Exhibit 10.2
HUTCHINSON TECHNOLOGY INCORPORATED
1996 INCENTIVE PLAN
(As Amended and Restated January 30, 2008)
*[Form of]*
Non-Statutory Stock Option Agreement
(Director)

     
Name of Optionee:
  *[Optionee’s Name]*
No. of Shares Covered:
  *[Number of shares]*
Exercise Price Per Share:
  $*[     ]*
Date of Grant:
  *[Date]*
Expiration Date:
  *[Date]*

This is a Non-Statutory Stock Option Agreement (“Agreement”) between Hutchinson
Technology Incorporated, a Minnesota corporation (the “Company”), and the
optionee identified above (the “Optionee”), effective as of the date of grant
specified above. Unless the context indicates otherwise, terms that are not
defined in this Agreement will have the meaning set forth in the Plan as it
currently exists or as it is amended in the future. For purposes of the Plan and
this Agreement, as provided in Section 4 of the Plan, service as a director of
the Company constitutes employment with the Company for purposes hereof.
Recitals
WHEREAS, the Company maintains the Hutchinson Technology Incorporated 1996
Incentive Plan (As Amended and Restated January 30, 2008) (the “Plan”); and
WHEREAS, awards may be granted pursuant to the Plan to non-employee directors of
the Company; and
WHEREAS, the Optionee is eligible to receive an award under the Plan in the form
of a non-statutory stock option (the “Option”).
NOW, THEREFORE, the Company hereby grants this Option to the Optionee under the
terms and conditions as follows.

 

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Terms and Conditions

1.   Grant.  The Optionee is granted this Option to purchase the number of
Shares specified at the beginning of this Agreement.

2.   Exercise Price.  The price to the Optionee of each Share subject to this
Option will be the exercise price specified at the beginning of this Agreement
(which price may not be less than the Fair Market Value of a Share as of the
date of grant).

3.   Non-Statutory Stock Option.  This Option is not intended to be an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).

4.   Exercise Schedule.  This Option will vest (a) as to 50% of the Shares
covered hereby, on the second anniversary of the date of the grant of this
Option, and (b) as to the remaining 50% of the Shares covered hereby, on the
third anniversary of the date of the grant of this Option. If this Option has
not expired prior thereto, it may be exercised in whole or in part with respect
to any Shares as to which this Option has vested.

This Option may also be exercised under the circumstances described in
Sections 8 and 9 of this Agreement if it has not expired prior thereto.

5.   Expiration.  This Option will expire at 5:00 p.m. Central Time on the
earliest of:

  (a)   the expiration date specified at the beginning of this Agreement;    
(b)   the last day of the period following the termination of employment of the
Optionee during which this Option can be exercised (as specified in Section 7 of
this Agreement); or     (c)   the date (if any) fixed for cancellation pursuant
to Section 9 of this Agreement.

In no event may anyone exercise this Option, in whole or in part, after it has
expired, notwithstanding any other provision of this Agreement.

6.   Procedure to Exercise Option.

Method of Exercise.  This Option may be exercised by delivering written or
electronic notice of exercise to the Company at the principal executive office
of the Company, to the attention of the Company’s Vice President, Human
Resources or the party designated by such officer (which written or electronic
notice will state the number of Shares to be purchased and must be signed or
otherwise authenticated by the person exercising this Option), or by such other
means as the Board or Committee may approve. If the person exercising this
Option is not the Optionee, he/she also must submit appropriate proof of his/her
right to exercise this Option.

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Tender of Payment.  Upon giving notice of any exercise hereunder, the Optionee
will provide for payment of the purchase price of the Shares being purchased
through one or a combination of the following methods:

  (a)   cash;     (b)   to the extent permitted by law, a broker-assisted
cashless exercise in which the Optionee irrevocably instructs a broker to
deliver proceeds of a sale of all or a portion of the Shares to be issued
pursuant to the exercise (or a loan secured by such Shares) to the Company in
payment of the purchase price of such Shares;     (c)   by delivery to the
Company or its designated agent of unencumbered Shares having an aggregate Fair
Market Value on the date of exercise equal to the purchase price of such Shares;
or     (d)   by a reduction in the number of Shares delivered to the Optionee
upon exercise, such number of Shares having an aggregate Fair Market Value on
the date of exercise equal to the purchase price of such Shares.

Notwithstanding the foregoing, the Optionee may not pay any portion of the
purchase price with Shares if the Committee, in its sole discretion, determines
that payment in such manner is undesirable.
Issuance of Shares.  As soon as practicable after the Company receives notice of
the exercise in a manner approved by the Board or Committee and the purchase
price provided for above, it will arrange for the delivery of the Shares being
purchased in accordance with the delivery instructions related to such notice.
The Company will pay any original issue or transfer taxes with respect to the
issue or transfer of the Shares and all fees and expenses incurred by it in
connection therewith. All Shares so issued will be fully paid and nonassessable.
Notwithstanding anything to the contrary in this Agreement, the Company will not
be required to issue or deliver any Shares prior to the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company may determine to be necessary or
desirable.

7.   Employment Requirement.  This Option may be exercised only while the
Optionee remains employed with the Company or a parent or subsidiary thereof,
and only if the Optionee has been continuously so employed since the date of
this Agreement; provided that:

  (a)   this Option may be exercised for three months following the day the
Optionee’s employment by the Company ceases if such cessation of employment is
for a reason other than Cause, death or disability, but only to the extent that
it was exercisable immediately prior to termination of employment;     (b)  
this Option may be exercised within three years after the Optionee’s employment
by the Company ceases if such cessation of employment is because of death or
disability;

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  (c)   if the Optionee’s employment terminates after a declaration made
pursuant to Section 13 of the Plan in connection with an Event, this Option may
be exercised at any time permitted by such declaration;     (d)  
notwithstanding paragraph (a) of this Section 7, if the Optionee has served as a
director of the Company for at least five years (whether or not consecutive),
then this Option may be exercised at any time within three years following the
day the Optionee ceases to be a member of the Board, but only to the extent that
it was exercisable immediately prior to such cessation of membership; and    
(e)   notwithstanding paragraphs (a), (b) and (d) of this Section 7, if (i) the
Optionee has served as a director of the Company for at least five years
(whether or not consecutive), and (ii) the Optionee ceases to be a member of the
Board after the Optionee has reached age 65, then this Option may be exercised
at any time during its full original term (i.e., before 5:00 p.m., Central Time,
on the expiration date specified at the beginning of this Agreement) but only to
the extent that it was exercisable immediately prior to termination of
employment.

Notwithstanding the above, this Option may not be exercised after the expiration
date specified at the beginning of this Agreement.

8.   Acceleration of Option.  This Option may be exercised in full, regardless
of whether such exercise occurs prior to a date on which this Option would
otherwise vest, upon termination of the Optionee’s employment with the Company
and any parent or subsidiary thereof due to the death or disability of the
Optionee; provided that the Optionee has been continuously employed by the
Company or a parent or subsidiary thereof between the date of this Agreement and
the date of such death or disability.

9.   Change in Control.  In the event there is a Change in Control of the
Company during the term of this Option, the effect of that Change in Control
shall be as provided in Section 12 of the Plan as in effect on the date of this
Agreement. In connection with a proposed Change in Control of the Company that
would also constitute an Event, any of the actions described in Section 13 of
the Plan as in effect on the date of this Agreement may be taken.

10.   Limitation on Transfer.  Except as otherwise provided in this Section 10,
while the Optionee is alive, only the Optionee or his/her guardian or legal
representative may exercise this Option. Except as otherwise provided in this
Section 10, this Option may not be assigned or transferred other than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order. This Option may be transferred at any time that it remains
outstanding and unexpired to (a) any member of the Optionee’s “immediate family”
(as such term is defined in Rule 16a-1(e) promulgated under the Securities
Exchange Act of 1934, as amended, or any successor rule or regulation), (b) one
or more trusts whose beneficiaries are members of the Optionee’s “immediate
family” or the Optionee, or (c) partnerships in which such family members or the
Optionee are the only partners; provided, however, that the Optionee receives no
consideration for the transfer. Following any such transfer, this Option, when

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held by any such permitted transferee, shall continue to be subject to the same
terms and conditions that were applicable to this Option immediately prior to
its transfer and may be exercised by such permitted transferee as and to the
extent that this Option has become exercisable and has not terminated in
accordance with the provisions of the Plan and this Agreement.

11.   No Shareholder Rights Before Exercise.  No person may have any of the
rights of a shareholder of the Company with respect to any Share subject to this
Option until the Share is actually issued to him/her upon exercise of this
Option.

12.   Changes in Capitalization.  In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, or extraordinary dividend
or divestiture (including a spin-off), or any other change in the corporate
structure or Shares of the Company, such adjustments as are authorized pursuant
to Section 14 of the Plan shall be made as to the number and kind of securities
issuable upon exercise of this Option and the exercise price hereof in order to
prevent dilution or enlargement of rights of the Optionee.

13.   Interpretation of This Agreement.  All decisions and interpretations made
by the Board or the Committee with regard to any question arising hereunder or
under the Plan will be binding and conclusive upon the Company and the Optionee.
If there is any inconsistency between the provisions of this Agreement and the
Plan, the provisions of the Plan will govern.

14.   Discontinuance of Employment.  This Agreement does not give the Optionee a
right to continued employment with the Company or any parent or subsidiary of
the Company, and the Company or any such parent or subsidiary employing the
Optionee may terminate his/her employment at any time and otherwise deal with
the Optionee without regard to the effect it may have upon him/her under this
Agreement.

15.   Option Subject to Plan, Articles of Incorporation and By-Laws.  The
Optionee acknowledges that this Option and the exercise thereof is subject to
the Plan, the Articles of Incorporation, as amended from time to time, and the
By-Laws, as amended from time to time, of the Company, and any applicable
federal or state laws, rules or regulations.

16.   Obligation to Reserve Sufficient Shares.  The Company will at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy this Agreement.

17.   Binding Effect.  This Agreement is binding in all respects on the heirs,
representatives, successors and assigns of the Optionee.

18.   Choice of Law.  This Agreement is entered into under the laws of the State
of Minnesota and will be construed and interpreted thereunder (without regard to
its conflict of law principles).

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          IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of the ___ day of _____, 20__.

            *[OPTIONEE’S NAME]*
                     
HUTCHINSON TECHNOLOGY INCORPORATED         
      *[Name of Authorized Officer]*
*[Title of Authorized Officer]*     

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