EXHIBIT 10.1

HUTCHINSON TECHNOLOGY INCORPORATED

1996 INCENTIVE PLAN

Non-Statutory Stock Option Agreement
(Employee)

     
 
   
 
    Name of Optionee:

 
   
 
   
 
   
No. of Shares Covered:
  Date of Grant:
 
   
Exercise Price Per Share:
  Expiration 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.

Recitals

WHEREAS, the Company maintains the Hutchinson Technology Incorporated 1996
Incentive Plan (“Plan”); and

WHEREAS, pursuant to the Plan, the Compensation Committee of the Board of
Directors (the “Committee”) has been appointed to administer the Plan and has
the authority to determine the awards to be granted under the Plan; and

WHEREAS, the Committee has determined that 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 shall be the exercise price specified at the beginning of this Agreement.

  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 shall vest on the first anniversary of the
date of 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 Section 8
of this Agreement if it has not expired prior thereto.

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

(a) The date occurring ten years after the date of grant of this Option;

  (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 8 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 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 (which written notice
shall state the number of Shares to be purchased and shall be signed by the
person exercising this Option), or by such other means as the Board of Directors
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.

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

  *   Unless the context indicates otherwise, terms that are not defined in this
Agreement shall have the meaning set forth in the Plan as it currently exists or
as it is amended in the future.

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(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 of unencumbered Shares having an aggregate
Fair Market Value (as defined in paragraph 7 of the Plan) 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 shall not be permitted to 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 of Directors or Committee and the
purchase price provided for above, it shall arrange for the delivery of the
Shares being purchased in accordance with the delivery instructions related to
such notice. The Company shall 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 shall be fully paid
and nonassessable. Notwithstanding anything to the contrary in this Agreement,
the Company shall 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 shall 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 (or such longer period, if
any, as the Committee, in its sole discretion, may determine) following the day
the Optionee’s employment by the Company ceases if such cessation of employment
is for a reason other than death or disability, but only to the extent that it
was exercisable immediately prior to termination of employment (i.e.,
termination of employment occurs on or after a date one year after the date of
grant of this Option).

  (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.

  (c)   If the Optionee’s employment terminates after a declaration made
pursuant to Section 8 of this Agreement 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 (i) the Optionee has
been employed by the Company for at least ten years (whether or not
consecutive), and (ii) the Optionee’s employment with the Company terminates
after the Optionee has reached age 55, then this Option may be exercised at any
time within three years following the day the Optionee’s employment by the
Company ceases, 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 it has
expired.

8. Acceleration of Option.

Death or Disability. 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 the death or disability of the Optionee; provided that the Optionee shall
have 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.

Change in Control. In the event of a Change in Control as defined in paragraph
12 of the Plan, then, without any action by the Committee or the Board, this
Option, to the extent not already exercised in full or otherwise terminated,
expired or canceled, shall become immediately exercisable in full and the
Committee may, as provided in paragraph 12(c) of the Plan, make certain cash
payments with respect to this Option.

Event. In the event of an Event as defined in paragraph 13 of the Plan, the
Committee may, but shall not be obligated to:

  (a)   if the Event is a merger or consolidation or statutory share exchange,
make appropriate provision for the protection of this Option by the substitution
for this Option of options or voting common stock of the corporation surviving
any merger or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation, as provided in paragraph 13 of the Plan;
or

  (b)   at least 20 days prior to the occurrence of the Event, declare, and
provide written notice to the Optionee of the declaration, that this Option,
whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of the Event (unless it shall have been
exercised prior to the occurrence of the Event). In connection with any such
declaration, the Committee may, but shall not be obligated to, cause payment to
be made to Optionee of cash equal to, for each Share covered by the canceled
Option, the amount, if any, by which the Event Proceeds per Share, as defined in
paragraph 13 of the Plan, exceeds the exercise price per Share covered by this
Option. At the time of any such declaration, this Option shall immediately
become exercisable in full and the Optionee shall have the right, during the
period preceding the time of cancellation of the Option, to exercise this Option
as to all or any part of the Shares covered by this Option. In the event of a
declaration pursuant to this subsection, to the extent this Option has not been
exercised prior to the Event, the unexercised part of this Option shall be
canceled at the time of, or immediately prior to, the Event, as provided in the
declaration. Notwithstanding the foregoing, the holder of this Option shall not
be entitled to the payment provided for in this subsection if this Option shall
have expired pursuant to Section 5 above.

Discretionary Acceleration. The Committee has the power, in its sole discretion,
to declare at any time that this Option shall be immediately exercisable.

  9.   Limitation on Transfer. Except as otherwise provided in this Section 9,
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 9, 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 as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. 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 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.

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

  11.   Discretionary Adjustment. 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, the Committee (or if the Company does not
survive any such transaction, a comparable committee of the Board of Directors
of the surviving corporation) may, without the consent of Optionee, make such
adjustment as it determines in its discretion to be appropriate as to the number
and kind of securities subject to and reserved under the Plan and, in order to
prevent dilution or enlargement of rights of the Optionee, the number and kind
of securities issuable upon exercise of this Option and the exercise price
hereof.

  12.   Tax Withholding. Delivery of Shares upon exercise of this Option shall
be subject to any required withholding taxes. As a condition precedent to
receiving Shares upon exercise of this Option, the Optionee may be required to
pay to the Company, in accordance with the provisions of paragraph 10 of the
Plan, an amount equal to the amount of any required withholdings.

  13.   Interpretation of This Agreement. All decisions and interpretations made
by the Committee with regard to any question arising hereunder or under the Plan
shall 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 shall govern.

  14.   Discontinuance of Employment. This Agreement shall 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 shall 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 shall be 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 shall 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

HUTCHINSON TECHNOLOGY INCORPORATED

By

Its

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