Document:

Exhibit 10.6

 

 
	
 
Notice of Grant of Non-Qualified Stock 

 Options And Option Agreement – 

 Employee

 	
  

   	
 
MTS
 SYSTEMS CORPORATION
ID: 41-0908057

 14000 Technology Drive

 
	
 
«First» «MI» «Last»
«Address»

 «M_2nd_Line»

 «City» «Rg» «Postal_code»

	
  

 	
 
Option Number:

 Plan:

 ID:

 	

 
«Number»

 2011

 «ID»

 

Effective «Option_Date», you (the
“Participant”) have been granted an Option to buy «Shares» shares of MTS
SYSTEMS CORPORATION (the Company) common stock at $«Price» per share. This
Option is granted pursuant to the Company’s 2011 Stock Incentive Plan (the
“Plan”) and is classified as a Non-Qualified Stock Option.

The total option exercise price of the shares granted is $«Total_Price».

Shares under this Option will become fully vested and exercisable on the
following dates, subject to earlier vesting and exercise as described in the
Plan:

	
  

 	
  

 
	
 Shares

 	
 Date Shares Vest and are

 First Exercisable

 
	
 «SharesY1»

 	
 «DateY1»

 
	
 «SharesY2»

 	
 «DateY2»

 
	
 «SharesY2»

 	
 «DateY3»

 

By accepting this grant via this website, you
and the Company agree that the option evidenced by this Option Agreement is
subject to the following:

	
  

 	
  

 
	
 A.

 	
 This Option is governed by all the terms, provisions and conditions
 set forth in the Company’s 2011 Stock
 Incentive Plan, as amended, and by Uniform Terms and Conditions Applicable to
 Option Grants adopted by the Compensation Committee (the
 “Committee”) of the Board of Directors of the Company, which are incorporated
 herein.

 
	
 B.

 	
 This
 option shall expire on mergedate,
 but may expire earlier in the event your services with the Company are
 terminated or a change in control of the Company occurs, as further described
 in the Plan.

 
	
 C.

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

 
	
 D.

 	
 The
 shares of stock received as a result of the exercise of this Option may be
 recouped at the discretion of the Committee if certain events occur,
 including termination of your services to the Company or you compete with the
 Company after termination of your services in violation of your agreements
 with the Company, or upon certain acts detrimental to the Company, as further
 described in the Plan.

 
	
 E.

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

 
	
 F.

 	
 This
 electronic document and your acceptance are the only evidence of this grant
 and no paper copy will be sent to you to evidence the grant and your
 acceptance.

 

	
  

 	
  

 	
  

 
	
 

 	
  

 	
 %%Option_Date%-%

 
	
 MTS SYSTEMS CORPORATION

 	
  

 	
 DateExhibit 10.7

	
  

 	
  

 
	
 

 	
UNIFORM TERMS AND CONDITIONS APPLICABLE TO 

 EMPLOYEE
 OPTION GRANTS UNDER

 THE MTS SYSTEMS CORPORATION 2011 STOCK INCENTIVE PLAN
 

Pursuant to the
authority set forth in Section 5.2 of the MTS Systems Corporation 2011 Stock
Incentive Plan (the “Plan”), the Compensation Committee (the “Committee”) of
the Board of Directors hereby establishes the following uniform terms and
conditions that apply to any and all Options granted under the Plan to
employees (the “Participant”), in addition to the terms set forth in the Plan
(Section references are to Sections of the Plan): 

	
  

 	
  

 	
  

 	
  

 
	
 Terms Applicable to Options

 
	
  

 	
 1.

 	
 All unexercised Options shall expire
 immediately following the seventh anniversary of the date of grant of the
 Option, subject to earlier expiration as set forth in the Plan, including for
 Cause, a Qualifying Event, a Change in Control, or the dissolution or
 liquidation of MTS. (Section 7.2). If the Qualifying Event is termination of
 employment, the Option shall expire at 5 pm CST on the 90th day after the
 date of termination (180th day after the date of termination as a result of
 death, disability, or retirement).

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 The Option shall be exercisable as to
 one-third of the total number of Shares from and after the first anniversary
 of the date of grant; an additional one-third of the total number of Shares
 from and after the second anniversary of the date of grant, and the remainder
 of Shares from and after the third anniversary of the date of grant of the
 Option, subject to the earlier exercise of the Option under the terms the
 Plan or at the discretion of the Committee. (Section 7.1(e)). In the event of
 the death or Disability of the Participant while in the employ of the
 Company, the Option shall immediately be exercisable in full (Section
 7.1(f)), subject to the expiration conditions as provided in Paragraph 1.

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 The Option may not be sold, transferred,
 pledged, assigned or otherwise alienated, except upon the death of the
 Participant by will or the laws of descent and distribution. (Section
 7.1(h)).

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Any Option of a Participant who is on: (a)
 a qualified military leave; (b) an MTS-approved leave of absence of less than
 90 days; or (c) an MTS-approved leave of greater than 90 days and MTS is
 obligated by statute or written contract to re-employ the Participant at the
 end of the approved leave, shall not expire and if an Incentive Stock Option
 (ISO), shall continue to constitute an ISO during the leave period. If the
 Participant does not return to employment with MTS within 30 days of the end
 of the military or an MTS-approved leave, the Participant will incur a
 termination of employment as of the last day of the approved leave period,
 and the Option will expire at 5 pm CST on the 90th day after the date of
 termination of employment. If a Participant is on an MTS-approved leave of
 absence of more than 90 days but whose re-employment with MTS is not provided
 by statute or contract, the Option will not expire during the period of leave
 but if an ISO, shall constitute a Non-qualified Stock Option (NQSO) from and
 after 180 days following the commencement of the leave of absence. In that
 case, if the Participant does not return to employment with MTS prior to the
 end of the approved leave period, the Option will expire at 5 pm CST on the
 last day of the approved leave period. (Section 13.4) The Vice President of
 Human Resources of MTS has been delegated the authority to approve all leaves
 of absence and to enter into such contracts to provide for re-employment for
 purposes of the Plan. (Section 5.3).

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 MTS may make an equitable adjustment in the
 number of Shares with respect to any outstanding Option for which the
 exercise period has not lapsed in the event of any change in the capital
 structure of MTS, including but not limited to such changes as stock
 dividends or stock splits. (Section 3.4) Any additional Shares issued to the
 Participant as a result of any of the foregoing events shall continue to be
 subject to the terms set forth herein to the same extent as the Shares giving
 rise to the right to receive such additional Shares.

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

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

 
	
  

 	
  

 	
 a.

 	
 Cashing out or requiring the exercise of Options
 upon a Change in Control (Section 11.3);

 

1

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 b.

 	
 Modifying Options to comply with tax laws
 or upon dissolution or liquidation of MTS (Section 12.3);

 
	
  

 	
  

 	
 c.

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

 
	
  

 	
  

 	
 d.

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 9.

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

 
	
  

 	
  

 	
  

 
	
 Conditions of Exercise of Option

 
	
  

 	
 10.

 	
 In payment of the exercise price of an
 Option in a form other than cash, the Participant may: (a) deliver or attest
 to the ownership of unrestricted Shares (including Shares issuable under this
 Option) having a Fair Market Value equal to the exercise price; (b) deliver
 with the exercise notice, irrevocable instructions to a broker to promptly
 deliver to MTS the amount of sale or loan proceeds to pay the exercise price,
 except in the event, in the opinion of counsel to MTS, such right constitutes
 a direct or indirect loan in violation of federal securities laws. (Section
 7.2(f)).

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 As a condition to MTS’s obligation to issue
 Shares upon exercise of the Option, the Participant shall pay or make
 arrangements for the payment of any required tax withholding applicable to
 the vesting of the Units and issuance of the Shares in settlement therefore.
 A Participant may elect by written notice to MTS to satisfy part or all of
 the withholding tax requirements associated with the award by: (a)
 authorizing MTS to retain from the number of Shares that would otherwise be
 deliverable to the Participant, except to the extent such retention would
 violate applicable securities laws; or (b) delivering to MTS from Shares
 already owned by the Participant that number of Shares having an aggregate
 Fair Market Value equal to part or all of the tax payable by the Participant
 under this Section, and in the event Shares are withheld or delivered, the
 amount withheld shall not exceed the statutory minimum required federal,
 state, FICA and other payroll taxes. (Section 9.6).

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 Shares shall be issued only if and to the
 extent such issuance is in compliance with all applicable securities laws or
 is otherwise exempt from such laws. The Participant may be required to sign a
 document satisfactory to MTS that, among other things, the Participant is
 purchasing the Shares for investment purposes and not with a view to sell or
 distribute the Shares except in compliance with applicable securities laws.
 (Section 8.2)

 
	
  

 	
  

 	
  

 
	
 Terms Applicable to Shares

 
	
  

 	
 13.

 	
 The Participant shall immediately notify
 the Human Resources department of MTS in the event the Participant sells or
 otherwise disposes of any Shares issued pursuant to an ISO on or before the
 later of: (a) the date two years after the date of grant of the Option or (b)
 the date one year

 

2

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 after the exercise of such Option. The
 Participant shall cooperate with MTS to enable MTS to properly report such
 disposition for tax purposes, and agrees to include any compensation income
 as a result of the disposition in the Participant’s income for federal tax
 purposes. (Section 9.7)

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

 	
 Any “affiliate” (as defined in Rule 144
 under the Securities Exchange Act) shall exercise and shall resell any Shares
 acquired upon exercise of the Option only in accordance with the applicable
 requirements of the MTS Insider Trading Policy, as amended from time to time,
 and any other requirements under applicable securities laws. (Section 8.1).

 

Except to the extent specifically provided in
this Agreement, this Option shall be subject to and governed by the terms and
conditions of the Plan, which shall be incorporated as though fully set forth
herein. The foregoing terms and conditions shall remain in effect until further
modified by action of the Committee, either in the form of a modification of
these terms and conditions or by a written term or condition set forth in any
individual award approved by the Committee subsequent to the date of adoption
of these terms and conditions, provided that no change shall adversely affect
any accrued right of the Participant without the Participant’s written consent.

3

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