SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MTS SYSTEMS CORPORATION
(Name of Registrant as Specified in Its Charter)
MTS SYSTEMS CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-56(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
Dear MTS Shareholder:
On behalf of your Board of Directors, I want to invite you to attend your
Company's Annual Meeting of Shareholders. The Annual Meeting will be held on
Tuesday, January 31, 1995, at 4:00 p.m. at the Company's main office in Eden
Prairie, Minnesota.
It is our preference that all our shareholders be represented at the Annual
Meeting, in person or by proxy. To that end, our staff works earnestly to
follow up on proxies which are not returned. Last year 86% of the shares were
voted and we thank our shareholders for that response. Please help us by
taking the next few minutes to complete the enclosed proxy and then drop it
in the mail even if you plan to attend the Annual Meeting. Shareholders who
attend the Annual Meeting may revoke their proxies and vote in person if they
desire. Your promptness is much appreciated.
Very truly yours,
Donald M. Sullivan
Chairman and
Chief Executive Officer
December 22, 1994
MTS SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 31, 1995
The Annual Meeting of Shareholders of MTS Systems Corporation (the "Company")
will be held on January 31, 1995 at the Company's main office which is
located at 14000 Technology Drive, Eden Prairie, Minnesota 55344. The meeting
will convene at 4:00 p.m. Central Standard Time for the following purposes:
1. To elect six directors to hold office until the next Annual Meeting of
Shareholders or until their successors are elected and qualify.
2. To ratify and approve the appointment of independent public accountants
for the Company for the current fiscal year.
3. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on December 3, 1994 as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
For the Board of Directors,
Patrick Delaney
Secretary
MTS Systems Corporation
14000 Technology Drive
Eden Prairie, Minnesota 55344
December 22, 1994
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE, AND RETURN
YOUR PROXY WHICH IS LOCATED ON THE OUTSIDE OF THIS ENVELOPE. A POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR THIS PURPOSE. THE PROXY IS SOLICITED BY MANAGEMENT
AND MAY BE REVOKED OR WITHDRAWN BY YOU AT ANY TIME BEFORE IT IS EXERCISED.
MTS SYSTEMS CORPORATION
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished to the shareholders of MTS Systems
Corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the Annual Meeting of
Shareholders to be held on January 31, 1995 or any adjournment thereof.
The cost of this solicitation will be borne by the Company. In addition to
solicitation by mail, officers, directors and employees of the Company may
solicit proxies by telephone, telegraph or in person. The Company may also
request banks and brokers to solicit their customers who have a beneficial
interest in shares registered in the names of nominees and will reimburse
such banks and brokers for their reasonable out-of-pocket expenses. The
Company's principal offices are located at 14000 Technology Drive, Eden
Prairie, Minnesota 55344, its telephone number is (612) 937-4000 and its
facsimile number is (612) 937-4515. The mailing of this Proxy Statement to
shareholders of the Company commenced on or about December 22, 1994.
Any proxy may be revoked by request in person at the Annual Meeting or by
written notice mailed or delivered to the Secretary of the Company at any
time before it is voted. If not revoked, proxies will be voted as specified
by the shareholders. The shares represented by proxies that are signed but
which lack any such specification will be voted in favor of the proposals set
forth in the Notice of Annual meeting of Shareholders and in favor of the
slate of directors proposed by the Board of Directors and listed herein.
Under Minnesota law, each item of business properly presented at a meeting of
shareholders generally must be approved by the affirmative vote of the
holders of a majority of the voting power of the shares present, in person or
by proxy, and entitled to vote on that item of business. However, if the
shares present and entitled to vote on that item of business would not
constitute a quorum for the transaction of business at the meeting, then the
item must be approved by a majority of the voting power of the minimum number
of shares that would constitute such a quorum. Votes cast by proxy or in
person at the Annual Meeting of Shareholders will be tabulated to determine
whether or not a quorum is present. Abstentions will be treated as shares
that are present and entitled to vote for purposes of determining the
presence of a quorum and in tabulating votes cast on proposals presented to
shareholders for a vote but as unvoted for purposes of determining the
approval of the matter from which the shareholder abstains. Consequently, an
abstention will have the same effect as a negative vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The Company has outstanding only one class of stock, $.25 par value common
stock (the "Common Stock"), of which 4,540,997 shares were issued and
outstanding on December 3, 1994. Each share is entitled to one vote on all
matters presented to shareholders.
Shareholders have cumulative voting rights in the election of directors. If
any shareholder gives written notice to any officer of the Company before the
meeting, or to the presiding officer at the meeting, that shareholder may
cumulate votes for the election of directors by multiplying the number of
votes to which the shareholder is entitled by the number of directors to be
elected and casting all such votes for one nominee or distributing them among
any two or more nominees.
Only shareholders of record at the close of business on December 3, 1994 will
be entitled to vote at the meeting. The presence, in person or by proxy, of
the holders of a majority of the shares of Common Stock entitled to vote at
the Annual Meeting of Shareholders constitutes a quorum for the transaction
of business.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of December 3, 1994, the number and
percentage of outstanding shares of Common Stock of the Company beneficially
owned (i) by each person who is known to the Company to beneficially own more
than five percent (5%) of the Common Stock of the Company, (ii) by each
director of the Company, (iii) by each executive officer named in the Summary
Compensation Table below, and (iv) by all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address of Beneficial Owner Beneficially Owned of Class
---------------------------------------------------------------------------------
<S> <C> <C>
Pioneering Management Corporation 452,350(1) 9.96%
60 State Street
Boston, MA 02114
State of Wisconsin Investment Board 400,200(2) 8.81%
c/o Keith Johnson, Acting General Counsel
P. O. Box 7842
Madison, WI 53707
Mitchell Hutchins Institutional Investors, Inc. 378,254(3) 8.33%
1255 Avenue of the Americas
New York, NY 10019
Wellington Management Company 353,200(4) 7.78%
75 State Street
Boston, MA 02109
E. Thomas Binger 291,750(5) 6.42%
5575 Wayzata Boulevard
Minneapolis, MN 55412
Donald M. Sullivan 60,326(5)(6) 1.32%
Charles A. Brickman 45,000(5) *
Thomas E. Holloran 6,907(5) *
Thomas E. Stelson 7,000(5) *
Bobby I. Griffin 1,000(5) *
Marshall L. Carpenter 35,739(5)(7) *
Keith D. Zell 22,024(5) *
Mauro G. Togneri 10,000(5) *
William G. Beduhn 16,067(5)(9) *
All directors and executive officers
as a group (14 persons) 575,603(5)(10) 12.41%
</TABLE>
* Less than 1%.
(1) Based upon information included in a Schedule 13G and Form 13F filed
with the Securities and Exchange Commission. Consists of sole voting and
dispositive power.
(2) Based upon information included in a Schedule 13D and Form 13F filed
with the Securities and Exchange Commission. Consists of sole voting and
dispositive power.
(3) Based upon information included in Schedule 13G and Form 13F filed with
the Securities and Exchange Commission. Consists of shared voting and
dispositive power.
(4) Based upon information included in Schedule 13G and Form 13F filed with
the Securities and Exchange Commission. Consists solely of shared dispositive
power as an investment adviser, and includes ownership by the Wellington
Trust Company, National Association, Wellington Management Company's wholly
owned subsidiary. The shares are owned by a number of investment advisory
clients, none of which have an interest of more than five percent (5%) of the
Common Stock of the Company.
(5) Includes the following number of shares which could be purchased under
stock options exercisable within sixty (60) days of the date hereof: Mr.
Binger, 4,000 shares; Mr. Sullivan, 29,501 shares; Mr. Brickman, 4,000
shares; Mr. Holloran, 4,000 shares; Mr. Stelson, 3,000 shares; Mr. Griffin,
1,000 shares; Mr. Carpenter, 6,957 shares; Mr. Zell, 10,600 shares; Mr.
Togneri, 10,000 shares; Mr. Beduhn, 5,408 shares; and by all directors and
executive officers as a group, 98,066 shares.
(6) Includes 6,350 shares owned jointly with his spouse, and the voting and
investment discretion over those shares are shared accordingly, and 725
shares held by his adult children living in his household, and the beneficial
ownership of such shares is disclaimed.
(7) Includes 28,782 shares owned jointly with his spouse and the voting and
investment discretion over those shares are shared accordingly.
(8) Includes 11,424 shares owned jointly with his spouse and the voting and
investment discretion over those shares are shared accordingly.
(9) Includes 10,659 shares owned jointly with his spouse and the voting and
investment discretion over those shares are shared accordingly.
(10) Includes 82,613 shares owned jointly with a spouse and 1,559 shares
which are owned directly by children.
ELECTION OF DIRECTORS
(PROPOSAL #1)
Although the Company's Bylaws currently provide for a Board of Directors
consisting of seven persons, only six directors will be elected at the Annual
Meeting, each to serve until the next Annual Meeting of Shareholders or until
a successor is elected and qualified. The Board of Directors will fill the
remaining vacancy when a qualified candidate is identified. The Board of
Directors has nominated for election the six persons named below and each has
consented to being named a nominee. It is intended that proxies will be voted
for such nominees. The nominees represent all of the directors of the Company
elected at the Annual Meeting of Shareholders on January 31, 1994, except for
George N. Butzow, who retired from the Board of Directors effective May 27,
1994. The Board of Directors believes that each nominee named herein will be
able to serve, but should any nominee be unable to serve as a director, the
persons named in the proxies have advised that they will vote for the
election of such substitute nominee as the Board of Directors may propose.
The proxies cannot be voted for a greater number of persons than six.
The names of the nominees, their principal occupations for at least the past
five years and other information is set forth in the following table:
<TABLE>
<CAPTION>
Director
Name and Age Principal Occupation and Other Directorships Since
------------------------------------------------------------------------------------------
<S> <C> <C>
Charles A. Brickman President Pinnacle Capital Corporation, venture capital; 1967
(62) Vice President and Director, Kidder, Peabody Co., Inc.
through 1989
Thomas E. Holloran Professor, Graduate School of Business, University of St. 1971
(65) Thomas; former Chairman and CEO of Inter-
Regional Financial Group, Inc., a financial services
holding company; Director of: Flexsteel Industries, Inc.;
Medtronic, Inc.; ADC Telecommunications, Inc.; National
City Bancorporation
E. Thomas Binger General Partner of Pittsburgh Pacific Company, Ltd., an 1975
(71) iron ore mining company; Director of Investors Savings
Bank
Thomas E. Stelson Independent Engineering Consultant since January 1994; 1979
(66) Pro Vice Chancellor, Hong Kong University of Science and
Technology from 1991 to 1994; previously Professor and
Vice President, Georgia Institute of Technology
Donald M. Sullivan Chairman, President and Chief Executive Officer of 1982
(59) the Company; Director of: TSI, Inc.; ADC Tele-
communications, Inc.
Bobby I. Griffin President of Medtronic Pacing Business since 1991 and 1993
(57) Executive Vice President of Medtronic, Inc. since 1988;
Director of Lutheran Brotherhood Mutual Funds Board
</TABLE>
OTHER INFORMATION REGARDING THE BOARD
MEETINGS.
The Board of Directors met four times during fiscal year 1994, which ended
September 30, 1994. None of the directors attended fewer than 75% of the
aggregate of the total number of Board meetings and Committee meetings on
which he served during fiscal year ended 1994. The Board of Directors also
took action in writing in lieu of a meeting two times during fiscal 1994,
which all of the directors signed.
BOARD COMMITTEES.
The Audit Committee of the Board of Directors, which during fiscal year
1994 was composed of Messrs. Binger, Brickman, Stelson and Holloran, met
twice during that year. Among other duties, the Audit Committee reviews
and evaluates significant matters relating to the audit and internal
controls of the Company, reviews the scope and results of the audits by,
and the recommendations of, the Company's independent auditors and
approves services provided by the auditors. The Audit Committee also
reviews the audited financial statements of the Company.
The Human Resources Committee of the Board of Directors, which during
fiscal year 1994 was composed of Messrs. Binger, Brickman and Holloran,
met three times during that year. The Human Resources Committee makes
decisions regarding the employment practices, programs and policies of the
Company and recommends salaries to be paid to Company officers for
decision by the Board of Directors.
The Company does not have a Nominating Committee.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending September 30, 1994,
1993 and 1992, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to Donald M. Sullivan,
the Company's Chairman, President and Chief Executive Officer, and each of
the four other most highly compensated executive officers of the Company as
of September 30, 1994 (together with Mr. Sullivan, the "Named Executives"),
in all capacities in which they served:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------- -------------
Securities
Underlying All Other
Salary Bonus Options Compensation
Name and Principal Position Year ($) ($)(1) (#) ($)(2)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
D. M. Sullivan 1994 $218,494 $ 33,755 9,000 $17,111
Chairman, President, Chief 1993 210,648 48,860 9,600 12,461
Executive Officer and Director 1992 202,700 12,210 9,600
M. L. Carpenter 1994 146,779 11,942 3,000 11,927
Vice President and Chief 1993 140,345 28,135 3,000 8,309
Financial Officer 1992 135,551 13,312 3,000
Keith D. Zell 1994 150,104 7,468 6,000 11,449
Executive Vice President 1993 131,020 15,555 3,000 8,968
1992 123,737 33,610 3,000
M. G. Togneri 1994 144,376 93,840 -0- 9,746
Vice President 1993 140,342 6,466 -0- 7,648
1992 133,399 35,000(3) -0-
William G. Beduhn 1994 123,926 55,951 2,250 11,388
Vice President 1993 116,697 40,973 2,100 8,725
1992 104,955 43,887 1,500
</TABLE>
(1) Represents earnings under the Management Variable Compensation Plan. The
amounts listed were earned in the fiscal year shown and were paid or will be
paid in the following year, unless deferred by the Named Executive.
(2) Represents contributions by the Company to the Company's Profit Sharing
Retirement Plan and the Company's 401(k) Plan on behalf of the Named
Executives. The rules of the Securities and Exchange Commission require the
presentation of this information for 1994 and 1993 only.
(3) Represents a guaranteed payment under the Management Variable
Compensation Plan pursuant to Mr. Togneri's employment agreement.
STOCK OPTIONS
The following table contains information concerning grants of stock options
under the Company's Stock Option Plans to the Named Executives during the
fiscal year ending September 30, 1994:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rate of Stock Price
Underlying Options Granted Appreciation for Option
Options Granted to Employees Exercise Price Expiration Term
Name (#) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -------------- --------------- --------------- -------------- ---------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
D. M. Sullivan 9,000(1) 7.6% $31.75 01/31/01 $116,329 $271,096
M. L. Carpenter 3,000(1) 2.5% $31.75 01/31/01 38,776 90,365
K. D. Zell 6,000(1) 5.0% $31.75 01/31/01 77,553 180,731
M. G. Togneri -0- N/A N/A N/A N/A N/A
W. G. Beduhn 2,250(1) 1.9% $31.75 01/31/01 29,082 67,774
</TABLE>
(1) Each option becomes exercisable in equal installments over a period of
three years, commencing one year after the date of grant.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during the fiscal year ending
September 30, 1994 and unexercised options held as of September 30, 1994:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at FY-End (#) Options at FY-End ($)(1)
---------------------------------------------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
D. M. Sullivan -0- N/A 20,102 18,598 $95,625 -0-
M. L. Carpenter -0- N/A 3,957 6,000 15,203 -0-
K. D. Zell 132 $1,254 6,600 9,000 40,500 -0-
M. G. Togneri -0- N/A 10,000 -0- 50,000 -0-
W. G. Beduhn 1,555 20,925 3,395 4,150 12,814 -0-
</TABLE>
(1) Based on closing price of $24.25 per share of the Company's Common Stock
on September 30, 1994.
(2) The market value of the shares covered by the unexercisable options on
September 30, 1994 exceeded the option exercise price.
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This is the report of the Company's Human Resources Committee, which is
composed of the undersigned Board members, all of whom have been non-employee
directors of the Company since the close of 1993. This report shall not be
deemed incorporated by reference into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934.
The Human Resources Committee is responsible for executive compensation, the
Management Variable Compensation and Stock Option Plans, and all other
employee benefit plans such as the Company's Profit Sharing/Retirement Plans.
The compensation philosophy of the Company is to be competitive with
comparable and directly competitive companies to attract and motivate highly
qualified employees.
The Company uses various compensation surveys -- international, national and
local -- to develop its compensation strategy and plans; this practice is
also used by the Human Resources Committee for executive compensation. In
general, the Committee does not use outside consultants to prepare specific
studies for it unless it judges the available survey data to be incomplete or
unrepresentative.
There are four components to the Company's executive compensation program:
(1) base salary; (2) management variable compensation (referred to in the
Summary Compensation Table above as "Bonus"); (3) stock options and (4)
profit sharing/retirement. The Committee may adjust the mix of these
components from year to year according to survey data. In general, as is true
for all the Company's compensation programs, salaries and retirement
compensation are somewhat lower than average survey data, and bonus and stock
options (i.e., potential annual and longer term variable compensation) are
somewhat higher. This proportionality increases as responsibility and
compensation increase.
BASE SALARY.
Executive base salary is adjusted annually in January based on the prior
fiscal year's financial results and performance on developmental
objectives the Committee believes are critical to the Company's long term
progress. These objectives include, but are not limited to, progress on
the Company's Total Quality Management objectives and staff development.
MANAGEMENT VARIABLE COMPENSATION.
The Human Resources Committee annually approves the Management Variable
Compensation Plan, which includes executives, managers, and key functional
and technical leaders, and recommends to the full Board the corporate
earnings and growth objectives upon which the Chief Executive Officer's
variable compensation is principally based. These objectives are a mix of
earnings per share, return on average net assets and revenue growth.
Variable compensation is paid to each recipient within 90 days of the
close of the fiscal year unless the executive elects to defer a portion
into the Company's non-qualified, non-secured compensation deferral plan.
STOCK OPTIONS.
The Company's current Stock Option Plans include executives, managers, and
key functional and technical leaders. Stock options are priced and granted
annually on the date of the January Board of Directors' meeting. Executive
award levels are based on the matters discussed above. Options outstanding
under current plans fully vest in three or four years and expire in five
to seven years.
PROFIT SHARING/RETIREMENT.
The Company sponsors an all employee Profit Sharing/Retirement Plan for
U.S. employees, except certain subsidiary employees who are covered by
subsidiary plans. All of the executives listed in the tables above are
included in this Profit Sharing Plan. The Human Resources Committee
annually approves the contribution formula for all employees, including
executives.
The Company also has a 401(k) Plan for U.S. employees, including
executives, under which the Company partially matches employee
contributions at a proportion set by the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION.
Mr. Sullivan's compensation for 1992-1994 is shown in the Summary
Compensation Table above. The Human Resources Committee believes Mr.
Sullivan has managed the Company well in a difficult economic climate for
the business sectors in which the Company competes. Mr. Sullivan's
compensation is consistent with this evaluation and with the Company's
overall management compensation strategy.
BOARD ACTION.
The full Board of Directors approves new stock option plans for submittal
for shareholder vote and approves the annual corporate earnings and growth
objectives for inclusion into the Management Variable Compensation Plan.
The full Board reviews all components of executive compensation and the
Profit Sharing/Retirement Plan every two to three years.
SUBMITTED BY THE HUMAN RESOURCES COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS:
Thomas E. Holloran, Chairman
E. Thomas Binger
Charles A. Brickman
STOCK PERFORMANCE
The graph below sets forth a comparison of the cumulative shareholder return
of the Company's Common Stock over the last five fiscal years with the
cumulative total return over the same periods for the Nasdaq Market Index and
the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling
Instruments Index (the "Analytical Instruments Index") (SIC Code 382, which
includes 110 companies). The graph below compares the cumulative total return
of the Company's Common Stock over the last five fiscal years assuming a $100
investment on October 1, 1989 and assuming reinvestment of all dividends.
<TABLE>
<CAPTION>
--------------------------------------------------------
FISCAL YEAR ENDING
--------------------------------------------------------
1989 1990 1991 1992 1993 1994
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MTS SYSTEMS CORPORATION 100.00 96.90 116.76 134.51 158.07 130.38
---------------------------------------------------------------------------
ANALYTICAL INSTRUMENTS INDEX 100.00 76.90 115.38 127.62 156.94 167.54
---------------------------------------------------------------------------
NASDAQ MARKET INDEX 100.00 75.69 101.56 99.88 129.89 137.45
---------------------------------------------------------------------------
</TABLE>
The Company's Common Stock closed at $24.25 per share on September 30, 1994.
EMPLOYMENT AGREEMENTS
Messrs. Sullivan, Carpenter, Zell, Togneri and Beduhn, individually, have
agreements with the Company whereby, upon the termination of their employment
with the Company, other than for cause, such officers will receive monthly
payments, over periods ranging from 12 to 18 months, or until age 65,
whichever occurs first, based upon their highest annual salary and the
average management variable compensation and benefits they received during
the previous three years. As of the date hereof, the maximum aggregate
amounts of such payments to each of Messrs. Sullivan, Carpenter, Zell,
Togneri and Beduhn are $396,617, $261,435, $178,541, $195,285 and $180,942,
respectively. As a condition of such payments, the officer receiving the
payments must agree to not render services to any competing entity concerning
any similar or competing product for periods ranging from nine to twelve
months.
DIRECTOR COMPENSATION
Directors who were not otherwise directly or indirectly compensated by the
Company (Messrs. Binger, Brickman, Holloran, Griffin and Stelson) were each paid
an annual retainer of $13,500 during fiscal year 1994. Members of the Human
Resources Committee (Messrs. Binger, Brickman and Holloran) were each paid $750
for the committee meetings held during fiscal 1994. Each of the non-employee
directors (Messrs. Binger, Brickman, Holloran, Griffin and Stelson) were
automatically granted options to purchase 1,000 shares each of Common Stock upon
their reelection to the Board of Directors at the Company's Annual Meeting of
Shareholders for fiscal year 1994, and will be automatically granted an option
to purchase 1,000 shares each of Common Stock upon their re-election to the
Board of Directors at the Company's Annual Meeting of Shareholders to be held on
January 31, 1995 at the fair market value on such date. Mr. Brickman and Mr.
Stelson were also reimbursed for travel expenses to Board of Directors'
meetings.
APPROVAL OF AUDITORS
(PROPOSAL #2)
Arthur Andersen & Co., independent certified public accountants, have been
the auditors for the Company since 1966. They have been reappointed by the
Board of Directors, on recommendation of its Audit Committee, as the
Company's auditors for the current fiscal year and shareholder approval of
the appointment is requested. In the event the appointment of Arthur Andersen
& Co. should not be approved by the shareholders, the Board of Directors will
make another appointment to be effective at the earliest feasible time.
A representative of Arthur Andersen & Co. is expected to be present at the
Annual Meeting of Shareholders, will have an opportunity to make a statement
if he or she desires to do so, and will be available to respond appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN & CO.
SHAREHOLDER PROPOSALS
In order for a shareholder proposal to be considered for inclusion in the
Proxy Statement for the January 1996 Annual Meeting of Shareholders, the
proposal must be received by the Secretary of the Company in writing no later
than August 25, 1995.
GENERAL
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
and the NASD. Executive officers and directors are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of such forms furnished to
the Company and written representations from the Company's executive officers
and directors, the Company notes that all such reports have been filed in a
timely manner.
The management of the Company knows of no matters other than the foregoing to
be brought before the meeting. However, the enclosed proxy gives
discretionary authority in the event that any additional matters should be
presented.
The Annual Report of the Company for the fiscal year ended September 30,
1994, is enclosed herewith.
PROXY
MTS SYSTEMS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS -- JANUARY 31, 1995
The undersigned hereby appoints Donald M. Sullivan and Patrick Delaney (the
"Proxies"), each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of MTS Systems Corporation, held of record by the undersigned on December
3, 1993, at the ANNUAL MEETING OF SHAREHOLDERS to be held on January 31, 1995,
or any adjournment thereof.
(1) ELECTION OF DIRECTORS:
FOR all nominees [ ] WITHHOLD AUTHORITY [ ]
(except as marked below) to vote for nominees listed
E. THOMAS BINGER, CHARLES A. BRICKMAN, THOMAS E. HOLLORAN,
THOMAS E. STELSON, DONALD M. SULLIVAN, BOBBY I. GRIFFIN
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
(2) The proposal to ratify and approve the appointment of Arthur Anderson & Co.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued, and to be completed and signed on the reverse side)
(continued from the other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH PROPOSAL.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED IN
FAVOR OF THE PROPOSALS.
Dated:
Signed:
Signature of Shareholder
Signed:
Signature of Shareholder
Please vote, date and sign this proxy statement as your name is printed hereon.
When signing as attorney, executory administrator, trustee, guardian, etc. give
full title as such. If the stock is held jointly, each owner should sign. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
