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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MTS SYSTEMS CORPORATION
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
<PAGE>
[LOGO] MTS(R) MTS SYSTEMS CORPORATION
14000 Technology Drive
Eden Prairie, MN 55344-2290
Telephone 612-937-4000
Fax 612-937-4515, Telex 29-0521
--------------------------------------------------------------------------------
December 26, 2000
Dear MTS Shareholder:
On behalf of the Board of Directors, we want to invite you to attend
your Company's Annual Meeting of Shareholders. The Annual Meeting will be held
on Tuesday, January 30, 2001 at 5:00 p.m. at the Company's headquarters in Eden
Prairie, Minnesota.
We would like all our shareholders to 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 93% 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 card 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,
/s/ Sidney W. Emery, Jr.
Sidney W. Emery, Jr.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
MTS SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2001
The Annual Meeting of Shareholders of MTS Systems Corporation (the
"Company") will be held on Tuesday, January 30, 2001 at the Company's
headquarters located at 14000 Technology Drive, Eden Prairie, Minnesota 55344.
The meeting will convene at 5:00 p.m. Central Standard Time for the following
purposes:
1. To elect seven directors to hold office until the next Annual
Meeting of Shareholders or until their successors are duly
elected;
2. To ratify and approve the appointment of independent public
accountants for the Company for the current fiscal year; and
3. To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on December 4,
2000 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting and at any adjournments or postponements thereof.
For the Board of Directors,
/s/ John R. Houston
John R. Houston
SECRETARY
MTS Systems Corporation
14000 Technology Drive
Eden Prairie, Minnesota 55344
December 26, 2000
--------------------------------------------------------------------------------
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD, WHICH IS LOCATED ON THE OUTSIDE OF THE
ENVELOPE, AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE
MEETING. 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.
--------------------------------------------------------------------------------
<PAGE>
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 Tuesday, January 30, 2001 (the "Annual Meeting") at
5:00 p.m. Central Standard Time, or any adjournments or postponements thereof.
The Company will bear the entire cost of the solicitation of proxies,
including the preparation, assembly, printing and mailing of this Proxy
Statement and any additional information furnished to shareholders. In addition
to solicitation by mail, officers, directors and employees of the Company may
solicit proxies by telephone, facsimile 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 Company intends to mail this Proxy Statement and the accompanying
proxy card on or about December 26, 2000 to all holders of the Common Stock of
the Company as of the record date of December 4, 2000, who are entitled to vote
at the Annual Meeting.
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 in this Proxy Statement.
Each item of business presented at this Annual Meeting of Shareholders
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. Votes cast by proxy or in person at the Annual Meeting
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 not voted for purposes of
determining the approval of the matter on 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.
1
<PAGE>
OUTSTANDING SECURITIES AND VOTING RIGHTS
The Company has outstanding only one class of stock, $.25 par value
common stock (the "Common Stock"), of which 20,722,568 shares were issued and
outstanding on December 4, 2000. 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 proper written notice to any officer of the
Company before the Annual Meeting, or to the presiding officer at the Annual
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 4,
2000 will be entitled to vote at the Annual 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 constitutes a quorum for the transaction of business.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of the close of business on December
4, 2000, 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>
Dimensional Fund Advisors Inc. 1,622,256(1) 7.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Putnam Investments, Inc. 1,479,591(1) 7.1%
One Post Office Square
Boston, MA 02109
Mairs and Power Growth Fund, Inc. 1,293,100(1) 6.2%
332 Minnesota Street, Suite W-2062
Saint Paul, MN 55101
E. Thomas Binger 1,143,000(1)(2) 5.5%
15500 Wayzata Boulevard
Wayzata, MN 55391
State of Wisconsin Investment Board 1,291,700(1) 6.2%
121 East Wilson Street
Madison, WI 53702
Charles A. Brickman 189,000(2) *
Sidney W. Emery, Jr. 177,570(2)(3) *
</TABLE>
2
<PAGE>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------------------ ------------------ --------
Mauro G. Togneri 67,000(2)(4) *
James M. Egerdal 46,315(2)(5) *
Bobby I. Griffin 25,000(2)(6) *
Russell A. Gullotti 17,000(2) *
Steven M. Cohoon 14,765(2)(7) *
Linda Hall Whitman 14,374(2) *
Jean-Lou Chameau 11,000(2) *
Brendan C. Hegarty 12,000(2) *
David E. Hoffman -0-
All directors and executive officers as 748,214(2)(8) 3.6%
a group (18 persons)
------------------
*Less than 1%.
(1) Based upon information provided to the Company. In particular, Dimensional
Fund Advisors Inc. ("Dimensional") has advised us that Dimensional, an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940, furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other investment vehicles, including
commingled group trusts. (These investment companies and investment vehicles
are the "Portfolios"). In its role as investment advisor and investment
manager, Dimensional possessed both voting and investment power over the
1,622,256 shares of the Company's stock as of September 30, 2000. The
Portfolios own all securities reported in this statement, and Dimensional
disclaims beneficial ownership of such securities.
(2) Includes the following number of shares which could be purchased under
stock options exercisable within sixty (60) days of December 4, 2000: Mr.
Binger, 7,000 shares; Mr. Brickman, 15,000 shares; Mr. Emery, 8,000
shares; Mr. Togneri, 46,000 shares; Mr. Egerdal, 28,001; Mr. Griffin,
15,000 shares; Mr. Gullotti, 15,000 shares; Mr. Cohoon, 12,466 shares; Dr.
Whitman, 11,000 shares; Dr. Chameau, 11,000 shares; Dr. Hegarty, 11,000
shares; and by all directors and executive officers as a group, 345,977
shares.
(3) Includes 56,155 shares owned jointly with his spouse. The voting and
investment discretion over those shares are shared accordingly. Includes a
restricted stock grant of 24,000 shares issued on March 17, 1998 in
connection with his employment with the Company.
(4) Includes 3,840 shares owned jointly with his spouse. The voting and
investment discretion over those shares are shared accordingly.
(5) Includes 11,780 shares owned jointly with his spouse. The voting and
investment discretion over those shares are shared accordingly.
(6) Includes 8,000 shares held by his spouse, the beneficial ownership of such
shares is disclaimed.
(7) Includes 4,163 shares owned jointly with his spouse. The voting and
investment discretion over those shares are shared accordingly.
(8) Includes 77,273 shares owned jointly with a spouse, 8,000 shares owned
directly by a spouse and 40,018 shares which are held in trust.
3
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL #1)
Seven directors will be elected at the Annual Meeting. The Board of
Directors has nominated for election the seven persons named below and each has
consented to being named a nominee. Each of the nominees is currently a director
of the Company and will, if elected, serve until the next Annual Meeting of
Shareholders or until a successor is elected. If any nominee is 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. It is intended that proxies will be voted for such nominees. The
proxies cannot be voted for a greater number of persons than seven.
The names of the nominees, their principal occupations for at least the
past five years and other information is set forth below:
[PHOTO] CHARLES A. BRICKMAN -- Age 68
DIRECTOR SINCE 1968
President of Pinnacle Capital Corporation (a venture capital company) since
1990; with Kidder Peabody & Co., Inc., an investment banking firm, from 1960 to
1990 (Vice President from 1964 to 1990 and a director from 1975 to 1990); a
director of a number of small, privately-held companies.
[PHOTO] JEAN-LOU CHAMEAU -- Age 47
DIRECTOR SINCE 1998
Dean of the College of Engineering and Georgia Research Alliance Eminent Scholar
at the Georgia Institute of Technology since 1997; Vice Provost for Research and
Dean of Graduate Studies at the Georgia Institute of Technology from 1995 to
1997; President of Golder Associates, Inc. from 1994 to 1995; Director of the
School of Civil and Environmental Engineering at the Georgia Institute of
Technology from 1991 to 1994; Professor and Head of the Geotechnical Engineering
Program at Purdue University from 1980 to 1991; a director of a number of
privately-held companies and non-profit organizations.
4
<PAGE>
[PHOTO] SIDNEY W. EMERY, JR. -- Age 54
DIRECTOR SINCE 1998
Chairman of the Board of Directors of the Company since January, 1999; Chief
Executive Officer and President of the Company since March, 1998; management and
executive positions with Honeywell, Inc. (manufacturer of control systems) from
1985 to 1997 (Area Vice President, Western and Southern Europe from 1994 to
1997; Group Vice President, Military Avionics Systems from 1989 to 1994; Vice
President and General Manager, Space Systems Division from 1988 to 1989; Vice
President, Operations, Process Controls Division from 1985 to 1988); a director
of the Minnesota Business Partnership.
[PHOTO] BOBBY I. GRIFFIN -- Age 63
DIRECTOR SINCE 1993
Private Investor; formerly President of Medtronic Pacing Business (manufacturer
of pacing arrhythmia products and the largest business unit within Medtronic,
Inc.) from 1993 until his retirement in August 1998; Executive Vice President of
Medtronic, Inc. (medical technology company) from 1988 to 1998; held various
management positions in the pacing business since joining Medtronic in 1973;
involved in biomedical research and development since 1961; a director of
Lutheran Brotherhood Corporation (a fraternal life insurance services and
investment products company), Urologix, Inc. (a medical device company) and a
number of early stage, development companies in the biomedical industry; a
member of the Board of Directors of The Redeemer Center for Life, a nonprofit,
faith-based community development agency.
[PHOTO] RUSSELL A. GULLOTTI -- Age 58
DIRECTOR SINCE 1995
Private Investor; Chairman of the Board of Directors of National Computer
Systems, Inc. (NCS) (provider of data collection systems and services) from May
1995 until his retirement in October 2000; President and Chief Executive Officer
of NCS from October 1994 to October 2000; management and executive positions
with Digital Equipment Corporation from 1977 to 1994 (President Sales/Service
for Americas from 1992 to 1994 and Vice President Digital Services from 1988 to
1992); a director of GenRad, Inc.
5
<PAGE>
[PHOTO] BRENDAN C. HEGARTY -- Age 58
DIRECTOR SINCE 1998
Consultant; formerly Executive Vice President and Chief Executive Officer of
Recording Head Group of Seagate Technology (manufacturer of computer disk
drives), from 1993 to 1998; Senior Vice President and Chief Technical Officer
since 1989; Vice President of Thin Film Operations for Control Data Corporation
(computer hardware and software company) from 1988 to 1989; management and
executive positions with IBM (computer hardware and software company) from 1967
to 1987.
[PHOTO] LINDA HALL WHITMAN -- Age 52
DIRECTOR SINCE 1995
President of Ceridian Performance Partners, Ceridian Corporation from 1996
through December 2000; Vice President, Business Integration, Ceridian
Corporation (information services company) from 1995 to 1996; management and
executive positions with Honeywell, Inc. (manufacturer of control systems) from
1980 to 1995, most recently as Vice President, Consumer Business Group from 1993
to 1995; consultant, psychologist, social worker and special education teacher
in Minnesota and Michigan schools from 1969 to 1980; a member of the Minnesota
Women's Economic Roundtable, the Committee of 200, the Minnesota Science Museum
Board of Trustees, the Visiting Nurse Association Board of Directors, and the
9th District Federal Reserve Bank Board of Directors.
The affirmative vote of a majority of the holders of shares of Common
Stock of the Company represented at the Annual Meeting in person or by proxy is
required for the election of the above nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH
NOMINEE LISTED.
6
<PAGE>
OTHER INFORMATION REGARDING THE BOARD
MEETINGS. The Board of Directors met in person five times during fiscal
year 2000, which ended September 30, 2000. None of the directors attended fewer
than 75% of the aggregate of the total number of Board meetings and Committee
meetings on which he or she served during fiscal 2000. The Board of Directors
also took action in writing in lieu of a meeting five times during fiscal 2000,
which all of the directors signed, and held three telephonic meetings, which all
of the directors attended.
BOARD COMMITTEES. The Audit Committee of the Board of Directors, which
is currently composed of Mr. Brickman (Chair), Dr. Chameau and Dr. Whitman, met
three times during fiscal 2000. Among other duties, the Audit Committee reviews
and evaluates significant matters relating to the audit and internal controls of
the Company, reviews and approves management's processes to ensure compliance
with laws and regulations, 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 and meets quarterly prior to filing of the Company's
quarterly and annual reports containing financial statements with the Securities
and Exchange Commission.
A report of the Audit Committee is also contained in this Proxy
Statement. In May 2000, the Board of Directors adopted an Audit Committee
Charter which is attached as Exhibit A. All members of the Company's Audit
Committee are independent directors as defined by the rules of the National
Association of Securities Dealers (NASD) for companies listed on the Nasdaq
National Market.
The Human Resources Committee of the Board of Directors, which is
currently composed of Mr. Griffin (Chair), Dr. Hegarty and Dr. Whitman, met four
times during fiscal 2000. The Human Resources Committee makes recommendations to
the Board of Directors regarding the employment practices and policies of the
Company and the compensation paid to Company officers and administers the
Company's stock option and retirement plans. In fiscal 2000, the Board of
Directors established a Subcommittee of the Human Resources Committee, currently
composed of Mr. Griffin and Dr. Whitman, for the purpose of administering, and
granting awards under, the Company's various Stock Option Plans, and to approve
compensation to certain executive officers of the Company.
The Governance Committee of the Board of Directors, which is currently
composed of Messrs. Gullotti (Chair) and Griffin and Dr. Whitman, met one time
during fiscal 2000. The responsibilities of the Governance Committee include
Board governance practices and Board evaluation, Board membership
recommendations and chief executive officer succession planning.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended September 30,
2000, 1999, and 1998, the cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to Sidney W. Emery,
Jr., the Company's Chairman, Chief Executive Officer and President, and each of
the four other most highly compensated executive officers of the Company as
determined in accordance with the Securities and Exchange Commission rules
(together with Mr. Emery, the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ----------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($) (#)(2) ($)(3)
----------------------------- ------ --------- ---------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sidney W. Emery, Jr. 2000 323,848 -0- -0- 70,000 10,396
Chairman, Chief Executive 1999 302,081 -0- -0- 97,250 10,564
Officer and President 1998 160,097 84,000 351,000(4) 120,000(5) 10,684
Mauro G. Togneri 2000 170,856 104,070 -0- 11,800 10,396
Vice President 1999 165,338 20,675 -0- 27,500 10,564
1998 160,334 67,791 -0- 6,500 10,684
James M. Egerdal 2000 148,003 74,904 -0- 17,300 10,396
Vice President 1999 142,809 78,162 -0- 5,500 10,564
1998 134,535 33,208 -0- 5,500 10,684
Steven M. Cohoon 2000 164,417 49,483 -0- 20,800 10,396
Vice President 1999 148,329 66,437 -0- 43,250 10,564
1998 135,259 36,549 -0- 5,500 10,684
David E. Hoffman 2000 207,860 -0- -0- 21,000 10,396
Chief Financial Officer 1999 50,004 26,675 -0- 55,971 500
and Vice President 1998 -0- -0- -0- -0- -0-
</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) Options granted prior to February 1, 1998 have been adjusted to reflect the
Company's two-for-one stock split occurring on that date.
(3) 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.
(4) Represents a restricted stock grant of 24,000 shares issued on March 17,
1998 in connection with his employment with the Company. The value of the
restricted stock grant is based upon the last reported sale price for shares
of the Company's Common Stock on March 17, 1998, which was $14.625 per
share. The restricted stock vests in full in three years from the date of
issuance unless the Company terminates Mr. Emery's employment. In the event
that the Company terminates Mr. Emery's employment after the second
anniversary of his employment, 16,000 shares of the restricted stock will
vest. The restricted stock will also vest in full in the event of a change
in control of the Company that occurs at any time within three years
8
<PAGE>
from the date of grant. The aggregate value of the restricted stock grant at
the end of fiscal 2000 was $7.00 per share or $168,000. Mr. Emery will be
entitled to receive dividends on the shares of restricted stock in the event
that the Board of Directors authorizes a distribution of dividends to holders
of Common Stock of the Company.
(5) Represents a non-qualified stock option grant of 120,000 shares issued to
Mr. Emery on March 17, 1998 in connection with his employment with the
Company.
STOCK OPTIONS
The following table contains information concerning grants of stock
options under the Company's Stock Option Plans to the Named Executives during
the fiscal year ended September 30, 2000:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED GRANT DATE
UNDERLYING TO EMPLOYEES EXERCISE PRICE EXPIRATION PRESENT VALUE
NAME OPTIONS GRANTED(1) IN FISCAL YEAR (%) ($/SH) DATE $(2)
------------------ -------------------- -------------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
S. W. Emery, Jr. 70,000 6.4 7.3125 7/14/05 156,319
M. G. Togneri 11,800 1.1 7.3125 7/14/05 26,351
J. M. Egerdal 5,500 .5 6.8125 1/25/05 37,793
11,800 1.1 7.3125 7/14/05
S. M. Cohoon 20,800 1.9 7.3125 7/14/05 46,449
D. E. Hoffman 21,000 1.9 7.3125 7/14/05 46,896
</TABLE>
------------------
(1) Represents options granted pursuant to the Company's Long-Range Incentive
Plan which will become fully vested on January 26, 2002.
(2) Based upon a Black-Scholes valuation method. Assumptions used include
expected average option life (1.8 years), risk-free interest rate (6.0%),
dividend yield (3.4%) and historical volatility (.49).
9
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during fiscal year ended September
30, 2000 and unexercised options held as of September 30, 2000:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(1)
ACQUIRED ON VALUE ------------------------------- ---------------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ -------------- -------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
S. W. Emery, Jr. -0- -0- 80,000 207,250 -0- -0-
M. G. Togneri -0- -0- 43,832 41,468 14,624 -0-
J. M. Egerdal -0- -0- 22,500 22,800 -0- -0-
S. M. Cohoon -0- -0- 12,466 65,884 3,656 1,031
D. E. Hoffman -0- -0- -0- 76,971 -0- -0-
</TABLE>
------------------
(1) Based on closing price of $7.00 per share of the Company's Common Stock on
September 30, 2000.
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. Mr. Griffin, Dr. Whitman and Dr.
Hegarty are non-employee directors of the Company, serving 7, 5 and 2 years,
respectively. This report shall not be deemed incorporated by reference into any
filing under the Securities Exchange Act of 1933 or the Securities Exchange Act
of 1934.
The Human Resources Committee is responsible for executive
compensation, employment contracts and the Management Variable Compensation and
Stock Option Plans, and certain 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. In fiscal 2000, the Board of
Directors established a Subcommittee of the Human Resources Committee (the
"Subcommittee"), composed of Mr. Griffin and Dr. Whitman, for the purpose of
administering and granting awards under the Company's various Stock Option Plans
and to approve compensation for certain executive officers of the Company.
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 and the Subcommittee 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 unsuitable.
There are four components to the Company's executive compensation
program upon which executive officers named in the Summary Compensation Table
are compensated: (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
10
<PAGE>
these components from year to year according to survey data. In general, the
Company's compensation programs are competitive with average survey data.
BASE SALARY. Executive base salary is adjusted annually in January
based on performance against 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 current business plan's objectives,
longer-term strategies and staff development.
MANAGEMENT VARIABLE COMPENSATION. The Human Resources Committee and the
Subcommittee annually approve the Management Variable Compensation Plan, which
includes executives, managers, and key functional and technical leaders. They
also recommend to the full Board of Directors the corporate earnings and growth
objectives upon which the Chief Executive Officer's variable compensation is
principally based. These objectives are a mix of per share earnings, return on
average net assets and other measures as deemed appropriate.
Variable compensation is paid to each recipient by December 30
following the close of the fiscal year unless the executive elects to defer a
portion in the Company's non-qualified, non-secured compensation deferral plan.
STOCK OPTIONS. The Company's current Stock Option Plans include
directors, executives, managers, consultants and key functional and technical
leaders. Stock options are priced and granted by the Subcommittee annually on
the date of the January Board of Directors' meeting. In addition, Company
officers from time to time recommend to the Subcommittee for its approval at
regular Board of Directors' meetings stock option grants to employees who have
shown exceptional service. These discretionary stock options do not exceed 15%
of the number of shares that are granted annually and are priced as of the date
of approval. Options outstanding under current plans typically fully vest in
three years and all options expire in seven years or less.
PROFIT SHARING/RETIREMENT. The Company sponsors an all employee Profit
Sharing/Retirement Plan for U.S. employees. All of the executives listed in the
above tables are included in this Profit Sharing Plan.
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. The Human Resources Committee annually approves
the corporate matching formula for all employees.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Emery served as Chief
Executive Officer of the Company during the last fiscal year and is compensated
on the same basis as the other executive officers as described above. He
received an annual base salary of $323,848 during fiscal year ending September
30, 2000. Mr. Emery received no bonus for fiscal year 2000 as the Company did
not meet its financial objectives. In addition, Mr. Emery receives
reimbursements and certain fringe benefits available to executive officers of
the Company. The Human Resources Committee and the Subcommittee believe that Mr.
Emery has managed the Company well in a highly competitive industry. The
Committee strongly endorses Mr. Emery's decisions and actions to strengthen the
Company's internal operating performance and enhance the Company's potential for
profitable growth in the future.
11
<PAGE>
BOARD ACTION. The full Board of Directors approves new stock option
plans for submission to shareholder vote and approves the annual corporate
earnings and growth objectives for inclusion in 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:
Bobby I. Griffin, Chairman
Linda Hall Whitman
Brendan C. Hegarty
12
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SHAREHOLDER RETURN 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 195 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 September 30, 1995 and assuming reinvestment of all dividends. The
performance graph is not necessarily indicative of future investment
performance.
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
MTS SYSTEMS CORPORATION $ 100.00 $ 142.0 $ 266.7 $ 218.7 $ 157.0 $ 109.4
NASDAQ MARKET INDEX 100.00 119.00 163.7 169.5 216.2 255.9
ANALYTICAL INSTRUMENTS INDEX 100.00 104.1 176.0 112.3 191.0 338.6
</TABLE>
The Company's Common Stock closed at $7.00 per share on September 30, 2000.
13
<PAGE>
EMPLOYMENT AND OTHER AGREEMENTS
Sidney W. Emery, Jr., Mauro G. Togneri, James E. Egerdal, Steven M.
Cohoon and David E. Hoffman, individually, have agreements with the Company
under which, upon the termination of their employment with the Company other
than for cause, such executive officers will receive monthly payments over
periods ranging from nine to eighteen months or until age 65, whichever occurs
first, based upon their highest annual salaries 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. Emery, Togneri, Egerdal, Cohoon and Hoffman, are $570,525,
$248,904, $167,335, $206,070 and $288,375, respectively. As a condition of the
receipt of such payments, Mr. Emery and the executive officers of the Company
have agreed not to render services to any competing entity concerning any
similar or competing product for periods ranging from nine to twelve months and
agreed to maintain the confidentiality of certain information deemed by the
Company to be proprietary.
In 1998, the Company also entered into change-in-control agreements
with Messrs. Emery, Togneri, Egerdal and Cohoon, and in 1999 with Mr. Hoffman.
In the event of a change in control, these executive officers will be entitled
to receive upon the termination of their employment by the Company without cause
or by the executive for good reason at any time within three years of such
change in control, a lump-sum payment equal to (a) six to eighteen months of the
highest annual compensation they received during the previous three years, or
(b) twelve to thirty-six months of such officers' compensation in the event of
an unfriendly takeover. The executive officers may also, within a period
beginning thirty days and ending one hundred and eighty days following a change
in control, resign for any reason and receive the aforementioned payments.
DIRECTOR COMPENSATION
Directors who served during fiscal 2000 and were not otherwise directly
or indirectly compensated by the Company were each paid directors' fees in the
form of a retainer. The retainers for Messrs. Brickman, Griffin, Gullotti and
Drs. Hegarty, Chameau and Whitman, who served the entire fiscal year, were
$17,600 each. The payment of retainers is not dependent upon Board meeting
attendance. In addition, non-employee directors who attended over a total of
five Board or committee meetings not held on the same day as a regular Board
meeting were compensated at the rate of $750 per half day meeting and $1,500 per
full day meeting. Mr. Griffin and Dr. Whitman each attended two committee
meetings on different days than the Board meetings during 1999 and each received
$1,500. Dr. Hegarty and Mr. Gullotti attended one such committee meeting and
received $750. Messrs. Griffin, Brickman and Gullotti each received $1,000 in
connection with their service as Committee Chairs. During fiscal 2000, the
Company also paid Mr. Hegarty $96,482 for consulting services provided by him to
the Company.
Each of the non-employee directors who were elected at last year's
Annual Meeting of Shareholders (Messrs. Brickman, Griffin and Gullotti and Drs.
Hegarty, Chameau and Whitman) were granted non-qualified options to purchase
4,000 shares each of Common Stock upon their re-election to the Board of
Directors at the Company's Annual Meeting of Shareholders for fiscal year 2000.
Each non-employee director will be granted a non-qualified option to purchase up
to 4,000 shares 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 30, 2001
at the fair market value of the Common Stock on such date. Mr. Brickman and Dr.
Chameau were also reimbursed for travel expenses to Board of Directors' meetings
in Eden Prairie, Minnesota.
14
<PAGE>
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company is
composed of three independent directors and operates under a written charter
adopted by the Board of Directors. The written charter is attached to the Proxy
Statement, of which this report is a part, as Exhibit A. Management is
responsible for the Company's internal control and the financial reporting
process. The independent public accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Committee's responsibility is to monitor and oversee these
processes.
In this context, the Committee has met and held discussions with
management and the independent public accountants. Management represented to the
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee has
reviewed and discussed the consolidated financial statements with management and
the independent public accountants. The Committee discussed with the independent
public accountants matters required to be discussed by Statement on Auditing
Standards Numbers 90 and 61 (Communication with Audit Committees). The Company's
independent public accountants also provided to the Committee the written
disclosures required by Independence Standard No. 1 (Independence Discussions
with Audit Committees), and the Committee discussed with the independent public
accountants that firm's independence.
Based upon Committee's discussion with management and the independent
public accountants and the Committee's review of the representation of
management and the report of the independent public accountants, the Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended September 30, 2000 filed with the Securities and Exchange Commission.
Charles A. Brickman (Chair)
Jean-Lou Chameau
Linda Hall Whitman
APPROVAL OF AUDITORS
(PROPOSAL #2)
Arthur Andersen LLP, 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 LLP 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 LLP 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 to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP.
15
<PAGE>
SHAREHOLDER PROPOSALS
The proxy rules of the Securities and Exchange Commission permit
shareholders of a company, after timely notice to the company, to present
proposals for shareholder action in the Company's Proxy Statement where such
proposals are consistent with applicable law, pertain to matters appropriate for
shareholder action and are not properly omitted by action of the Company in
accordance with the proxy rules. In order for a shareholder proposal to be
considered for inclusion in the Proxy Statement for the January 2002 Annual
Meeting of Shareholders, the proposal prepared in accordance with the proxy
rules must be received by the Secretary of the Company in writing no later than
August 28, 2001. In addition, if the Company receives notice of a shareholder
proposal before November 16, 2001 or after December 16, 2001, such proposal will
be considered untimely pursuant to Rules 14a-4 and 14a-5(e) and the persons
named in proxies solicited by the Board of Directors for its fiscal 2001 Annual
Meeting of Shareholders may exercise discretionary voting power with respect to
such proposal.
The Company's Bylaws provide that certain additional requirements be
met in order that business may properly come before the shareholders at the
Annual Meeting. Among other things, shareholders intending to bring business
before the Annual Meeting must provide written notice of such intent to the
Secretary of the Company. Such notice must be given not less than 45 days nor
more than 75 days prior to a meeting date corresponding with the previous year's
Annual Meeting date, and must contain certain required information. Shareholders
desiring to bring matters for action at an Annual Meeting should contact the
Company's Secretary for a copy of the relevant procedure. Since no notice was
received with respect to this year's Annual Meeting, no shareholder may bring
additional business before the Annual Meeting for action.
GENERAL
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
Based solely on a review of the copies of such reports 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.
OTHER MATTERS
The management of the Company knows of no matters other than the
foregoing to be brought before the Annual 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, 2000 is enclosed herewith.
16
<PAGE>
EXHIBIT A
MTS SYSTEMS CORPORATION
AUDIT COMMITTEE CHARTER
I. ORGANIZATION
1. MEMBERSHIP. The Audit Committee of the Board of Directors of this
Corporation will at all times consist of at least three directors appointed
by the Board of Directors of this Corporation, each member to serve until
his or her successor is duly elected, or until his or her earlier death,
resignation or removal by the Board of Directors.
2. QUALIFICATIONS.
(A) FINANCIAL LITERACY. All members of the Audit Committee must be
financially literate, or must be able to become financially literate
within a reasonable period after his or her appointment to the Audit
Committee. At least one member of the Audit Committee must have
accounting, finance or related financial management expertise or
experience, or related professional degree or certification.
(B) INDEPENDENCE. Except as provided in the next sentence, all members of
the Audit Committee must be independent directors (within the meaning
of the applicable rules of the National Association of Securities
Dealers, Inc. ("NASD")) and free of any relationship which, in the
opinion of the Board of Directors, would interfere with the exercise
of independent judgment of the member in carrying out the
responsibilities of a director of this Corporation. The Board of
Directors may, if necessary, appoint one member to the Audit Committee
who is not an employee of the Corporation and does not qualify under
applicable NASD rules as "independent." However, if the Board of
Directors appoints a director to the Audit Committee who is not
independent within the meaning of the rules of the NASD governing such
matters, such appointment shall be made only in strict compliance with
the rules governing appointment of non-independent members.
(C) MISCELLANEOUS. All members and prospective members must respond to
such reasonable inquiries as the Board of Directors deems appropriate
to ascertain the qualifications of a member or a prospective member of
the Audit Committee.
3. MEETINGS.
(A) FREQUENCY. The Audit Committee shall meet at least four times during
each fiscal year of this Corporation, or as frequently as the
Committee deems, in its reasonable judgment, to be appropriate during
any fiscal year.
(B) AGENDA AND NOTICE. The Chief Financial Officer (non-voting attendee)
and the Chairman of the Audit Committee shall establish the meeting
dates and the meeting agenda and send proper notice of each Audit
Committee meeting to each member prior to each meeting.
(C) CHAIR. The Board of Directors shall designate a Chair of the Audit
Committee.
II. STATEMENT OF POLICY
The Audit Committee shall assist the Board of Directors in fulfilling the
oversight responsibilities of the Board of Directors relating to corporate
accounting, financial reporting practices, and the quality and
A-1
<PAGE>
integrity of the financial reports of this Corporation. The Audit Committee
shall periodically review the financial reports of this Corporation; the
internal controls regarding finance and accounting and compliance with
applicable rules and regulations; and the adequacy and appropriateness of the
overall auditing, accounting and financial reporting processes of this
Corporation. The Audit Committee shall foster and encourage continuous
improvement of and adherence to the Corporation's internal policies and to
applicable rules and regulations that affect auditing, accounting and financial
reporting matters. The Audit Committee shall also foster and provide open
avenues of communications by and among the Corporation's management, independent
public accountants, finance department and the Board of Directors.
III. RESPONSIBILITIES
1. SELECTION AND DISENGAGEMENT OF INDEPENDENT AUDITORS. The Audit Committee is
expected to review and recommend to the Board of Directors the independent
auditors to be selected to audit and review the financial statements of
this Corporation and its subsidiaries. The Audit Committee shall also
recommend to the Board of Directors the disengagement of previously
selected independent auditors, if the Committee determines that
disengagement is warranted, and shall provide the reasons for recommending
disengagement. Final selection and disengagement of independent auditors
shall always be made by the Board of Directors. If the Board of Directors
so determines in its sole discretion, or if required by this Corporation's
Articles or Bylaws, the selection of independent auditors shall be
submitted for ratification by this Corporation's shareholders. The Audit
Committee shall also review and approve the compensation to be paid to the
independent auditors.
2. INDEPENDENCE OF INDEPENDENT AUDITORS. The Audit Committee is expected to
confirm the independence of the independent auditors selected, including a
prior review and approval of any management, consulting or other services
and fees provided by, or paid to, the independent auditors. The Audit
Committee must confirm receipt from the independent auditors a formal
written statement delineating all relationships between this Corporation
and the independent auditors, consistent with Independence Standards Board
Standard 1. The Audit Committee must actively engage in a dialogue with the
auditors with respect to any disclosed relationships or services that may
impact the objectivity and independence of the auditors and shall take, or
recommend that the full Board of Directors take, appropriate action to
oversee the independence of the auditors.
3. ACCOUNTABILITY OF AUDITORS. The independent auditors shall be accountable
to the Audit Committee and to the full Board of Directors as
representatives of the Corporation's shareholders.
4. OPEN COMMUNICATIONS. The Audit Committee is expected to provide and
facilitate an open avenue of communications between the independent
auditors, the Board of Directors, senior management and the Corporation's
finance department. The Audit Committee shall also provide and facilitate
sufficient opportunity for the internal and independent auditors to meet
with members of the Audit Committee without members of the management
present.
5. ANNUAL REVIEW OF THIS CHARTER. The Audit Committee is expected to, at least
annually, review and reassess the adequacy of this Audit Committee Charter.
6. ANNUAL AUDIT REVIEW. The Audit Committee is expected to review with
management and the independent auditors the Corporation's financial
statements (including footnotes) for each fiscal year, together with the
independent auditor's audit and audit report thereon. In performing such
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<PAGE>
review, the Audit Committee shall review the scope of the audit, the audit
procedures utilized, any difficulties or disputes encountered during the
audit, any changes in accounting practices or principles, and any other
matters related to the conduct of the audit brought to the Audit
Committee's attention by management or the independent auditors, or which
are raised by members of the Audit Committee. In connection with the annual
reviews, the Audit Committee shall inquire about and review with management
and the independent auditors any significant risks or exposures faced by
the Corporation and discuss with management the steps taken to minimize
such risk or exposure. Such risks and exposures include, but are not
limited to, threatened and pending litigation, claims against the
Corporation, tax matters, regulatory compliance and correspondence from
regulatory authorities, environmental exposure, and rules and regulations
governing internal controls and financial reporting.
7. QUARTERLY REVIEWS. The Audit Committee is expected to review with
management and the independent auditors the Corporation's financial
statements for each quarter prior to their filing with the U.S. Securities
and Exchange Commission, together with the independent auditors review
thereon pursuant to professional standards and procedures for conducting
such reviews, as established by generally accepted auditing standards. In
connection with the quarterly reviews, the Audit Committee shall inquire
about and review with management and the independent auditors any
significant risks or exposures faced by the Corporation and discuss with
management the steps taken to minimize such risk or exposure.
8. REVIEW OF INTERNAL CONTROLS. The Audit Committee is expected to consider
and review with management and the independent auditors the adequacy of
this Corporation's internal controls, including information systems control
and security and bookkeeping controls. The Audit Committee shall also
review in this regard any findings and recommendations of the independent
auditors, including their management letters.
9. REVIEW AUDIT SCOPE. The Audit Committee is expected to consider and review
with management and the independent auditors the scope of the audit for the
current fiscal year and the plan of the independent auditors in conducting
the audit.
10. AUDIT COMMITTEE REPORT. The Audit Committee shall prepare an Audit
Committee Report for inclusion in this Corporation's Proxy Statement for
each annual meeting of shareholders occurring after December 15, 2000
pursuant to the rules governing such Reports.
11. LEGAL COMPLIANCE; INVESTIGATIONS. In connection with the annual and
quarterly reviews, the Audit Committee is expected to inquire about and
review with management any legal and regulatory matters that may have a
material impact on the Corporation's financial statements or financial
reporting practices. The Audit Committee shall have the authority to
initiate and conduct investigations to matters within the scope of the
Audit Committee's responsibilities.
12. LEGAL COUNSEL AND OTHER EXPERTS. The Audit Committee may consult with the
Corporation's legal counsel at such times as the Audit Committee deems
appropriate. The Audit Committee shall have the authority to engage
independent counsel or accountants or other experts to assist it in the
performance of its duties or the conduct of any investigation the Audit
Committee has undertaken.
13. REPORTS TO THE BOARD OF DIRECTORS. The Audit Committee is expected to
report regularly to the Board of Directors of the Corporation regarding the
meetings of the Audit Committee with such recommendations to the Board of
Directors as the Audit Committee deems appropriate. The Audit Committee
shall keep minutes of its meetings and submit such minutesto the Board of
Directors.
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<PAGE>
14. OTHER RESPONSIBILITIES. The Audit Committee is expected to perform such
other duties as may be required by law or requested by the Board of
Directors or deemed appropriate by the Audit Committee. Any member of the
Audit Committee or management of this Corporation is authorized to certify
to the NASD this Corporation's compliance with rules governing audit
committees in such form as the NASD may prescribe.
This Audit Committee Charter was approved by the Board of Directors of this
Corporation on May 22, 2000.
A-4
<PAGE>
PROXY
MTS SYSTEMS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS -- JANUARY 30, 2001
The undersigned hereby appoints Sydney W. Emery, Jr. and John R. Houston
(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 4, 2000, at the ANNUAL MEETING OF SHAREHOLDERS to be held on January
30, 2001, or any adjournments or postponements thereof.
(1) ELECTION OF [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
DIRECTORS: (except as marked below) to vote for nominees listed
CHARLES A. BRICKMAN, JEAN-LOU CHAMEAU, SIDNEY W. EMERY, JR., BOBBY I. GRIFFIN,
BRENDAN C. HEGARTY, RUSSELL A. GULLOTTI, LINDA HALL WHITMAN
(INSTRUCTION: To withhold authority to vote for any individual nominee mark the
FOR box and write that nominee's name on the space provided below.)
-----------------------------------------------------------------------------
(2) The proposal to ratify and approve the appointment of Arthur Andersen LLP
as independent public accountants for the Company.
[ ] 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)
<PAGE>
(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 "FOR" PROPOSALS (1) AND (2).
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.
