holding immediately prior
         to the change in control of the Company) or a substantial adverse
         alteration in the nature or status of your responsibilities from those
         in effect immediately prior to the change in control of the Company;

                  (B) a reduction by the Company in your annual base salary as
         in effect on the date hereof or as the same may be increased from time
         to time except for across-the-board salary reductions similarly
         affecting all senior executives of the Company and each of its
         affiliated companies and all senior executives of any person in control
         of the Company and each of its affiliated companies;

                  (C) the relocation of the Company's principal executive
         offices to a location outside the Chicago Metropolitan Area (or, if
         different, the metropolitan area in which such offices are located
         immediately prior to the change in control of the Company) or the
         Company's requiring you to be based anywhere other than the Company's
         principal executive offices except for required travel on the Company's
         business to an extent substantially consistent with your present
         business travel obligations;

                  (D) the failure by the Company, without your consent, to pay
         to you any portion of your current compensation except pursuant to an
         across-the-board compensation deferral similarly affecting all senior
         executives of the Company and all senior executives of any person in
         control of the Company, or to pay to you any portion of an installment
         of deferred compensation under any deferred compensation program of the
         Company, within seven (7) days of the date such compensation is due;

                  (E) the failure by the Company to continue in effect any
         compensation plan in which you participate immediately prior to the
         change in control of the Company which is material to your total
         compensation, including but not limited to the Company's Management
         Incentive Plan and 1987 Stock Compensation Plan or any similar or

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 5

         substitute plans adopted prior to the change in control, unless an
         equitable arrangement (embodied in an ongoing substitute or alternative
         plan) has been made with respect to such plan, or the failure by the
         Company to continue your participation therein (or in such substitute
         or alternative plan) on a basis not materially less favorable, both in
         terms of the amount of benefits provided and the level of your
         participation relative to other participants, as existed at the time of
         the change in control;

                  (F) the failure by the Company to continue to provide you with
         benefits substantially similar to those enjoyed by you under the
         Company's Retirement Plan for Woodhead Industries, Inc. & Affiliated
         Companies (the "Pension Plan"), Woodhead Industries, Inc. & Affiliated
         Companies Employees Profit Sharing Plan (the "Profit Sharing Plan"), or
         under any or the Company's life insurance, medical, health and
         accident, or disability plans in which you were participating at the
         time of the change in control of the Company, the taking of any action
         by the Company which would directly or indirectly materially reduce any
         of such benefits or deprive you of any material fringe benefit enjoyed
         by you at the time of the change in control of the Company, or the
         failure by the Company to provide you with the number of paid vacation
         days to which you are entitled on the basis of years of service with
         the Company in accordance with the Company's normal vacation policy in
         effect at the time of the change in control of the Company;

                  (G) 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 5 hereof; or

                  (H) any purported termination of your employment which is not
         effected pursuant to a Notice of Termination satisfying the
         requirements of Subsection (iv) below (and, if applicable, the
         requirements of Subsection (ii) above); for purposes of this Agreement,
         no such purported termination shall be effective.

Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.

                  (iv) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.

                  (v) Date of Termination, Etc. "Date of Termination" shall mean
(A) if your employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that you shall not have returned to

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 6

the full-time performance of your duties during such thirty (30) day period),
and (B) if your employment is terminated pursuant to Subsection (ii) or (iii)
above or 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 (ii) above shall not be less than thirty (30) days, and in the case
of a termination pursuant to Subsection (iii) above shall not be less than
fifteen (15) nor more than sixty (60) days, respectively, from the date such
Notice of Termination is given); provided that if within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this proviso), 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, by a binding arbitration award, or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided further 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 will
continue to pay you your full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, base salary) and
continue you as a participant in all compensation, benefit and insurance plans
in which you were 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
due under this Agreement except to the extent otherwise provided in paragraph
(E) of Subsection 4(iii).

                  4. Compensation Upon Termination or During Disability.
Following a change in control of the Company, as defined by Subsection 2(i),
upon termination of your employment or during a period of Disability you shall
be entitled to the following benefits:

                  (i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical or mental
illness, you shall continue to receive your base salary at the rate in effect at
the commencement of any such period, together with all compensation payable to
you under the Management Incentive Plan or other plan during such period, until
this Agreement is terminated pursuant to Section 3(i) hereof reduced by any
payments made to you during such period pursuant to the Company's long-term
disability plans or programs. Thereafter, or in the event your employment shall
be terminated by the Company or by you for Retirement, or by reason of your
death, your benefits shall be determined under the Company's retirement,
insurance and other compensation plans and programs then in effect in accordance
with the terms of such programs.

                  (ii) If your employment shall be terminated by the Company for
Cause or by you other than for Good Reason, Disability, death or Retirement, the
Company shall pay you your full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, plus

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 7

all other amounts to which you are entitled under any compensation plan of the
Company at the time such payments are due, and the Company shall have no further
obligations to you under this Agreement.

                  (iii) If your employment by the Company shall be terminated
(a) by the Company other than for Cause, Retirement or Disability or (b) by you
for Good Reason, then you shall be entitled to the benefits provided below:

                  (A) the Company shall pay you your full base salary through
         the Date of Termination at the rate in effect at the time Notice of
         Termination is given, plus all other amounts to which you are entitled
         under any compensation plan of the Company, at the time such payments
         are due, except as otherwise provided below;

                  (B) in lieu of any further salary payments to you for periods
         subsequent to the Date of Termination, the Company shall pay as
         severance pay to you a lump sum severance payment (together with the
         payments provided in paragraphs C and D, below, the "Severance
         Payments") equal to three (3) or, if less, the number of years,
         including fractions, from the Date of Termination until you reach your
         normal retirement age, times the sum of (x) your annual base salary in
         effect immediately prior to the occurrence of the circumstance giving
         rise to the Notice of Termination given in respect thereof, and (y)
         your target bonus amount (computed by multiplying your target bonus
         percentage as set forth in the Management Incentive Plan or, any
         substitute plan adopted prior to the change of control, times your base
         salary in effect immediately prior to the occurrence of the
         circumstance giving rise to the Notice of Termination given in respect
         thereof).

                  (C) in lieu of shares of common stock of the Company ("Company
         Shares") issuable upon exercise of outstanding options ("Options") or
         any related stock appreciation rights ("Rights"), if any, granted to
         you under any of the Company's stock compensation plans (which Options
         and Rights shall be canceled upon the making of the payment referred to
         below), you shall receive an amount in cash equal to the product of (i)
         the excess of the higher of such closing price or the highest per share
         price for Company Shares actually paid in connection with any change in
         control of the Company, over the per share exercise price of each
         option or Right held by you (whether or not then fully exercisable),
         times (ii) the number of Company Shares covered by each such Option or
         Right; and

                  (D) an amount in cash equal to the sum of (i) the present
         value of your accrued benefit (determined by using the ongoing
         actuarial assumptions in effect immediately prior to your Date of
         Termination under the Company's defined benefit plan in which you are a
         participant) under any defined benefit plan sponsored by the Company
         and (ii) your account balance under any defined contribution plan
         sponsored by the Company, in either case to the extent that such
         accrued benefit or account balance, as the case may be, shall not be
         fully vested at the time of your Date of Termination.

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 8

                  (E) In the event that you become entitled to the payments (the
         "Severance Payments") provided under paragraphs (B), (C) and (D),
         above, and Subsection (iv), below, if any of the Severance Payments or
         any other portion of the Total Payments (as defined below) will be
         subject to the tax (the "Excise Tax") imposed by section 4999 of the
         Code, the Company shall pay to you at the time specified in paragraph
         (F), below, an additional amount (the "Gross-Up Payment") such that the
         net amount retained by you, after deduction of any Excise Tax on the
         Severance Payments and such other Total Payments and any federal and
         state and local income tax and Excise Tax solely upon the payment
         provided for by this paragraph, shall be equal to the present value of
         the Severance Payments and such other Total Payments. For purposes of
         determining whether any of the Severance Payments will be subject to
         the Excise Tax and the amount of such Excise Tax, (i) any other
         payments or benefits received or to be received by you in connection
         with a change in control of the Company or your termination of
         employment (whether payable pursuant to the terms of this Agreement or
         any other plan, arrangement or agreement with the Company, its
         successors, any person whose actions result in a change in control or
         any person affiliated with (or which, as a result of the completion of
         the transactions causing a change in control, will become affiliated)
         the Company or such person within the meaning of section 1504 of the
         Code (together with the Severance Payments, the "Total Payments"))
         shall be treated as "parachute payments" within the meaning of section
         28OG(b)(2) of the Code, and all "excess parachute payments" within the
         meaning of section 28OG(b)(1) shall be treated as subject to the Excise
         Tax, unless in the opinion of tax counsel selected by the Company's
         independent auditors and acceptable to you, the Total Payments (in
         whole or in part) do not constitute parachute payments, or such excess
         parachute payments (in whole or in part) represent reasonable
         compensation for services actually rendered within the meaning of
         section 28OG(b)(4) of the Code in excess of the base amount within the
         meaning of section 28OG(b)(3) of the Code, or are otherwise not subject
         to the Excise Tax, (ii) the amount of the Total Payments which shall be
         treated as subject to the Excise Tax shall be equal to the lesser of
         (A) the total amount of the Total Payments or (B) the amount of excess
         parachute payments within the meaning of section 28OG(b)(1) (after
         applying clause (i), above), and (iii) the value of any non-cash
         benefits or any deferred payment or benefit shall be determined by the
         Company's independent auditors in accordance with the principles of
         sections 28OG(d)(3) and (4) of the Code. For purposes of determining
         the amount of the Gross-Up Payment, you shall be deemed to pay federal
         income taxes at the highest marginal rate of federal income taxation in
         the calendar year in which the Gross-Up Payment is to be made and state
         and local income taxes at the highest marginal rate of taxation in the
         state and locality of your residence in the calendar year in which the
         Gross-Up Payment is to be made, net of the maximum reduction in federal
         income taxes which could be obtained from deduction of such state and
         local taxes. In the event that the Excise Tax is subsequently
         determined to be less than the amount taken into account hereunder at
         the time of termination of your employment, you shall repay to the

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 9

         Company at the time that the amount of such reduction in Excise Tax is
         finally determined the portion of the Gross-Up Payment attributable to
         such reduction (plus the portion of the Gross-Up Payment attributable
         to the Excise Tax and federal and state and local income tax imposed on
         the Gross-Up Payment being repaid by you if such repayment results in a
         reduction in Excise Tax and/or a federal and state and local income tax
         deduction) plus interest on the amount of such repayment at the rate
         provided in section 1274(b)(2)(B) of the Code. In the event that the
         Excise Tax is determined to exceed the amount taken into account
         hereunder at the time of the termination of your employment (including
         by reason of any payment the existence or amount of which cannot be
         determined at the time of the Gross-Up Payment), the Company shall make
         an additional gross-up payment in respect of such excess (plus any
         interest payable with respect to such excess) at the time that the
         amount of such excess is finally determined.

                  (F) The payments provided for in paragraphs (B), (C), (D) and
         (E), above, shall be made not later than the fifth day following the
         Date of Termination, provided, however, that if the amounts of such
         payments, cannot be finally determined on or before such day, the
         Company shall pay to you on such day an estimate, as determined in good
         faith by the Company, of the minimum amount of such payments and shall
         pay the remainder of such payments (together with interest at the rate
         provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
         thereof can be determined but in no event later than the thirtieth day
         after the Date of Termination. In the event that the amount of the
         estimated payments exceeds the amount subsequently determined to have
         been due, such excess shall constitute a loan by the Company to you,
         payable on the fifth day after demand by the Company (together with
         interest at the rate provided in Section 1274(b)(2)(B) of the Code).

                  (G) the Company also shall pay to you all legal and accounting
         fees and expenses incurred by you 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 or in connection with
         any tax audit or proceeding to the extent attributable to the
         application of section 4999 of the Code to any payment or benefit
         provided hereunder). Such payments shall be made at the later of the
         times specified in paragraph (F) above, or within five (5) days after
         your request for payment accompanied with such evidence of fees and
         expenses incurred as the Company reasonably may require.

                  (iv) If your employment shall be terminated (A) by the Company
other than for Cause, Retirement or Disability or (B) by you for Good Reason,
then for a thirty-six (36) month period after such termination, the Company
shall arrange to provide you at the Company's expense with life, disability,
accident and health insurance benefits substantially similar to those which you
are receiving immediately prior to the Notice of Termination. Benefits otherwise
receivable by you pursuant to this Subsection 4(iv) shall be reduced to the
extent comparable benefits are actually received by you during

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 10

the thirty-six (36) month period following your termination, and any such
benefits actually received by you shall be reported to the Company.

                  (v) You 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 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.

                  (vi) In addition to all other amounts payable to you under
this Section 4, you shall be entitled to receive all benefits payable to you, at
the respective time or times such payments are due, under the Pension Plan, the
Profit Sharing Plan, the 401(k) Plan and any other plan or agreement relating to
retirement benefits.

                  5. Successors; Binding Agreement. (i) The Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all 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 you to compensation from the
Company in the same amount and on the same terms as you would be entitled to
hereunder if you terminate your employment for Good Reason following a change in
control of the Company, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

                  (ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amount would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee or
other designee or, if there is no such designee, to your estate.

                  6. 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 mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 11

accordance herewith, except that notice of change of address shall be effective
only upon receipt.

                  7. 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 you and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto 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 subsequent 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 Illinois. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law. The
obligations of the Company under Section 4 shall survive the expiration of the
term of this Agreement.

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

                  9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  10. Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled, at the Company's expense,
exclusively by American Arbitration Association arbitration in Chicago, Illinois
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

<PAGE>

Mr. Philippe Lemaitre
October 1, 1999
Page 12

                  If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.

Sincerely,

WOODHEAD INDUSTRIES, INC.

By /s/ C. Mark Dewinter
   ---------------------------
Chairman and Chief
Executive Officer

Agreed to this 1st day of October, 1999.

By /s/ Philippe Lemaitre
   ---------------------------
Philippe Lemaitre

<PAGE>

                       AMENDMENT NO. 1 TO LETTER AGREEMENT
                          DATED OCTOBER 1, 1999 BETWEEN
          WOODHEAD INDUSTRIES, INC. AND PHILIPPE LEMAITRE ("AGREEMENT")

This Amendment is made and entered into effective as of April 25, 2001, between
Woodhead Industries, Inc. and Philippe Lemaitre. All provisions of the
Agreement, except as modified by this Amendment shall remain in full force and
effect.

         1.       Section 4.(iii)(B) of the Agreement is hereby deleted in its
                  entirety and replaced with the following:

                  "(B) in lieu of any further salary payment to you for periods
                  subsequent to the Date of Termination, the Company shall pay
                  as severance pay to you a lump sum severance payment (together
                  with the payments provided in paragraphs C and D, below, the
                  "Severance Payments") equal to three (3) or, if less, the
                  number of years, including fractions, from the Date of
                  Termination until you reach your normal retirement age, times
                  the sum of (x) your annual base salary in effect immediately
                  prior to the occurrence of the circumstance giving rise to the
                  Notice of Termination given in respect thereof, and (y) two
                  (2) times your annual target bonus amount (computed by
                  multiplying your target bonus percentage as set forth in the
                  Management Incentive Plan or, any substitute plan adopted
                  prior to the change in control, times your base salary in
                  effect immediately prior to the occurrence of the circumstance
                  giving rise to the Notice of Termination given in respect
                  thereof)."

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date set forth above.

WOODHEAD INDUSTRIES, INC.                  PHILIPPE LEMAITRE

/s/ Robert Tortorello                      /s/ Philippe Lemaitre
-------------------------------------      -------------------------------------
Robert Tortorello                          Philippe Lemaitre
Vice President, General Counsel and
Secretary

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