Item 1.01. Entry into a Material Definitive Agreement.

On September 7, 2012, MTS Systems Corporation (the "Company") entered into an agreement (the "Agreement") to purchase shares of its common stock from J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association, London Branch ("JPMorgan"), for an aggregate purchase price of $35 million pursuant to an accelerated share purchase program. The Company is acquiring these shares pursuant to approval by the Company's Board of Directors, on August 21, 2012, authorizing the purchase of up to $40 million of the Company's outstanding shares of common stock ("Common Stock").

Under the Agreement, on September 11, 2012, JPMorgan is required to deliver to the Company 80 percent of the purchased shares, or approximately 533,000 shares at a price of $52.53, the closing price of the common stock on September 7, 2012. These shares will be retired immediately and will be authorized but unissued shares, as required under Minnesota law. The final number of shares to be delivered to the Company by JPMorgan under the Agreement at program maturity, net of the initial delivery, will be adjusted based on an agreed upon discount to the average of the daily volume weighted average price of the Common Stock during the term of the Agreement. If the number of shares to be delivered to the Company at maturity is less than the initial delivery of shares by JPMorgan, the Company would be required to remit shares or cash, at the Company's option, to JPMorgan in an amount equivalent to such shortfall.

The Agreement is subject to terms believed to be customary for a transaction of this type, including, but not limited to, (i) the mechanism used to determine the number of shares that will be delivered, (ii) the required timing of delivery of the shares, (iii) the circumstances under which JPMorgan is permitted to make adjustments to the transaction terms, (iv) the circumstances under which the Company could be required to deliver cash or shares (at the Company's option) to JPMorgan upon settlement of the transaction and (vi) various acknowledgements, representations and warranties made by the parties to one another.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosures set forth in Item 1.01 above are hereby incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit 10.1 - Letter Agreement Regarding Accelerated Share Repurchase Program by and between MTS Systems Corporation and J.P. Morgan Securities Inc., as agent for JPMorgan Chase Bank, National Association, London Branch, dated September 7, 2012.