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Error: The following layers in your document reference data sources that are not supported in the version of ArcGIS you chose

Error Message

When trying to save an MXD as an MXT, the following error message displays:

"The following layers in your document reference data sources that are not supported in the version of ArcGIS you chose. These layers cannot be drawn when the copy is open in that version."

Cause

This is a known issue.

Solution or Workaround

Use the 'Save A Copy...' option instead of the 'Save As...' option and select 'ArcMap Templates (*.mxt)' as the type.